The Role of The State Beyond Boundaries
Globalization can be understood as neoliberalism that operates at the international level. It aims to liberalize both trade and finance to facilitate the functionings of markets of the world, thereby creating an international investment climate in which capital and tradable goods and services can move freely. Nevertheless, there is no such a thing as self-regulating markets: the Great Depression taught us that. Hence, a much stronger state is required to redesign the world system in a way that favors capital accumulation. As a result, supranational bodies—or international organizations—are established for this very purpose.
It is usually argued that globalization has clear benefits, since it opens up markets so that resources will be allocated optimally. The problem, according to the mainstream perception, is that states try to pursue their own goals and, hence, cannot act in one voice. Therefore, international organizations are meant to solve the coordination failure and realize the gains from globalization. However, this is not necessarily true.
This view of institutions as harmonizing, free-of-biases devices lacks historical context and deep structural analysis.
Although it is true to a certain context, this interpretation leaves out the unequal power relations between the rich and poor countries. Robert Cox, a scholar in the critical studies of international relations, argues that:
“Among the features of international organisation which express its hegemonic role are the following: (1) they embody the rules which facilitate the expansion of hegemonic world orders; (2) they are themselves the product of the hegemonic world order; (3) they ideologically legitimate the norms of the world order; (4) they co-opt the elites from peripheral countries and (5) they absorb counter- hegemonic ideas.”
Robert Cox. “Gramsci, hegemony and international relations: An essay in method” in Stephen Gill, Ed. Gramsci, Historical Materialism and International Relations. Cambridge: Cambridge University Press, p. 62.
In other words, international institutions are not neutral but humanly devised. For this reason, they serve merely as mechanisms of a world hegemon to enforce, expand, and reproduce economic and social forces that best suit its interest. It is also this reason why the historian of international history Quinn Slobodian points out that one of the grand success of the neoliberal world order is the establishment of the World Trade Organization, because it helps lower almost all barriers to trade. As a reminder this could be achieved only though the exercise of state power to rewrite the international rules. This accentuates even more the fact that globalization requires stronger states to operate.
The WTO appears to be a rule-based organization, but it is not. It is more of a power-based one.
The institution is heavily influenced by developed countries, such as the United States, making it very unlikely for developing countries to truly pursue their agenda. India, however, is an exception. Due to its brilliant strategies, India managed to utilize the WTO to suit its interest and has become even more economically powerful at the moment. Yet to say that all countries, especially the poorer ones, can be like India if they try hard enough is only a partial diagnosis of the disease. It ignores the fundament cause of the problem, which is the unequal power relations in the current world system. For this reason, it is also important to include the “structural factors” in the analysis. Otherwise, it is questionable whether the problem will be truly solved.
It is plain to see that unlike the general claim that the state is irrelevant, globalization NEEDS the power of the state to shape institutional frameworks that allows more capital accumulation on a world scale.
Impacts
Neoliberalism/Globalization has altered the role of the state to favor only corporates and multinational companies. However, as it turns out, an international investment climate comes at the expense of the rest of the world. The transition devastates the lives of the majority of people around the world. Using the context of Thailand, Seksan Prasertkul, a former student leader of the October uprising and later a renowned political scientist at Thammasat, states that globalization poses three challenges to the Thai state itself, yet I believe his argument could also be applied to any states as well.
First, it creates a “democracy without sovereignty” (“ระบอบประชาธิปไตยที่ไร้อธิปไตย”). That is, the state has lost its control over certain domains and can no loner manage its own national affairs because it has submitted itself to the global governance, (such as the WTO, the European Union, the International Monetary Fund, etc.)
Second, it leads to “the state of a two-class society” (“สภาวะหนึ่งรัฐสองสังคม”), in which investment projects from aboard divide the society in half. With the altered role of the state that very much favors capital accumulation, it is impossible for the prosperity to trickle down to everyone. As it turns out, the rich and the rest are living a different world because of the heavily concentrated wealth.
Lastly, it is “the undemocratic exercise of power of a democratic government” (“การใช้อำนาจของรัฐบาลประชาธิปไตยท่ีขาดฉันทานุมัติ”). As already mentioned throughout the essay, the state has become much more powerful in the age of globalization, and with such power, the state would no longer have to listen to the voices of the people as much as before.
Nonetheless, the state always claims that everything it does, despite the tremendous cost that the ordinary people have to bear, is best for the “national interest.” But is that so? It is striking that these two words, six syllables always appear in the negotiation process but their meaning is hardly discussed in the practice of diplomacy these days. So once again, let’s ask ourselves:
What exactly is a “national interest”?
(To be continued in the next issue)
