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Introduction
After
economic globalization, the political variety is probably that most
feared by anti-globalizers. They are right to fear that a world
government modelled on the nation state would be terrifying; but
it is the message of this book that such an outcome is highly improbable.
Previous chapters have shown how many of the key features of society
- a healthy economy, cultural goods, welfare and the law among them
- will be delivered by people-friendly, globalized mechanisms that
will bypass the nation state rather than reinforcing it.
It is
reassuring to remember that during the heyday of the Roman
Empire, with the Pax Romana extending to almost all of the known
world, people in local communities were able to get on with their
day-to-day lives with little or no interference from the 'global'
power of Rome. The Roman Empire delivered a rule-based global order
which encompassed freedom of religion and custom for member peoples.
The comparison should not be pushed too far, of course, but in time
the day of the nation state will come to be seen as an interregnum
during which human freedoms were severely compromised. It will be
replaced by a globalized governance structure in which technology
and the Internet will allow greater freedom of cultural expression
and freedom of association, as well as a degree of personal political
involvement more closely approaching democracy than has ever before
been possible. These ideas are more fully developed in Books Two
and Three.
Most science
fiction writers, and many others, take it as inevitable that one
day there will be a world government; but globalization so far has
had far more traction in the economic and cultural spheres than
in politics.
The
Purposes Of Government
'Politics'
is very vague word, of course, so it's necessary first to define
those aspects of the existence of a nation
state and its citizens that can be treated as 'political' for the
purposes of this analysis.
The 'governance'
of a country is a first approximation: the tasks which are subject
to the political process include the making
and upholding of laws, including the legislature and the judiciary;
the raising of taxes and debt; the formation
and carrying out of spending programmes; issuance and maintenance
of a currency; defence; the conduct of an administration; the provision
of services including education, health,
welfare and pensions.
While
that may be a list of the roles of a modern nation state, it would
have looked very different two hundred years ago, let alone 1,000
years ago. The State has tended to accrete
roles over many hundreds of years. However in the last 50 years
there has been a tendency for the list to shorten again rather than
lengthen, even if the total amount of money raised by the State
has continued to increase as a proportion of national wealth in
almost all countries, so that considerable parts of the administration
of a country as defined above can by now be treated as part of non-governmental
economic management.
The formation
and carrying out of spending programmes, and the conduct of an administration,
while crucial roles of the nation state, are functions which have
to be performed by any organization at whatever level of 'globalisation'
it may exist; thus they don't call for analysis as part of the globalization
process. Many executive agencies of government, as they are trendily
termed, have in fact been privatized or
at any rate made independent of political control in a number of
countries. It is likely but not certain that this process will continue.
Whether or not such functions will become globalized in due course
is a harder riddle to solve.
Most liberal
economists agree that education, health, welfare and pensions should
be privatized to a greater or lesser extent (mostly greater!); but
governments are extremely unenthusiastic about it, for doctrinal
or 'nanny state' reasons. It is clear that while nation states still
have a firm grip on the delivery of these services, there is growing
demand among practitioners and users (parents and patients) for
more choice. There is economic logic in it, as well, and the sheer
cost and inefficiency of state provision in these areas, combined
with growing affluence on the part of consumers will combine to
drive such services gradually into the private sector, at least
in richer countries.
Of course
it is true that every year the absolute number of 'not better off'
people in the world is growing, so that even if many more people
move to private provision of education, health, welfare and pensions,
in the short term they will represent a diminishing proportion of
the global population. However this is only a short-term situation:
within thirty years the enormous populations of China, India and
other rapidly developing countries will have lifted themselves out
of poverty, and we will enter a phase during which the number of
poor people will decline, both absolutely and relatively. Given
the speed with which understanding of economic mechanisms is advancing
worldwide, poorer countries may at least be spared the socialist
experiments that have been imposed on today's economically advanced
countries, and will perhaps move directly to more market-oriented
systems for the provision of social goods.
Chapters
One and Two have described the processes by which economic management,
and the delivery of health, welfare and education, as 'cultural'
goods, are gradually becoming globalized; they can therefore be
excluded from this Chapter's consideration of 'political' globalization.
The residual
governmental tasks, then, may eventually be defence, monetary
and fiscal affairs (issuing, raising, borrowing and spending money),
and the law. Chapters Three described the globalization
process in fiscal affairs from a taxation perspective, and Chapter
Four described the globalization of the law and dispute resolution;
it remains in this chapter to deal with defence, the monetary aspects
of fiscal affairs, and to review the international organizations
which are taking shape as the building blocks of a globalized polity
of the future.
Globalization
Of Defence
Among
national virility symbols, an army presumably
counts higher than a central bank or a currency, but slightly below
a Queen or a President. Not all countries have armies: Costa Rica
is an example of one that by law doesn't and can't have an army.
Japan and Germany are still so to speak on probation after WWII,
although both are moving towards again having fighting forces with
more than defensive roles.
It wasn't
always so. In the last thousand years, the first permanent, professional
national army came into existence only under Cromwell. Previously,
and for many countries for two hundred years afterwards, armies
were mercenary. It was only when the unitary nation
state gained control over its borders and the physical bodies of
its subjects (say, 1800 for most of Europe) that it became possible
for countries to maintain standing armies. England, being an island,
found it easier, although even there the press-gang lasted until
well into the 19th century. Conscription, in one form or another,
has sustained most European armies for the last hundred years or
more.
The point
has been made in previous chapters that most nation states are likely
to be extremely unwilling to give up their armies, which are so
very potent a symbol of the power of the State. One just needs to
think of all those TV clips of travelling politicians inspecting
guards of honour, more often than not dressed in improbably Ruritanian
18th century uniforms and carrying guns which would be blown away
by any whiff of 'shock and awe'. Even the Pope (how many divisions
does he have?) is secured by his mediaeval Swiss Guards.
Curiously
enough, it may be the Pope's apparently outdated mercenary model
that comes to the fore again in future. Although there are still
national armies, there are few national armourers: with the exception
of some national champions in the very grandest countries, arms
manufacturing has become an entirely private, international affair.
Wars
themselves are increasingly becoming international cooperative efforts
supervized by global or regional governance bodies or alliances
(the United Nations, NATO,
the European Union). But
why
aren't there any United Nations or NATO soldiers? The 'casques bleus'
are always national soldiers delegated for a period to a UN force,
ditto with NATO. The principle of a UN-mandated force exists, yes,
but countries have never yet been willing to equip the UN with actual
firepower of its own, and when you consider how it operates, you
can understand why. Therefore the countries which sign up to a particular
UN mission are often pursuing their own political or economic goals
under cover of the UN mission. Sooner or later however there will
be a reform of the UN which puts this right; and it seems more likely
than not that an EU military force will eventually crystallize out
of existing national military establishments.
Armed
forces in the employ of non-territorial bodies such as the United
Nations will look a great deal like mercenaries, in the older sense
of the term before it became tainted with ex-colonial overtones.
And given that the equipment of such 'armies' will be provided on
a commercial basis by multinational manufacturers, would we also
not expect those manufacturers to expand into the provision of fully-equipped
and trained armies? Anyway (see later in the book) by 2050 the fighting
units will no longer be people, they will be advanced robots
- and only large, sophisticated manufacturers will have the technology
and resources to supply them. The movie 'Robot' explored some of
the scarier dimensions of this territory; but failed to create a
believable global governance framework in which such dangers would
in actuality be minimized.
Globalization
Of Monetary And Fiscal Affairs
Although
some countries, notably the US and UK, have separated control of
their currencies from the day-to-day business of running a government,
there remains in all countries a very close connection between the
value of a currency and the fiscal behaviour of government. Further,
there is no longer any sense in which a country can operate monetary
policy in disregard of global trends.
Clearly,
the IMF
and the BIS
take part in creating and controlling the global financial environment
in which currencies exist. They were described in Chapter 1 and
are more fully analyzed in Appendix One. Rating agencies also form
part of the global financial landscape in which nation states must
maintain their currencies. Organizations such as Standard and Poors
and Moody's have great power over the fiscal behaviour of nation
states, and they certainly don't have just a reactive role, being
very ready to voice criticisms and make suggestions with the goal
of strengthening a currency or a nation's credit-worthiness.
Says
Fitch Ratings Sovereigns Group: 'The sovereigns rating methodology
draws on modern instances of default and near-default to identify
a range of key indicators of debt payment capacity and willingness
- quantitative and qualitative - to assess and monitor sovereign
creditworthiness in a consistent fashion across countries and over
time. A comprehensive analysis of public and external accounts,
structural strengths and weaknesses of the economy and the political
and social constraints faced by the national authorities are central
to the Fitch sovereign rating approach, underpinned by rigorous
and data rich research available to clients.'
Perhaps
it is a bit strong to say that there is a modern science of sovereign
debt-worthiness; but still there is clearly a received idea of how
nation states can and must behave if they wish to tap global debt
markets on the best possible terms - and they all do! Taken together
with the IMF's policy prescriptions, there is not much fiscal freedom
of action left to individual countries.
The
enormous foreign exchange and derivatives markets - which in their
size absolutely dwarf the economies of even the largest states -
also maintain a close watch over governments' fiscal behaviour and
are quick to punish any departure from fiscal orthodoxy.
Then there
are the central banks, which are increasingly supra-national in
nature, not just because of the work of the BIS, but because they
are tending to form regional power-bases. This is particularly true
of the central banks of smaller countries, which are largely powerless
to swim against global tides. The EU is the
most obvious example, with currency issuance and management having
been abandoned by most member states in favour of the ECB (European
Central Bank) and its euro. The 9 East Caribbean
states (OECS) have also created a common Central Bank. It would
be quite surprising not to see equivalent organizations arising
among Asian and African countries during the next ten years.
Other
small - and not so small - countries have given up the unequal battle
to remain fiscally sovereign simply by adopting a dollar peg. Examples
are Hong Kong, Panama and Costa Rica, Thailand and Saudi Arabia.
The Fed is therefore not just the central bank of the USA,
but to all intents and purposes the Central Bank of a large slice
of the world's economy. In the past, Canada, Russia and China have
all pegged to the dollar, but for differing reasons have abandoned
it. In the cases of Canada and China, it was growing economic strength
that allowed them to drop the peg; in the case of Russia, it switched
to the euro.
It is
extremely hard to say whether the loss of fiscal freedom that goes
along with the loss of a national currency is balanced by the gains
in terms of stability and discipline. The United States is an instructive
example, showing that regional economic flexibility is an economically
satisfactory replacement for currency flexibility - but the social
consequences are unacceptable to many social democrats. This scenario
has yet to play itself out in Europe. If and when it does, all eyes
will be on the euro. Which nation will be the first to ditch it?
Or will 'ever closer union' prove to be stronger than political
convenience?
One thing
is clear: while there are more and more countries in the world,
there are fewer and fewer currencies. Logically, it should end with
very many more countries and just one currency (the latter is another
assumption made by most science fiction writers).
Monetary
globalization has arguably progressed fast because of the internationalization
of securities markets; fiscal affairs have not been impacted to
the same extent. But as economic and cultural globalization progresses
along the lines of Chapters One and Two, pressure will mount on
existing largely national fiscal models. Governments
may retain control of local and personal taxation and spending,
but they will certainly lose control of international and business
taxation. These developments were explored in Chapter Three - Fiscal
Globalization, which concludes that while business taxation will
probably disappear, personal and value-added taxation will be retained
at national level, albeit according to internationally-agreed rules.
Models
For Supra-National Government
Governments
and the globalizing organizations to which their power is leaching
away can be discussed both in regional and global terms. One object
of this discussion, obviously, is to clarify the future role and
functions of the nation state.
In 1750,
residents of the United States would have been
very alive to the possibility of regional (supra-state) government,
something that was gradually to be imposed on (or that evolved from)
their contemporary model of independent sovereign states. Nowadays,
however, very few US citizens would give house room to the notion
that their country might one day form part of a larger association,
in political terms.
In
Europe, however ('Old' Europe!) the oppposite is true. In 1750,
at a time when nation states were coming to be all the rage, only
a few nutters would have looked forward to a United States of Europe.
But in 2007, this is what they have got, for better or worse.
The United
States of America has been a huge success, and continues to be,
although its legislative process seems to have become a martyr to
pork. The United States of Europe (Winston Churchill's term) is
also itself on the way to being a success, although Eurosceptics
in the UK and elsewhere think otherwise.
On the
other hand, there are now 192 independent, sovereign nation states
in the UN, up from 50 at the time of its founding,
and the number continues to rise, due to de-colonization, political
fragmentation and the triumph of 'human rights'
as a guiding principle of political life. Few of these new 'states',
though, could be said to have 100% control over the 'essential'
political competencies of defence, the law and fiscal affairs. Almost
all of them are beholden to a larger power for some or all of these.
Until
WWII, the guiding principle of politics was force, and it is easy
to forget how much progress has been made in creating and sustaining
the idea of national self-determination in the New World Order.
Flawed, corrupt and ineffectual as it is, we must thank the UN for
this, rather wonderful state of affairs.
The word
'federal' is understood very differently by different groups of
political philosophers, but if for the moment we allow it to mean
simply a grouping of semi-independent states under a central (federal)
authority, then this can adequately describe either the USA or the
EU. Both of these federations have successfully prevented internal
fighting wars (the USA for 130 years now, and
the EU for 60); and both have lively and evolving antagonisms between
component states and the federal centre.
Despite
'enlargement fatigue' the EU is still growing, and the weight of
its settled policies and economy seems likely to bring economic
stability to even the difficult Balkans within the next ten years.
As to Turkey, the outcome remains unclear. The USA for its part
would like to extend its democratic 'pax americana' to the Middle
East and to Central if not Southern America. That also remains to
be seen.
Chapter
8 explores the idea that the nation state, which for 300 years was
the most successful political unit so far evolved by humanity, is
now an outmoded form. There are no more African jungles to conquer
and exploit. This is hardly a new idea to philosophers or historians,
but it is not easily accepted by politicians, for obvious reasons.
One of the reasons for the success of the EU is that it has offered
local politicians a bigger stage on which to act (surely the same
must have been true of the USA in the 19th century). If local bigwigs
are given enough federal candy to entrance their egos, they quickly
forget all about local autonomy.
Thus it
is an incontrovertible fact that regional political groupings eat
away at the powers of their national member states, on all the 'essential'
levels of national sovereignty itemized above: defence, the law
and fiscal affairs. The very public mantra of the authorities of
the EU in Brussels is 'ever closer union'; but is necessary to spend
time in Brussels to understand just how deeply this is imbued in
all the processes and forward planning of the European Commission
and its legislative associates, the European Parliament, the Economic
and Social Committee, and the wittily mis-named Committee of the
Regions.
Regional
politicians, even of the stature of Margaret Thatcher, normally
don't understand this, and they are easy meat for Brussels' agenda
of regulatory creep. The onward march of the EU's 'acquis communautaire'
seems as unstoppable as the tide, and it is far from having reached
its high-water mark. The centralizing or harmonizing
impetus of the Commission and its legislative process are enormously
assisted by the European Court of Justice, which
has carved out for itself a role equivalent to that of the US Supreme
Court. Like the Supreme Court, the ECJ has proved to be far more
than just a superior court of appeal, and has frequent reference
to the language of the EU's founding documents. This has led to
a string of judgements in favour of the 'freedoms' which are spelled
out in the Treaty of Rome and its later amendments (Nice and Helsinki),
much to the benefit of individual actors
(personal and corporate) and for the most part to the disbenefit
of the powers of member states.
It is
the ECJ that will turn the EU from a single economic market into
a real political unit. This outcome is implicit in the EU's Treaties,
but without the enforcing mechanism of the Court, it is likely that
Member States would have been able to use the Council (the governing
body of the Union, in political terms) to fend off the Commission's
incursions on to their national turf.
It all
takes time, though. The attempt to forge a formal constitution for
the Union is - probably only temporarily - stalled, and it may come
into being through a series of sideways shuffles rather than all
in one go. Meanwhile, the proposed inclusion of Turkey will hand
backsliders and eurosceptics a powerful delaying mechanism. These
are just teething problems, and by, say, 2030, it can be expected
that, for better or worse, the EU will have, in addition to economic
hegemony, unified fiscal, military and judicial responsibilities
which will leave little freedom of action to individual member states.
Probably it will look a lot like the USA in political terms.
Other
regions of the world are hard on the heels of the European Union.
Although it is premature to guess at the timescale, organizations
such as CARICOM, Mercosur and ASEAN are all likely to develop meaningful
regional economic and political powers during the next quarter century.
There are many other proto-regional bodies at varying stages of
development and with varying degress of political pretension.
The bodies
mentioned in this chapter and some others are further described
in Appendix One.
CARICOM
The
Caribbean Community and Common Market was established by the 1973
Treaty of Chaguaramas, which was revised in 2001. CARICOM replaced
the Caribbean Free Trade Association, originally founded in 1965.
Currently there are 15 full members, 5 associate members and 7 observer
countries. Since the great majority of these jurisdictions are ex-British
colonies, CARICOM is largely English-speaking.
CARICOM's
progress towards integration has been stuttering, and it was not
until 2006 that a first group of members (Barbados, Belize, Jamaica,
Guyana, Suriname and Trinidad and Tobago) brought the CSME (CARICOM
Single Market Economy) to life, although with quite limited scope.
CARICOM
has set up a number of state-like institutions, including a secretariat
with a Secretary-General, located in Georgetown, Guyana, a Standing
Committee incorporating heads of government with specific portfolios,
and a Committe of Central Bank Governors (the Eastern Caribbean
states - OECS - have had their own regional central bank and stock
exchange for some time already). The Caribbean
Court of Justice came into being in 2005, and apart from acting
as a forum for the resolution of CARICOM disputes, has taken over
the powers of the Privy Council in London as a court of final appeal
for many Caribbean jurisdictions. The CCJ is based in Port of Spain,
Trinidad and Tobago. A CARICOM passport, allowing freedom of movement
within certain parts of the area, was launched in 2005, and has
been adopted by five member states already.
CARICOM
has entered trade negotiations with a number of regional groupings
and individual states, including the USA.
MERCOSUR
Mercosur
(Mercado Común del Sur) remains in reality little more than
a South American regional trading pact, but it has pretensions to
political integration on the scale of the EU.
Mercosur
was founded in 1991 by the Treaty of Asunción, amended and
updated by the 1994 Treaty of Ouro Preto. Current members are Argentina,
Brazil, Paraguay, Uruguay and Venezuela. Bolivia, Chile, Colombia,
Ecuador and Peru are associate members.
To
some extent, the Free Trade Area of the Americas is an alternative
to Mercosur, at least on the level of trade, and it's possible that
the US sees the FTAA as a means of vitiating
independent moves towards regional political union. The EU, on the
other hand, has given strong support to Mercosur, and there are
political as well as trade dialogues between the two. If South America
does proceed towards any kind of political union, it will be through
Mercosur.
The
region it covers has more than 220 million inhabitants and has GDP
of more than one trillion dollars a year.
ASEAN
The
Association of Southeast Asian Nations (ASEAN) was established in
1967 between Indonesia, Malaysia, Philippines, Singapore, and Thailand.
Since then, Brunei Darussalam, Vietnam, Lao PDR, Myanmar and Cambodia
have joined. The region has a population of about 500 million, and
a combined GDP of US$700 billion. ASEAN is mid-way between the EU
and Mercosur in terms of its maturity as an organization.
The
ASEAN Declaration gives the aims and purposes of the Association
as being to accelerate economic growth, social progress and cultural
development in the region and to promote regional peace and stability
through abiding respect for justice and the rule of law in the relationship
among countries in the region and adherence to the principles of
the United Nations Charter.
The
ASEAN Economic Community seeks to create a stable, prosperous and
highly competitive economic region in which there is a free flow
of goods, services, investment and a freer flow of capital, equitable
economic development and reduced poverty and socio-economic disparities
by 2020.
Global
Government
Not
many organizations have yet emerged to stake their claim to global
political legitimacy; probably the United Nations
is the only one which has voiced clear intentions in that direction,
but its attempts to develop global responsibilities in the key political
areas of fiscal and military power have been brushed aside by its
member nation states.
We
have seen, on the other hand, that in cultural terms the UN has
a powerful profile through agencies such as the World
Health Organization and UNICEF. Its affiliates include the International
Olympic Committee. All these organizations were described in Chapter
Two.
The
United Nations has considerable involvement in the development of
international and harmonized laws, although it has relatively little
to do with the judicial process itself other than through The
International Court of Justice (see Chapter Two) and the International
Criminal Court (see Chapter Four).
United
Nations bodies involved in framing or harmonizing laws include
the
International Law Commission and the Commission on International
Trade Law (UNICTRAL), both described in Chapter Four.
Summary
This
chapter has put forward the case that the momentum of globalization
will leave nation states high and dry in an
ocean of international regulation, and that over the next 50 years
even key national responsibilities such as defence and taxation
will be subsumed by global or international bodies. Of course nation
states will continue to exist, and will continue to deal with local
issues, will continue to raise and spend money, and (no doubt) will
continue to legislate for all they are worth. They will continue
to have politics, as well; but by 2050 the politics of a nation
state will have a relationship to world politics rather similar
to that between national and state politics in the USA.
The
removal of language as a barrier to human
understanding, something that will begin to happen in the 2020s,
will further weaken the boundaries that divide nation states. A
later chapter (number 8) on The Future of the State will speculate
on the likely direction of world governance during the remainder
of the 21st century as a result of this and other tendencies that
have been sketched out in the first part of this book, and will
also take account of the massive enhancement of human cognition
and inter-personal communication that will result from technological
developments in the first half of the new century - to be described
in Part Two of the book.
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