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Sunday, August 23, 2009

"Fictional Sovereignties"

More side of the road blogging (still traveling):

Fictional Sovereignties, by Robert Skidelsky, Commentary, Project Syndicate: ...The world's population is about six billion. Suppose it was divided into independent political units of two million people each. That would mean 3,000 micro-states, each refusing to accept any sovereignty superior to its own. Of course, this would be a recipe for global anarchy.

Yet the trend over the past century has been toward a continuous increase in the number of small states, mainly owing to nationalist revolts against multinational empires: the latest bout of state creation followed the disintegration of the USSR.

Even long-established states like the United Kingdom now have strong separatist movements. In its political life, the world has been regressing to a form of tribalism, even as its economic life has become increasingly globalized.

The equation of state with nation is the arch-heresy of our time. A "nation" is, at root, an ethno-linguistic ― occasionally religious ― entity, and because it is through language and liturgy that culture is transmitted, each nation will have its own distinctive cultural history, available for use and misuse, invention and discovery.

The state, however, is a political construction, designed to keep the peace in an economically viable territory. There are simply too many "nations," actual or potential, to form the basis of a world system of states, not least because so many of them, having been jumbled up for centuries, cannot now be disentangled.

Micro-states can never be made small enough to satisfy their advocates' exalted standards of cultural integrity. So the unraveling of multinational states is a false path.

The way forward lies in democratic forms of federalism, which can preserve sufficient central authority for the purposes of statehood, while respecting local and regional cultures.

Today's upsurge of micro-nationalism is not just a consequence of the revolt against empires: it is also a revolt against globalization.

There is widespread resistance to the idea that the chief function of modern states is to slot their peoples into a global market dominated by the imperatives of efficiency and cheapness, heedless of the damage to non-economic activities.

This feeling is strengthened when the global economy turns out to be a global casino. National assertion is a way of combating impersonal forces and remote authorities.

Globalization promises too much in terms of welfare gains, particularly to developing countries, to be abandoned.

But the lesson from the current crisis is that we will have to develop styles of global economic governance to manage, regulate, and mitigate the creative, but often disruptive forces unleashed by the global market.

In the absence of an actual world government, this can be done only through cooperation among states. The fewer "sovereigns" there are, the easier it will be to secure the necessary cooperation.

The Bretton Woods Agreement of 1944, which laid the institutional foundation for the postwar World War II economy, was made possible because the United States and Britain called the shots.

When objections were raised to Cuba being put on the drafting committee, Harry Dexter White, the American representative, remarked that Cuba's function was to provide cigars.

Such a cavalier attitude to the demands of lesser powers to be heard is no longer possible. But all this means is that the facades will have to be more subtle and the fictions more elaborate.

Provided we do not deceive ourselves about where real power lies, let presidents and parliaments be three a penny if that is what makes people feel good about themselves.

I agree that we shouldn't deceive ourselves about where the real power lies, but we also need to recognize that as other economies around the world develop, the distribution of power will shift, something that global institutions must begin to incorporate into their governance structures (the power shift is already happening, even more so after the war in Iraq and the financial crisis undermined the authority of the U.S.).

    Posted by on Sunday, August 23, 2009 at 03:39 PM in Economics | Permalink  Comments (21)


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