Master of Arts Thesis Euroculture
University of Uppsala (Home)
University of Deusto (Host)
Month and Year when submitted May 2013
“European Economic Crisis: Revisiting the Role of State, and its
Cultural, Political and Economic Implications”
Submitted by:
Georgios Tsarsitalidis Kantorsgatan 50, Uppsala 75424, Sweden
Supervised by:
Sverker Gustavsson, Uppsala University Laura Teresa Gómez Urquijo, Deusto University
Place, date
Uppsala, May
Signature
MA Programme Euroculture Declaration
I, (Georgios Tsarsitalidis) hereby declare that this thesis, entitled “European Economic Crisis: Revisiting the Role of State, and its Cultural, Political and Economic Implications”, submitted as partial requirement for the MA Programme Euroculture, is my own original work and expressed in my own words. Any use made within it of works of other authors in any form (e.g. ideas, figures, texts, tables, etc.) are properly acknowledged in the text as well as in the List of References.
I hereby also acknowledge that I was informed about the regulations pertaining to the assessment of the MA thesis Euroculture and about the general completion rules for the Master of Arts Programme Euroculture.
Signed ………Tsarsitalidis Georgios ………
TABLE OF CONTENTS
1. INTRODUCTION 4
2. VARIOUS PARAMETERS OF THE ‘STATE’ 12
3. STATE'S ROLE: THE TWO SCHOLAR GROUPS AND THEIR ARGUMENTS 29
4. EUROPEAN UNION AND EURO CRISIS: STATE'S POSITION 36
5. CONCLUSION 60
Introduction
[t]he distinctive role of the state is emphasized every time a crisis appears. If the economic system is in trouble, as in the so-called ‘Asian crisis’ of finance in the late 1990s, states are called upon to re-create order. When terrorism strikes, as in the outrageous attacks on the World Trade Center and the Pentagon in 2001, states are called upon to provide security, order and justice.1
The deepening world crisis involving not only economic but also political and ethnic relations impels the scientific community to focus its intellectual energy on the real functions and role of the political state on the national and also on the international level.2
Bearing in mind the above epigraphs, it becomes clear that the dialogue about the role of the state is revisited every time that there is either an economic and social crisis or a natural catastrophe, where the state has to intervene in order to promote and create order. With this thesis, I venture to provide an answer to the following questions: ‘What is the role of the state during the current economic crisis and what is the implications of the Euro crisis to the academic discourse about state’s role?’ In order to answer this question, I will attempt to employ and analyze Susan Strange’s criteria found in The Retreat of the State: The Diffusion of Power in the World Economy concerning the role of the state in conjunction to the EU and the Euro crisis. Therefore, after having a brief retrospection and analysis about the state and its variable and the main academic discourse concerning its role, I will attempt to analyze those criteria in conjunction to the EU and Euro crisis. The upshot of all this is that, I will analyze the implications and contributions of Euro crisis in the theoretical discourse facilitated by academic scholars concerning the role and functions of state as well as about their clashing arguments concerning state’s position, either as a center (state-centric position) entity or in retreat (retreat of the state position).
The most interesting in the study of state’s role is that both groups of scholars are right in their own ways. Consequently, it should be highlighted that “both views are correct; they merely portray different aspects of a complex reality. Political
1 Georg Sörensen, The Transformation of the State: Beyond the Myth of Retreat. (New York: Palgrave Macmillan, 2004), 71.
decisions are increasingly made in context of networks involving many different types of actors.”3
Both sides provide perspectives and interpretations about state’s role that can be right and wrong depending which side you adopt. Therefore, this is one of the main reasons why there is no clear cut answer concerning what is the role of the state in general since both groups adopt different focal points for formulating their arguments.
Even though there is no definite answer about the role of the state, with this thesis I attempt to argue that the current economic crisis contributes in the
change of the state’s role and in particular in the strengthening of the arguments of the ‘retreat state’ scholars, since it forces the state into formulating transnational and trans-borders cooperation in order to cope with the current economic crisis. This cooperation signifies that a part of state’s sovereignty and
power is transferred to the hands of exogenous institutions and entities. Through this cooperation, the sovereignty of the state is diminished since it indirectly suggests the compromise of state’s role and desires during decision-making. As Bickerton argues in his book “[t]hose who stress the primacy of national sovereignty in Europe struggle to make sense of the multiple ways in which national capitals are bound up with institutions, rules and expectations that together subvert traditional understandings of national sovereignty and statehood.”4
Therefore, cooperating with those institutions can signify the subversion of the understandings of national sovereignty and statehood, in conjunction to the previous roles and functions of the state. These co-operations are facilitated due to the high internal competition that exists within the state systems as well as among the states, the markets and in particular among the financial companies. As many theorists have underlined “there are two competitive mechanisms at work:
the market and the state system. Private firms compete by seeking low-cost production operations and/or markets that promise high rates of return. States seek power, influence and prestige and to this end form alliances and acquire military power. But what concerns us here is neither of the two mechanisms taken in isolation but their interaction, for it is this interaction, which holds the
3 Georg Sörensen, The Transformation of the State: Beyond the Myth of Retreat. (New York: Palgrave Macmillan, 2004), 71.
key to the structure of power and authority, both nationally and internationally, and therefore to the meaning and efficacy of state sovereignty.5
In this thesis, I will employ the EU and the current Euro crisis as a case study since I consider that they provide us with insightful views on whether the state intervenes successfully or not, as well as on the consequences that this crisis has on the state’s role and power in the globalized world, where economic issues become even more crucial. State’s successful intervention during the current economic crisis signifies the importance and centrality of the state whereas the opposite denotes state’s disempowerment and its retreat. Furthermore, as a case study, the European Union and the Euro crisis will provide us with new perspectives about state-market/capital discourse and their political, cultural and economic consequences that this discourse has to the lives of the European citizens. As Ulrick Beck highlights in
Power in the Global Age, “[w]hat is new in this is not the fact that the strategies of
capital are putting pressure on states or making them follow their lead – this is exactly what political economy has been about from the very beginning–but rather how this is being done.”6
This would be also an important fact for this thesis since it will also highlight how the international institutions and financial companies put pressure on the state during the current economic crisis.
The reason why I have decided to employ the EU and the Euro crisis as a case study for getting a grip of the state’s role lies to the fact that recent scholars from political science paid more attention on the importance and meaning of ‘state’ in supranational entities such as the EU. As it is highlighted in Hendrk Spruyt’s “The Origins Development and Possible Decline of the Modern State”:
Recent scholarship in political science has returned with vigor to examining the origins and development of the modern state. On the one hand, this revival of interest has been due to expectations that the state might have reached its high water mark. Such supranational entities as the European Union, and the increasing powers of such multinational entities as the World Trade Organization, seem to foreshadow an end to the ultimate authority of national governments. From that perspective, state sovereignty appears to be shifting, albeit imperfectly, to multilateral and supranational levels of authority.7
The extensive rise of multinational entities assisted in revisiting the discussion about state since its sovereignty appears to be shifting as well as the national governments,
5 Joseph A. Camilleri and Jim Falk, The End of Sovereignty?: The Politics of a Shrinking and
Fragmenting World (Hants: Edward Elgar, 1992), 80-81.
6 Ulrick Beck, Power in the Global Age (Cambridge: Polity Press, 2005), 249.
7 Qtd in Hendrik Spruyt, “The Origins Development and Possible Decline of the Modern State,”
and in particular the citizens are not considered during the decision-making in the contemporary economic chess games. My further focus on Euro crisis is due to the fact that the role and the importance of the state become even prominent during a crisis since under these circumstances the need for state intervention raises. Consequently, the current economic crisis can provide us with interesting insights about the state as part of a multinational entity, such as the European Union during a time of crisis.
In this thesis, I will also focus on state’s inability to create a European public sphere during the economic crisis as well as on the consequences that the Euro crisis has on state’s power due to the cultural, economic and political polarization. This polarization destabilizes member states and it has serious consequences on the EU cohesion. The member states become even more fragile when they enter a multinational entity such as the EU, which during the Euro crisis does not facilitate a more democratic European governance for their protection. Additionally, in this discussion it will play a vital role the discourse between the national states and markets in a European level concerning the Euro crisis as well as the lack of the EU state/government, which further contributes to state’s inability to control the international markets and their desires. A possible EU government would have been able to protect the member states and their citizens from markets’ desires as well as it would have been avoided a cultural, political and economic polarization that became prominent during the Euro crisis between the Southern and the Northern EU countries. Additionally, the inexistence of a European super-state facilitated by further EU integration, makes the arguments about the role of the state really interesting especially during the economic crisis since a creation of a supra-European nation is needed in order to create a European economic, political and cultural ‘umbrella’ for the indebted EU member-states, which suffer due to the lack of an unanimous political, cultural and economic voice.
over of the political and economic sphere of indebted countries by imposing austerity measures and cuts to the national budgets something that renders the national governments puppets which obey and act according to their desires. It is highlighted that the
power to withhold economic and financial assistance or cut off sources of international loans has enabled the World Bank and IMF to exercise substantial and continuous leverage on a great many national economies. The key to their power lies not only in the financial resources at their disposal but in their capacity to influence the aid programmes of major governments and the lending policies of banks and other key financial institutions.8
Therefore, due to the economic crisis, the EU states have to impose austerity measures to their citizens, which are mostly decided by the financial institutions, like the IMF and the World Bank in conjunction to markets’ ups and downs. The surrender of (economic) power from the state to the IMF assists in the further dissatisfaction of the citizens due to possible problems that may appear in the austerity measures and economic programs. A current example of this is the IMF’s decision concerning the fiscal multipliers of Greece. This led to citizens’ dissatisfaction towards the financial institutions and their states, which in order to survive in the international economic sphere have to satisfy markets’ desires. The states unable to act differently are ‘economically enforced’ to surrender themselves and part of their sovereignty to the markets concerning their national economic policy by following the directives of financial companies.
Certainly, this surrender of power has serious consequences concerning the role and the responsibilities of the state during the economic crisis as well as concerning the EU and states’ social cohesion since more movements like ‘Indignant’ and the ‘Occupy’ movement (i.e Occupy Wall street/London/Greece/Barcelona) made their appearance due to citizens’ dissatisfaction. Despite those movements it has been noticed that more extreme right movements came up like the ‘Golden Dawn’ in Greece, ‘Front National’ in France and ‘Sverigedemokratena’ in Sweden. Furthermore, the enforcement of austerity measures signifies most of the time the destruction of the welfare state which in conjunction to further privatization, economic globalization and development of technology and communication shake
8 Joseph A. Camilleri and Jim Falk, The End of Sovereignty?: The Politics of a Shrinking and
state’s power especially when state’s intervention is needed during the crisis for the protection of society’s poorest groups.
Another obvious example is the fear that those financial companies attempted to spread to Greek citizens during the last elections in June 2012. Most of the representatives of those companies represented the voting for SIRIZA9
as the signification of the Greek exit (GRexit) from the Euro family. Through the brainwashing and unconscious enforcement of their wills to Greek citizens through national media, the financial companies achieved in rendering the last Greek elections into an economic Russian roulette or even worse into a parody of their democratic right to vote. The last and current victim of the companies and financial institutions is Cyprus. Cyprus faced economic problems after the Greek debt cut since Cypriot banks where exposed to the Greek debt. This as a consequence resulted in the cut of the citizen’s savings more than 40%, which triggered citizens’ dissatisfaction. The Greek debt cut shook Cyprus economic sovereignty by rendering the island a victim of the IMF and the EU bank, which imposed their decisions to it.
Moving on to the methodological part of this project, first I will bring forth the most important definitions (by bringing different theorist, such as Max Weber and Machiavelli) about the state and I will explain which definition I will employ and why. Afterwards, I will delve into the ideas about globalization in conjunction to the state by first investigating what globalization means (through the employment of Ulrich Beck’s theory as theoretical background) and what are the consequences for the contemporary state during the economic crisis. This means that I will employ globalization and nation-state theory in conjunction with international markets’ theory. In particular, I will analyze whether the state has transformed into a contemporary entity or it has remained the same. In order to investigate this I will bring up the importance of globalization in destabilizing the state by focusing on state’s power and sovereignty. State’s retaining or losing power is connected to nation-state’s sovereignty, which is also depicted to their citizen’s lives through decision-making. Therefore, in this point I will underline state’s sovereignty in conjunction with the theory and ideas referred in the previous sections of the project.
The shifting or not of the state, is related to the arguments formulated by the two groups of scholars. The first group argues for the retreat of the state whereas the
other group argues for state’s centric position. In this part, important will be Georg Sörensen and Susan Strange’s ideas about the retreat of the state in conjunction to the ideas concerning the state-centric role of the state. The retreat-state scholars show the surrendering of state’s power to non-governmental companies through the privatization of national companies, which assist in the relocation of the state’s power and reposition of state from leader into a regulator of the game. On the other hand, the state-centric scholars argue that the state expands its role and its power through its participation and cooperation with international institutions. I consider the investigation of the role of the state vital since “[t]here is considerable emphasis in this work on the decline or the crisis of the territorial nation-state brought about by the tempo and diffusion of modernizing processes.”10
During the Euro Crisis, the EU states unprotected by markets’ desires, fail to facilitate a more democratic European political and economic voice through the already existing attempts of further integration. The question raised here is that this voice is not enough, thus common fiscal policy as well as common European Treasury are in need. Nonetheless, the most crucial point for Europe is to render its citizens familiar with it and persuade them that in a future economic crisis the citizens of the North have to help the citizens of the South and the opposite. The lack of a more democratic EU governance renders the states straitjacketed concerning the decision-making since they cannot take decisions without considering the rest Euro group or the EU states, while the same time there isn’t any supra-EU state that can protect them from globalization and markets’ desires during the current economic crisis. This democratic EU governance will assist in the protection of the EU citizens as well as it will assist in the more democratic engagement of states in decision making. Therefore, the states are trapped in a limbo concerning the decision-making since by themselves are not able to confront Euro crisis while there is no a supra EU state that can help them, moreover they have to face also the economic, cultural and political polarization facilitated by the Euro crisis and the lack of a cohesive and a more democratic EU voice. Consequently, states surrender a part of their power to the EU and the Euro group by becoming members whereas there is no responsible EU governance that would assist them in case of a crisis. Despite the fact that EU citizens
10 Nassif Hitti, “The Internationalization of the State in the Middle East” in Global Transformation:
observe the inability of EU and Euro group to protect their member states, citizens witness and become victims of the cultural, political and economic polarization that is facilitated during the Euro crisis. This has as a result the revitalization of nationalism and the appearance of extreme right political parties that threaten the democratic state as well as the European integration. This lack of European supra-state assists in the destruction of the individual states as well as of the EU itself during economic crisis, since the state appears weak in front of markets’ power. The EU construction is similar to the Russian Dolls (Babuskas/Matryoshka Dolls-the ones within the other), which means that a possible destruction of the EU or of the individual states will trigger severe consequences for the whole construction.
Moreover, concerning the EU and the Euro group in relation to the states, I will refer to the horizontal and vertical axis as well as to the democratic deficit that exists in decision-making in the European level. The main focus of this chapter is the analysis of Susan Strange’s criteria concerning the role of the state in conjunction to the EU and the current economic crisis. Additionally, this part will include the discussion conducted in the previous chapters about the retreat and state centric arguments concerning the national sovereignty, statehood and globalization in conjunction with the arguments that deal with market’s empowerment or not.
Various Parameters of the ‘State’
The state is related to the whole society although in practice not directly but through state representation, although socialist constitutions stipulate the institution of referendum by which the state can be directly authorized by the society as an entity.11
Before starting our discussion concerning the role and functions of the state in the EU and during the economic crisis, it is important to mention that the role and the functions of the state during Euro crisis became center of my attention due to the fact that (as the above epigraph underlines) the state is the indirect representative of citizens and the whole society. In particular, the EU states are responsible for representing all the European citizens in a higher level of the European structure, though in my opinion this is not as applicable as it used to be before the Euro crisis for various reasons that I will highlight later on. Briefly, the state in Europe is considered as a welfare state, which protects its citizens by putting an end to discrimination and racism by facilitating integration in every level. Europe is based on cooperation within and among states, which are considered sovereign and efficient to exercise their power in a national as well as in European level, though for the last one compromises are required certain for specific policies. The European states depict the social and welfare character of the state, whose main purpose is citizen’s full employment, pension system, low cost education and health-care system, democracy and social inclusion.
Before, getting into deeper with the discussion about the state, first it is important to briefly mention that this chapter will retrospectively provide the most important and related definitions for the ‘state’ to our discussion in order to be able to get a hold of this entity. Therefore, this chapter will bring forth, (a) some definitions about the state, (b) what happens to state’s boundaries, (c) what is the difference between state and nation-state, (d) what is globalization and its relation to the state, (e) the relation of the state to international markets (f) and last what happens with state’s power and sovereignty. I consider this brief retrospective journey on various aspects of the state crucial in order to move on with our discussion about the state as
11 György Szoboszlai, “Theoretical Perceptions of the Nature and Functions of the Nation State,” in
The Role of the State in Social Transformation Under the Impact of the World Crisis: The Case of East Central Europe, Ed.Kalman Kulcsar (Budapest: Institute for World Economics of the Hungarian
well as in order to keep it in mind for the later on analysis of state’s role in relation to the EU and the Euro crisis.
A. State Definitions and its Relation to Different Variables
Get moving with our academic discussion about the definition of state, I will bring forth important theorists who provided various and essential definitions about it. Among them are the well-known theorists Max Weber and Machiavelli. But first as Christopher J. Bickerton underlines in European Integration: From
Nation-States to Member Nation-States, “[i]n order to grasp the dynamics of transformation we need
to identify the tensions and contradictions within the concept of the state as change springs from the attempted resolutions of these contradictions. In addition to its coercive aspects, the state is also a repository of ideas and norms.”12 Therefore I
considered crucial to start at this point with a brief retrospection concerning the definition of the state. In Martin Shaw’s book it is highlighted the Weberian
definition of the state, which is not characterized by class antagonism but rather it is
seen as a political organization that acquires the privilege of the legitimate monopoly concerning the employment of violence which has been pivotal during the twentieth century:
First, Weber defines the state in a way that goes beyond the Marxian idea of it being a product of class antagonisms. A compulsory political organization with continuous operations will be called a ‘state’, he argues, ‘insofar as its administrative staff successfully upholds the claim to the monopoly of the legitimate use of physical force in the enforcement of its order’, in a given territory. The Weberian concept of the monopoly of legitimate violence has remained seminal to understanding the state throughout the twentieth century.13
Therefore, Weber by surpassing the Marxian notion of the state, succeeded to put together an important definition, which remained pivotal throughout the twentieth century. It remained pivotal since Weber’s notion provided a distinctive characteristic concerning state’s power, which is the ‘monopoly of legitimate violence’ that distinguished the state from other entities.
In contrast to the above definition, Joseph A. Camilleri and Jim Flak argue in
The End of Sovereignty?, that the economic organization threatens state’s privilege
concerning the ‘monopoly of legitimate violence’ by highlighting the fact that the
12 Christopher J. Bickerton, European integration: From Nation-States to Member States, (Oxford: Oxford UP, 2012), 57.
Weberian notion of the state has lost its explanatory value due to its inability to point out the change of the economic system as well as to include the relation between economic and politics either in national or international level:
The changing face of economic organization is calling into question Weber’s notion of the state as a territorial entity exercising a monopoly on the legitimate use of violence. It is not that the Weberian interpretation has been proven false, but that it has lost much of its explanatory power precisely because it fails to take sufficient account of the intimate connection between economic and politics, between national and international phenomena, in short the simultaneous internationalization and denationalization of economic organization.14
On top of that, the same authors considered the state as an autonomous and formally co-ordinated institution linked to bureaucratic systems, which renders itself distinctive from other institutions: “[there] was the Weberian model of the state as an autonomous, formally co-ordinated institution. Influenced by the steady expansion of bureaucratic systems of control, this model differentiated the state from other organizations by stressing its reliance on bureaucratic and legalistic methods of regulation and technical criteria of decision-making.”15
As a result, the Weberian definition of the state became an important theoretical landmark, since it incorporated the sociopolitical characteristics of the modern society.
Before Weber’s definition there were academics, who provided various definitions by highlighting state’s characteristics and powers while bearing in mind the social characteristics of various periods. During the nineteenth century, there were writers and theorists who formed the idea of the state as a military organization, which was distinguished by extreme changes in the European geopolitics and the European geographic map: “[o]ther writers of the late ninetieth-century German historical school also contributed [in state’s definition]: Otto Hintze, for example, devoted the idea that military organization was the key to shape of the state. This idea shades into the classical geopolitical theory of Halford Mackinder, imperialist founder of modern geography.”16
Going even further back chronologically, during the sixteenth century, the French philosopher Jean Bodin provided his own definition of the state as a ‘sum or totality of power’ which referred to the state as the final and supreme authority of power: “Only the existence of a political community or state
14 Joseph A. Camilleri and Jim Falk, The End of Sovereignty?: The Politics of a Shrinking and
Fragmenting World (Hants: Edward Elgar, 1992), 99.
15 Ibid, 17.
could give rise to a comprehensive legal system. The state was understood as summa
potestas, a Latin phrase denoting a quality of mystique and majesty, which the
sixteenth-century French philosopher, would subsequently use interchangeably with ‘sovereignty.’”17
Meanwhile, in conjunction to Jean Bodin’s definition, Thomas Hobbes also considered the state as an entity that exercises supreme authority in a particular geographical territory: “[i]t was left to subsequent theorists, notably Bodin and Hobbes, to equate the state with the exercise of supreme authority within a given territory or society. Institutions and individuals in charge of the state represented the highest power in the land, acting as a court of last resort and holding an effective monopoly on the use of force.”18
In addition to that, for Nicollo Machiavelli “the state, […], is an organization of force which ensures security of persons and property. Its success, given the dangers posed by internal corruption and external enemies, ultimately depends on ‘a strong hand and a clear intelligence at the helm.’”19
Therefore, Machiavelli highlighted the protectionist aspect of state as well as the welfare character of the state, which has to take care of its citizens and their properties. Additionally, Machiavelli underlined the various powers of the state as political and material phenomenon through the employment of the following simile, which refers to the state as a centaurs: “[t]his view of state power as both a political phenomenon (command of wills) and a material one (monopoly over force) is given in Machiavelli’s famous account of rulers as centaurs: half–man, half-beast, with the human element corresponding to the need for consent and the bestial element to the exercise of violence.”20
Moving on to the contemporary definitions about the state, Talcott Parsons
and David Easton, as members of the neo-functionalism movement,
defined the state as a political system driven by interest group pressures within a framework of over-arching consensus. […] Neo-functionalism expected political and ideological conflicts to be resolved by the upgrading of the common interest and the replacement of the monolithic concept of ‘national interest’ with a complex of group and individual interest at the international
17 Qtd in Joseph A. Camilleri and Jim Falk, The End of Sovereignty?: The Politics of a Shrinking and
Fragmenting World (Hants: Edward Elgar, 1992), 16.
18 Ibid. 19 Qtd in Ibid.
level where the state, no longer a unified actor in the international system, competed with other non-state actors for the loyalties of its citizens. 21
Therefore, as more of a political entity, the state is guided by interests groups within and outside the national territories as well as it is no longer a unified entity that competes with other actors for the loyalties of its citizens. As it is quoted in Bickerton’s book, Martin Loughlin also supports the idea of the state as a more of a political entity, rather than reduced to private economic power or force: “In his words, ‘the state… is an expression of the realm of a political. In this respect, the specificity of the state is not so much the way in which it has managed to legitimize violence but in its representation of the idea of the autonomy of the political realm: a realm constituted only by a community of human wills, reducible neither to private economic power nor to force.”22
We have to bear in mind at this point that the state is ‘penetrated’ by
different sides. Therefore the loyalty of its citizens is at stake especially if we
considered integration and in particular the European one, which is also characterized by the movement of labors around Europe. In contrast, this definition is in opposition to the definition that the international theory provides for the state, since it is seen as a unified or a ‘glue’ among the nation states, which exist in an international system: “For international theory, on the other hand, states have been unitary competing actors within an international system. The system as a whole has sometimes been seen as constituting the basis for an ‘international society’ of states, but a ‘society without a state.’”23
In other words, “[t]hat is, that in relations with other states, governments adopt a united front, based on an agreed consensus concerning the national interests of the state.”24
Nowadays, the Westphalian25
state is considered as the theoretical cradle for
the discussion concerning the state since now it is taken as the most representative version of the concept state: “The so-called ‘Westphalian state’ is taken as the general
21 Alan S. Milward and Vibeke Sörensen, ”Interdependence or Integration?: A Nation Choice,” in The
Frontier of National Sovereignty: History and Theory 1945-1992, (London: Routledge, 1993), 4.
22 Christopher J. Bickerton, European integration: From Nation-States to Member States, (Oxford: Oxford UP, 2012), 57.
23 Martin Shaw, Theory of the Global State: Globality as an Unfinished Revolution, (Cambridge: Cambridge UP, 2000), 179.
24 Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy. (Cambridge: Cambridge UP, 1996), 68.
representative of a world of states, and anything that seems not to fit with this Westphalian model is seen as suggestive of a move beyond nation states. This is particularly prominent in work on the EU where the discussion is framed in terms of the retreat, return, or rescue of the nation state.”26
Bearing in mind all the aforementioned definitions from various philosophers it is certain that the state does not acquire a concrete and tangible definition. There are multiple definitions due to the fact that the state is related and connected to various alterations of particular socioeconomic and political characteristics of the society during each period. Therefore, there is a noticeable difference between the definition given for the state by a philosopher of the 16th
century with the one who lived during the 20th
century. Similarly, Bodin and Machiavelli highlighted state’s characteristics that were more prominent during those years by perceiving the state as an organization of forces that protects and secures its citizens as well as a supreme authority in a given territory.
On the other side, the contemporary definitions of the state are more
related to state’s interests in conjunction to the international system and the outside
economic and political forces, while bearing in mind the class antagonism as well as the monopoly of legitimate violence. Those social changes that undermine the old-fashioned definitions of the state are also referred by Ulrick Beck in Power in the
Global Age: “[g]enetic modification, communications technology and artificial
intelligence, now also being combined with one another, undermine the state’s monopoly on the use of violence and leave the door wide open to an individualization of war—unless effective measures are taken soon at an international level to bolt it shut.”27 This denotes that each human being perceives itself in various states as alone,
as a single entity and not as a part of a group where the state functions as glue. Therefore, depending on the specific period there are definitions that contribute or change state’s meaning and definition. Therefore, the definition and the meaning of state changes and it is not concrete since it depends on the society’s development. Certainly, the meaning of the state will not be the same in one hundred years from now since technology, communication and globalization will certainly assist in the
26 Christopher J. Bickerton, European integration: From Nation-States to Member States, (Oxford: Oxford UP, 2012), 55.
further change of the political system and consequently in the change of the current meaning of the state.
B. The Nation-State
Moving on with this discussion, this research would be lacking if I wouldn’t refer to the nation-state or as Ulrick Beck highlighted, it would have been like throwing the babe out with the bathwater: “No matter how right it is to get rid of the nation-state fixation—the state no longer being the actor in the international system, but rather one actor among others—it would nonetheless be wrong to throw the baby out with the bathwater […].”28
Therefore, it is crucial here to refer briefly to the relationship between the nation and the state. Bearing in mind the difficulty to pin down what state really means, this issue is further exacerbated due to the inability to
provide a sufficient definition concerning what ‘nation’ is. Therefore, it is also
difficult to define the ‘nation-state’. Balogh Andras highlights in “Changing Role of the Nation-State” that
[t]he concept of the ‘nation’ has been used by various ideologies in various countries in a different manner: at places and at times it was identified with the entire population, at other times only with some classes with the entire occasionally excluding certain categories from it; the consciousness of belonging to a certain nation has not always and everywhere been separated from also belonging to a certain religious community, and the difference between the nation and the state has frequently been blurred. These widely differing interpretations still continue to have their impact.29
Despite the difficulty that exists in defining the nation, there is a blurry distinction
in finding the difference between the nation and the state. Many philosophers and
theorists talked about the ’nation-state’, which “is traditionally envisaged as a single, conscious agent capable of conscious sovereign desire, judgment and action.”30
The nation-state denotes and underlines a developing relation “between the citizens and the state on a certain territory. When this relationship is strengthened, we may say that the nation-state develops or integrates, and that its position in the world system is becoming more self-reliant. When the relationship between a state and its population weakens, we may speak of underdevelopment, disintegration and increasing
28 Ibid 9.
29Andras Balogh, “Changing Role of the Nation-State” in The Role of the State in Social
Transformation Under the Impact of the World Crisis: The Case of East Central Europe, Ed. Kalman
Kulcsar (Budapest: Institute for World Economics of the Hungarian Academy of Sciences, 1986), 86. 30 Joseph A. Camilleri and Jim Falk, The End of Sovereignty?: The Politics of a Shrinking and
dependency.”31
Depending on this relationship, the nation-state evolves or deteriorates, thus its position in the international game is once again reconsidered. In particular, when the relationship between the nation-state and its citizens weakens, then the state disintegrates since its citizens are the most crucial element for its survival, which is facilitated through citizens’ self-identification with it. Its citizens reaffirm and reassert through democratic institutions and in particular through voting, the legitimate power of the nation-state to exercise power on them in order to represent them either in national or international level. The citizens become vital for the existence of the nation state since “[s]tates are characterized by their particular national territories. Associated with that territory are all the people who live within it and who identify themselves, whatever their other differences, as members of that national community.”32
As we have seen from the various definitions of the state, it becomes obvious that during the years the state survived as well as adapted to socioeconomic and
political changes that occurred in society. Therefore, there are theorists, who argue
that the state will continue to adapt in the social changes. One of them is Timson, Peter, who in “The Nation-State and Globalization: A Myth of Diminished Agency?” argues that the state as a political unit “has proved historically resilient in adapting to a changing world. Far be it from drifting into irrelevancy, the nation-state will likely adapt and evolve once more. Through international cooperation, be it regional grouping […] or through international institutional arrangements, it is the state which will continue to primarily shape the world order.”33
The power of the state to adapt to social changes and to the international globalized game is also highlighted by Krasners in “Sovereignty”, who argues that “[t]hose who proclaim the death of sovereignty misread the history. The nation state has a keen instinct for survival and has so far adapted to new challenges, even the challenge of globalization.”34
Other theorists claim that the state will not die but it adapts by transforming according to the society’s demands. Nowadays, the state is transforming into a neo-liberal state,
31 Jan Otto Andersson, “The State in the Transformation of Industrially Mature Societies” in The Role
of the State in Social Transformation Under the Impact of the World Crisis: The Case of East Central Europe, Ed. Kalman Kulcsar (Budapest: Institute for World Economics of the Hungarian Academy of
Sciences, 1986), 74)
32 Joseph A. Camilleri and Jim Falk, The End of Sovereignty?: The Politics of a Shrinking and
Fragmenting World (Hants: Edward Elgar, 1992), 3.
where economy becomes dominant and supersedes state’s political aspect. Moreover, the state has transformed from a state into a member-state something that signifies the modification to the state’s character. Though, this change has serious consequences to state’s identity and power.
Additionally, the state follows the capital and acknowledges the
competition within and among states in national and international markets.
Ulrick Beck asserts that the state transforms and adapts by acknowledging the power of the IMF and the markets, which both become more dominant during the economic game in the international economic chess game where the politics are substituted by economy and economic politics:
While the god of the nation-state may be mortal, it certainly doesn’t mean that the state itself will die (as the national outlook would have us believe). If anything, the situation is more like that in the legend where the hero cuts off the head of the dragon, only to see several new heads grow in its place. A second form into which the model of the old nation-state is transformed in the cosmopolitan constellation is the neo-liberal state. The neo-liberal state is the competition state, the market state, the state figuration in which politics follows the logic of capital. This form of the state bears the ‘IMF-tested’ stamp of approval, as it were.35
The change of the state into a neo-liberal state, which focuses on the capital, market and economic antagonism, renders itself into being subjected and observed by the IMF, which plays an important role for its survival. Therefore, this change signifies the shifting of state’s identity into a more submissive entity that has to obey the IMF’s demands. This submissiveness to the IMF can create frictions in the relations between the state and its citizens since the state has to implement measurers according to the IMF’s demands, which are not pleasant for its citizens. The IMF has an economic panoptic view36 of the state due to the shift of its character:
35 Ulrick Beck, Power in the Global Age (Cambridge: Polity Press, 2005), 261.
The probability that the nation-state will be transformed into a neo-liberal state grows in parallel with the process of states’ disciplining in line with the demands of the global economy, something forced upon them by the IMF as a result, in particular, of the carrot-or-stick policy consisting of either the threat of loan withdrawal or the offer of loans. In this sense, a worldwide ‘Panopticon System’ (Patomäki 2001:101) exists in which agencies that establish creditworthiness probe and judge states, corporations and municipal communities according to whether they follow the rules of ‘good’, that is, neo-liberal, budgeting. As the twenty-first century begins, the IMF is monitoring the economic policies of at least every third ‘sovereign’ state on the planet.37
Therefore, the IMF functions as an economic Panopticon that observes all the indebted states. This surveillance can create huge frictions within the states concerning the exercise of its power as well as concerning state’s sovereignty.
Moving on, at this point I bring light to what happens to the state’s
boundaries in our contemporary globalized and constant shifting society since it
becomes obvious that due to globalization and constant changing society the state boundaries are either broken down or are reinterpreted. The question raised here is: what is the reason that state’s boundaries broke down as well as what this means for the state. The reason hidden behind the erosion of state’s boundaries lies in the social advances of transport and communication: “[a]dvances in transport and communication technology are rapidly eroding the boundaries between hitherto separate national markets—boundaries that were a necessary requirement for national economic management.”38 This change in conjunction to “[c]limate change,
environmental consequences of innovations in genetics, human genetics, nanotechnology, and so forth, all serve to call into question in a quite tangible way the very foundations of social life. The nation-state has ceased to be the way the very foundations of reference that encompasses all other frames of reference and enables political answers to be found.”39
Consequently, the nation-state is no longer the
main reference for providing answers to political questions. The transformation of
the state into a member state also opened the boarders of the state either metaphorically or literary through the movement of citizens around Europé as well as through a more European governance. Therefore, another entity that takes over
37 Qtd in Ulrick Beck, Power in the Global Age (Cambridge: Polity Press, 2005), 261p.
38 Qtd in David Held and Anthony McGrew, “Globalization and the Liberal Democratic State,” in
Global Transformation: Challenges to the State System, ed. Yoshikazu Sakamoto (Tokyo: United
Nations UP, 1994), 64.
instead is the member-state that is even more confusing entity comparing to what
state is considered.
Though the “[t]he interesting questions appear to be about how boundaries are broken down, or at least reinterpreted, in an era of rapid social change and globalization.”40
The boundaries broke down due to state’s weakness to avoid entering in the international economic game of the globalized society or its inability to control and regulate the whole game. For the state, taking part in international economic competition is the only solution in order to survive economically and politically during the fierce competition. Notwithstanding, the question-raised deals with what does the erosion of the national boundaries mean for the state? Ulrick Beck argues that “[n]ational boundaries provide protection against competition. The removal of boundaries […] intensifies competition, albeit a particular kind of competition, namely that between people […]. Nation-state boundaries are of crucial importance to individual members of a profession (or office-holders): they reduce and channel competition within the system of professional qualification.”41
As a result, the weathering of state’s boundaries is of great importance for the national market, its citizens and their welfare.
C. Globalization and the Nation-State
Considering the above discussion it becomes obvious that globalization takes the leading role as the main reasons for the erosion of state’s boundaries. Nevertheless, it is vital at this point to provide some definitions about what globalization is, since I consider that globalization as a term brings a lot of trouble. Martin Wolf defines globalization as a “journey, but towards an unreachable destination, the globalized world. A globalized economy in which neither distance nor national borders impede economic transactions. A world where the cost of transport and communication were zero and the barriers created by differing national jurisdictions had vanished.”42
Therefore, according to Wolf the world becomes one where the barriers broke down while national jurisdiction has vanished. As Beck has cleverly put it ““[g]lobalization means domination by nobody. Nobody started it, nobody can stop it, and nobody is responsible. The word ‘globalization’ stands for
40 Martin Shaw, Theory of the Global State: Globality as an Unfinished Revolution, (Cambridge: Cambridge UP, 2000), 174.
41 Ulrick Beck, Power in the Global Age (Cambridge: Polity Press, 2005), 99.
organized irresponsibility.”43
This organized irresponsibility becomes extreme dangerous in case of economic crisis since nobody is responsible for it while everyone gets affected. In other words, some people get rich by using the system and national economies, while due to the organized irresponsibility some are able to escape without any charge or blame. Though, a more tangible definition is highlighted by Camilleri and Flak, for whom globalization appears like “[…] the internationalization of trade, finance and corporate organization, the globalization of the security system, the rapid transformation of technology, the accompanying spread of ecological problems, and the emergence of new social movements with both a local and transnational consciousness.”44
I will also come and add that globalization besides being one reason of the economic crisis for the small uncompetitive and weak nation-states; it is also the main reason for the spread of the crises, like the ecologic crisis.
Additionally, “globalization has become associated with a ‘crisis of the territorial nation-state.’”45
The state is not restricted to its territorial nation-state but it is trespassed by the powers of the global market, which become important for the economic survival of the individual state. The state is not any more the only player, which can set the rules since more
[i]nternational organizations such as the Organization for Economic Cooperation and Development (OECD), the international banks, UN agencies, and regional organizations such as those of the European Community, play an increasingly complex and vigorous role in cultivating and shaping corporate development in a time of intense technological and economic competition in a rapidly integrating global market.46
Consequently, the game is conducted somewhere else, outside the nation-state’s borders where the state used to put the rules and dominate the entire nation. The economic game has evolved and transformed into something different characterized by different rules from the older game, ”which goes by many names, such as ‘nation-state’, ‘national industrial society’ ‘national capitalism’ or even ‘national welfare state’, can no longer be played on its own.”47
The new game is characterized by
43 Ulrick Beck, Power in the Global Age (Cambridge: Polity Press, 2005), 55.
44 Joseph A. Camilleri and Jim Falk, The End of Sovereignty?: The Politics of a Shrinking and
Fragmenting World (Hants: Edward Elgar, 1992), 3.
45 David Held and Anthony McGrew, “Globalization and the Liberal Democratic State,” in Global
Transformation: Challenges to the State System, ed. Yoshikazu Sakamoto (Tokyo: United Nations UP,
1994), 58.
46 Joseph A. Camilleri and Jim Falk, The End of Sovereignty?: The Politics of a Shrinking and
Fragmenting World (Hants: Edward Elgar, 1992), 6.
“politics [, which] is no longer subject to the same boundaries as before, and it is no longer tied solely to state actors and institutions, the result being that additional players, new roles, new resources, unfamiliar rules and new contradictions and conflicts appear on the scene.”48
Another important element that is raised here due to the interaction between
the state and globalization is whether state’s power becomes an object used by the
global political and economic centers of power. If this is true then this certainly highlights the fact that globalization is the one who is in charge of the strings that facilitates changes in the global arena. Therefore, the collective political action either in national or international level is broken down into a more complex process, which is characterized by the transcending of the sub-political and global political power. As Ulrick Beck has brought up “the very foundations of state power themselves become the object of global political and global economic strategies of power. Yet this means that it is globalization and not ‘the state’ that defines and changes the arenas of collective action.”49
On top of that, the absence of state power has been the main reason for the over empowerment of globalization as an entity through which the global business actors take over the national and international political scenes around the world. Therefore, “[i]t is not the relativization of state power but rather its absence altogether that gives global business actors the rights to be the first to legislate.”50
Rounding up, this discussion about the state in conjunction to globalization, it is important to underline the fact that ‘capital’ becomes the main object of political discussion. During the twenty-century, “states have accumulated economic (and social) functions which their predecessors mostly did not posses, while even some core functions of states have been privatized to corporations”51, even though (in my
opinion) at the end of the 20th
century and during the beginning of the 21st century the transfer of state’s functions to private corporations has become common phenomenon especially during the current economic crisis. This is highlighted by Susan Strange, who underlined the fact that there was a transfer or share of state’s functions of authority with other authorities or with other states:
48 Ibid. 3-4.
49 Ibid, 3. 50 Ibid, 142.
[…] on many issues most states have lost control over some of the functions of authority and are either sharing them with other states or with other (non-state) authorities. The outcome in some cases is that no one is responsible for authority functions, even though they may pretend to be. It presumes some general decline in the power of most states and some gain in the authority of world markets and of enterprises operating in world markets. This shift away from states and towards markets is probably the biggest change in the international political economy to take place in the last half of the twentieth century.52
D. Sovereignty and the Nation-State
This thesis would be lacking, if I would not bring up the issues concerning ‘state’s
sovereignty’ and what are the consequences of the above discussion to the
aforementioned entity. Notwithstanding, it is important to bring forth what is ‘sovereignty’ by providing a brief definition about it in order to have a pretty good idea about the aforementioned entity (state) something that it will contribute to our discussion later on. According to Guigo Wang in “The Impact of Globalization on State Sovereignty”, sovereignty is the “[a]bsolute supremacy over internal affairs within its territory, absolute right to govern its people, and freedom from any external interference in the above matters.”53
In other words, a state is considered sovereign when it is not in need of external power or assistance concerning the regulation of the state, while it is able to implement smoothly the national law within its specific territory. Certainly, a state is also sovereign when it provides the fundamental and basic welfare to its citizens. On top of this definition, comes the definition that Martin Shaw provided who regarded the state as a source of power which is internationally legitimated: “A state is a state when it is recognized by its citizens and/or by other states as a sovereign, i.e. supreme, authority within a given territory. A sovereign is thus a nationally and internationally legitimate institution of power.”54
Even so, for me this last definition entails a mistake since someone can say that state’s sovereignty is mostly defined through international legitimate acknowledgement only.
Many times, state sovereignty is related to the economic sovereignty of the state thus this thesis will attempt to indirectly underline the fact that nowadays state’s sovereignty is aligned with the state’s economic competence:
52 Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy. (Cambridge: Cambridge UP, 1996), 42-43.
53 Wang, Guigo “The Impact of Globalization on State Sovereignty,” Chinese Journal of International
Law, 3 (2004): 473.
