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Globalization and Governance Author(s): Kenneth N. Waltz Source: PS: Political Science and Politics, Vol. 32,

Globalization and Governance Author(s): Kenneth N. Waltz Source: PS: Political Science and Politics, Vol. 32, No. 4 (Dec., 1999), pp. 693-700

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-;,'-'- i

ii IiiC'

Globalizationand Governance

n 1979 I describedthe interdependence

of statesas low but

increased, but only to about the 1910

increasing. It has

by

the

mobility of labor, and lower

by

themutual

military

of states.Yet one feelsthat

cosmopolitan in

beyond.

centersand

produced

in its

years, and

presented not in Shanghai

or Bei-

in New York. Communicationis

become part of American design teams

without leaving

World War

of stateswas thought of as heralding an

era of

peace among racy and prosperity withinthem.Associat- inginterdependence,peace, democracy, and prosperity is nothing new. In his

muchtranslatedand

The GreatIllusion (1933), Norman

summed up the textsof generations of

classicaland neoclassicaleconomistsand

drewfromthemthedramaticconclusion

thatwarswould no

cause they would not pay. WorldWar I

instead

whichreduced

level thatremainedlow almostuntilthe

end of the Cold War. I

cause

theirhomelands.Before

I, theclose interdependence

nationsand democ-

widely read book,

Angell

longer be fought be-

level ifmeasured by tradeor capital flows

as a percentage of GNP; lowerifmea-

sured

stillifmeasured

dependence theworldhas become a smallerone. In- ternationaltravelhas become faster, eas-

ier, and cheaper;music,art,cuisines, and

cinemahave all become

theworld's

major The Peony Pavilionwas

entirety forthefirsttimein 400

itwas

produced the greatdisillusion,

politicaloptimism to a

"almost"be-

say

beginning in the 1970s a new opti-

resurface. Interdependence

jing, but

almost instantaneous, and morethanwords can be transmitted,

whichmakesthere- mism,strikingly similarin contentto the

duced mobility of labor

of less consequence.

by

KennethN. Waltz,

Columbia University

old, began to

was

again

associatedwith peace and peace

High-technologyjobs can be brought to theworkersinsteadof

theworkersto

increasingly with democracy, which began

to

to Asia, and withthe SovietUnion's col-

spreadwonderfully to Latin America,

the jobs; foreigners can

:::::21 ::,~~::44
:::::21
::,~~::44

;:'r:::'O~;:::::_:::?OR ~~OME

KennethN. Waltz, 1999JamesMadisonLecturer.

PSOnline www.apsanet.org

693

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lapse, toEastern Europe. Francis Fukuyama(1992)

sawa timewhenall stateswouldbe liberaldemocracies

and, more recently, Michael Doyle(1997)projected the

year foritto happen as lying between2050and2100.

JohnMueller (1989),heralding the disappearance ofwar among theworld'sadvanced countries,argued thatNor-

fore- nessto investmentand trade, anda

stable currency. The

herddecideswhichcountriestorewardandwhichto punish, and nothing canbe doneaboutitsdecisions.In

meeting,Malaysia's

primeminister, Dr. Mahathir Mohammad,complained

bitterly that greatpowers andinternational speculators

hadforcedAsiancountriesto

September1997, at a WorldBank

man

had

Angell'spremises were right all along, butthathe published hisbook prematurely.

RobertKeohaneand

JosephNye

intheir1977 book,

open had manipulated theircurrenciesinorderto

them.Friedman (1999,93) wonderswhatRobert Rubin,

then-U.S. treasurysecretary,might havesaidin response.

He imagines itwouldhavebeen

theirmarketsand

destroy

Powerand Interdependence,strengthened thenotionthat andlimitstheuse of

interdependencepromotespeace

force byarguing that simpleinterdependence hadbe-

come

complexinterdependence,binding theeconomic andhencethe political interestsofstatesevermore

tightlytogether.Now,

terdependence hasreached yet another height, tran- scending statesand making TheBorderless World, which is thetitleandthemeofKenichiOhmae's1990book. People,firms, marketsmatter more; statesmatterless. Each tightening oftheeconomicscrewraisesthebenefits ofeconomic exchange andmakeswar among themore

advancedstates increasinglycostly. The simple and plau-

sible propositions arethatas thebenefitsof

so do thecostsofwar.Whenstates perceive warstobe immenselycostly,they willbe disinclinedto fight them. Warbecomes rare, butis notabolishedbecauseeventhe

strongest economicforcescannot conquer fearorelimi- nateconcernfornationalhonor (Friedman1999, 196-

97).

Economicinterestsbecomeso strong thatmarketsbe-

gin to replacepolitics at homeandabroad.Thateco-

nomics depressespolitics andlimitsits significance is takentobe a happythought. Thefirstsectionofthis

paper examinesits internationally.

TheStateoftheState

1990s, and globalization

is madeinAmerica.ThomasFriedman'sTheLexusand theOliveTreeis a celebrationoftheAmerican way, of

market capitalism andliberal democracy. Free markets,

something likethis:

"What

planet are you living on?

andthe

speed that yourpeople

Globalizationisn'ta

choice, it'sa reality,

at the

intothe global stockandbond

multinationalstoinvestin

intothe

duce.Andthemostbasictruthabout globalization is

onlywayyou can grow

grow is bytapping

wantto

wehearfrom many sidesthatin-

markets,byseeking out

yourcountry, and byselling

globaltradingsystem what your factories pro-

this:No one is in charge."

complain to orto

The herdhasno telephone number.Whentheherd

country, thereis no

decidestowithdraw capital froma

one to

theherdarecollectiveones. They arenot made;they

happen, and theyhappen because many investorsindi- vidually makedecisions simultaneously andon similar grounds to investortowithdrawtheirfunds.Do what displeases the herd, anditwill trampleyou intothe

ground. Globalizationis shapedbymarkets, not bygov- ernments. Globalizationmeans homogenization.Prices,products,

wages,wealth, andratesofinterestand profit tendto

becomethesameall overtheworld.Like

anypowerful movementfor change,globalization encountersresis-

tance-in

abroad, from anti-Americanists;everywhere fromcul-
turaltraditionalists.Andtheresistersbecomebitterbe-

cause

Driven bytechnology, internationalfinance sweeps all

beforeit.Underthe

power,globalizationproceedsrelentlessly. As

proclaims: "America truly is theultimate benignhege-

petition forrelief.Decisionsof

peacerise,

applicationdomestically; the second,

America, from religiousfundamentalists;

they know they aredoomed.

consciously ornot

Globalizationis thefadofthe

protection ofAmerican military

Friedman

mony"(375).

transparency,

"electronicherd"movesvastamountsof

outofcountries according totheir political andeco- nomicmerits.Capital movesalmost instantaneouslyinto countrieswithstablegovernments,progressive econo-

mies,openaccounting,andhonestdealing,andoutof countrieslacking those qualities. Statescan defy the "herd,"buttheywill pay a price,usuallya steepone,as didThailand,Malaysia,Indonesia,andSouthKoreain

the1990s.Somecountriesmaydefytheherdinadver-

tently(the countriesjustmentioned);others,outofideo-

logicalconviction (Cuba andNorth Korea);some,be- causetheycanaffordto (oil-richcountries);others, becausehistory has passed them by(many Africancoun- tries). Countrieswishingto attract capital andtogainthe benefitsoftoday'sandtomorrow's technology haveto donthe"goldenstraitjacket,"a packageofpolicies in- cludingbalancedbudgets,economic deregulation,open-

694

and flexibility

arethewatchwords.The

The "endoftheColdWarandthe collapse ofcom-

munismhavediscreditedall modelsotherthanliberal

democracy." The statementis

Friedman repeats itwith approval. Thereis onebest

capital inand

byLarryDiamond, and

"It's a post-industrial

way, and Americahas foundit.

world,and America today is good at everything thatis post-industrial"(145, 303). The herddoes not care about formsof government as such,butit values and rewards

"stability,predictability,transparency, and the ability to transferand protect its privateproperty." Liberal democ- racies represent theone best way. The message to all governments is clear: Conformor suffer. There is muchinwhatFriedman says, and he says it very well. But how much?And, specifically, whatis the

effectof closer

internaland externalaffairsofnations?

interdependence on the conductof the

globalization has pro-

First,we shouldask how far

ceeded? As everyoneknows,muchof theworldhas been leftaside: mostofAfricaand Latin America,Russia, all

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oftheMiddleEast

Moreover, for manycountries, the degree of participa- tioninthe globaleconomy varies byregion. Northern

Italy, for example, is in;

globalization is

ernlatitudes.LindaWeiss points out

81% oftheworldstockof foreign directinvestmentwas in high-wage countriesofthenorth: mainly theUnited

States, followed by

Canada.Sheaddsthattheextentofconcentrationhas

grownby 12 points since1967 (Weiss1998;cf., Hirstand

Thompson1996,72).

exceptIsrael, and largeparts ofAsia.

southern Italy is out.In fact,

globalization, evenwithinits zone, is nota statement

aboutthe

Manyglobalizers underestimatetheextenttowhich

thenewlooksliketheold.In

winnersareimitated by the losers, or they continueto

present, buta

prediction aboutthefuture.

anycompetitivesystem the

lose.In political as in

economic develop- ment, latecomersimi-

tatethe

adopt theinstitution ofthecountrieswho haveshownthe way. Occasionally, someone findsa way to out- flank, to inventa new

way, orto ingeniously

modify an

gain an advantage; andthenthe

process ofimitation begins anew.That

tors begin to looklike

practices and

old way to

competi-

closeandcontinuousis

not global butis mainly limitedtonorth-

that, as of 1991,

theUnited Kingdom,Germany, and

interdependence of

Manyglobalizers un- derestimatethe ex- tentto which the new looks likethe old. In anycompeti- tive system thewin- nersare imitated by the losers, or they continueto lose.

competition is

Second, we should compare the

nationsnowwith interdependence earlier.Thefirst para-

graph ofthis papersuggests thatinmost ways wehave

rapidgrowth of

notexceededlevelsreachedin 1910.The

internationaltradeandinvestmentfromthemiddle

1850sintothe1910s preceded a

prolongedperiod of

war,

WorldWar II, protectionistpolicieslingered as the

UnitedStates opened itborderstotradewhile taking a

relaxedattitudetowardcountriesthat protected their markets during the years of recovery fromwar'sdevasta-

tion.One

mightsay interdependence deficit developed, which helps toex-

plain the steadygrowth of interdependence thereafter.

Among therichest24 industrialeconomies (the OECD countries),exportsgrew at abouttwicetherateofGDP after1960.In 1960,exports were9.5% oftheir GDPs; in

1900, 20.5% (Wade 1996,62;cf., Weiss 1998,171). Find-

ing that1999

terdependence is hardlysurprising. Whatis trueoftrade

also

GDP (Hirst and Thompson1996,36). Third,money markets may be the only economicsec-

toronecan

moves freely acrossthefrontiersofOECD countriesand

quitefreely elsewhere (Weiss1998,xii). RobertWade notesthatrealinterestrateswithinnortherncountries andbetweennorthernandsoutherncountries varyby no morethan5%. Thisseems quitelarge untilonenotices variationsacrosscountriesof10to50 timesinreal

wages,years of schooling, andnumbersof working scien-

tists. Still, withthemovementoffinancialassetsas with

commodities, the present remainslikethe past.Despite

today's ease of communication,financialmarketsat

internal revolution, andnational insularity. After

one anotherifthe

a familiar story.Competitionamong stateshas always

led someofthemto

and economically; butthe apostles of globalizationargue

thatthe

the straitjacket allowslittleroomto

politicalera,

economic era, "thefasteattheslow" (Klaus Schwab

No longer is it"Do what

the

instead"Do whattheelectronicherd requires orremain

impoverished."

are always winnersandlosers.A fewdo well, some getalong, and manybringup

Stateshaveto conformtothe ways ofthemoresuc-

cessful among themor

We thenhaveto askwhatis thestateofthestate?What

becomesof politics withinthecoilsof

nomic processes? The message of globalizers is

nomicand

of political andeconomicformsandfunctionson states.

They do so becausetheherdis attracted only tocoun-

trieswith reliable,stable, and opengovernments-that is, toliberaldemocraticones.

thatfrom1914intothe1960san

imitateothers politically,militarily,

process hasnow spedup immensely andthat

the

wiggle. In

theold

strongvanquished the weak; inthenew

approximatelyequals

1910inextentofin- quoted inFriedman 1999,171).

strongpartysays orrisk physicalpunishment"; but

But then, ina competitivesystem there

exceptionally

therear.

pay a stiff price fornot doing so.

encompassing eco-

thateco-

technological forces impose near uniformity

holdsfor capitalflows,again as a percentage of

say

hasbecome trulyglobal. Finance capital

the

turnof the previouscentury wereat least as integrated as they are now (Wade 1996,73-75). Obviously, theworldis not one. Sadly, the disparities of theNorthand Southremainwide. Perhapssurpris- ingly,among the countriesthatare thought of as being in thezone of globalization, differencesare considerable and persistent. To take just one example, financial pat- ternsdiffer markedly acrosscountries.The UnitedStates depends on capitalimports, Western Europe does not,

and Japan is a majorcapitalexporter. The more closely

one looks,themoreone findsvariations.That is hardly

surprising. Whatlooks smooth,uniform,and simple from

a distance,on closer inspectionproves to be pock marked,variegated, and complex. Yet here,thevaria- tionsare largeenough to sustaintheconclusionthat

Yet a glance at just the past

75 years revealsthata

variety of political-economicsystems have produced im- pressive resultsandwereadmiredintheir day for doing

so. In the1930sand again inthe 1950s, theSoviet Union'seconomic growth rateswere among theworld's

highest, so impressive inthe '50s thatAmericafeared

being overtakenand

Kennedygot

radically different systemgained world respect. In the

'70s,

directedeconomicswere highlyregarded. In thelate'70s

and through muchofthe

neomercantilismwas

Western European welfarestateswith managed and

passedby.

In the1960sPresident

"the

countrymovingagain," andAmerica's

'80s, the

Japanese brandof
thewaveofthefu-

thought tobe

ture; andWestern Europe andtheUnitedStatesworried about being ableto keepup. Imitateor perish wasthe

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counsel of some; pry the Japaneseeconomyopen and

make it compete on our grounds was the message of

others.Americadid not-succeed in

Yet in the 1990s, its economy has flourished.Globalizers

offer it as theultimate political-economic model-and so comes to an end. Yet it is odd to conclude

historyagain

froma decade's experience thattheone bestmodel has

at last appeared.

mean a near uniformity of conditionsacrosscountries.

Even in the 1990s, one findslittleevidenceof tion.The advancedcountriesof theworldhave

globaliza-

enjoyed or suffered quite different fates. Major WesternEuro-

pean countrieswere plaguedbyhigh and persistent un-

employment; Northeastand SoutheastAsian countries

whileChina

continuedto

experienced economic stagnation or collapse

doing

muchof either.

Globalization, ifitwere realized, would

do quite well;

and we knowabout the

UnitedStates. Variationin thefortunesof nationsunderlinesthe

point:

the UnitedStates.Those who have fared

supposedly done so because they have failedto conform

to theAmerican Way. Globalizersdo notclaimthat

globalization is complete,

and thatthe process is irreversible.Some evidence sup-

ports the conclusion; some does not. Looking at the big

picture, one noticesthatnationswhose economieshave falteredor failedhave been more fullycontrolled, di-

rected, and supportedgovernmentally thantheAmerican economy.Soviet-style economiesfailed miserably; in

China,only thefree-marketsector flourishes; theonce

much-favoredSwedishmodel has

can easily add more examples.

tempting

to leap to theconclusionthatAmericahas indeed found,

or stumbled onto, theone best way.

The country thathas done best, at least lately, is

poorly have

but only thatit is in

process

provedwanting. One

Fromthemit is

Obviously, Thomas Friedmanthinksso.

Tip O'Neill,

whenhe was a

clared thatall politics are local.

all politics have become global.

he writes, "turnsthewholeworldintoa parliamentary

system, in which everygovernment livesunderthefear

of a no-confidencevote fromthe

processes or determinea nation's policies, that spontaneously ar- rivedat decisionsabout whereto place resourcesreward

or punish

menteitherdoes what pleases the "herd"or its economy failsto prosper or even risks collapse. We all recallre- centcases, some of themmentionedabove, thatseem to

support Friedman'sthesis. Mentioning thembothmakes

a point and raisesdoubts. First,withinadvancedcountriesat similarlevelsof development thatare closelyinterrelated,one expects uniformitiesof formand functionto be mostfully dis- played. Yet StephenWoolcock,looking at formsof cor- porategovernance withinthe European community, finds

a "spectrum of approaches" and expects it to persist for theforeseeablefuture (1996, 196). Since the 1950s,the economiesof Germany and France have grown more closelytogether as each became the principaltrading partner of theother.Yet a study of thetwocountries concludesthatFrance has copied German policies but

congressman from Massachusetts, de-

Wrong,

"The electronic herd,"

Friedman says,

herd" (1999, 62, 115).

I

findit hardto believethateconomic

a national economy so

direct

strongly thata govern-

696

has been

unwilling or unable to copy

institutions (Boltho

1996). GDP per workhour among sevenof themost

prosperous countriescame close together betweenthe

1950sand the 1980s (Boyer 1996,37). Countriesat a

high level of development do tendto converge in pro- ductivity, but thatis

something of a tautol-

ogy. Second, even ifall politics have become

global,

mainlocal perhaps to

economiesre-

a surprising extent. Countrieswith large

economiescontinueto

WhatI foundto be truein 1970 remains true today: The worldis less interde- pendent thanis usu- allysupposed.

do mostof theirbusi- ness at home.Ameri- theybuy. Sectorsthat

are scarcely involvedin international trade, such as gov-

ernment,construction,nonprofitorganizations,utilities,

and wholesaleand retailtrade

cans (Lawrence 1997,21). As Paul Krugmansays,

United Statesis stillalmost90% an

duces goods and servicesforitsown use" (1997, 166).

For theworld'sthree largest economies-the United

States,Japan, and the European

exports are 12% or less of GDP

I

is less interdependent thanis usuallysupposed (Waltz

1970). Moreover,developedcountries, oil importsaside,

another,

and thatmeansthatthe extentof their dependence on

do thebulkof theirexternalbusinesswithone

cans produce 88% of the goods

employ

82% ofAmeri-

"The

economy that pro-

Union-taken as a unit, (Weiss 1998,176). What

world

foundto be truein 1970 remainstrue today: The

commoditiesthat is furtherreduced.

Reinforcing the parochialpattern of productivity, the famousfootloose corporations in factturnout to be firmly anchoredin theirhome bases. One study of the

world's100

of themcould be called

Another study foundone multinational corporation that

seemed to be leaving itshome base: Britain'schemical

company, ICI (Weiss 1998,18,22;

1996,82-93, 90, 95ff.). On all the important counts- locationof most assets, siteof researchand develop-

son

they could not produce forthemselves

largestcorporations concludesthatnot one

truly"global"

or "footloose."

cf., Hirstand Thomp-

ment,ownership, and management-theimportance of a

corporation's homebase

cal

of thecountriesin which they are located.

is marked.And the

technologi-

that

prowess of corporationscorrespondsclosely to

Third, the "transformativecapacity" of states, as Linda

Weiss emphasizes, is the key

world economy(Weiss 1998,xii). Because technological

innovationis

home and abroad

have considerable advantages. International politics re-

mainsinter-national.As thetitleof a review by William

H. McNeill

Soon." Global or world politics has not takenoverfrom

century

of thenation-state.The

national politics. The twentieth century was the

to theirsuccessin the

rapid,

and because economicconditionsat

changeoften, statesthat adapt easily

"TerritorialStatesBuriedToo

best

way

to

(1997) putsit,

twenty-first willbe too. Trade

single

and technology do not determinea

organize a

polity and its economy. National systems dis-

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play a great of choice.Most states survive, and the unitsthat

range

survivein

to

adapt. Others just manage

competitivesystems. In this spirit, Ezra Taft Benson,

whenhe was PresidentEisenhower's secretary of

ture,gave this kindly adviceto America'ssmallfarmers:

"Get

quires

prefer to avoid. States

afoot, and othersare heavy.

be heavy afootin the 1980swhen

booming. Sometimesit seemed thatMITI (Ministry of

InternationalTrade and Industry) was manned

niuseswho

impressiveaccomplishments. Now

that

Its

flows freely, mosteconomicdecisionsare made

vate firms.These are thecharacteristicsthatmake for

flexibility and for quick adaptation to changing condi- tions. Competitivesystems selectforsuccess.Over time, the

qualities thatmake forsuccess vary. Studentsof Ameri-

can

a federal system is thatthe

out thatone

deal of resilience.Statesstillhave a wide

really is happening. The statehas lostits "monopoly

over

and as "an

thing of the past" (1997, 137; cf., Thurow 1999). Inter-

nally, the state's monopoly has neverbeen complete, but

it seemsmore nearly so now than earlier, at least in

well-establishedstates.The range of

tionsand the extentof statecontrolover

economy has seldombeen fullerthanitis now.In many

parts state'sdiminishedinternal powers butwiththeirin- crease. And although statecontrolhas lessenedsome- what recently, does anyone believethatthe United

Statesand Britain, for example,

level, let alone to a nineteenth-century level of govern-

mental regulation?

internal sovereignty,"Wolfgang H. Reinecke writes,

externallysovereign actor"it "willbecome a

governmental func-

society and

of theworldtheconcernhas been notwiththe

are back to a 1930s

competitivesystems are thosewiththe ability

Some do it well, and theygrow and prosper.

to get along. That's the way it is in

or

get

out." Success in

agricul-

competitivesystems re- adoptwaysthey would

big

theunitsof the system to

adapt

to theirenvironment.Some are

light The UnitedStateslooked to

Japan'seconomy was

byge-

guidedJapan'seconomyeffortlessly to its

States perform essential political social-economicfunc-

fostertheinstitutionsthat

In thestate

prosperitypossible. thereis "no mineand thine."

into property and thusmake sav-

The

sovereign

proved to be thebest organi-

and fostering the conditionsfor

keepingpeace

We do nothave to wonderwhat

to

again and many African

less competent a componentparts or

in

post-SovietRussia,

transnational developments.

at home and abroad testthe mettleof states.

times,enough states always

statesendure. They

make it to

keep

the

have proved to be

it is theUnitedStates

other

bypri-

tions, and no other organizationappears as a possible

competitor to them. They make internal peace and

of nature, as Kant put it,

Statesturn possession

ing,production, and prosperitypossible.

statewithfixedbordershas

zationfor

economicwell being.'

happens to society and economy whena state begins

fade away. We have all too manyexamples. A fewobvi-

ous ones are China in the 1920sand '30s and

the 1960sand '70s,

statessincetheir independence. The

state, thelikelierit is to dissolveinto

to be unable to adapt to

Challenges Some states fail, and otherstates pass thetests nicely. In

modern

international systemgoing as a system of states.The

appearslightafoot,lighter than any

government is open:

country.

Accuratefinancialinformation

governmentpoint

of the advantages of

separate statescan act as

laboratoriesforsocial-economic experimentation. When some states succeed, others may imitatethem.The same

thoughtapplies

nextwinnerwillbe.

to nations.One mustwonderwho the

States adapt; they also protect themselves.Different

different ways.Japan fosters industries,

itstrade.The UnitedStates

political, economic,

and

militaryleverage to pro-

nations, withdistinctinstitutionsand

traditions,protect

themselvesin

defends them, and manages

uses its

tectitselfand manipulate internationaleventsto

moteitsinterests. Thus, as David E.

shows, internationalmarketsand institutionsdid notre-

cyclepetrodollars after 1974.The United Statesdid.

Despite many statementsto the contrary, theUnited

Statesworkedeffec-

tivelythrough different administrationsand underdifferentcabinet secretariesto under- minemarketsand thwartinternational institutions.Its lever- enabled it to ma-

age nipulate the oil crisis to serveitsown inter- ests (1999, chap. 6). Many of theinterde-

penders of

fade away. Charles

nation-stateis

(207). Globalizersof the 1990sbelievethatthistimeit

pro- challengesvary;

hardy survivors.

Having

Spiro elaborately

asked howinternationalconditions affect

and ask how states

states, I now reversethe question

affect the conductof international political affairs.

Because technologi- cal innovationis rapid, and because economic conditions at home and abroad changeoften,states that adapt easily have considerable advantages.

thestateto witherand

The State in International Politics

Economic globalization wouldmean thttheworld

at least the

economy, or

be integrated and not merelyinterdependent. The differ- ence betweenan interdependent and an integrated world is a qualitative one and not a merematterof proportion-

ately moretradeand a greater and more rapid flowof capital. With integration, theworldwould look like one big state.Economic marketsand economicinterestscan- not perform thefunctionsof government.Integration requires or presumes a government to protect,direct,

and

is "the meremutualism"of states,as Emile Durkheim put it.It is not only less close than usuallythought but also politically less consequential.Interdependence did not produce the world-shaking eventsof 1989-91. A po- liticalevent,thefailureof one of theworld'stwo great

globalizedportion of it, would

control. Interdependence, in contrastto integration,

the 1970s

just

expected Kindleberger wrotein 1969 that"the about through as an economicunit"

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697

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powers, didthat.Had the configuration ofinternational

politics not fundamentallychanged, neithertheunifica- tionof Germany northewar against SaddamHussein

wouldhavebeen

international politics are explainedby differencesinthe

capabilities of states, not by acrossstatesor

globalizers evenmore so,argue thattheinternational economicinterestsofstateswork against their going to

war. True,they do. Yet ifone askswhethereconomic interestsornuclear weaponsinhibitwarmore strongly, theanswer obviously is nuclear weapons.Europeangreat powersprior toWorldWarI were tightly tied together economically.They nevertheless fought a long and bloody war.The UnitedStatesandtheSovietUnion

werenoteven loosely connected economically.They co- existed peacefullythrough thefour-and-a-halfdecadesof theColdWar.The most important causesof peace, as of

war, arefoundin

cluding the weaponry availabletostates.Eventsfollow-

ing theColdWar dramatically demonstratethe political

weaknessofeconomicforces.The

the

andof

interests, didnot prevent their disintegration. Govern-

mentsand

nationalism,ethnicity, and religion.

Political explanationsweighheavily in accounting for

international-political events.National politics, notinter-

national markets, accountfor many internationaleco-

nomic developments. A

andofeconomicsbelievethatblocsare

becoming more common internationally. Economicinterestsandmarket

forcesdo

governmentaldecisions, theCoal andSteel Community,

the

Unionwouldnothave

states negotiateregulations inthe European Commis-

sion.The

types ofdirectiveswould require lessthana unanimous

voteintheCouncilofMinisters.This

clearedthe way for passage ofmostoftheharmoniza-

tionstandardsfor Europe(Dumez andJeunemaitre

possible. Themost important eventsin

economicforces operating

them. Interdependers,

and

transcending

international-politicalconditions, in-

integration(notjust

interdependence) ofthe parts oftheSovietUnion

Yugoslavia, withall oftheir entangling economic

people

sacrificewelfareandeven security to

numberofstudentsof politics

notcreate blocs;governments do. Without

European Economic Community, andthe European

emerged. The representatives of

Single-Market Actof1985 provided thatsome

political act

1996,229). American governmentsforgedNAFTA; Ja-

pan fashionedan EastandSoutheastAsian

producing

and trading area. The decisionsand acts of a country, or

a set of countries arriving at politicalagreements,shape international political and economicinstitutions.Govern- mentsnow intervenemuchmorein internationaleco- nomicmattersthan they did in the earlierera of interde-

pendence. BeforeWorldWar I, foreign-ministry officials

werefamedfortheirlack of knowledgeof,or interestin,

economicaffairs.Because

muchmoreactivein economicaffairsat home and abroad,interdependence has become less of an autono- mous forcein international politics. The manycommentatorswho exaggerate thecloseness of interdependence, and even moreso thosewho write of globalization,thinkin unitratherthanin systemic

governments have become

698

terms. Many smallstates import and

oftheir gross domestic products. Stateswith large GDPs

do

numberofotherstates heavilydepend on them.The

termsof political,economic,and militarycompetition

areset by the

exportlarge shares

not. They arelittle dependent on others, whilea

larger unitsofthe international-political system.Through cen-

turiesof

great powers of comparable size competing with one another,theinter- national system was

withfiveorso

multipolarity,

quiteclosely interde- pendent. Underbi-

and unipolarity the

degree of interdepen-
dencedeclinedmark-

edly.

In real terms, Ameri- ca's 1995 military

budgetapproxi-

matelyequaled the

1980

budget, and in

1980

the Cold War

reachedits peak.

Statesare differentiatedfromone anothernot by func-

tionbut primarilybycapability. For two reasons, ine- qualities acrossstateshave greaterpoliticalimpact than inequalities acrossincome groups withinstates. First, the

inequalities of statesare

more rapidly. Rich countrieshave become richerwhile poor countrieshave remained poor. Second, in a system

withoutcentral governance, theinfluenceof theunitsof

greatercapability is disproportionatelylarge because thereare no effectivelawsand institutionsto directand constrainthem. They are able to workthe system to their advantage, as the petrodollarexample showed.I

argued in 1970 thatwhatcountsare states'

adjust to externalconditionsand their ability to use their

economic

Stateswas thenand is still doubly blessed.It remains

highlyimportant in

a principal marketfora numberof countriesand as a majorsupplier of goods and services,yet its dependence on othersis quite low. Precisely because the United

Statesis relatively little dependent on others, it has a

ability bothto bring

wide

pressure on othersand to assistthem.The "herd"with

its capitalmay

decides that they are politically and economically unwor- thy, butsome countries abroad, like some firmsat home,

are so important that they cannotbe allowedto fail.Na-

tional

to the rescue.The UnitedStatesis the country thatmost

oftenhas the ability and thewillto

thatmostoftenacts is the IMF, and mostcountries

thinkof the IMF as the enforcementarmof theU.S.

Treasury(Strange1996,192).

thatwhenthe "herd"makesits decisions, thereis no

appeal; butoftenthereis an

out

The international economy, like national economies, operates withina set of rulesand institutions.Rules and institutionshave to be made and sustained. Britain, to a

largeextent, provided thisservice prior to WorldWar

larger and have been

growing

capacity to

The United

leverage for politicaladvantage.

theinternational economy,serving as

range

of policy choicesand the

fleefromcountrieswhenit collectively

international agencies thencome

step in. The agency

Thomas Friedmanbelieves

appeal, and it is fora bail

governments and

organizedby

theUnitedStates.

I;

PS December1999

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no one didbetweenthe wars, andtheUnitedStateshas doneso since.Morethan any other state, theUnited

Statesmakestherulesandmaintainstheinstitutionsthat

shape theinternational politicaleconomy.

Economically, theUnitedStatesis theworld'smost

pointsimply: Theworldis sustained by "the

importantcountry;militarily, itis not only themostim-

portantcountry, itis thedecisiveone.ThomasFriedman

puts the

presence ofAmerican power andAmerica's willingness

touse that poweragainst thosewhowouldthreatenthe

system of globalization

ketwillneverworkwithouta hiddenfist" (1999,373).

Butthehiddenfistis infullview.On its

theUnitedStates outspends thenextsixorseven big

spenders combined.Whenforceis neededto

restorethe peace, eithertheUnitedStatesleadsthe way

orthe

national politics. RelationsbetweentheUnitedStates

andtheSoviet Union, and among someothercountries

as well, cametobe

the

Weedehas

insome

theUnitedStates" (1989,

many) is actuallypenetratedby

The hiddenhandofthemar-

militaryforces,

keep

orto

is not kept. The ColdWarmilitarizedinter-

defined largely ina singledimension,

peace

military one.As theGerman sociologist Erich

remarked, "National security decision making

democracies (mostnotably inWestGer-

225).

Oddly, theendoftheColdWarhasraisedthe

impor-

pace.

In

height-

that

tanceoftheAmerican military tonew heights. The

UnitedStatescontinuesto spend at a ColdWar

real terms, America's1995 militarybudgetapproximately

equaled

reachedits

peak. their budgets morethantheUnitedStateshas

enedthe military dominanceofone

theworldis unipolar andthattheworldis

throughglobalization is all too suggestive. Some say theworldis not reallyunipolar becausetheUnited

Statesoften needs, orat least wants, the

(see,e.g.,Huntington1999;Nye1999).

ever, remains:The

stronger have

coping withadversitiesthantheweak have, andthelat-

ter depend on theformermuchmorethantheother way

around.The UnitedStatesis the

organize andleada militarycoalition, as itdidin Iraq andintheBalkans.Somestateshavelittlechoicebutto

the1980 budget, andin 1980theColdWar

Thatothercountrieshavereduced

country. To say

becoming one

that

help

ofothers

The truth, how-

many more ways of

onlycountry thatcan

participate,partly because

bring to bear on theweak and partly because of the needs of thelatter.Western European countriesand Ja- pan are more dependent on Middle Easternoil thanthe UnitedStates,and Western European countriesare moreaffected by what happens in Eastern Europe than the UnitedStatesis. As expected, thebeneficiariesresenttheirbenefactor, whichleads to talkof righting the imbalanceof power. Yet, whenthe imbalancebetweenone and therestis great, to catch up is difficult.Frenchleaders,especially, bemoan the absence of multipolarity and call for greater European strength, butone cannot usefully willtheend without willing themeans.The unevendistributionof

of the pressure the strong can

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capabilities continuesto be the key to understanding in- ternational politics.

To an

increasingextent, American foreignpolicy relies

for ways of keepingtroops

in

ways

to withdrawthemas

at the Cold War's end.2The

on military means.Americacontinuesto

garrison much

of theworldand to look

foreign countriesratherthan

one

Pentagon'sDefensePlanning Guidance

advocated "discouraging theadvancedindustrializedna-

might have expected

1992 draftof the

aspiring to a largerglobal role." The United States may at timeswant help

even

or re-

gional

from others, but nottoo much

position in one part

ment, whenitwas

sponse,emphasis was placed

but it continuesto guide

help lest it lose its leading

of theworldor another.The docu-

leaked,provoked criticism.In re-

on its

beingonly a draft,

and describeAmerica's policy.

Carter,respectively

William J.Perry and AshtonB.

guide

theformer secretary and assistant secretary of defense,

have recently offeredthe

fense"as a

is conducted by Americandefenseofficials engaging in

"security and militarydialogue

calls for"a morerobustdefenseto defense

(1999, 9. 11; cf.,Carter,Perry, and Steinbruner 1992).

Bismarcktriedto

fromtheir opposite numbersin foreign countrieslestthe

military'smilitarypolicy become

policy. In part,

sors'failureto do this.In the United

and Defense now make as

thanState does.

concept of "preventive de-

to American policy. Preventivedefense

with regionalstates"; it

program"

keep Germany'smilitary officials away

the

country'sforeign

WorldWar I resultedfromhis succes-

States,Treasury

muchor more foreignpolicy

Conclusion

In a system of balanced states, the dominationof one

thereactionof others

or some of themis preventedby

acting as counterweights. The statesof Europe

otherin balance through thefirst300 years of the mod-

ernstate system. In thenext50 years, the UnitedStates

and the SovietUnion balanced each

ing

Since the end of the Cold

been alone in the world; no stateor combinationof

states

held each

other, each protect- affairswithinit.

its

sphere and helping to manage

War,

the UnitedStateshas

provides an effective counterweight.

Whatare the implications forinternational politics?

surro-

needed. Who can supply it? Some

The more interdependent the system, themorea

gate for government is

Americansbelievethatthe UnitedStates benignlypro- vides a necessary minimumof management of the system and that,because of itsmoderation,otherstateswill

continueto appreciate, or at least to accept, itsservices (see, e.g.,Ikenbery1998/99,77-78). Benignhegemonyis, however,something of a contradictionin terms."One reads about theworld'sdesireforAmerican leadership only in theUnitedStates,"a British diplomat has re- marked. "Everywhere else one reads about American arrogance and unilateralism" (quoted in Huntington

1999,42).

McGeorge Bundy

once describedtheUnitedStatesas

"the locomotiveat the head of mankind,and therestof theworldthecaboose" (quoted in Gardner1995,178). America's pullingpower is at a peak thatcannotbe sus-

699

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tained, fortwomainreasons. First, Americais a of 276 million people in a worldof sixbillion.It

sents4.6% of theworld'stotal population. The country's

physicalcapabilities and political willcannotsustain present worldburdens indefinitely.Second, othercoun-

tries may not

Both friendsand foeswillreactas countries always have

to the threatenedor real predominance of one from

among

country

repre-

enjoybeingplaced

at theback of the train.

them

byworking to right thebalance (Waltz

1998).

The present conditionof international politics is

unnatural.Both the predominance of America and, one

Notes

1. The picture of the purpose and the performance of statesis espe- cially clear in Thomsonand Krasner (1989).

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