Globalisation: Part 3 – Changing Political interrelationships

Conventionally, political relationships operate between nation states in three general areas:

  1. Trade: The development of transnational trading blocs (in North/South America, Asia and Europe, for example) involves some measure of political interrelationship. In the case of Europe, economic interrelationships have developed alongside a range of political interrelationships – the European Union has an elected parliament, bureaucratic structure and single European currency, although member countries may opt out of specific parts of political agreements (the UK, for example, is not currently part of the single European currency).

On a global level, world trade agreements relating to the movement of goods, access to markets and the like provide some form of regulatory framework for economic activity. In some instances, these agreements override national law (as in the case of the European Union, for example, and the provision for the free movement of labour across national boundaries).

  1. International law: Political relationships between societies also exist at the legal level, not just in terms of trade agreements (which can be legally enforced and tested), but also in terms of areas like extradition treaties, cross-border policing (in the European Union, for example), membership of the United Nations and the like.
  2. Military: How different countries relate to one another in military terms (through cooperation or antagonism, for example) also represents a political dimension to the interrelationship between societies.



One of the main themes of globalization theory, as Sporer (2000) notes, is the idea of the ‘loss of power and authority of nation states’, something echoed by Smith and Doyle (2002) when they note ‘a decline in the power of national governments to direct and influence their economies’. This “loss of power” thesis has a range of economic and political features and consequences:

  1. Economic: The globalisation of trade (whether in terms of regional blocs or world systems) removes from national governments the ability to control major areas of economic policy in areas like:
  • Employment, where nations experience rising or declining levels of employment depending on how capital, labour and jobs move across national borders.
  • Taxation policies relating to businesses, especially transnational corporations. If business taxation is too high, ‘capital flight’ may occur – TNCs, for example, choose to locate and invest elsewhere. TNCs can also export profits, making it difficult for national governments to track what profit is being made and where.
  • Investment: In a global economic climate, where TNCs can potentially locate and relocate factories and businesses in the most favourable economic areas, there is increased pressure on governments to provide environments and packages to attract corporate investment.
    1. Political: Involvement in regional economic and political institutions (such as the European Union) further limits the decision-making powers of national governments, mainly because decisions are conditioned by things like international:
    • agreements, binding on member states and relating to areas like trading arrangements, levels of national debt, and so forth.
    • laws relating to, for example, the free movement of labour across national borders.



    Those who argue that economies are locked into a global financial system that limits the ability of national governments to act are conventionally seen as advocating the idea of hyper-globalisation – the idea globalisation has created a world political, economic and cultural web that, as Veseth (1998) puts it, connects ‘…people and businesses without much attention to geography, government regulation, or anything else. High-tech, knowledge-intensive connections to the global web are the source of wealth and power…and a sort of global class system arises that is based on access to the web, much as an industrial class system based on access to capital appeared to Karl Marx’.

    National governments, from this position, are ‘secondary players’ on the world stage, if they have a role at all: as Ohmae (1995) argues ‘The modern nation-state itself – that artefact of the 18th and 19th centuries – has begun to crumble.’

    The demise of the nation state (imminent or otherwise) has, some argue, been overstated.

    Gray (2002), for example, is sceptical about the idea globalisation involves ‘the world becoming a true single market, in which nation-states have withered away…supplanted by homeless multinational corporations’; he sees this – as do Hirst and Thompson (1996) when they refer to ‘the political impact of ‘globalization’ as ‘the pathology of over-diminished expectations’ – as ideological wishful thinking on the part of, in the main, new right / neo-liberal theorists.

    New Right / Neo-liberal approaches

    From this general position social development is related to the presence or absence of free economic markets. In other words, for countries to maintain their developed status they must adjust, politically, to the new demands of a globalised economy, while developing nations must be opened up to the economic benefits of free market economies.

    In this respect, the private sector is considered the motor of development – the way to achieve economic growth is through the adoption of free-market policies and initiatives that include things like private ownership of:

  • businesses
  • education
  • welfare provision
  • health care.
  • For this approach, a lack of social development is caused by, among other things:

  • corrupt government and political leadership in developing countries
  • government economic intervention and ownership
  • state-controlled/financed welfare systems.
  • Capitán and Lambie (1994) summarise neoliberal development theories in terms of:

  • economic inequality ‘as an important human incentive’ in all areas of social life.
  • non-intervention by the state in economic markets that ‘will maximize efficiency and economic well-being’
  • international trade between developed and developing countries being ‘mutually beneficial’
  • a minimalist state (in terms of welfare provision etc.).
  • Although hyper-globalising tendencies may, as Veseth (1998) argues, be over-exaggerated, this is not to say global economic developments have had no impact on political interrelationships. Hirst and Thompson, in this respect, suggest we should see nations as:

    Pivotal institutions in terms of creating the stable political conditions under which trade and international development can continue. Shaw (1997) further argues we should not see nation states as being ‘in opposition’ to globalisation, since ‘globalisation does not undermine the state but involves the transformation of state forms’.

    The main problem here, therefore, is one of interpretation – where nation states play an international role (such as Britain and the USA’s military involvement in countries like Iraq), do we interpret this as a changing and expanding set of political interrelationships between societies or merely the dying attempts of nation states to exert political influence in a globalized world?

    The final examines the idea of changing cultural relationships.

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