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Dani Rodrik
Published: Thursday 16 February 2012
“For now, people still must turn for solutions to their national governments, which remain the best hope for collective action.”

The Nation-State Reborn

One of our era’s foundational myths is that globalization has condemned the nation-state to irrelevance. The revolution in transport and communications, we hear, has vaporized borders and shrunk the world. New modes of governance, ranging from transnational networks of regulators to international civil-society organizations to multilateral institutions, are transcending and supplanting national lawmakers. Domestic policymakers, it is said, are largely powerless in the face of global markets.

The global financial crisis has shattered this myth. Who bailed out the banks, pumped in the liquidity, engaged in fiscal stimulus, and provided the safety nets for the unemployed to thwart an escalating catastrophe? Who is re-writing the rules on financial-market supervision and regulation to prevent another occurrence? Who gets the lion’s share of the blame for everything that goes wrong? The answer is always the same: national governments. The G-20, the International Monetary Fund, and the Basel Committee on Banking Supervision have been largely sideshows.

Even in Europe, where regional institutions are comparatively strong, it is national interest and national policymakers, largely in the person of German Chancellor Angela Merkel, who have dominated policymaking. Had Merkel been less enamored of austerity for Europe’s debt-distressed countries, and had she managed to convince her domestic electorate of the need for a different approach, the eurozone crisis would have played out quite differently.

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Yet even as the nation-state survives, its reputation lies in tatters. The intellectual assault on it takes two forms. First, there is the critique by economists who view governments as an impediment to the freer flow of goods, capital, and people around the world. Prevent domestic policymakers from intervening with their regulations and barriers, they say, and global markets will take care of themselves, in the process creating a more integrated and efficient world economy.

But who will provide the market’s rules and regulations, if not nation-states?Laissez-faire is a recipe for more financial crises and greater political backlash. Moreover, it would require entrusting economic policy to international technocrats, insulated as they are from the push and pull of politics – a stance that severely circumscribes democracy and political accountability.

In short, laissez-faire and international technocracy does not provide a plausible alternative to the nation-state. Indeed, the erosion of the nation-state ultimately does little good for global markets as long as we lack viable mechanisms of global governance.

Second, there are cosmopolitan ethicists who decry the artificiality of national borders. As the philosopher Peter Singer has put it, the communications revolution has spawned a “global audience” that creates the basis for a “global ethics.” If we identify ourselves with the nation, our morality remains national. But, if we increasingly associate ourselves with the world at large, our loyalties will expand, too. Similarly, the Nobel laureate economist Amartya Sen speaks of our “multiple identities” – ethnic, religious, national, local, professional, and political – many of which cross national boundaries.

It is unclear how much of this is wishful thinking and how much is based on real shifts in identities and attachments. Survey evidence shows that attachment to the nation-state remains quite strong.

A few years ago, the World Values Survey questioned respondents in scores of countries about their attachments to their local communities, their nations, and to the world at large. Not surprisingly, those who viewed themselves as national citizens greatly outnumbered those who regarded themselves as world citizens. But, strikingly, national identity overshadowed even local identity in the United States, Europe, India, China, and most other regions.

The same surveys indicate that younger people, the highly educated, and those who identify themselves as upper class, are more likely to associate themselves with the world. Nevertheless, it is difficult to identify any demographic segment in which attachment to the global community outweighs attachment to the country.

As large as the decline in transport and communications costs has been, it has not obliterated geography. Economic, social, and political activity remains clustered on the basis of preferences, needs, and historical trajectories that vary around the globe.

Geographical distance is as strong a determinant of economic exchange as it was a half-century ago. Even the Internet, it turns out, is not as borderless as it seems: one study found that Americans are much more likely to visit Web sites from countries that are physically close than from countries that are far away, even after controlling for language, income, and many other factors.

The trouble is that we are still in the grasp of the myth of the nation-state’s decline. Political leaders plead impotence, intellectuals dream up implausible global-governance schemes, and the losers increasingly blame immigrants or imports. Talk about re-empowering the nation-state and respectable people run for cover, as if one has proposed reviving the plague.

To be sure, the geography of attachments and identities is not fixed; indeed, it has changed over the course of history. That means that we should not entirely dismiss the likelihood that a true global consciousness will develop in the future, along with transnational political communities.

But today’s challenges cannot be met by institutions that do not (yet) exist. For now, people still must turn for solutions to their national governments, which remain the best hope for collective action. The nation-state may be a relic bequeathed to us by the French Revolution, but it is all that we have.

Absolutely correct We have

Absolutely correct We have been trying to force "Global Economics" into a "National Economy" world and we have reaped the consequences - because of the huge Trade Deficits the US has allowed to happen via so called Free Trade, we have offshored one half our manufacturing base along with 12 Million jobs. and at the same time allowed unprecedented immigration into the nation, both legal and illegal, thereby inflating the worker force to the point wages have decreased because of too many workers chasing too few jobs, and with lower wages come lower general demand, and with lower general demand comes shrinkage in consumption and with lower consumption comes store closures and layoffs, leading to fewer jobs and lower demand leading to more decline in consumption. Its a visiuous circle which our leaders dont get
We need to produce everything we consume!!!!! and import nothng!!!
Any international trade has to be exactly balanced You, Germany, buy 5000 of our cars and we will buy 5000 of your cars If you keep our cars out through trade barriers (which they do) , we will keep yours out via Protective Tariffs"

Brad, the great challenges on

Brad, the great challenges on the human agenda reach across political boundaries. We respond to minor ones like controlling air traffic, world health, communications, etc., by international organizations. The big ones like climate change of course reach across boundaries and require golbal, international action. The Kyoto Treaty, however, shows that national governments are the primary players. We are in transition to movement in power from national states to international organization and downward to cities as states. The U. S. model of federalism is a model for the emerging international order. Some problems are best addressed at the international level, some at the regional or local level. We should be pragmatice and incremental as we create creative responses.

Rodrik has been drinking the

Rodrik has been drinking the cool aid. As much as we all would like to think globalism is dead it persists. The national governments were ordered at financial gun point to bail out the banks. In fact the banks have had the collective taxpayers of these nations as lenders of last resort for many years. The bond market and banks rely on taxation to operate with the tax collector, government, as a middle man.

This whole system is so bogus I feel queasy every time an article like this comes along. This system is called fractional reserve banking. Under this system all money and credit is created by private for profit banks. What could you do with a monopoly over all the world's money supply? It is the biggest on going fraud ever created by man. Now this system has gained for the bankers and the corps around them such power and wealth they have a vitual strangle hold over what is left of the western democracies.

google "The Money Masters", watch the video to see what we're up against. As MacKenzie King (Canadian Prime Minister during WWII) said:
"Until the control of the issue of currency and credit
is restored to government and recognized as its most
conspicuous and sacred responsibility, all talk of
sovereignty of Parliment and of democracy is idle and
futile... Once a nation parts with control of it's credit,
it matters not who makes the laws....
Usury once in control will wreck any nation."

Globalism is not dead simply because the peoples of the nations of the world disagree with globalism's outcome of increased poverty and inequality. It will die only when the peoples take back their right to control their own economic destiny by ending fractional reserve banking for once and all. Anything less and the "Money Trust" will simply bide their time till once again they regain the complete power of authourity over all nations as now by the issuence of all money and credit as debt owed to them.

This esay is a lump of bankers s^*&#@. The "Monet Trust" likes hollowed out nation states as they are most pliable.

Well, i think globalization

Well, i think globalization has certainly failed in the sense that 30 years or so into it it is not producing very good results, and the system is fragile in new, unexpected ways. (For example, a serious flood in Thailand has the effect of knocking out 30% or so of the world's capacity for manufacturing disk drives. Why on earth can't every industrialized nation make disk drives for their own people?)

I don't think Rodrik is hostile to this point, but he may have to be very guarded just to keep his writing in print --- the establishment, which will barely mention globalization, is still strongly committed to it.

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