Susan Strange

1
Susan Strange

• The Erosion of the State, Current History, vol.
  96, November 1997

2
Main argument

• Two anti-globalization schools
•  
• Globaloney school denies the very existence
  of globalization.
• Resistance school acknowledges globalization,
  but argues for slowing or stopping an immoral and
  damaging process

3
The globaloney school

• Primarily associated with discipline of
  international relations, which grew and matured
  around the theme, Why do states make war?.
  Have not adapted to post-statist international
  system. They are wrong globalization is real
  because of
• changes in material life (Braudel), the
  production structure
• changes in the financial structure (credit is now
  created and used in global markets)
• changes in perceptions, beliefs, ides, and tastes

4
The Resistance school

• This school acknowledges globalization as
  reality, but urges resistance to it there are
  really three core problems they see as being
  embodied in the globalization phenomenon
• There is no longer any state control over
  financial markets, no lender of last resort
• Globalization encourages corporations to ignore
  environmental concerns, while diminishing the
  power of the state to impose environmental
  controls.
• Globalization reduces political accountability
  there is a democratic deficit.

5
So, why globalization?

• Two factors account for globalization
• technological change
• accelerated mobility of capital
• Both of these factors go back at least 200 years

6
What caused these factors to accelerate in the
20th century?

• Globalization refers to the relatively recent
  acceleration in the pace of these two phenomena.
  Two additional factors explain this
• economic the pace of change meant that
  eventually a threshold was crossed where firms
  could no longer survive on the basis of profits
  in the home market.
• Political the new diplomacy

7
The New Diplomacy

• The new diplomacy (a term coined by Strange and
  Stopford) refers to the importance of state-firm
  or firm-firm relations in the modern world put
  another way, part of the erosion of the state is
  its inability to make uncontested and binding
  (sovereign) decisions.
• governments now have to negotiate directly with
  firms, as national economies cannot survive
  without international trade.
• Corporate takeovers are major factors in
  determining wages, employment, and trade.

8
The Erosion of the State

• Thus the power of the state has been eroded in
  three key areas, according to Strange
• Defense it is no longer so necessary to worry
  about defense, as trading interconnectedness
  has made war less rational and thus less likely
  (three exceptions are wars over oil or gas,
  water, and irredentism).
• Financial states no longer have the power to
  control their own currencies.
• Welfare states can no longer provide welfare, as
  the costs (taxation) discourage multinational
  corporations from investing in the economy.