4: MODULE THE FORMATION OF THE GLOBAL POLITY The State: Modern / Pre-Modern The distinctive characteristics of the modern state can only be appreciated and then understood against the backdrop of what came before. The major contrast is with the feudal state. The absolutist state which came immediately after and so was the immediate precursor of the modern state was clearly transitional in form. The Feudal State1 The first thing we should note about the feudal state was the way in which sovereignty was parcellized, divided up. The crucial agent was the feudal lord baron, count, or whatever since it was the feudal lord who held land and administered justice to the immediate producers: the serfs who had customary possession of land but had to provide services in kind to the lord. A fraction of their product had to be delivered to him and labor services also had to be provided on the land of the lord, the so-called demesne. But land was held by the feudal lord from someone higher up and it was held conditionally. Barons held land from the king in return for providing military service when required and for administering the land and those attached to it. Barons might have sub-tenants who in turn owed allegiance to the baron in the same way; sub-tenants might have sub-sub-tenants who would likewise owe allegiance upwards, and so it went. The idea of some central power wielded by the king and analogous to the high degree of centralization of power in the modern state was quite anathema to the feudal state, therefore. The king was much like the lords who were his tenants.2 His access to resources depended on his own estates; what he obtained from his barons (and what the barons got from their sub-tenants) was very little indeed. So along with the high degree of parcellization of power went a similarly high degree of division of the material resources on which the mobilization of power ultimately depended.
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On the formation of feudalism and its distinguishing features see the excellent book by Perry Anderson: Passages from Antiquity to Feudalism. M. M. Postans book, The Medieval Economy and Society is also an extremely useful source. 2 Though not tenants in the sense of paying a rent to the king!
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The second thing we would note about the feudal state was the way in which there was a fusion of economic and political power. In modern societies there is a division between the political and the economic that takes the form of one between the state and the corporation or firm. The firm retains the power to put the means of production and labor power in motion and to appropriate the product. The state, on the other hand, underwrites the power of the firm to do those things through its judiciary and body of statutory law. In other word, corporations do not wield justice and nor does the state for the most part at least organize the labor process. How different it was under feudal conditions. The lord not only dealt out justice of a sort to those on land held from him. He also organized the labor process on his demesne using the labor of the serfs.3 There were two other features we should notice about the feudal state. The first was the absence of any direct relations between the population and those to which their lord was enfeoffed either his tenant-in-chief, like a baron, or the king. Any dealings that the crown had with the population at large, therefore, was highly mediated: very indirect. This, of course, is in sharp contrast to the modern state and the constant dealings that citizens have with the central organs of the state: filling in state and federal forms, paying taxes, and voting, among other things. And second, of course, there is the matter of voting itself. The feudal state was devoid of virtually all democratic impulse: again in sharp contrast to the modern state where democracy is not simply an ideal but rises from peoples material relations material relations that, in the form of commodity exchange, are radically different from those of feudalism. The Absolutist State4 For feudalism was a social formation in which production for exchange was very poorly developed. Towards the end of the Middle Ages, however, starting in the aftermath of the Black Death in the thirteen-forties, trade resuscitated and there were shifts that portended the emergence of capitalist production relations: not yet strong, but strong enough to bring about changes in the form of the state. In particular there was a slow dissolution of that hallmark of the feudal state, the parcellization of authority. A crown growing in power started levying taxes throughout the realm, so releasing itself from dependence purely on its own estates for income.
3
It is true that the serfs also organized the labor process on the lands to which they held customary rights of possession but the main point remains; the political was significantly fused with the economic in the person of the feudal lord. 4 Again, Perry Anderson provides an excellent discussion in a second book: Lineages of the Absolutist State.
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The duties that towns, baronies, counties, bishoprics and so forth had levied on trade were slowly suspended allowing the beginnings at least of the formation of a national market. Law became more codified. The increased activity of the crown led to the formation of a permanent bureaucracy. The power of the monarch increased relative to that of the feudal lords; this was the absolutism that the absolutist state was about. One of the effects of the Black Death was a severe demographic crisis in the countryside. Since there were fewer people to work the land, this resulted in a decline in the revenues of feudal lords: fewer serfs making over dues and services in kind. One consequence of this might have been increased feudal repression: demands on the part of the feudal lords for increased dues and services to make up for the losses resulting from the diminution of available hands. This in fact did happen in parts of Europe. But in Western Europe, particularly in England, the Low Countries and France the feudal lords started competing with one another to ensure they had a peasantry to exploit. One of the ways in which they did this was to commute dues and services in kind to money payments. This, of course, committed the peasants to selling at least some of their produce. It also committed the feudal lord to hiring workers to work the demesne: not such a big problem since there had always been a number of people in the medieval village whose pieces of land were too small to sustain them and who contracted themselves out at busy periods of the agricultural year. Moreover, once peasants started depending more on the produce that they could sell on the market, there was the prospect that some would fail and have to sub-lease land to their more successful neighbors and even work for them to make ends meet. The separation of immediate producers from the means of production was getting under way. There were changes in the law too. The conditional form of property characteristic of feudalism conditional on providing military service and administering justice began to give way to absolute private property as the merits of Roman law were rediscovered. The relation between feudal lord and peasant, therefore, began to assume more and more the character of a commercial one. But as this happened there was a problem: How to ensure that peasants continued to pay rent? This was the role of the absolutist state through its codified law and growing procedures for enforcement.
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The Modern State It is in terms of its contrasts with the feudal and absolutist states that we can grasp what is specific to the modern state. Much of this will be plain from what has already been said, but it bears repeating. Some amplification is also merited. The Separation of the Economic from the Political The first thing to note is the radical separation of the economic from the political. We recognize this intuitively when we refer to politicians and businesspeople; likewise when people vote they are performing a different function than that of wage worker. The assumption is, rightly or wrongly, that the roles of wage worker and employer are non-political. In severe contrast to the feudal form of state, the ultimate power of coercion is given over to a specialized organization quite separate from the sphere of production. For sure, employers depend on adherence to certain rights and obligations typically codified in the form of contracts and titles. But they themselves do not have the independent right either to determine the content of these rights and obligations or to enforce them. Those are matters for the state. The modern state, of course, does much more than defining and enforcing the laws that facilitate the smooth functioning of a society dependent on the production of commodities with commodities. Among other things it finances and regulates the construction of highways, education, public health systems, a defense force, sewerage and water systems. It also passes laws protecting the health and safety of workers, it regulates the length of the workday, trade and, as we saw in the last Module, the money supply. These are all essential aspects of the reproduction of a capitalist society. Firms need highways along which to move their goods to market. They need an educated, healthy workforce, a money supply of a magnitude that threatens neither inflation nor deflation, and defense against the destruction that might be wreaked by foreign armies. Since they need these infrastructures and regulatory services one might well ask: Why dont they themselves provide these themselves? The simple reason for this is that of the competition of one firm, one industrialist, one farmer one with another. Consider one instance of this: In the advanced capitalist societies education has become immensely important. Basic skills of numeracy and literacy have become fundamental.
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Instructions have to be read, calculations done in the head, time and space rationed, all of which demand some form of education. On the top of that, of course, there is the education required of the technical strata the engineers, the lawyers, the scientists, the accountants, the doctors; and without some form of elementary and secondary education they would never have reached the point at which they could even apply for university or professional school. Education is not something that can be provided adequately by employers. Workers are free to move around from one employer to another. This means that investment in worker skills that are generally in demand may not yield an adequate return on their money for the firm so investing. It is true, of course, that parents have a motivation to see that their children are educated. A more educated person can gain a higher paying job and that is one of the reasons that formal education has, among other things, become such a significant part of the residential choice calculus of households. In itself, however, this does not mean that the state has to provide education or to insist that people make provisions for the education of their children. Education can be provided by the market and to some degree it is. There are private schools and there are private universities. But if all education was private then many children would not go to school, since their parents would be unable to afford it. The state, therefore, is an essential part of the social division of labor in a capitalist society. It performs functions, carries out activities, that business could not possibly carry out, but which are essential to its reproduction and development. This does not mean to say that what the state does is not contested; that, for example, particular groups of firms may not argue that such-andsuch could just as well be performed by the so-called private sector. And the boundary between provision by the state and provision by the market does indeed fluctuate over time. During the last fifteen to twenty years there has been a strong movement for transferring some state functions to the market: what has come to be known as the marketization or privatization of the state. States have sold assets, industries have been denationalized, there have been experiments designed to introduce market principles into public provision as in the case of school vouchers in the US. Likewise there are few local governments in the US or in the United Kingdom which are not required to put out requests for services to competitive tender; no longer is it inevitable that the state agency set up to perform that function gets the job. At the time of writing this is a
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transfer that has yet to completely run its course. But having said that, it still remains the case that there is an irreducible core of activity that the state must perform; activities that are beyond the market because the principles according to which markets operate make it impossible. Its Capitalist Nature The fact of a tension over the boundary between provision by the state and provision by private firms, however, underlines the capitalist nature of the state. The state clearly performs important functions as part of capitals social division of labor. But it is also formally independent of, separate from, capital with its own distinctive, constitutionally guaranteed, powers and responsibilities. How is it that its policies, by and large, do not undermine that profitability which capital must maintain if it is to be reproduced as a mode of organizing production? Without the prospect of profit nobody wants to lay money out in order to produce. One answer to this question returns us to the separation of the economic from the political which we just discussed. The state needs money. It needs money to pay its armies of civil servants and other employees like schoolteachers, the military and the police. It needs money for its various public works: money for highways, bridges, public buildings, for the purchase of land for airports, military bases, national parks, for sewage and water treatment plants and the like. In the advanced industrial societies the state is a major claimant on national resources: somewhere around 32% in the US and higher in most of the European states. The money is raised in various ways. Taxation of various sorts is the major source: taxation of incomes, profits, property, interest, capital gains in particular. Money is also raised through the sale of government bonds. This is the typical way in which money is found for public works like highways, bridges, public buildings, airports, but ultimately most of this has to be paid back out of taxation. 5 So taxes are crucial. The state, therefore, has a stake in the health of the economy, in the rate of business expansion. Business expansion means an expanding tax base. It also means expanded employment, and given the way in which people tend to vote their pocket books, this is also an important consideration for any government. In consequence government policy typically tries to ensure
5
I insert the qualifier most since in some cases, like that of airports, the bonds will be paid off from charges to users.
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that the economy will expand. If policies are overtly unfriendly to business then it can expect retribution: capital flight to other countries or simply a refusal to invest. This is not, however, to posit a direct stimulus-response relationship which sees government as the cynical implementer of policies in which it does not believe but which it must implement to save its own skin. The fact is, we are all socialized from an early age pocket money, buying candy, selling lemonade into the mental categories through which we engage with a society rooted in the production of commodities with commodities. These understandings and interpretive frameworks are deepened through the messages we get from the media, from editorials in the press and the commentaries of the pundits. We come to see the categories appropriate to a capitalist society categories like wages, profits, business, labor, unemployment, which are central to media discourse as natural: not as social constructions emanating from a particular set of historically specific, social relations but as eternal. Yet four hundred years ago, they would have made no sense in societies that were dominantly feudal in their organization and in which commodity exchange and the categories appropriate to it like profit, bankruptcy, earning a living, looking for a job, even supply and demand would have been very weak growths and for most, not meaningful at all. We live in a world, in other words, in which it seems that there is no alternative to the society in which we live. Given that horizon we have to make it work as effectively for us as we possibly can; which means ensuring that business has the incentives to invest and keep us in employment, earning wages so that we can pay the rent or the mortgage on the house and so forth. The categories we are socialized into, moreover, are not simply cognitive: knowing what wage or profit means, but normative. To illustrate this and its importance to policy making, consider the case of unemployment benefits. To be unemployed and to receive benefits from the state is something that most people are ashamed of. Think of the implications, however, of a society in which it was not so stigmatized: not something to be proud of, perhaps, but not something to be ashamed of either. Under those circumstances, it would be easier to argue the case for increased unemployment benefits. Likewise, and given the lack of stigma, once unemployed, people would not feel the same urge to get back into the labor market. Labor supply would diminish, wages would therefore increase, business would start to feel pinched, profits would fall as would taxes,
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and the government would have to start looking more critically at its policies towards the unemployed. But how easy it is to do that if the unemployed are a stigmatized group which, in any capitalist society they are. So the mental categories we are socialized into are important in understanding the way in which the state functions so as to ensure the profitability of business. It is in the states material interest to do that, but it gibes with the most fundamental beliefs and understandings of state officials, what their concept of the normal is, anyway. A Centralized State Compared with its pre-modern antecedents, the modern state is extraordinarily centralized. People in their localities are not left to their own devices with just an occasional visit from the emperors representative to collect the taxes from the local headman, say. Sovereignty is not shared out among feudal lords, bishoprics, so-called free cities, with the monarch presiding very, very loosely over it all. Rather we are all drawn into a nexus of relations with a state that arrogates considerable power to itself and which organizes itself from a geographic center: the capital city. The state is a nexus of relations at whose center are its various organs legislative, executive and judicial out of which radiate various sorts of connections with individual citizens and corporate bodies. These links assume a huge diversity of substantive forms. For example: People vote for others to represent them in the legislature; i.e., at the center, in the capital city. The state taxes everybody regardless of where they live within its territorial bounds. The state is the source of various payments: pensions and welfare benefits for individuals, orders for goods and services to private firms, subsidies to local governments. It is a source of information for all of us. It monitors disease epidemics and issues public warnings to us all. It tests foodstuffs and drugs and advises us, through the labeling of products, that it has done so, as in the case of the warnings carried by every pack of cigarettes. It monitors foreign countries and on that basis issues 8
warnings on the advisability of travel there. It also collects a huge amount of information on commercial conditions in foreign countries and distributes it to firms. Similarly consider the infrastructures and resources that we all make use of and which are provided by the central branches of the state. These include major highways, freeways, the postal service, public university systems, clean air standards, and public health more generally. It also assures freedom of commerce within the country striking down any local ordinance which appears to be in contradiction to it: a far cry from the pre-modern state and the exactions levied at the borders of their lands by bishoprics, feudal lords and boroughs. The central branches of the state with their location in the capital city form a crucial nexus, an organizing nerve center, in the flow of money within the country. Vast streams of money in the form of taxes flow towards the center, and much of it flows back again, though not necessarily to the same individuals or corporate bodies. It flows back in the form of subsidies, payments for various services, benefits, pensions and the like. Similarly it is from the center that regulatory activities are organized: the point to which those armies of inspectors of factories, schools, health facilities, water and sewer systems and the like deliver their reports and from which they receive their instructions. For sure there are branches of the state that are more local in character: what we typically call local government. But local governments municipalities, townships, counties, for example only have such powers and responsibilities as the central branches deem fit to delegate to them. Similarly much of their money will come from the tax resources of the central state in the form of various subsidies, for schools almost everywhere, and for public housing in Western Europe. What they do is also subject in its provision to standards defined by the central state. They are held to those standards by a mixture of inspectors and written reports that have to be filed with central government departments, all on pain of having flows of money suspended. This is not to say that all states are equally centralized in their activities. A distinction commonly referred to in this context is that between federal and unitary states. In federations, powers and responsibilities are shared by the federal government and its constituent states or provinces: there
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is a division of labor between them established by the constitution and statutory law. But within each state or province there will be a centralization similar to that observable at the federal level and within unitary states. Furthermore, not all unitary states are equally unitary. France is a much more centralized state than Britain, for example and the powers and responsibilities delegated to local governments there have been relatively very limited. This centralization of power in the modern state has been predicated on a high degree of timespace distanciation. The sort of centralization that I have described above would have been impossible in the late Middle Ages simply because the means of communication, across spans of both space and time, were so poorly developed. Governments communicate with citizens through the mail but regular postal services arent known before the eighteenth century, and even then they were sporadic and unreliable. Prior to the mid-nineteenth century mail and the railroad, mail was rarely transported at a speed exceeding ten miles an hour. Consider likewise those armies of state inspectors that have to get from (e.g.) one school or factory to another if they are to do their job. Printing was equally important to the development of the modern state and its high degree of centralization. It facilitated the keeping of records on citizens, corporate bodies like firms, municipalities, etc. on a vastly greater scale than would have been possible in the age of feather quill and parchment. Printing also made possible that diversity of forms through which governments communicate with citizens: tax returns, application forms of various sorts, notices to register for the draft. That in turn assumed mass literacy, however: another condition for the centralized state as we know it. A Democratic State The association between democracy and capitalist development is one that has been frequently remarked on by social scientists. It is a fact that the most developed states are the most democratic: democratic, that is, in the sense of achieving certain criteria regarded as essential to that condition competitive party systems, freedom of speech and assembly, a universal adult
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franchise,6 the subordination of the executive to the legislative branch, an independent judicial system. The most developed capitalist societies are typically those at the most advanced stages of capitalist development. These are ones in which virtually everyone has been absorbed into the roles of wageworker or recipient of various forms of property income. The immediate producers have been separated from the means of production and subsistence agriculture or even agriculture in which the excess finds its way into market channels is now just a memory. They are also societies which enjoy relatively high and increasing standards of living; hence the usual correlation between democracy and gross national product per capita. But this in turn is a function of the way in which capitalist social relations have become pervasive (producing commodities with commodities) so that those who reunite immediate producers and the means of production through money are subordinated to a regime of intense competition and therefore to the development of new, productivity-enhancing, technologies. As the product per person swells so some degree of redistribution to the masses becomes possible, and as the labor movement gains in strength, necessary. The vast majority of the worlds population, however, experiences forms of state which it would be hard to describe as democratic in the terms in which we have defined democracy above. Rather they live under military dictatorships, or states in which there are no competing parties, states in which there is censorship so that freedom of expression is quashed; and in which the police subordinate themselves not to the principle of equality under the law but to the desires of the government in power. But there again, and significantly, the vast majority of the worlds population does not live under the conditions one associates with the advanced capitalist societies. Many societies, say in Africa, are barely capitalist in the way we have defined capitalism: the production of commodities with commodities. Rather people are immersed in modes of production which are still largely for immediate use. How, however, are we to explain this relationship between capitalist development and the democratic institutions that we associate with the most modern of modern states?
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I.e., a right to vote that is available to all adult citizens, regardless of their race, gender or level of property ownership. The latter is significant because in various European countries the history of enfranchisement is marked by various property ownership qualifications.
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In pre-capitalist societies, representation in the state is of limited significance. People are relatively indifferent to whether or not they are represented. They depend for means of subsistence on what they can produce themselves. The negative of this is that they are not dependent on forces beyond their control7 like the hiring and firing practices of an employer, or the state of the national labor market: whether there is a shortage of labor relative to demand or the converse. As production relations are transformed, however, as the immediate producers find themselves separated from the means of production and have to become wage workers if they are to keep body and soul together, so they are subjected to forces beyond their individual control: unemployment, the unhealthy housing conditions of the rapidly growing cities in which they are forced to live if they are to find work, the material deprivations of an old age when one has to keep working to survive but employers fail to see you as a productive worker worth your hire. It is at this point that they join with other wageworkers experiencing similar sorts of subordination to forces that seem objective in kind, in order to intervene in the economic process and to reorder the dominant contours of social life to their collective advantage. In short: The labor movement starts to recognize the strength that comes from numbers. But in order to intervene so as to mitigate the social conditions under which they live, working the levers of state power becomes necessary. Without state sanction there can be no labor unions to provide the workers with some leverage in the bargaining process with employers. Without state legislation there can be no unemployment compensation that rejects the stigmatization of the workhouse, and no provision for old age in the form of pensions. It is at this point that the broad mass of the population starts seeking the vote so as to exercise some say in what is legislated; in other words, to make the state work to their advantage. As capitalism takes hold, therefore, workers movements pushing for democratic rights, and for the right to organize in the form of labor unions, inevitably appear. Just as inevitably, these demands are resisted by the employer class and the state alike. Historically, as capitalism developed in Western Europe it was technically relatively undynamic. The technologies employed in the labor process were much as they had been inherited from pre-capitalist times, with the proviso, perhaps, that the looms, spinning wheels and the like were brought together
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Natural disasters, resulting in poor harvests or the death of livestock from disease, aside.
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into a factory. Profits were increased relatively as a percent of capital laid out by such devices as extending the length of the workday without any comparable increase in the wage, or by speeding up the work process;8 and they were increased absolutely simply by hiring more workers and purchasing more raw-materials for them to work on, along with the necessary instruments of labor. This meant that any increase in the workers wage, any decrease in the length of the workday a major issue for workers would have meant a diminution of profits. It was only with the active intervention of the owner into the labor process, its reorganization, equipping workers with improved instruments of labor, tools, machines, which enhanced their productivity that there emerged the basis for some modus vivendi between them and their employees. For with technical developments, labor saving machinery and the like, there came the realization that wage increases need not be at the expense of profits; that what was conceded in the form of wage increases or, later, taxes to fund the welfare state, could be retrieved by a further transformation of the labor process and a subsequent increase in labor productivity. And in fact the tendency has been for wage increases, any advance in the condition of the working class that initially seems to be to businesss disadvantage, to stimulate the development of new technologies, the re-organization of the workplace so as to raise profitability to its previous level. On top of that, of course, business found that dealing with the workers was good business because it created a more trusting, cooperative atmosphere in the workplace. To be sure, under todays conditions where technologies can be borrowed by developing countries from the more developed, this argument needs to be amended. For there have been other changes too. Developing countries today develop in a world in which some countries enjoy huge productivity advantages in world markets the advanced industrial societies of North America and Western Europe in particular. This means that invading existing markets, pushing aside the products of, say, French, British or German firms can be very difficult indeed since the productivity advantages of the latter allow them to price their products at a relatively low level. The one advantage that developing countries have is the relative cheapness of their labor. And clearly, conceding democratic rights, facilitating the organization of labor unions and claims for
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For example, by operating a system of piece rates in which workers are paid for work completed, but reducing the amount paid per piece so providing an incentive to workers to work more quickly within the limits of a workday of fixed length.
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various sorts of transfer payments from the state, risks eroding that advantage. This is a major reason why in, for example, the Newly Industrializing Countries of the Far East, like South Korea, Taiwan, Indonesia, the claims of the labor movement for free elections were resisted for so long. Only as their workforces acquire industrial skills, only as they are able to graduate to more advanced industrial processes and compete in world markets on the basis not simply of price but on the basis of the unique characteristics of their products, do states begin to feel somewhat more secure about their economic accomplishments and so willing to loosen their grip on freedom of speech, the rights of the opposition to organize and to contest free elections, and so forth. The Global Polity Territory and the State States, regardless of whether they are modern or pre-modern, are always territorial in their activities. Their ultimate interest is always in conditions and events within their geographically circumscribed jurisdiction: the ultimate concern of the French government is France and all that therein is, that of the British government is the United Kingdom and so on. True, all states enter into relations of various benignity or hostility with other states and always have. But for diverse reasons the ultimate benchmark of success for them is their own proverbial backyard. This is something to be conserved, protected, defended. But having said that we need to register an important difference in the way in which pre-modern as opposed to modern, states were territorial. What territory meant was quite different then. Recall first of all the typical fusion of the economic and the political in pre-modern states. The extraction of resources by feudal lords, for example, was direct. They claimed the labor services of the serfs on their demesne-land and also compelled payments of agricultural goods in kind. Their revenues depended on the unity of serfs with the land. Without the serfs they were lost, which is why their movement was forbidden, except on payment of fines. But note how this depended on the lords having absolute power within the manors that belonged9 to them.
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I have put scare quotes around belonged since the land did not belong to the feudal lords in the absolute sense of private property rights. Rather they possessed the land on condition of providing military service to those to whom they were enfeoffed and administering justice to the serfs attached to the land.
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Under these circumstances, increasing the resources under your control meant extending your rule over lands and the serfs attached to those lands. But this meant, in turn, wresting the lands of other feudal lords away from them; or alternatively, uniting your lands with those of others through marriage. Arranging the marriages of his sons, and war were both, therefore, essential elements of the feudal lords way of life. Moreover, if you could indeed take control of the lands of others. then you could grant some of that land to still others on condition of their provision of military service to you which put you, as a feudal lord, in an improved position for waging further war and expanding your domain at the expense of still others. How different it is now. Land is purchased and sold and not seized by force. Nor does it come with a set of immediate producers bound to it and compelled to provide you with your revenue. Rather it is the site for all manner of capital improvements and a location from which productive relations can be established with others. In the first place, therefore, it is the necessary precondition for investments of long life: factories, railroads, office buildings, power stations, docks, housing for workers, pipelines, reservoirs, sewerage systems. All the fixed physical appurtenances of life as we know them in modern times, require land on which to be built and the value of that land depends on how attractive it is for constructing them. Second, that attractiveness depends in part on whether it is in the right place: its locational qualities. People dont build factories unless they are to be in locations where money can be made. Workers dont want housing unless it is close to jobs, and so on. So land is not just site: a physical condition for various sorts of physical infrastructure. It is also a location with respect to various events, activities, conditions. Industrial sites in Silicon Valley will be attractive to computer and software firms because of their proximity to other computer and software firms. Proximity means possibilities of collaboration on new products, entering into relations of buying and selling as the different firms develop particular specialities in an emergent division of labor, or it might mean the opportunity to poach workers from other firms. At any rate, the development of these sorts of socio-spatial relations, these networks of association, will be important to firms and to their profitability. And, important for our argument, they are only built up slowly over time: the result of painstaking effort to determine who can be relied on, who is
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helpful and who isnt, and so on. Once secured these relationships are only relinquished with great reluctance. So commitments, both physical and social, are made to various geographic areas: localities, regions, countries. Without them production is impossible. And exactly where these commitments are made, is important to whether or not that production will be profitable. The nodes of production that emerge in this way, however, are tied into nodes of production of rawmaterials, other inputs elsewhere, and to final markets scattered possibly throughout the world by a web of commodity exchange. Not only that, we have seen that the worlds economic geography is constantly changing. New centers of production emerge and at all manner of geographic scales: the so-called silicon fen around Cambridge in England, the silicon hills around Austin, Texas, Southern Germany, China. Consider likewise the suburbanization of employment within the advanced capitalist societies, leaving behind an inner city of what have become known as brownfield sites; or, over the last thirty years or so, the attractions of small towns over larger cities in various sorts of semi-skilled, highly routinized assembly work or for call centers. As these changes occur, as the kaleidoscope of locations assumes new configurations, so the web of commodity exchange changes. Old centers of production find that their markets are being taken over by newer ones, working with more advanced technologies, cheaper labor, or both. Factories may be forced to close down and this has knock-on effects. Unemployment increases. People who can move elsewhere in search of work do. In either case, local retail and housing markets suffer. State agencies find that their tax bases are deteriorating and they too have to release workers. Everybody has trouble paying their bills the rent, mortgages, loans taken out to expand production facilities, the interest and principle that municipalities owe on the bonds they sold in order to raise the money for new schools, bridges, an expanded airport, perhaps. This sort of scenario can occur in particular localities or in many localities simultaneously in the same region, so that the problem assumes regional forms. It can even be national as the islands of prosperity seem to dwindle and people start referring to a country as the sick man of Europe10 or whatever.
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France in the thirties, Britain in the sixties and seventies.
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This is not to say that the anxiety, the insecurity is totally localized in particular places. Rather these events are registered in a spirit of them today, perhaps us tomorrow. As a result of the uncertainties induced by an ever-changing economic geography, anxiety is chronic. Too much investment in our locality / region / country cannot be enough if its place in wider geographic divisions of labor is to be secure and hopefully enhanced as it moves up the product ladder to those commanding some sort of quasi-monopoly profits. The dilemma will be experienced across the class divide and also across that separating state from economy. It is not just firms that find themselves embedded in particular places in virtue of the money they have sunk in the ground and have yet to amortize; or which face considerable opportunity costs if they move as a result of the favorable relations that they have built up with other local firms, or the skill base that they have managed to develop in the local labor force things that they will lose if they are forced to relocate in order to avoid bankruptcy. The workers too are affected. We already remarked in Module Three on the problems they have in finding work in other labor markets. For all but the professional, managerial and higher technical strata, job markets are extraordinarily localized. People find work through word of mouth or through local newspaper adverts. And they do not enjoy the sort of risk-reducing treatment from potential employers the offer of a job before the move is made, visits at company expense to look over housing and so forth that a high flying marketing person or accountant will be given. So most working people, unless they are very young and without commitments of marriage and family, will find themselves trapped in particular places and so committed to them and their, perhaps, uncertain futures. Likewise people invest in houses and these can assume a very significant element indeed in their savings portfolios. If the bottom should drop out of the local housing market as plants there close, then there can go their savings. So they too have an intense interest in the future of particular places, their economic trajectories, how they are impacted by foreign imports, the opening up of cheap labor reserves south of the border or in Eastern Europe. Nor, it should be emphasized, is this just a problem for the private economy. State agents, again at varying geographic scales local, regional, national will view a decline in the economic fortunes being experienced within their territorially defined jurisdiction with trepidation. Tax
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revenues dry up as firms close down, as unemployment sets in and property values decline. This means that providing the services that people expect becomes more difficult. Similarly it becomes harder to raise money through bonds as investors scrutinize the state agency doing the borrowing and wonder if they will get their money back; accordingly, while they may be willing to lend, it be will at a higher rate of interest. And at the same time the electoral prospects of governments deteriorate as people yearn for a return of the good times. In short, there is likely to be a confluence of interests across a broad spectrum of agents around an agenda of re-establishing the conditions for continued economic growth; or for ensuring that existing growth trajectories are maintained, and perhaps even improved on. So here we have the territorial interest as it is expressed in the modern state. But note how it is an interest that requires for its realization some intervention into the relationship between the area and wider commodity flows. Somehow the area has to rebuild its relationship with the capital markets so that instead of investing in the new growth areas, money returns to be invested in employment in the old: tax breaks for investment, new rules which make the repatriation of profits easier are examples of such policies. Alternatively the solution may be seen to rest in some shifts in trade flows to be secured by new policies: tariffs possibly, so as to return the home market to domestic producers; or export duties on major raw-material exports so that their cost for domestic processors can be held down. On the other hand, some interests may look to a relaxation of immigration controls as at least part of the solution.11 In this context one can expect various sorts of coalition to emerge around some sort of program for resuscitating the national economy. Almost certainly state agencies will be central to those efforts since they have such a major stake in it: fiscal, electoral and, as far as the various appointed officials are concerned, their own employment. Usually policy will also be highly contested. Not all businesses, localities will be threatened by the changing flux of investment flows and trade around the world. Attempts by some to get the government to impose various forms of protection from imports are likely to be opposed by businesses enjoying buoyant export
11
Germany is no longer the European economic power-house that it was and one of the reasons advanced for that is a severe shortage of software writers and computer technicians: a shortage which many believe can only be solved over the short term by relaxing current German restrictions on the immigration of highly trained workers.
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markets. From the standpoint of those most concerned about the home market, import controls can be a clear condition for a return to profitability. But for major exporters import controls can deprive their overseas buyers of the foreign currency they need in order to buy their products. One can expect similar divisions within labor and even within the state itself. Concern for jobs often results in some degree of alliance between employees and their employers. In pushing for trade protection, for example, businesses and the unions that organize workers in that particular sector of the economy can be expected to present a united front. In the localities where they are dominant they will be joined by local governments, banks, local retailers, and all who depend on the health of those particular local economies. So local governments can push for policies opposed by other local governments, just as more regionally based elements in the state may contest policies which tend to favor, implicitly or otherwise, particular regions and, clearly enough, not their own. Compared to the pre-modern, therefore, what seems to be at stake here is a different conception of territory and what it means. Compared to feudal times and the stake of the lord in land, the serfs attached to it and the wealth it could yield something highly immobile land now appears as little more than a relatively short term resting place for flows of capital and people objectified in physical and social forms. For sure people are committed to those forms: money has been invested in factories, housing and the like and a social infrastructure of kinship networks, churches, voluntary organizations, relations of trust between different firms has been built up. But for how long those commitments can persist depends on a wider context of mobility. As a result structuring that wider context is fundamental to defending the interests that people, firms, state agents have in particular places. And as those interests seem more and more difficult to defend so people will move out, disinvestments will occur and businesses and lives will be rebuilt somewhere else; and the cycle will repeat itself: to paraphrase Marx once again, All that is solid melteth into air. The modern world is one of mobility and defining the meaning of territory is inseparable from that mobility. How different that is from feudal times! What we are moving towards in this argument, therefore, is a conception of the global polity as one of interacting units, of various territorially based coalitions in the orchestration of which
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states play a central role. They are forced to interact because they enter into relations of competition with one another. For certain purposes they may even see some degree of collaboration with others as useful in promoting their ends. So, and for example, they want access for their corporations to the markets of other countries, and want to see the dismantling of the various barriers, unintended or otherwise, to that movement. Yet they also want to do it on their own terms, protecting those home industries that need it from competition of corporations with home bases elsewhere in the world. It is in this context that one can understand the emergence of various institutions of a supranational character: organizations like the International Monetary Fund (IMF) or the World Trade Organization (WTO) or even more informal arrangements like the gold standard. All state-based territorial coalitions of forces share an interest in trade and in foreign investment: either making it or receiving it. There are obstacles, however, to the easy flow of commodities and money across international boundaries. Apart from the barriers posed by protectionist policies, for example, and the issue of foreign exchange risk which we reviewed in Module Two in the context of the discussion of the gold standard, there is also the matter of ensuring that each and every country has policies in place which allow it to participate in international flows of goods and money. This is a major goal of the International Monetary Fund. The Fund serves as a lender of last resort for countries which are having trouble finding the credit from private banks to finance their balance of payments deficits. The danger is that a particular debtor state will default on its loans; in which case it will forfeit the possibility of credit, both public and private, for a long time to come. This will hobble its ability to implement expansionary policies within its own territory and so severely limit it as a trade and investment opportunity for businesses around the world. So in exchange for an agreement to lend it money, the IMF insists on changes in economic policy which will restore the economy to long term health and eliminate the long term balance of payments problems which drag it down in mountains of debt. The World Trade Organization has as its goal reducing the barriers to trade between countries. These barriers can be explicit, like tariffs and import quotas. They can also be more implicit like the prohibition of genetically modified crops, since this means that the major producers of the seeds, American seed companies, are shut out of lucrative markets, especially in Western Europe
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where much of the anti-GM feeling is concentrated. These negotiations can be extremely complex and range outside of what might appear to be matters of trade as countries look for bargaining chips. There is the whole issue of intellectual property rights, for example; a matter of intense concern for developing countries. There has been an increasing tendency for the major pharmaceutical firms of North America and Western Europe to, in effect, ransack the folk remedies of these countries, remedies using locally grown herbs, bark extracts and the like, for potential blockbuster drugs: taking them back to the laboratory, and identifying just what it is that gives them their useful effect, refining it, and producing it in drug form. The issue is, the sort of compensation that developing societies should receive for this, since clearly there is an origin in some sort of local knowledge of indigenous, developing-world peoples. This can be turned to the advantage of developing countries by them agreeing to waive their rights to compensation in exchange for concessions on the barriers to their products that developed countries have typically erected. We would be wrong, however, to focus merely on international institutions that bring together most countries from around the world. International collaboration of a mutually beneficial sort can also be achieved through more limited, regional-level institutions. These would include free trade areas like the North American Free Trade Area and common markets like the European Union. One of the virtues of these institutions from the standpoint of their members is that by eliminating the barriers to trade between member countries, firms there can, in virtue of the larger markets to which they have ready access, become more specialized.12 As more specialized firms, however, they can achieve advantages of productivity over the less specialized that put them in a powerful position for penetrating the markets of other countries around the world. So far, so good. But there is something missing from this argument. All has been peace and light. Countries seemingly seemingly resolve their differences in the arenas provided by the World Trade Organization. They help each other to be good trading and investment partners through the offices of organizations like the IMF. They negotiate new common trading arrangements with one another common markets, free trade areas as a means of lifting all boats. It all seems very benign. Yet we know that violence lurks beneath the surface in the geopolitics of the
12
Recall Adam Smiths dictum regarding the limits placed on the division of labor by the size of the market.
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modern world. The twentieth century was in all probability the bloodiest in human history. Ten million people died in the First World War and a staggering fifty million in the Second. In the one hundred and sixty wars since 1945 (the Korean War, the Vietnam War, the war of liberation in Algeria, in Angola, Mozambique, Yugoslavia, Nicaragua, Columbia and Iraq, among others) a further twentyfive million have died. Testifying to a continual potential for violence are the significant amounts of production around the world dedicated to weaponry, as illustrated in Table 4.1. Note also that the figures in the table refer only to weapons and not to expenditures on people: soldiers, sailors, airforce pilots and supporting personnel. So Table 4.1 is a very considerable understatement of investment in the potential for violence. True, there have been no major eruptions for over fifty years. So how are we to explain that? How is it that no country today argues, as did Germany in the thirties, for lebensraum, or room to live? One of the theories of the thirties which is worth revisiting in this context, is that of the so-called Haves and Have Nots. This was the idea that the major international tensions of the period, particularly between Germany, Italy and Japan on the one side and Britain, France and the US on the other, had their source in a division of the great powers into two. There were those which had empires, which had succeeded in the course of the nineteenth century in creating large maritime empires (in the case of Britain and France), a large continental one in the case of the US. And there were, on the other hand, those countries which, for diverse reasons, had arrived at the feasting table late and so had to make do with the leftovers. This theory acquired further resonance in the thirties because of the way in which, in the depressed conditions of the thirties, Britain and France tried to convert their empires into exclusive trading blocs: trading blocs in which their manufactured goods would be exchanged for raw-materials from the colonies.13 In a world of diminishing trade opportunities the have nots saw this is a real threat: hence the Japanese push for what it called a co-prosperity sphere in East Asia with itself at its core; and Germanys attempt to create an exclusive trading zone with Eastern European countries like Hungary, Rumania and Bulgaria during that period.
13
And in the case of Britain, with former colonies like Australia, Canada, New Zealand and South Africa.
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In retrospect one can see that empire was a way, partial to be sure, in which major powers tried to protect and enhance their economic prospects by securing long term relations of a trading and investment kind with large parts of the rest of the world. But the attempt to make them exclusive Table 4.1: Arms Expenditures as a Percent of Central Government Expenditures for Selected Countries, 1999. REGION / COUNTRY ARMS EXPENDITURES AS % OF TOTAL CENTRAL GOVERNMENT WORLD DEVELOPED COUNTRIES FRANCE GERMANY JAPAN SPAIN UNITED KINGDOM UNITED STATES DEVELOPING COUNTRIES BRAZIL INDIA NIGERIA SAUDI ARABIA SOUTH AFRICA EXPENDITURES 10.1% 9.0% 5.9% 4.7% 6.1% 6.1% 6.9% 15.7% 14.5% 11.5% 14.6% 8.1% 43.2% 5.0%
preserves created tensions with countries that lacked those advantages. Decolonization in the post-WWII period eliminated this as an issue so that coordination of trading and investment relations between countries devolved more and more to purely international institutions like the IMF and the WTO. Violence has continued why otherwise would one want to spend so much money on armies, navies, and airforces? But the outbreaks have been more localized and have had to do with either challenges to the territorial integrity of states (e.g. Yugoslavia, Russia and Chechnya, Indonesia and Irian) or to do with threats to / displacements of local capitalist classes (e.g. Nicaragua, Guatemala, Cuba, Angola, Mozambique). Moreover, tensions among the nations of the world, the different, ruling, territorial coalitions, wont go away. International organizations like the IMF and the WTO are not about a nice mutual reciprocity from which everyone gains to the 23
same degree. And under conditions of intense competition between those territorial coalitions it could not be otherwise. Home bases are to be protected and they are protected by aggressive moves that inevitably will be at the expense of other countries: widening exports at their expense, opening them up to investment by your corporations, and, where possible, defending your home base against imports from other countries. Certainly countries form coalitions of convenience with one another. The WTO is dominated by conflicts between the more developed and the developing countries, for example, around such issues as the access of the latter to the raw-material and foodstuff markets of the former. Countries use international organizations for their own narrow purposes, purposes that invariably are antagonistic to those of others. In some instances, the way in which those organizations are constituted makes it easy for their deliberations and decisions to be dominated by one or a few countries, and so to work to their advantage. The IMF is a case in point. As lender of last resort for the states of the world, it depends on subscriptions from its members. Those countries which subscribe more typically the wealthier countries which can afford it have more power over decisions because they are granted proportionately more voting rights. So we should not be surprised that the conditions that the IMF imposes on supplicant countries work to the advantage of the US and some others like Britain. Insisting in the context of the Far Eastern financial crisis of the mid- to late nineties that countries open up their banking system to foreign corporations, for instance, or that Indonesia abandon its plans for a national car are seemingly transparent in their self-interestedness. For sure, the conditions would be justified in terms of seemingly objective models of how economic development is to be achieved: in that instance, through liberalizing just about everything. But neither can one ignore the fact that particular models of economic development work to the advantage of some countries evidently, for example, those with international banking interests and to the disadvantage of others trying to build up strong domestic banking systems closely integrated with government plans for developing industry there.
Nationalism We have made Italy. Now we must make Italians14
14
Massimo DAzeglio subsequent to the Risorgimento and the creation of a united Italy.
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Nations, we now know ... are not, as Bagehot thought, as old as history. The modern sense of the word is no older than the eighteenth century, give or take the odd predecessor15 We have just been talking about the global polity and the relations between the various states that make it up: relations both pacific and violent. These relations are often referred to as international, and it is to the -national part of that word that we now need to attend. Evidently the national enters into the sorts of relations we have been talking about. It is drawn upon, for example, to justify what different states are trying to achieve in their relations with others: it is almost invariably in terms of some national interest. So exactly what is the relation of the global polity to nations, the national, nationality? Why does nation seem to matter in the modern world? For as the above quote from Hobsbawm indicates, the idea of the nation is virtually foreign to the pre-modern world. It is, rather, only with the rise of capitalism and of the modern state that the idea of the national, national as an important part of our identity, something we are quizzed about in censuses, or, in an age of global mobility, in more informal contexts,16 becomes important. So exactly why would that be? In order to answer this question we first need to explore just what the national amounts to. What sort of identity is it? As the other quotation implies, it is not something natural. Italians were to be produced and this is how we all acquire a sense of who we are in the family of nations. The nation, the sense of belonging to it, are constructed through the interventions, sometimes intended, at other times more inadvertent, of human agents: state officials, labor unions, business interests. This, of course, is in acute contrast to the usual way in which nationality is seen: as something we are born with; something almost biological like the color of our skin or our sex. In school history lessons young children in Britain learn about their predecessors the ancient Britons just as French children learn about theirs the Gauls. But to attribute such a sense of unity, let alone national identity to peoples living two millennia ago is ludicrous. Based on the conditions of the time there would have been no such unity, no such identity. We are simply projecting onto the past our contemporary understandings of people and their relations; while forgetting that they are contemporary and so conditioned by circumstances of our time, at least
15
Hobsbawm Nations and Nationalism 1990: 3. As in Oh, so youre British are you? I thought you were Australian / South African / etc.
16
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those of the last three hundred years or so. In other words, we take the idea of nation for granted, when we shouldnt. So what sort of identity is the national: being English, French, American as opposed to, say, being working class, Roman Catholic, African-American, middle class, a woman, etc? There are several things we can point out here: i. It is an identity that is linked to people in a particular place and their common life there. Nations are inseparable from motherlands, homelands, countries. But it is always place linked to people and a way of life that they share: culinary habits, possibly, a language maybe, a landscape, sports, customs of all sorts. ii. It crosscuts other forms of identity such as those mentioned immediately above. Both men and women are American, old and young as well, along with blue collar workers, yuppies and the corporate class. In some cases, particularly those of a national emergency, national identity not only cross-cuts, it also trumps these other identities. Prior to the First World War European governments worried about the allegiance of working class people. The solidarities that they thought they had formed internationally were seen as an obstacle to mobilizing them for war amongst each other. But clearly in retrospect they need not have worried as most of them fought willingly for king or Kaiser and country. And the labor movement, as indicated through its key institutions like labor unions, has continued to be stubbornly national in its organization and often in its allegiances. iii. National identity draws on a set of differences between one people and another. Peoples see themselves as sharing certain attributes, relationships that define them in their own eyes as distinctively Greek, Italian, Canadian, etc, and which others dont share. In fact others are often seen as having the opposite characteristics. The sheer ability to draw distinctions in this way, of course, testifies to the high level of (time-)space distanciation that forms a crucial part of the humus in which ideas of nationhood grow; in fact the idea of the national seems impossible without the role of the media insistently reminding us that we are part of a particular country and a people who inhabit that country, that we are oppressed / threatened in various ways by others, and altogether prioritizing us over them.
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iv.
These latter features of national identity the way they draw on opposites and sharp contrasts, and from around the world17 points to a further feature of national identity: it is one that allows a people to position itself in a wider moral hierarchy and to define itself as better in some way, pacific victim of the aggressions of others, its people winning more Gold medals at the Olympics / more Nobel prizes / more World Cups / more wars // having had a grander empire / a higher standard of living / more democratic traditions / more caring traditions, than any other people ever!
In short, nationality pits us against them: We share a way of life to which others are not party. Others have threatened us and we have shared those challenges. In a hostile world we only have ourselves to rely on. Accordingly wars either of liberation as in the case of the colonies, or wars fought against other countries, as in the two World Wars have been major crucibles of nation formation. At the same time national identity not only defines lines of inclusion and exclusion resulting in the us against them feeling; it is also a source of pride, something that not only distinguishes us from others in cognitive terms (the French beret, the American high school band, national holidays, a national way of life) but also in normative terms: we are morally superior, altogether more meritorious and deserving. If we are going to give money to the poor it is to our own poor that we should give it; as the saying goes, charity begins at home. And since we are morally superior, others around the world can benefit from the export forcible if need be of our way of life. Consider now the broader context of social relations, the incentive framework, constraints and possibilities, within which nations formed and continue to form, and the dramatis personae of agents involved in their formation. We saw how the national as an identity, the idea of the nation as a particular sort of social group, emerged alongside those foundation stones of modernity, capitalism and the modern state. So just what are the connections? As far as the capitalist form of organization for production is concerned we should start out by noting how it presides over the installation of a regime of material possibility but also one of quite intense material insecurity: intense competition and downward pressure on wages and
17
And always as construed by the beholders, one should add.
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benefits, on company profitability so as to risk bankruptcy, and the every present threat of unemployment. This is an insecurity that manifestly has little to do with natural hazards crop failure due to the weather or disease, for example and almost everything to do with how we organize our economic life. And the fear of bankruptcy or unemployment is, of course, what drives the system forward in its characteristically dynamic, innovative, frontier-probing fashion. There is something else about this insecurity, however, and that is the way in which it is associated with the stretching out of social relations over increasing geographic distances. The threat always seems to come from somewhere else: cheap labor south of the border, China, the Japanese, and as far as Boeing and Seattle are concerned, from Airbus and Europe. The competition to which workers and employers are subjected always seems to be a competition between people in or from different places. This means that as those social relations are progressively elongated so it becomes possible to construct those people as not just competitors who are threatening to us but as different: different in virtue of certain characteristics of their way of life, their distinct history, their relations to us as (e.g.) colonial overlord or long term political antagonist. We, here in a particular place, therefore, share something: we are all threatened by competitors elsewhere. We share a threat to ourselves, to our way of life as we know it and in which we are deeply embedd...