Do States Matter?

Studium Generale, Wageningen University
Lecture Series: States, Nations and Sovereignty in a Globalised
Second Session:
Do States Matter?
Jeffrey Harrod
University of Amsterdam
16 September 2014
Introduction the lecturer
the lecture – part 1 – the states and their relations
part 2 – corporations and other sub-state organisations
Basic Arguments
1) Yes, states matter and more than ever but not as they did in the 19 and 20th
2) the 21st century begins as a period of neo-imperialism
3) so-called “non-state actors” - corporations, international non-governmental
organisations , rich individuals - are part of the new dynamics and structure of
global relations.
4) the new role of the state is to interact with the new players in a regulating,
assessing and monitoring role.
The States Today
There are between 189 and 196 independent countries/states
in the world today.
So, human beings divide themselves into distinguishable units
based on:
Ethnicity - distinguished by ethnicity (language, race, culture)
Religion – distinguished by religion
Civic – distinguished by values, governance
Ideological – distinguished by a formal ideology
What are the collective/elite motivations of these
Three Modes of Operation
One unit seeks to exploit another through territorial expansion, economic
extraction (finance, labour, resources); - leads to: military invasion
and/or politico-economic intrusion
to be able to live a life with the expectation of stability and peace and free
from perceived foreign domination/ to satisfy the sense of belonging to a
unit; – leads to: military preparedness, unit-based cohesion
Cooperation between units for common interests; – leads to:international organisations, agreements, negotiations
What are the connections between these units?
People - migration, refugees
Goods - trade in manufactures, raw materials, food
Money – investment, loans, transfers
War – military invasion, occupation and domination
Ideas/advocacy – religious and civic organisations
How Important Are These Transactions?
People – not so important as usually stated
- International Migration report 2013 = 232 Million
- United Nations High Commission for Refugees = 10.4 million
- World Population 2013 7.2 billion
3.2 percent of world population live outside of their country of birth
Trade – important for some not others
- trade dependent countries – eg Germany, mono export countries of Global South
- Less trade dependent – USA , Japan ,
- Energy dependent countries , Japan, Germany, China? India?
Trade in energy at the core of international politics
Money - Investment (FDI) – the sectoral power game
- multinational investment mainly between rich countries
- most sectors controlled by 4-7 large corporations
- economic advantages versus political problems
Multinational corporation investment as extension of state power
Money – - the power of creditors
- financial transactions only real material indication of globalisation
- IMF as debt collector
- debt as means of extraction
Finance and debt involves external manipulation of internal politics
Who Controls these Transactions ?
The State until mid 20th century - the imperial mode
- migration
- trade and investment– tariffs, quotas bans, imperial corporations
- finance – currency manipulation and controls
The States from the mid-20th century - cooperative /security mode
- end of direct colonialisation
- rise of USA as dominant state/economy
- creation of inter-state organisations – UN Agencies, Regional Groups
- rise of corporate power
The State and Corporation in 21 Century - the neo-imperial mode
- multinational corporations hold 95% of global foreign investment
and control 75% world trade
- transnational banks control 70% of national sovereign debt
Where do Multinational Corporations Come From?
Usually large corporations with foreign branches therefore
usually from large economies
No. of MNC’s in
Top 500 2012
Percent of Global
Stock of investment
Other BRICs
Where Do USA Corporations Invest?
Source: U.S. Bureau of Economic Analysis: K. B. Barefoot and M. Ibarra-Caton
“Direct Investment Position for 2009: Country and Industry Detail” July 2012, p19
How Can the corporation Challenge the State ?
Basics of Corporate Power
- the nature of the sector – natural resources, socially strategic
- need for investment and technology transfer – Global South and development
- weakness of governing elites – acceptance or rewards
- promotion of values and culture – mass persuasion
How Corporate Power has Increased
- 20 years of concentration – global sectors now almost all oligopoly
- the IMF, World Bank,WTO promotion of corporate-friendly investment climates
- merger of corporate and business elites in headquarter countries
- legitimization of activities of rich individuals – Gates, Soros, Trump etc
Multinational corporate power now faces greater opposition
How Can the State Respond ?
- Use of internal political mobilization
- control for security, environment, national interest
- nationalisation of foreign assets
- threat of debt defaults
Recent examples
Bolivia – water and Bechtel
Argentina – oil and Repsol….
Venezuela – cement corporations
India – Gujarat and power corporations
Sweden - Dole
Main resistance to corporate power is from the
global south
Are International Non-Governmental
Organisations a Counter-Force ?
- two sides of international civic organisations –
- support of hegemony
organization cements presence, values and practices of country of origin
- help with opposition
organization works with local population to control activiies of foreign
corporations and banks
- most ingo’s limited in funds
budget of Greenpeace $150 million Budget of Shell $450 billion
Global Union Federations - limited to publicity by sector
- churches as INGO’s
religious values and ideas and politics - Pentacostal churches in Brazil
- increase in criminal non-governmental organisations through drugs networks
Ingo’s do not constitute yet a counterforce but some begin to
•Conclusion and personal note
•The diversity of peoples and places in the world prevents any long-tem
harmonisation and uniformity.
•The core of imperialism and colonialism was the forced import of people
goods , finance and institutions which and who were formed or
constructed for another place.
•This produced “imperial dysfunction” - when something imported does
not “fit”, perform, or work properly in the new circumstance and produces
stress, rejection and conflict. Neo-imperialism suffers the same dynamic.
•The conflict will be resolved by resort to a new form of state.
•Globalisation is the ideology of corporate power and as it fails it will be
replaced by cooperation based on inter-state arrangements, coalitions
and organisations which recognise, respect and work with diversity
•The period of dominant globalisation will however leave behind networks
and practices which will be positive in the reconstruction of a more
peaceful, just and environmentally sustainable world.
•But only if we work at it.

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