This apparent failure of global integration is not, however, a failure of globalization so much as a symptom of it. Globalization has been as much about preventing as promoting integration. The global movements of capital require not only free transborder access to labour, resources and markets but also protection from the opposite movements, as well as a kind of economic and social fragmentation that enhances profitability by differentiating the costs and conditions of production. Here again, it is the nation state that must perform the delicate balancing act between opening borders to global capital and deterring a kind and degree of integration that might go too far in levelling social conditions among workers throughout the world.
It cannot even be said unequivocally that global capital would gain most from levelling the costs of labour downward by subjecting workers in advanced capitalist countries to the competition of lowcost labour regimes. This is certainly true, up to a point. But, apart from the dangers of social upheaval at home, there is the inevitable contradiction between capital's constant need to drive down the costs of labour and its constant need to expand consumption, which requires that people have money to spend. This, too, is one of the insoluble contradictions of capitalism. But, on balance, global capital benefits from uneven development, at least in the short term (and short-termism is an endemic disease of capitalism). The fragmentation of the world into separate economies, each with its own social regime and labour conditions, presided over by more or less sovereign territorial states, is no less essential to `globalization' than is the free movement of capital. Not the least important function of the nation state in globalization is to enforce the principle of nationality that makes it possible to manage the movements of labour by means of strict border controls and stringent immigration policies, in the interests of capital.
The Indispensable State
Some of the best-known critics of globalization, at least in the dominant capitalist economies, characterize it mainly as a development driven and dominated by transnational corporations, whose infamous brand names -- Nike, McDonald's, Monsanto, and so on -- are the symbols of today's global capitalism. At the same time, they seem to assume that the services traditionally performed by the nation state for national capital must now be performed for transnational corporations by some kind of global state. In the absence of such a state, the political work of global capital is apparently being done by transnational institutions such as the WTO, the IMF, the World Bank or the G8. Anti-capitalist movements acting on these assumptions have targetted transnational corporations by such means as consumer boycotts, sabotage and demonstrations; and they have directed their oppositional energies against supranational organizations which appear to be the institutions that come closest to representing the political arm of global capital, in the way that the nation state has traditionally represented national capital.
These 'anti-capitalist' movements have been effective in bringing to light the devastating effects of `globalization', especially in capturing the attention of the advanced capitalist world, which has long ignored the consequences of global capitalism. They have raised the consciousness of many people throughout the world, and they have offered the promise of new oppositional forces. But it may be that in some respects they are based on faulty premises. The conviction that global corporations are the ultimate source of globalization's evils, and that the power of global capital is politically represented above all in supranational institutions like the WTO, may be based on the assumption that global capitalism behaves the way it does because it is global, rather than (or more than) because it is capitalist. The principal task for oppositional forces, it seems, is to target the instruments of capital's global reach rather than to challenge the capitalist system itself.
In fact, many participants in movements of this kind are not so much anti-capitalist as anti-'globalization', or perhaps anti- neoliberal, or even just opposed to particularly malignant corpora tions. They assume that the detrimental effects of the capitalist system can be eliminated by taming global corporations or by making them more `ethical', `responsible', and socially conscious.
But even those who are more inclined to oppose the capitalist system itself may assume that the more global the capitalist economy becomes, the more global the political organization of capital will be. So, if globalization has made the national state increasingly irrelevant, anti-capitalist struggles must move immediately beyond the nation state, to the global institutions where the power of global capital truly lies.
We need to examine these assumptions critically, but not because anti-capitalist movements are wrong in their conviction that transnational corporations are doing great damage and need to be challenged, or that the WTO and the IMF are doing the work of global capital -- which is certainly true. Nor are these movements wrong in their internationalism or their insistence on solidarity among oppositional forces throughout the world. We need to scrutinize the relation between global capital and national states because even the effectiveness of international solidarity depends on an accurate assessment of the forces available to capital and those accessible to opposition.
It should be clear by now that, just as globalization is not a truly integrated world economy, it is also not a system of declining nation states. On the contrary, the state lies at the very heart of the new global system. As we saw in Chapter 1, the state continues to play its essential role in creating and maintaining the conditions of capital accumulation; and no other institution, no transnational agency, has even begun to replace the nation state as an administrative and coercive guarantor of social order, property relations, stability or contractual predictability, or any of the other basic conditions required by capital in its everyday life.
Just as the state is far from powerless, multinational corporations are far from all-powerful. Scrutiny of corporate operations is likely to reveal that `multinational enterprises are not particularly good at managing their international operations', and that profits tend to be lower, while costs are higher, than in domestic operations.'5 These enterprises `have very little control over their own international operations, let alone over globalisation'. Any success such companies have had in the global economy has depended on the indispensable support of the state, both in the locale of their home base and elsewhere in their `multinational' network.
The state, in both imperial and subordinate economies, still provides the indispensable conditions of accumulation for global capital, no less than for very local enterprises; and it is, in the final analysis, the state that has created the conditions enabling global capital to survive and to navigate the world. It would not be too much to say that the state is the only non-economic institution truly indispensable to capital. While we can imagine capital continuing its daily operations if the WTO were destroyed, and perhaps even welcoming the removal of obstacles placed in its way by organizations that give subordinate economies some voice, it is inconceivable that those operations would long survive the destruction of the local state.
Globalization has certainly been marked by a withdrawal of the state from its social welfare and ameliorative functions; and, for many observers, this has perhaps more than anything else created an impression of the state's decline. But, for all the attacks on the welfare state launched by successive neoliberal governments, it cannot even be argued that global capital has been able to dispense with the social functions performed by nation states since the early days of capitalism. Even while labour movements and forces on the left have been in retreat, with so-called social democratic governments joining in the neoliberal assault, at least a minimal `safety net' of social provision has proved to be an essential condition of economic success and social stability in advanced capitalist countries. At the same time, developing countries that may in the past have been able to rely more on traditional supports, such as extended families and village communities, have been under pressure to shift at least some of these functions to the state, as the process of `development' and the commodification of life have destroyed or weakened old social networks -- though, ironically, this has made them even more vulnerable to the demands of imperial capital, as privatization of public services has become a condition of investment, loans and aid.
Oppositional movements must struggle constantly to maintain anything close to decent social provision. But it is hard to see how any capitalist economy can long survive, let alone prosper, without a state that to some extent, however inadequately, balances the economic and social disruptions caused by the capitalist market and class exploitation. Globalization, which has further undermined traditional communities and social networks, has, if anything, made this state function more rather than less necessary to the preservation of the capitalist system. This does not mean that capital will ever willingly encourage social provision. It simply means that its hostility to social programmes, as being necessarily a drag on capital accumulation, is one of capitalism's many insoluble contradictions.
On the international plane, too, the state continues to be vital. The new imperialism, in contrast to older forms of colonial empire, depends more than ever on a system of multiple and more or less overeign national states. The very fact that `globalization' has extended capital's purely economic powers far beyond the range of any single nation state means that global capital requires many nation states to perform the administrative and coercive functions that sustain the system of property and provide the kind of day-to- day regularity, predictability, and legal order that capitalism needs more than any other social form. No conceivable form of `global governance' could provide the kind of daily order or the conditions of accumulation that capital requires.
The world today is more than ever a world of nation states. The political form of globalization is not a global state or global sovereignty. Nor does the lack of correspondence between global economy and national states simply represent some kind of time-lag in political development. The very essence of globalization is a global economy administered by a global system of multiple states and local sovereignties, structured in a complex relation of domination and subordination.
The administration and enforcement of the new imperialism by a system of multiple states has, of course, created many problems of its own. It is not a simple matter to maintain the right kind of order among so many national entities, each with its own internal needs and pressures, to say nothing of its own coercive powers. Inevitably, to manage such a system ultimately requires a single overwhelming military power, which can keep all the others in line. At the same time, that power cannot be allowed to disrupt the orderly predictability that capital requies, nor can war be allowed to endanger vital markets and sources of capital. This is the conundrum that confronts the world's only superpower.