FREE ESSAY ON GLOBAL CAPITALISM

GLOBAL CAPITALISM

Global capitalism and the state
'Globalization' is a term that has come to be used in recent years increasingly
frequently and, arguably, increasingly loosely. In a close analysis of the term, the
author focuses on the concept of globalization as the transcendence (rather than the mere
crossing or opening) of borders arguing that this interpretation offers the most
distinctive and helpful insight into contemporary world affairs. The article goes on to
explore one of the key questions raised by this trend, namely how the growth of
supraterritorial space has altered capitalism in general, and the role of the state
within capitalism in particular. The author concludes by suggesting that globalization
poses a threat, it is not (as is often argued) to the state itself, but rather to
democracy
A number of commentators on globalization have recently speculated that the logic of
modern economic development is making the state redundant.* The argument is hardly new.
Early in the twentieth century both Leninists and certain liberal internationalists
forecast the demise of the state. Functionalist theories of international integration
reiterated the prediction in mid-century while some versions of what was called
'transnationalism' recycled the argument in the 1970s. In the latest revival, several
best-selling management consultants of the 1990s have suggested that, with the
contemporary advance of globalization, the state has seen its day.1 In a similar vein,
various public policy analysts have proposed that global companies are creating a world
beyond states and nationalities.2 
As in previous rounds of this debate, 1990s predictions of the end of the state have
provoked insistent refutations. For example, in a series of publications Paul Hirst and
Grahame Thompson have maintained that arguments of globalization are greatly exaggerated
and that states retain many crucial capacities for governance.3 In the realist tradition
of international relations theory, Stephen Krasner has affirmed that in the late
twentieth century 'de facto [state] sovereignty has been strengthened rather than
weakened'.4 Sociologists like Michael Mann who 'brought the state back in' to their
discipline during the 1980s have also been skeptical of any proposition that the state is
making its exit from history.5 
Of course one can, like Mann, refute the globalism of Reich et al. without turning to the
realism of Krasner et al. In this vein Susan Strange has described important shifts in
the quality as well as the quantity of state power and authority.6 For his part Phil
Cerny has traced a transition 'from the welfare state to the competition state' in
advanced industrial economies, as governments 'attempt to respond to, and shape and
control, growing international economic interpenetration'.7 Other, more deeply critical
analysts of international political economy have proposed that, under globalizing
capitalism, a globally oriented state and/or suprastate governance agencies are - without
adequate democratic control - supplementing, if not substantially supplanting, the
territorial nation-state of old.8 
This article likewise regards the relationship between globalization and the state in
terms of subtle interplays of continuity and change. Broad underlying continuity is
discerned in so far as the state and interstate relations persist at the core of
governance arrangements in the contemporary globalizing world. Yet there is also notable
change in the character of the state: its capacities; its constituencies; its
policy-making processes; its policy contents; and so on. 
This thesis is developed below through an analysis of global capitalism. Both the causes
and the consequences of globalization are substantially bound up with a capitalist
political economy.9 On the one hand, the dynamics of surplus accumulation have been a
major force behind contemporary globalization and on the other, globalization has
considerably reshaped the workings of capitalism, including in particular the activities
of the state. 
To be sure, globalization cannot be reduced to a question of capitalism alone. Thus, when
taken as a whole, my study of globalization has not espoused a narrow materialist
political economy, it has also accorded causal significance to structures of, for
example, identity, community, knowledge, and ecology.10 Yet no account of globalization
and the state is adequate without extended attention to capitalism either, and it is
regrettable that so much analysis of globalization has neglected even to consider the
importance of processes of surplus accumulation. 
The remainder of this article elaborates an argument concerning the changing state under
circumstances of globalizing capitalism in three sections. First, in view of the great
diversity and the usual vagueness of notions of 'globalization', it is necessary to
specify how that term is understood in the present context. I argue in the first section
that 'globalization' acquires a distinctive and analytically extremely helpful meaning
when it is conceived of as the spread of 'supraterritorial' or 'transborder' relations.
This approach contrasts with the more prevalent conceptualizations of globalization as
'internationalization' and/or 'liberalization'. 
The second section examines in general terms the relationship between globalization and
capitalism. As a causal force, processes of surplus accumulation are seen to have
encouraged the rise of supraterritoriality in three broad ways, namely, through the
pursuit of (a) larger market range; (b) lower costs of labor, taxation, and regulation;
and (c) new opportunities for accumulation through intangible items such as information,
telephone conversations, and mass media productions that circulate in global space
itself. At the same time, globalization has also had major repercussions for capitalism.
For one thing, a great deal of capital has adopted a supraterritorial mode of
organization: in terms of trans-border companies, global strategic alliances, and
transworld business associations. Furthermore, struggles for world market position in the
present globalizing economy have encouraged waves of mergers and acquisitions between
firms both within and between countries. As a consequence, levels of concentration have
risen in many industries. Globalization has also effected a substantial
deterritorialization of money that key channel of capital accumulation. 
Having developed this broader account of global capitalism, the article turns in the
third section to the character and activities of the state in relation to transborder
accumulation. Here it is argued that global capitalism has contributed to: (a) the end of
sovereign statehood; (b) a rise of supraterritorial constituencies; (c) possibly, a
decline in interstate warfare; (d) increased constraints on state provision of social
security; (e) a growth of multilateralism; and (f) the impracticability of achieving
democratic governance through the state alone. In sum, then, although the state survives
under globalizing capitalism, it is in at least six important respects a different kind
of state.
Bibliography
New York,1979