TMA 06 - 19/8/98J.P.BIRCHALL PO194869
The globalisation of economic activity is transforming the conditions of democracy in nation states?
Introduction.
The nation state is facing a dilemma, globalisation is undermining its authority, but non participation will risk the future prosperity of its citizens.
Globalisation is the increasingly uneven intensified interconnectedness of economic, political, social, cultural, environmental and military domains. One country’s actions effect others as communications intensify relationships and boundaries dissolve, encroaching on the environment. Global co-operation becomes a necessity.
This profound shift, or transformation, renders the nation state impotent. With limited territorial jurisdiction the state cannot control global economic activity.
McGrew’s summary is restrained,
‘in a world in which the organisation of social, economic and political life has acquired a significant global dimension, the efficacy of territorially delimited democracy is somewhat challenged’ [1].
However, although globalisation threatens the state it presents an opportunity for civil society.
Driven by burgeoning trade, underpinned by innovative technology and communications, diverse global co-operative associations are flourishing with the capacity to resolve the pressing problems of economic deprivation, military oppression, environmental degradation and gender bias.
The dilemma for the state is exacerbated as order is achieved only by coercive command with inevitable losers. However if global interconnectedness is seen as part of an evolutionary process order is self regulating, thriving on the diversity and innovations of civil society, a win win situation. It is in civil society that democracy is flourishing.
Globalisation of economic activity.
The rise of the nation state at the expense of the church has its origins in the advantages of economies scale in production and war. The same economic advantages now drive globalisation.
David Ricardo was the first to describe the globalisation process. Everybody and every nation can benefitfrom trading because comparative advantage [2]. Globalisation is an extension of trade between communities.
John Stuart Mill described how liberal democracies constitutionally constrained the state enabling market trading in civil society [3]. Civil society is the force behind globalisation. The problem is with state collective decisions and state ‘enhancement’ of civil society.
However, the state’s demise is not democracy’s demise as the ‘deep structure’ ordering society is not the Westphalian nation state but evolved order from custom and practice which nurtures the economic advantages of co-operation.
Thus, the transformationalists and the sceptics are both right. Fundamental shifts are underway but the process is nothing new, it is evolution which has a historical continuity and produces an ordered global whole [4].
The four schools.
Although there are four schools of globalisation theory separation is a cul de sac, economics is politics, is military, is environment, is social and is recognised by Cox,
‘no one area of human activity is isolated, no one is untouched by the condition and activities of others. But this has been hidden by our mental habits of fragmenting and isolating domains of knowledge’ [1].
But these mental habits have seduced political scientists.
Realists suggest continuance of nation state orchestration, where power politics produces new solutions.
Radicals think of a new start with philosopher kings who ‘know’ the answer is to break the rule of capital.
Cosmopolitans talk optimistically of states and people, able and willing to organise themselves democratically and vote for human salvation.
Liberal internationalists propose a multiplicity of co-operative groups not spontaneous self regulation but institutions understood in terms of designed law to ameliorate the problems of society.
All these schools offer planned solutions, derivatives of Westphalian order, with hands on institutions of global governance and legitimised by established world views of nationalism, socialism or liberal democracy. They do not conceive of the self regulating possibility of evolving capitalism.
It follows that the key questions about the transformation of the conditions of democracy concern the efficacy of new forms of global governance and the democratic credentials of self regulation in civil society?
World order. Command and control.
It is an impossible dream to reap the benefits of economic globalisation without the consequences. The unpalatable truth suggests that the benefits only accrue if state control is forgone.
The benefits of economic activity result from innovations. Innovations are hitherto unconnected connections. This definition immediately exposes why innovation is difficult to command and why diversity in civil society is preferred.
But command and control not only slows innovation, it also has associated democratic deficits. McGrew assumes a command solution through global governance but,
‘in establishing global forms of governance new concentrations of power are created which lack democratic credentials’ [1].
Command involves winners and losers which handicaps the nation state as losers don’t vote yes!
This inherent difficulty led Pareto to criticise the concept of the common good and propose an efficiency based on principles of co-operation and trade where,
‘activity leaves participants better off without others being worse off’ [5].
This theme of the intrinsic advantages of co-operation run through the whole debate on the globalisation of economic activity.
Not only are top down solutions ineffective they are also undemocratic.
World order. Economic advantage in global civil society.
McGrew partially concedes the solution,
‘global governance refers to formal and informal mechanisms for controlling international activity’ [1].
Rosenau supports the possibility of self regulated civil society,
‘it is possible to conceive of governance without government’ [1].
This is not only possible but all civil society has emerged from informal ‘regulation’, as illuminated by Braudel [6].
However, Cox rejects of the very notion,
‘the self regulating market did not come about naturally or spontaneously. It was the creation of the state’ [1].
This ignores the existence of markets long before nation states.
When Cox suggests,
‘the global economy is a very largely unregulated domain’ [1].
he is referring to state regulation.
However economic activity depends on following rules. Without property rights, contracts, debt recovery, credit systems, trade cannot function.
The whole of common law, canon law and mercantile law originated from custom and practice in society. Participants accept the rules, honed by years of rigorous experience and effective through the sanction of ostracism. Accountability is to associates, this is the norm, the precondition for participation.
But there are questions; can civil society resolve the problems of economic depravation, environmental degradation, military oppression and gender bias without recourse to command?
The evidence of transformation and order civil society.
Economic depravation.
The globalisation of economic activity has exposed the importance of human capital and knowledge.
Economic activity based on physical modification is being transformed by exchange of knowledge. ‘Weightless World’ and ‘Death of Distance’ are descriptive titles of books which have recently illuminated the process [7].
It starts with win win economic advantages of co-operation and trade and prospers as nation states can no longer tax and restrict. Innovation spreads as human association, particularly science and trade, deliver problem solving economic resource benefits.
Crucially for democracy these benefits of knowledge are available to everybody as science and trade are inclusive, more participants more benefits. Knowledge cannot be constrained within territories and manipulated by tyrants.
This insight applies to Burundi just as much as to the USA. To girls and boys, to blacks and whites, to rich and poor.
Military oppression.
Disputes over physical assets and the power to rule are win lose issues but the economic advantages of co-operation and trade is win win and thus denudes military power of rationale. Shaw suggested,
‘the liberal democratic state was based on an equation between political rights and military duties’ [1].
But the binding of society is no longer the result of external military threat and the duty to defend. The defence of civilisation is achieved through trade. The Americans are in Hanoi not as a result of war but because of the win win nature of McDonald’s hamburgers!
Human capital is the source of wealth and that cannot be obtained with guns.
Environmental degradation.
Environmental degradation is the result of the explosive pace of economic activity. Insoluble by nation states because as Goldblatt says,
‘causal origins of environmental degradation are immensely complex’ [1].
Invisible, uncertain, enduring, cumulative, increasing in scale and scope, an interdependence of chains of causes and effects and compounded by differing opinion. Goldblatt perceives a truth,
‘science does not generate clear, unassailable descriptions of the world or accurate predictions of the future’ [1].
This is the big problem for command, if you don’t know how can you coerce?
The problem is not new, it is a problem of success; the growth of the human population and their capacity to transform nature, as Goldblatt relates,
‘we seem capable of generating immense new technologies without stopping to consider the degradation of the global commons’ [1].
But surprisingly he makes no reference to the ‘tragedy of the commons’ which was understood in the context of the 17th century and the land enclosure.
The problem was solved by establishing property rights, costs were confronted and taken into account and immense new technologies were applied to reduce them!
This is too difficult for Goldblatt, who, in desperation, asks,
‘is there a case for eco-fascism?’ [1].
But he is dismissive of the extension of property rights,
‘it is inconceivable that anyone can own the atmosphere and no one can be excluded from its use’ [1].
However pollution rights can be owned?
At the moment the practical problems are being addressed by innovations and incentives in the USA with experimental emission property and trading rights [8].
Nuisance has been a tort for generations. Global rights already exist in physical assets and intangible copyrights, patents, future rights to buy and sell.
Policing will follow the tradition. Participants want to join the club because of the benefits, but the club has rules, pollution rights cost you! Cost are internalised.
Cox also ignores this practical alternative to command,
‘nature’s tolerance are being tested and the implication is a need to rethink economics’ [1].
But it is Cox who needs to rethink! Economists has always stressed that free goods will generate excess demand. Nature’s valuable resources must be priced they are not ‘free’!
Gender bias.
All inequality issues, power, race, class, religion and including gender dissolve because of the overwhelming importance of human capital in the knowledge society. No one can control, oppress or tyrannise ideas.
Dickenson misses the poiny,
‘market forces make it more difficult for women’ [1].
Market forces guarantee opportunity because global competition generates economic efficiency from gender neutral human capital. Women are pushing at an open door.
The only question is how to speed up the process?
Evaluating the democratic credentials of global civil society.
Cox himself,
‘suggests a strategy towards reversing degenerative tendencies’.
A strategy of active citizenship in civil society.
But his is a controlled alternative, assuming philosopher kings with foresight dictating abandonment of ‘present mindedness’. However ‘present mindedness’ is the reality of the impossibility of foresight when each of us can only choose the best option available at the time. The personal autonomy which is the essence of democracy.
There are three main instruments of active citizenship in civil society.
First, international associations for not only Greenpeace, Amnesty International, Christian fellowship but also joint stock trading companies. All free to operate outside nation state restriction and censorship using, knowledge to co-operate and associate to gain mutual benefit.
Second, communications, the free press, satellite TV and the internet. Exposing tyranny and oppression outside the control of national censorship available to anyone who can sell newspapers, books, programmes or borrow a computer.
Third, science and technology. An international network using knowledge to solve problems which is uncontrollable.
These instruments are the essence of democracy based on three normative elements.
Firstly, identity, Joe as a father, a football fan, a musician, a Christian or whatever he chooses.
Secondly, legitimacy, what the people want in the opinion of the people not imposed.
Thirdly, security, of people not territory, rules of membership, imply obligation or ostracism.
Civil society as democracy is not impracticable it already exists.
Conclusion.
Globalisation is the reality of continuing evolution, a process which builds interconnected complexity.
The transformation brings positive benefits from economic activity.
Innovation and experiment is speeding up evolution in civil society encouraging everyone to participate in scale economies and technical progress through property rights in class, creed and gender neutral, human capital.
This is the antithisis of nation state command and control and the economic advantages of world order do not require global governance because, as McGrew himself suggests,
‘states are forced to acquiesce to agreed rules because it is in their own self interest’ [1].
The normative commitment to democracy is safe in global civil society.
[1] Anthony McGrew, Editor (1997) – Transformation of Democracy, O.U., Polity Press.
[2] David Ricardo (1817) – Principles of Political Economy.
[3] David Held (1997) – Models of Democracy, O.U., Polity Press.
[4] Stuart Kauffman (1993) – The Origins of Order, Oxford University Press.
[5] Alan Gillie (1992) – Pareto Efficiency, D345 Open University.
[6] Fernand Braudel (1985) – Civilisation & Capitalism 15th-18th century, Fontana Press.
[7] Matin Wolf (1998) – A Bearable Lightness, Financial Times 12/8/98.
[8] Fred L Smith . (1994) – Learning from the Past, Competitive Enterprise Institute, Washington.
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