It is important to be aware of the fact that the process of globalisation is far from complete. The question of whether the completed process of globalisation will be compatible with the current notion of the nation-state or not can only be speculative and may only be answered after defining how and in what form the model of the completed globalisation process is likely to present. Such a model can only be constructed based on the history of the evolution of modern globalisation to date and what relationship the nation-state currently has with the process of globalisation thus far. Since the question is, ‘Is globalisation incompatible with nation-states’, and not ‘Will globalisation be incompatible with nation-states’, this paper will concern itself with the contemporary relationship and its evolution.
One thing that history has demonstrated and, indeed, is currently demonstrating, is that the variables and options that may be considered have, in the past, been so vast that to construct any accurate model of some future relationship could prove to be impossible. It may well be that some variables could possibly be used to construct a model that would demonstrate deglobalisation! However, that is not an option this paper will involve itself with.
In an effort to unravel the huge complexities of the relationships of the nation-states with each other and the evolution of that relationship, many scholars have attempted to categorise, firstly, the types of nation-states, then their relations with other nation-states, (once referred to as foreign relations but now more generally referred to as International Relations, or IR), and finally the types of changes nation-states have undergone and the subsequent effect and change that has had on their IR. In his book, The State and International Relations, John Hobson provides us with some examples: “…neorealism grants the state high domestic/no international agential power, while classical liberalism and international society-centric constructivism grant it low domestic/high international agential power.” He goes on to tell us that, while this simplified model may suggest an inverse relationship between these two aspects of agential power, there are, in fact, a range of other theoretical models that demonstrate a myriad of other degrees of domestic agential power relative to that state’s international agential power. The resultant permutations seem to be endless. Furthermore, the ebb and flow of a nation-state’s domestic/international agential power will always have the effect of changing the domestic/international agential power of another nation. Sometimes the change may be small and the effect all but undetectable and at other times the change may be so large that the effect could be catastrophic. The categorisation of nation-states is itself highly complex and their relationships with other nation-states even more so.
The existence of these theoretical models are brought to attention here because they, importantly, reflect the theorists’ views of a continued existence of the nation-state regardless of the level of influence they have domestically and/or internationally. However, it is that level of influence that will directly dictate their importance relative to the trend of globalisation.
If it is accepted that the most dominant factor in globalisation is total independence of capital and the presumption that capital is used to enrich, then, ideally, that should take place in a world free from any distractions that would deny that pursuit, such as an inability to trade with another part of the world when that other part of the world would otherwise wish to do so. This infers that there would be capitalists in, say, one part of the world that would wish to trade with capitalists in another part of the world but that trade is disrupted by barriers imposed by people who are not capitalists and have some other reason for not wishing such trade to occur. The only people not wishing such trade to occur and having the power to halt such trade, or not allow such trade to proceed, would be the representatives of a nation-state. On at least one occasion, such representatives of a nation-state have lost their power over the nation-state because the desire for the capitalists, supported by their market, to make such trades with capitalists in other parts of the world, has been so overwhelming that further resistance to such trade would have given rise to a domestic turmoil that would have weakened the very fabric that is the nation-state. The demise of the communist states of the USSR was for reasons that were far more complex than this simplified view. But overall, when all the other factors are taken out, the demise of the USSR could, arguably, not have happened had not the states concerned wanted the independence to be able to conduct their own affairs in a world that was otherwise leaving them behind. Russia, the largest state within the USSR bloc and the most dominant, may well have been able to maintain its dominance over the other states had it not, itself, succumbed to such influences and desire to trade with others in order to enrich the capitalists and satisfy the desires of potential consumers within it.
Apart from the ‘push’ of the world outside of the USSR, which had demonstrated the ability of capital to develop advanced technologies, and the ‘pull’ from inside the USSR that needed that advanced technology, there was the fundamental desire of would-be capitalists within the USSR to develop technologies that would be able to compete with the ‘outside’ world. But to do this, however, capital would be required. The paradox, of course, was that the reasons primarily that they needed the technology was so that they could use it in weapons that would be able to defend them from a world that operated in a way that was ideologically abhorrent to them and the very reason that they had isolated themselves from the rest of the world in the first place. The Soviet economic system was unable to compete in this context. Its ruling elites had abused what little virtue its system theoretically may have had and what production there had been was completed without any enthusiasm because it was unable to provide even modest rewards for those involved. It is no coincidence that this failure of the Soviet bloc to compete occurred at the same time as the emerging so-called ‘techno-economic’ paradigm of the seventies.
By the seventies, some of the states within the bloc, but not part of the USSR, were indulging in capitalism themselves by making extensive borrowings from Western banks. Unfortunately, they did this at a time when the capitalist world was about to enter one of its own periodic slumps and the states concerned, Poland, Hungary and Yugoslavia, were left with massive debts. The Soviet Union, a little more conservative about the idea of involving the West in its economic affairs, was given some reprieve when oil prices suddenly jumped in the early seventies. This gave the USSR much of the funds it needed to update its technologies without having to go to the West for funds. However, it only served to delay the inevitable, not deflect it away forever. The technologies of the West, coupled with the associated emerging new ideas of global capitalism, together with the tantalising and tempting glimpses of Western consumerism, forced the USSR to capitulate its economic ideas of the previous seventy years and by 1990 it was left facing the turmoil that a nation-state must endure as it changes its entire structure to meet the reality of the world. This situation complies entirely with modern theorists’ ideas of capitalism that, far from destroying itself, as Marx would have had us believe, is actually able to renew itself completely after a failure and, as if just to reinforce the idea, in this case at the expense of a nation-state that would have preferred to believe Marx.
The collapse of communism in Eastern Europe left a vacuum that was difficult to fill. The first effect for most of the ex-East European communist bloc nations was to display a newfound notion of nationality and freedom. National flags were proudly hoisted and a myriad of nationalistic political parties and groupings sprang up. Some nations, for example the Baltic states of Latvia, Lithuania and Estonia, were already well placed historically, economically and geographically to slip easily into the comfortable ways of Western Europe and the developed world. Others, such as the Central Asian Republics of Uzbekistan, Tajikistan, and Kyrgyztan were, on the other hand, left with very little to offer the rest of the world, with Tajikistan also having deep internal troubles. Somewhere between these extremes of adjustment lay the nation-states, for example, of Turkmenistan and Kazakhstan, which both have their borders to the Caspian Sea and the potential that these untapped oil reserves have for the region. The question of sovereignty for these states became increasingly important as they achieved their independence because of the entrenched way in which many of them were economically and militarily reliant on Russia prior to the collapse of the USSR.
Russia itself has its own internal problems with ethnic groups that are within the many ‘republics’ which go to make up the Russian Federation, some of them seeing themselves as so different from Russia that they are seeking their own independence. Chechnya is the most prominent of these but others such as Bashkortostan, Chuvashia, Khakassia and Tartarstan, to name just a few, are also pushing for, if not complete independence, a degree of, at least, ethnic self-rule.
It would seem almost as though, after years of being shackled to the dominance of Russia during the years of the USSR, that nationalism must become a feature, an expression, by which many of these Republics, independent or otherwise, must go through before seeking their place on the road to becoming a part of the process of globalisation. This view, perhaps, is a simplification of an observation whereby many of the nations that are now actively part of the trend of globalisation have all gone through the same process themselves long ago and have put the problems of securing their ‘nationhood’ behind them and have ‘moved on’ with the help of technology and the new found freedom of movement of capital. Sovereignty for many of the newly independent republics is, they feel, the prerequisite before embarking on the road to globalisation. While they may need to relinquish some of that sovereignty later as control of capital passes to the capitalists, sovereignty needs to be established in order to maintain control of the myriad of other characteristics that go to make up a nation-state. For some the predominate feature is ethnicity, for others race and for others religion. No matter which, there seems to be a need to intensely consolidate their national and sovereign identity before moving on.
After the first stage of achieving some degree of independence, the next stage is to consolidate it and secure it. Within the post-communist world this has been done, or is being done, with varying degrees of difficulty. The states of the Czech Republic and Slovakia, for example, quickly consolidated their positions quite peacefully. The states of the former Yugoslavia, on the other hand, have had to endure, and still are, massive upheavals, which have resulted in dreadful loss of life as old and ancient ethnic animosities confronted each other as the search for statehood progressed. The reasons for this are highly complex and, of late, some historians argue that, apart from those age-old animosities, it was the structure of the Yugoslav nation-state during the Tito years and the evolution of social self-management and its subsequent demise post-Tito, that had aggravated an already potentially explosive mix of ethno-nationalistic fervour, decentralisation and disassociation of potential nation-states from a formerly powerful centralised federation. Added to these problems are the Balkans’ geographic position where ‘East’ meets ‘West’, the origin and cause of those age-old animosities, in which the clash of religions has often been the catalyst for the years of violence that flare up from time to time. These differences underpin the very nature of the desires of ethnic groupings to establish state hood and where economies and global participation are lesser considerations, at least for the time being.
Regardless of how the struggles for national identity and formation of the nation-state occurred, their necessity to go through the process seems to be a vital step on the road to a full and active role in the process of globalisation and participation in a world that is moving toward full utilisation of the ‘globalisation’ concept. The question of sovereignty remains important, even in the postcolonial situation where priorities for newly formed and developing nation-states are often, not so much control of capital and means of production, for some there is none anyway, but the concept and notion of nation-statehood for its own sake as a pre-requisite for capital and production planning later.
Sovereignty, it is suggested, is about the power of government to enforce its will over the people. Often that power is given to the government by the people but at other times it is forcibly taken from the people and wielded regardless of whether the people wish it or not. Either way, there is an expectation that to some level or another, the government will take on the day-to-day running of the nations affairs and ensure its protection, welfare and its notion of sovereignty. To say ‘at some level’ means that not all governments take on these tasks willingly or whole-heartedly. Some governments will simply neglect their responsibilities and all but enslave the peoples they govern in order to enrich individual members of a government. Such governments rarely last long and usually, then, sovereign power will revert back to the people who, in turn, will empower a government that will look after the people’s interests. What is important is not so much the nature of the relationship of sovereignty between government and people, but relationship of territoriality and sovereignty. It may be that a neighbour nation-state could take an advantage of a weaker nation-state when there is turmoil within it but, these days, this is unlikely. This brings us back to the idea that what is important for the notion of the nation-state today is the ability of that state to provide, well, whatever. For the rest of the world outside of that nation-state, what goes on within is essentially no other nation-states business unless it directly threatens another state. Whether it wishes to trade with the rest of the world is a decision only it can make. The rest of the world will continue to function in whatever way it deems it should, more than likely in the direction of globalism. To date, ‘globalism’, per se, has not been forced on any nation. Today, nation-states do not impose themselves on other nation-states simply because they refuse or are unable to participate in a global economy. One needs to ask if they do not do this through a fear of, at some stage, themselves being imposed on when they, for some reason, are unable to perform ‘globally’?
The next stage for many nation-states that wish to begin to compete in a global economy but find that they are too small on their own to do so, (unless they happen to have some vast resource that the rest of the world needs), is for them to join forces with states that find themselves in a similar situation. Confederation (as against Federation that implies relinquishment of a large proportion of sovereignty to a centralised organization or government), or economic union has provided the answer for many nation-states in Europe, North America, South America and South East Asia. In so doing, however, these nation-states do need to concede some level of their sovereignty to the consortium. This is done, though, via negotiation and agreement. Just as in capitalism itself, the nation-state that is prepared to concede such sovereignty does so because it believes that what it is getting in return is of equal or greater value. That is the price paid. But in no way is sovereignty conceded in its entirety. Most of the nation-states that have co-joined in such confederation have done so within the constraints of a democracy-style government where such mandate has been offered by its people for those respective governments to so do. It is done so with little disturbance to the status quo of that nation-state. The nation-state may well relinquish much of its financial independence and control of its wealth and capital based on the belief that in so doing it will ultimately be for the better of the nation-state, however, there may also be, in accompaniment to that, a relinquishment of the social responsibility a nation-state has toward its subjects. That is, the state may insist that those who are able to pay their way in the community should do so. The welfare state becomes rationalised. Welfare resources become market-orientated. They become intrinsically linked to the economic well-being of the state rather than the well-being of its people. These have become areas of concern for welfare administrators who struggle to keep up with increasing demands on their services while the financial resources diminish. There seems to be an increasing trend toward charity reliance. Indeed, charities have had to adopt and employ the practices of highly professional managers in order to manage the massive amounts of monies that have become involved.
Another major area of concern with regard to sovereignty is the problems associated with monetary union. Many nations have forgone their own currency to share in the currency of a close neighbour that has greater stability within its currency. This is another trend that seems to be expanding. Apart from the loss of control over currency, there is for some nations a deep and symbolic meaning to a currency that it has had for, in some cases, centuries.
Perhaps the most important issue regarding sovereignty, and currently the most topical, is that of movements of people and labour. At present the problem presents as one of security, but over the long term it is more one of sovereignty. The issues are highly emotive and, for some nations, extremely divisive. It is not the place of this paper to discuss those issues except to say that there is still some way to go before they may be resolved and, certainly, the issue of security needs to resolved first prior to any resolution to the question of labour movement that does not involve security. Embedded in this aspect of sovereignty are also the issues of citizenship and human rights. While human rights are extra-governmental and within the notion of globalisation via organizations such as the United Nations, citizenship is conferred by privilege from the nation-state but usually, though not always, under the auspices of human rights declarations. Again, a little sovereignty needs to be conceded if the nation-state concerned wishes to participate in the globalisation trend.
So, what is left after the nation-state has conceded sovereignty over capital, currency, human rights, labour trends and welfare? The hot issue in Australia at this time is the protection of borders and who and who is not allowed to be a part of this particular nation-state. But these are issues that relate to the broader context of globalisation and of Australia’s participation in globalisation. One way or the other, they will be resolved but the way in which they are resolved will most definitely affect Australia’s role in the global context by virtue of the way Australia is viewed from without. There may be a diminishment of sovereignty but certainly no demise.
The nation-state is quite compatible with the notion of globalisation. All the day-to-day functions of local governance still require servicing and the nation-states collectively will concern themselves with global governance. There is still much to be resolved and this may take many more years to do. But the concerns of the multitudes of groups of peoples will take precedence ultimately while democracy prevails. The alternatives are a possibility, but does the world really want to go there?
 John M. Hobson, The State and International Relations, (Cambridge: Cambridge University Press, 2000). pp. 9-10.
 David Lockwood, The Destruction of the Soviet Union: A Study in Globalization, (Basingstoke: Macmillan, 2000). pp. 87-90.
 Ankie Hoogvelt, Globalization and the Postcolonial World: The New Political Economy of Development, (Baltimore, Maryland: The John Hopkins University Press, 2nd ed., 2001). p. 65.
 Lockwood, The Destruction of the Soviet Union. p. 88.
 Lockwood, The Destruction of the Soviet Union. p. 88.
 R. Boyer, ‘Technical Change and the Theory of Regulation’, in G. Dosi and C. Freeman, (eds.), Technical Change and Economic Theory, (London: Pinter, 1988).
 Roger T. Kangas, “Problems of State-building in the Central Asian Republics”, World Affairs, (vol. 157, no. 1), Summer 1994. p. 29 (9). (para. 1).
 Kangas, “Problems of State-building in the Central Asian Republics”, (para. 5).
 Demitry Gorenburg, “Nationalism for the Masses: Popular Support for Russia’s Ethnic Republics”, Europe-Asia Studies, (vol. 53, no. 1), January 2001. p. 73. (para. 2).
 Patrick Brogan, World Conflicts: Why and Where they are Happening, (London: Bloomsbury Publishing, 1992). pp. 422-432.
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 Hoogvelt, Globalisation and the Postcolonial World. pp. 203-206.
 Andrew Grosso, “The Demise of Sovereignty”, Communications of the ACM, (vol. 44, no. 3), March 2001. p. 102. (para. 3).
 James D. Wilets, “The Demise of the Nation-State: Towards a New Theory of the State under International Law”, Berkeley Journal of International Law, (vol. 17, no. 2), Fall 1999. p. 193. (p. 20).
 Robert Geyer, “Globalisation and the (non)-defence of the Welfare State. (British and Norwegian Welfare States)”, West European Politics, (vol. 21 n0. 3), July 1998. p.77. (paras. 1-10).
 Dick Bryan, “Accumulation versus Sovereignty, (Monetary Unions)”, Arena Magazine, February 2001. p. 7.
 Bryan S. Turner, “Outline of a Theory of Human Rights”, Sociology, (vol. 27 no. 3), August 1993. p. 193. (8).