Reflective Writing-Globalization’s Impact on States


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Globalization’s Impact on States

As mentioned last class, protectionism raises questions in GPE over the impact of globalization on national governments. Are nation-states, as Kindleberger says, “over” as something relevant today? In other words, do nation-states still possess sovereignty? Sovereignty, meaning “to rule,” a concept associated with Machiavelli and Hobbes, and modern day theorists like Colin Hay and Krasner. Many would argue nation-states still rule, and economic nationalism speaks to this. Leading to the important question, can nationalism overwhelm the restraints of interdependence?
Many liberal theorists dismiss protectionism, arguing globalized trade and finance allows owners of capital to “exit” national economies unfavorable to capital, thus the autonomy of the state is constrained, or the state comes to enjoy benefits in supporting owners of capital. This idea can be found in Adam Smith, but also Albert Hirschman in the book Exit, Voice, and Loyalty. In this case, globalization leads to a convergence of national policies favoring capital like low tariffs, deregulation, and floating exchange rates. However, not all capitalist systems are the same, Peter Hall and David Soskice introduce the idea of “varieties of capitalism,” which instead of convergence into a single set of policies, see a “dual convergence”: states like the U.S. create “liberal-market institutions,” well insulated against protectionist forces, and states like Germany, coordinated, or social market institutions with more state involvement. Hall and Soskice focus on the institutional alignments of these types over several areas like finance, job training, labor regulations, etc. John Campbell and Ove Pedersen have looked at the political ideologies favoring liberalism or social democracy, showing that liberal economies have a strong liberal ideology, and socialist states have a strong socialist ideology.
In the 1990s it became common to speak of the “end of history,” convergence, or dual convergence, represents the end of history regarding the development of political economic systems, though there is still potential for trade conflicts between liberal and coordinated states. A well known China expert, Robert Sutter, for example, believes economic interdependence between the US and China should defuse most potential conflicts, even given China’s status as a rising geopolitical rival. Ka Zeng, writing on trade conflicts involving the US, argues the “complementary” structure of trade between the US and China, as opposed to the competitive US trade structure with Japan and Europe, isolates protectionist forces competing against Chinese imports, and undermines the credibility of US threats. The trade structure between the US is complementary because it promotes both exports and imports from both countries, even though many industries compete against Chinese imports. Japan and many EU countries have strong barriers against US exports, and they also have a strong import presence in the US. Others, like Stephen Roach are more cautious over the “unbalanced” nature of U.S. China trade, but argues there is a “way out” within current institutional arrangements by addressing the “savings shortfall,” or lack of savings in the U.S. Even liberal defenders of China, like James Fallows, from The Atlantic (the same magazine that published Randolph Bourne’s “Transnational America”), have noted its descent or “great leap backwards” into authoritarianism and militarism over the last ten years, but still argues for the restraints of interdependence, noting no “sane American leader would choose confrontation with China (Fallows, 2016).”
In contrast to these more optimistic predictions, neorealists like John Mearsheimer and Robert Gilpin, assert the state is an autonomous actor, openness depends on the security interests of the hegemonic state, and so interdependence is fragile, and rising powers in the international system are known to be disruptive. Graham Allison calls this the “Thucydides trap,” after the historian Thucydides theorized that Athens’ growth in power made the Spartans fearful, leading to war between the two. Samuel Huntington known for writing the so-called Hispanic challenge, also wrote of the coming “clash of civilizations” in the 1990s between the West and a “Sino-Islamic connection,” meaning China and Islam.
Between the liberals and realists, or “liberal realists” some GPE theorists argue for economic nationalism, but against the “liberal v. protectionist dichotomy” and see it as a different mode, or arrangement, of neoliberalism for late developing and post-communist countries. This is supported by the literature on the “developmental state,” which provides a drastically different model of political economy, particularly in East Asia, but still within the institutional framework of global capitalism. As Hay shows, increased spending in developed states also contradicts the “hyperglobalization thesis,” suggesting states possess autonomy to defy convergence, or public spending is compatible with globalization (though inflation and demographic factors have to be considered), or investors are not as concerned with spending as originally believed, suggesting policy-makers have autonomy in some areas but not others.
Marxists like David Harvey dismiss claims of the end of the nation-state as a “silly notion,” but disputes the viability of the developmental state in the face of the “creative destruction” of neoliberalism and “accumulation by dispossession”:
It distracts attention from the fact that the nation-state is now more dedicated than ever to creating a good business climate for investment, which means precisely controlling and repressing labor movements in all kinds of purposively new ways: cutting back the social wage, fine tuning migrant flows, and so on. The state is tremendously active in the domain of capital-labor relations. But when we turn to relations between capitals the picture is quite different. There the state has truly lost power to regulate the mechanisms of allocation or competition, as global financial flows have outrun the reach of any strictly national regulation (Harvey, 2001: 14-15).

However, as Hay has noted, often overlooked in the discussion of autonomy and convergence are the ideas that frame debates, shape policymaker’s choices, and mobilize public support, this is due, in part, to the prominence of rational choice and game theory in GPE.

Hegel
In response, some Marxists have turned to “critical theory,” associated with the Frankfurt School, or the Italian Marxist Antonio Gramsci, or even the 19th century philosopher G.W.F. Hegel, all to reemphasize the importance of “irrational” forces like ideology. In 1984, an influential article was published in the American Political Science Review, by James March and Johan Olson, calling for a “new institutionalism,” also highlighting the neglect of ideas in research. For example, the economist Milton Friedman, who is very important in the rise of neoliberalism, criticizes another school of economics known as “institutional economics” who claimed that economic models like Friedman’s presented unrealistic models of human behavior. Friedman says: “Criticism of this type is largely beside the point unless supplemented by evidence that a hypothesis differing in one or another of these respects from the theory being criticized yields better predictions for as wide a range of phenomena” (Friedman 1953, p. 31). Friedman argues that since economic interest applies in such a wide variety of cases, it can be taken as the best model for human behavior. The key notion here is width, often width comes at the expense of depth, or deep insight. Although economic interest applies in the widest number of cases, it lacks depth to explain the complexity of motivation, greatly limiting its value more than Friedman admits.
In the new institutionalism, ideas are now seen as the foundation of institutions: ideas motivate action, actions settle into routines, becoming institutions shaping actors’ choices, similar to Anthony Gidden’s theory of structuration, or how “agents” (actors) and “structure” mutually constitute each other. The importance of ideas in new institutional research, along with sociological theories, and a field known as the “philosophy of science” associated mainly with Thomas Kuhn, has led to the development of constructivism in international relations (IR), of which GPE is a subfield. It uses ideas to 1) explain how actors develop common “definitions of situations” and agreement on the “rules of the game” in strategic contexts (clarifying preferences used to model behavior), for example, how actors interpret and respond to systemic pressures, like the decline of manufacturing employment, 2) and the role of ideas structuring norms and identities of actors, like how foreign countries are identified as the cause of American woes.
Constructivism represents a relatively new “paradigm” in international relations from the liberal and realist paradigms, or as Alexander Wendt would argue both realism and liberalism (and structural Marxism) derive from a “rationalist” or “behavioralist paradigm” that assumes the self-interest of political actors, and these motives can be explained and predicted by quantitative measures. Constructivism does not replace, so much as supplements these paradigms. The idea of paradigms is associated with Kuhn who argued that scientific research has always been guided by paradigms, or dominant assumptions and beliefs regarding scientific research. This is in sharp contrast to views which see scientific knowledge in a progressive way, meaning scientific knowledge is constantly increasing in a linear fashion. For Kuhn, paradigms mean scientists will see some things, but not others. Over time paradigms “shift” as various anomalies in research multiply, leading to new paradigms. Kuhn’s concept of paradigms have become influential in the social sciences which are also guided by dominant assumptions, like self-interest. Most IR research seeks to combine the three approaches, or paradigms, helping bridge the gap between quantitative and qualitative research. Protectionism, for example, cannot be understood without quantitative measures of the economy, but constructivism incorporates statistical analysis as part of a systematic account also including the role of ideas, to explain how actors interpret and respond to economic forces.
In other words, constructivism analyses how ideas are used to “frame” political debates. Framing is a mental process that interprets sensory data according to socially mediated concepts given in language, what Erving Goffman called the “organization of experience.” With China the framing of trade conflicts creates a narrative, supported by other frames, the most general is 1) ‘breaking the rules’ of free trade, with other deep frames reinforcing the construction of an existential threat to the U.S. like 2) communism and the military threat China poses, as well as other suppressed frames 3) lingering racial and cultural prejudices towards East Asians, colloquially known as the ‘yellow peril’, more evident in the early 20th century and protectionist conflicts with Japan in the 1980s, and 4) a cultural bias favoring punishment as means of addressing social conflicts, an element of America’s Puritanical heritage perhaps or “authoritarian personality” type, and the tendency to frame social problems in moralistic terms rather than legal terms, thus demonizing the other in conflict.
These frames collectively form a protectionist ideology, or a set of political beliefs directed towards a goal. Framing helps determine an actor’s ideological stance. For example, actors may be labeled as socialist, but this should be reflected in how they frame political debates. Protectionist ideology, in turn, derives from the neoliberal paradigm, or assumptions about reality in general, and generally the dominant paradigm in social science since the late 1970s. Understanding the relationship between protectionism and neoliberalism can be difficult. In American political thought, the “Lockean consensus,” criticized by Wilson Carey McWilliams in The Idea of Fraternity in America, can be understood as a paradigm, with liberal and conservative ideologies deriving from this, sharing assumptions with differing beliefs, the “party of hope” and “party of memory”, as Arthur Schlesinger called them in the 1960s, in more mythical times. Another example would be Alvin Gouldner’s analysis of “ideology” and “sociology,” as two intertwined developments. Although sociologists see themselves as “value neutral”, where ideologies are goal-driven, Gouldner argues modern ideologies are informed by sociological research, and what he calls a “culture of critical discourse.” At the same time, despite claims of neutrality, sociology plays more of an ideological role than usually acknowledged by helping preserve the status quo. In a similar manner, protectionism is an ideology derivative of the dominant neoliberal paradigm in social science, expressed in economics, game theory, rational choice, etc. Neoliberalism can also be an ideology when employed in a goal-directed fashion, e.g. to implement (or prevent) institutional changes, but always functions as a paradigm as it forms the basis of general knowledge outside the context of political deliberation.
Framing is also important in the literature on social movements. Todd Gitlin is concerned with how the media frames social movements, but most research focuses on how “collective action frames” develop and how frames “resonate.” The ability to frame political issues is, in many regards, a great equalizer which can, to some extent, compensate for the material and organizational deficits of social movements, while also highlighting how material and organizational resources can be used for framing debates. Framing is a crucial variable for institutional change and continuity. Success at framing is, in turn, dependent on material and organizational resources, but also at being able to situate frames within an accepted paradigm, or to challenge accepted paradigms by identifying anomalies that cannot be resolved by the dominant paradigm, thus “breaking the frame” or “re-framing” the terms of debate, or sometimes appealing to a “higher” paradigm, e.g. challenging the neoliberal paradigm with a human rights paradigm or Marxist paradigm, or an economic paradigm for a political paradigm, and vice versa. For example, T.H. Marshall’s notion of social rights is a frame that is situated within the larger paradigm of human rights.

Kuhn argues that ‘anomalies’ cause paradigms to shift over time (when they cannot be dismissed) disrupting consensus, leading to a revolution in thinking and a new consensus. In politics these shifts help “recast basic power relationships” according to Sheldon Wolin. The development of constructivism in IR represents a paradigm shift (or at least a supplementary paradigm), in economics so does the shift from classical liberalism to embedded liberalism in the 1930s, and its later replacement by “monetarism” in the 1970s (Friedman’s specialty), the latter forming the foundations of neoliberalism. Peter Hall offers an analytic breakdown of changes in so-called “policy paradigms” as: 1) changes in basic values; 2) changes in techniques; 3) changes in measure of technique. Hall assumes changes in basic values, or first order change, are largely in response to external shocks, e.g. the embedded liberal paradigm collapsed due to hyper inflation and unemployment in the 1970s, leading to consolidation of the monetarist paradigm.
Hall’s research on first order change in policy paradigms is similar to Jeffrey Legro’s research on the “collapse” of the U.S. isolationist “episteme” ( from the Greek for knowledge, or ideology by another name) and “consolidation” of internationalism in the 1940s, and Sheri Berman’s theory that ideological changes can be understood in terms of “supply and demand.” One problem with Hall, Legro, and Berman’s analyses is they all focus on external events rather than an internal analysis of ideas. Worldwide, there is clearly demand for a new ideology since at least 2008, yet the supply of “alternatives” is limited to conservative movements like Trump, even though Berman assumes “consumer demand” stimulates creation of new ideologies better adjusted to economic realities.
In sum, despite the convergence theory, nation-states still possess some sovereignty, but not absolute sovereignty (they never did). At the same time, although actors may appear to be autonomous, their actions, and thus autonomy, is limited by dominant ideas that take shape as paradigms like neoliberalism. Trump may act like he is defying neoliberal globalization, but really his actions conform to neoliberal assumptions about the global economy. That is not to say he may not cause damage to, even the collapse, of the neoliberal system, especially when considering the rise of conservative movements throughout the world.

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