UNIT II THE STRUCTURES OF

GLOBALIZATION

The Global Interstate System

Sir Leandro Romano O. Dalisay

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The Global Interstate System
Globalization and the Nation- States
Globalization in the early years of the 21st century has not displaced
the state. Max Weber, a German social theorist define state as a
compulsory political organization with a centralized government that
maintains a monopoly of the legitimate use of force within a certain
territory. Hedley Bull, a 20th century international philosopher stated
that states are independent political communities each of which
possesses a government and asserts sovereignty in relation to a
particular portion of the earth’s surface and a particular segment of
the human population. This means that government and
constitutions come and go but states readily endure.

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The Global Interstate System
Nation on the other hand is an imagined political community
and imagined as both inherently limited and sovereign.

 It is imagined because the members of even the smallest nation

will never know most of their fellow- members, meet them, or
even hear of them, yet in the minds of each lives the image of
their communion.
 The nation is imagined as limited because even the largest of
them, encompassing perhaps a billion human beings, has finite, if
elastic, boundaries, beyond which lie other nations.

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The Global Interstate System
Nation on the other hand is an imagined political community
and imagined as both inherently limited and sovereign.

 It is imagined as sovereign because the concept was born in an age

in which Enlightenment and Revolution were destroying the
legitimacy of the divinely ordained, hierarchical dynastic realm…
nations dream of being free, and if under God, directly so. The
gauge and emblem of this freedom is the sovereign state.
 It is imagined as community, because regardless of actual
inequality and exploitation that may prevail in each, the nation is
always conceived as a deep horizontal comradeship.

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The State and the Economic Interdependence

The rising momentum of global free-market capitalism in the final decades

of the 20th century, the accompanying rise in transnational enterprises, and
the resulting disparities between easy flows of money and commodities
across international boarders and the legal barriers and logistical hurdles
that keep most workers tied to their home communities are associated with
globalization.
The belief that globalization imposes a forced choice upon states either to
conform to free market principles or run the risk of being left behind is
termed into a phrase called “Golden Straitjacket” by Thomas Friedman, a
neoliberalism journalist and advocate, to illustrate the forcing of states into
policies that suit the preferences of investment houses and corporate
executives (Electronic Herd) who swiftly move money and resources into
countries favored as adaptable to the demands of international business and
withdraw even more rapidly from countries deemed uncompetitive.
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The State and the Economic Interdependence

Further, countries are compared to individual stocks where the states and
their government are rewarded and punished similar to buying and selling
shares of individual companies. States also have lost an important element
of economic sovereignty and that neo-liberalism is beyond contestation.

There are two things that will happen if a country is in Golden Straitjacket:
the economy grows and politics shrinks. It is a straitjacket because it narrows
the political and economic policy choices of those in power to relatively tight
parameters. This is the reason of the difficulty of finding any real differences
today between ruling and opposition parties in those countries that have
put on the Golden Straitjacket.

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Neoliberalism and Economic Sovereignty

Neoliberalism is the intensification of the influence and

dominance of capital. It is the elevation of capitalism as a mode
of production into an ethic, a set of political imperatives, and a
cultural logic. It is a project to strengthen, restore, or, in some
cases, constitute anew the power of economic elites. It values
market exchange as an ethic in itself capable of acting as a
guide to all human action and substituting for all previous held
ethical beliefs. It emphasizes the significance of contractual
relations in the marketplace. It also holds that the social good
will be maximized by maximizing the reach and frequency
market transactions, and it seeks to bring all human action into
domain of the market.
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Neoliberalism and Economic Sovereignty

Economic sovereignty on the other hand is the power or

national governments to make decisions independently of
those made by other governments. Globalization as an increase
in the international integration of markets for goods, services,
capital and labor, is also a counterpoint of national sovereignty.
In a globalized world economy, governments have no
alternative but to adopt neoliberal economic policies of
privatization, deregulations, and reductions in public
expenditures.

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Neoliberalism and Economic Sovereignty

There are four different concepts of sovereignty. These include:

 International Legal Sovereignty
It refers to the acceptance of a given state as a member of the
international community.
 Westphalian Sovereignty
It is based on the principle that one sovereign state should not interfere in
the domestic arrangements of another.
 Interdependence Sovereignty
It is the capacity and willingness to control flows of people, goods and
capital into and out of the country.
 Domestic Sovereignty
It is the capacity of a state to choose and implement policies within the
territory

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Neoliberalism and Economic Sovereignty

Global economic trends are influenced by economic sovereignty of an

individual member. The increase of the number of international
organizations and the expansion of their functions have undeniably
restricted an individual country's sovereignty to certain extent. The
most typical example is the increasingly extensive involvement of the
world's three leading financial institutions the World Bank (WB), the
International Momentary Fund (IMF) and the World Trade
Organization (WTO) in domestic economic affairs of their members.
The 60,000-plus transnational corporations, which developed rapidly
in the latter half of the last century, are now sharing or "encroaching
upon“ individual country's "sovereignty" in the economic domain.

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Neoliberalism and Economic Sovereignty

Many underdeveloped nations that resorted to foreign assistance and

interventions resulted to the deprivation of government as regard control of
their economy due to the disorderly domestic economic establishments.
Due to this, some scholars predicted the loss of their economic sovereignty
under this form of neo- colonialism. More importantly, some of the world's
leading economic entities, such as the United States, the European Union
and Japan, by taking advantage of their predominant economic status, are
affecting or infringing upon other countries' economic sovereignty. Under
these circumstances, an increasing number of scholars have concluded that
the economic dominion of individual nations has come to an end. While
countries inevitably cede some control over their economic sovereignty to
external actors, it is the “structural power” of sovereign states which still
dictates the terms and tenets of globalization.

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Economic and Political Integration (European
Integration)

the process of industrial,

political, legal, economic,
social and cultural
integration of states wholly
or partially in Europe.
European integration has
primarily come about
European through the European
Union and its policies.
integration
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Economic and Political Integration (European
Integration)
An international organization
comprising 28 European countries
and governing common economic,
social, and security policies. In the
early 21st century EU expanded into
central and eastern Europe with the
following members:

Austria, Belgium, Bulgaria, Croatia,

European Cyprus, Czech Republic, Denmark,
Estonia, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Latvia,
Union (EU) Lithuania, Luxembourg, Malta, the
Netherlands, Poland, Portugal,
Romania, Slovakia, Slovenia, Spain,
Sweden, and the United Kingdom.

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Economic and Political Integration (European
Integration)

It can be described as a process

and a means by which a group of
countries strives to increase their
level of welfare. It is an
arrangement between different
regions that often includes the
reduction or elimination of trade
barriers, and the coordination of
Economic monetary and fiscal policies.
Reducing costs for both
consumers and producers and
Integration increasing trade between the
countries involved in the
agreement are the aims of
economic integration.
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Economic and Political Integration (European
Integration)

Seven Stages of Economic Integration

1)Preferential trading area (PTA)
2)Free trade area
3)Customs union
4)Common market
5)Economic union
6)Economic and monetary union
7)Complete economic integration

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Economic and Political Integration (European
Integration)

Preferential Trade Areas (PTAs)

Happens when there’s an agreement on reducing or eliminating tariff
(tax or duty to be paid on a particular class of imports or exports)
barriers on selected goods imported from other members of
countries within the geographical region or areas. Agreement can
either be bilateral (between two countries), or multi-lateral (several
countries). Free Trade Areas (FTAs) are created when two or more
countries in a region agree to reduce or eliminate barriers to trade on
all goods coming from other members. The North Atlantic Free Trade
Agreement (NAFTA) is an example of such a free trade area, and
includes the USA, Canada, and Mexico.
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Economic and Political Integration (European
Integration)

Free Trade Agreements (FTAs) or

Preferential Trade Agreements (PTAs)
Eliminate import tariffs as well as import quotas between
signatory countries. These agreements can be limited to a few
sectors or can encompass all aspects of international trade.
FTAs can also include formal mechanisms to resolve trade
disputes. The North American Free Trade Agreement (NAFTA) is
an example of such an arrangement.

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Economic and Political Integration (European
Integration)

Custom Union
Removal of tariff barriers between members, together with the
acceptance of a common or unified external tariff against non-
members is involved in the Custom Union. Single payment or duty is
made by countries exporting to customs union. Goods inside the
union can move freely with no additional tariffs. Members shared
tariff revenues while a small share is retained by the country that the
collects the duty. Removing internal barriers to trade and requiring
participating nations to harmonize their external policy as well as
building a free trade area are put up by customs union.

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Economic and Political Integration (European
Integration)

Common Market (CM)

One major step towards economic integration is Common Market
(CM). All barriers to the mobility of people, capital and other
resources within the area in question, as well as eliminating non-tariff
barriers to trade, such as the regulatory treatment of product
standards are removed by CM aside from containing the provisions of
a customs union. The extension of free trade from just tangible
goods, to include all economic resources which means that all
barriers are eliminated to allow the free movement of goods,
services, capital, and labor, including removal of tariffs and reduced
non-tariff barriers is the key feature of a common market.
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Economic and Political Integration (European
Integration)

Economic Union
The trading bloc that has both a common market between
members, and a common trade policy towards non-members,
although members are free to pursue independent macro-
economic policies is termed Economic Union. It requires
coordinated monetary and fiscal policies as well as labor
market, regional development, transportation and industrial
policies. In economic union the use of a common currency and
a unified monetary policy is considered. The best example of
Economic union is the European Union (EU).

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Economic and Political Integration (European
Integration)

Economic and Monetary Union

(EMU)
As a key stage towards complete integration, the Economic and
Monetary Union (EMU) involves a single economic market, a common
trade policy, a single currency and a common monetary policy. It
represents a major step in the integration of EU economies. EMU
involves the coordination of economic and fiscal policies, a common
monetary policy and a common currency, the euro. EMU is a means
to provide stability and for stronger, more sustainable and inclusive
growth across the euro area and the EU as a whole for the sake of
improving the lives of EU citizens.
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Economic and Political Integration (European
Integration)

Complete Economic Integration

The final stage of economic integration in which member states completely
forego independence of both monetary and fiscal policies. States that
participate in complete economic integration have no control of economic
policy including economic trade rules. There is full monetary union where
regulations regarding labor and capital are shared between member states
and this includes a single currency. There is also a complete harmonization
of fiscal policy which includes shared regulation of tax and benefit rates.
Involved in complete economic integration are single economic market, a
common trade policy, a single currency, a common monetary policy,
together with a single fiscal policy, including common tax and benefit rates
or the complete harmonization of all policies, rates, and economic trade
rules.
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Economic and Political Integration (European
Integration)

Political integration
Refers to the integration of components within political systems; the
integration of political systems with economic, social, and other human
systems; and the political processes by which social, economic, and political
systems become integrated . Creating common policy frame work that
creates equal conditions for the functions of the integrated parts of the
economy is the aim of policy integration. Political integration is mainly based
on welfare increasing effects of integrated policy making according to the
Economics of European integration. It brings economic benefits by leading
the recovery of effectiveness in policy making.

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Theories of European Integration

Neo-functionalism
This theory focuses on the supranational institutions of the EU of which the main driving forces
of integration are interest group activity at the European and national levels, political party
activity, and the role of governments and supranational institutions. The European integration is
mostly seen as an upper class-driven process-driven by national and international political and
economic upper crusts.
It is a theory of regional integration, building on the work of Ernst B. Haas, an American political
scientist and Leon Lindberg, also an American political scientist. Jean Monnet's approach to
European integration, which aimed at integrating individual sectors in hopes of achieving spill-
over effects. The core of neo-functionalism is the use of the concept ‘spill –over’, situations
when an initial decision by governments to place a certain sector under the authority of central
institutions creates pressures to extend the authority of the institutions into neighboring areas
of policy, such as currency exchange rates, taxation, and wages. This core claim meant that
European integration is self- sustaining: ‘spill-over’ triggers the economic and political dynamics
driving further cooperation.

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Theories of European Integration

Intergovernmentalism
This theory provides a conceptual explanation of the European integration
process. The main concept of the Intergovernmentalism is emphasizing on
the role of national states in the European integration; in another words it
argues that "European integration is driven by the interest and actions of
nation states". This theory was suggested by Stanley Hoffmann. The theory
proposed the Logic of Diversity, which 'set limits to the degree which the
‘spill-over’ process can limit the freedom of action of the governments...the
logic of diversity implies that on vital issues, losses are not compensated by
gains on other issues'.

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Theories of European Integration

Liberal Intergovernmentalism
This a dominant political theory developed by Andrew Moravsik in 1993 to
explain European integration. Application of rational institutionalism to the field
of European integration is the aim of this theory. Moravcsik stated that 'state-
society relations--the relationship of state to the domestic and transnational
social context in which they are embedded--have a fundamental impact on state
behavior in world politics and that the 'universal condition of world politics is
globalization.' It is the web of globalized economic, social and political
relationships that determines the living conditions of individual citizens,
corporations and civic groups and shapes what they want and thus what their
governments want”. Liberal intergovermentalists stated that the bargaining
power of member states is important in the pursuit of integration, and package
deals and side payments also occur in the process of making deals.

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Theories of European Integration

New Institutionalism
This theory emphasized the importance of institutions
in the process of European integration. Its three key
strands are: rational choice, sociological and historical.

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Theories of European Integration

Multi-level Governance (MLG)

This is a new theory of European integration. Writers Liesbet
Hooghe and Gary Marks defined MLG as dispersion of authority
across multiple levels of political governance. They stated that
over the last fifty years, authority and sovereignty has moved
away from national governments in Europe, not just to the
supranational level with the EU, but also to subnational levels
such as regional assemblies and local authorities.

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Transnational Activism in States

Transnational activism
Transnational activism can be defined as the mobilization of
collective claims by actors located in more than one country
and/or addressing more than one national government
and/or international governmental organization or another
international actor. It is a social movements and other society
organizations and individuals operating across state borders.
It also refers to the coordinated international campaigns on
the part of networks of activists against international actors,
other states, or international institutions.

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Transnational Activism in States

Social movement
A social movement is a type of group action. It refers to the
organizational structures and strategies that may empower oppressed
populations to mount effective challenges and resist the more
powerful and advantaged elites". They are large, sometimes informal,
groupings of individuals or organizations which focus on specific
political or social issues. They carry out, resist, or undo a social
change. They provide a way of social change from the bottom within
nations. A social movement is a collective challenges to elites,
authorities, other groups or cultural codes by people with common
purposes and solidarity in sustained interactions with elites,
opponents and authorities.
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Transnational Activism in States

Global justice movement

The global justice movement describes the loose collection of individuals
and groups often referred to as a “movement of movements”, who advocate
fair trade rules and are negative to current institutions of global economics
such as the World Trade Organization. The movement is often labeled the
anti-globalization movement by the mainstream media. Those involved,
frequently deny that they are anti-globalization, insisting that they support
the globalization of communication and people and oppose only the global
expansion of corporate power. Anti- capitalist and universalist perspective
on globalization in also indicated in the term differentiating the movement
from those whose politics are based on a defense of conservative on
national sovereignty as they identified opponents of globalization.

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Transnational Activism in States

New transnational activism

The new transnational activism is as multifaceted as the internationalism.
Although globalization and global neo-liberalism are frames around which
many activists mobilize, the protests and organizations are not the product
of a global imaginary but of domestically rooted activists who are the
connective tissue of the global and the local, working as activators, brokers
and advocates for claims both domestic and international.

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Social Media and the State

Social media
Social media is a computer-based technology that facilitates the
sharing of ideas and information and the building of virtual
networks and communities. By design, social media is internet
based and offers users easy electronic communication of
personal information and other content, such as videos and
photos. Users engage with social media via computer, tablet or
smartphone via web-based software or web application, often
utilizing it for messaging. It “empowers” individuals to have a
voice.

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Social Media and the State
Many social movements have increasingly seen social media as a means to
collaboratively crowdsource with diverse stakeholders. In large
organizations, social media are often supported because the technology can
help foster the sense of a “digital village” where individuals are able to “see”
the lives of others within their organization and feel closer to them. Social
media are used commercially as a key mode for product exposure and
messaging. Landscape of organizational communication within social
movements is shaped and often fundamentally influenced by social media.
Rippling effects which touch many different aspects of the movements
process from resource mobilization to actual interventions is often created
by social media. Social movements can and do draw from accumulated
knowledge gleaned from previous movements and activities. Social media
have changed the ways in which this knowledge is being recorded and
passed on.

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Social Media and the State
New forms of digital media are accompanied by globalization in bringing to
light the possibilities for merging new kinds of communities via networks
and creating new arenas for political interaction, identity and belonging. The
concept of network society affirms that citizens and civil society
organizations can increasingly use networks to gain power relative states by
generating alternative discourses that have the potential to overwhelm the
disciplinary discursive capacity of the state as a necessary step to
neutralizing its use of violence. It is believed that states are making
pragmatic transformation by adapting to fit in among decisive global
networks in finance, education, science, technology, arts, culture and sports.
New Media opens up potential for citizens to gain leverage. It is the only
power of global civil society acting on the public mind via the media and
communication networks that may eventually overcome the historical
inertia of nation states.

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Thank You For Listening
Sir Leandro Romano O. Dalisay

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