Technology goes international

As previous sections have argued, the rise of the state is inseparable from that of modern technology. Print, roads, railroads, telecommunications, and typewriters - to say nothing of weapons and weapons systems - were among the most important means that enabled the state to impose its power over every square mile of territory and every individual in the population.

From the beginning, though, much of modern - meaning, in this context, post-1800 - technology bore a Janus face. On the one hand, it enabled governments to cast the net of sovereignty farther, and more tightly, than ever before, and thus helped them to control everything within their national borders. On the other, it tended to transcend those borders, crossing them and turning them into obstacles to progress. This was because, unlike its pre-1800 predecessors, much of modern tech­nology can only operate when, and to the extent that, it is grouped into systems. A plow, a hammer, a musket, even a steam engine or a ship can do its job even in the absence of others of its kind; if numerous plows are used side by side, or many ships joined into a fleet, each one can still perform its function independently of the rest.

The nature of modern technological systems may be explained by the example of the very first of them, namely the optical telegraph.^[441] Dating to the last years of the eighteenth century and known after its inventors, the French brothers Chappe, it consisted of stations - either built into existing structures, such as church towers, or specially constructed ones - each of which was topped by a set of one horizontal and two vertical beams forming the letter H. Linked to each other by hinges, the beams were equipped with pulleys and ropes that allowed them to be set in 196 different positions, enough to cover the letters of the alphabet, pun­ctuation marks, a number of selected syllables, words, and even entire phrases. Messages could be sent both by day and (using lamps) by night, either in clear or, by substituting letters for each other, in code. The operator in each station was equipped with a telescope. He would pick up the signals displayed by the station before his own, write them down, and have his fellow operator transmit them to the next one. Depending on the topography the average distance between stations was in the order of four to five miles. The normal speed of transmission was around 200 or 300 miles per day, although much depended on atmospheric conditions (in fine weather some intermediate stations might be shut down) as well as on the length of the messages themselves.

As will be readily apparent, the efficiency of the system depended on the distances to be traversed as well as on its own density - the number of stations per square mile of territory.

What was true of the semaphore system applied a fortiori to the electric telegraphs and railways which started making their appearance from the 1840s on; often running in tandem, at first both telegraphs and railways were constructed on a local scale, such as, to cite but two examples, the famous telegraph line by which Samuel Morse connected Washington, DC, with Baltimore and the equally famous length of track which con­nected Liverpool with Manchester. Originally, too, they tended to be privately owned; regardless of who owned them, however, the advantages of linking them to each other were very soon apparent. By the 1850s, at the latest, rail and telegraph systems belonging to different countries were often being integrated with each other by way of state-appointed ad hoc commissions.

In theory each state was, and still is, free to exercise its sovereignty and build its own networks to its own standards, however idiosyncratic, while at the same time ignoring those of its neighbors and refusing to integrate with them. In practice, states could do so only at the price of incurring a tremendous technological and economic cost. The current plight of North Korea is a perfect case in point. There, a xenophobic communist government has imposed isolation on its citizens, forcing them to become self-sufficient in all important respects and thus preventing them from making use of whatever comparative advantages they may have; the price to be paid was inefficiency and the inability to maximize the benefits of precisely those technologies that have developed most rapidly since 1945 or so, i.e., communication (including data processing) and transpor­tation. The precise cost of isolation varies with circumstances and also depends on the size of the country in question. However, even in the case of the largest ones, it is still substantial - not for nothing has the United States, as the country with the largest economy of all, been switching over to the metric system. To avoid this cost, states had to gain access to international networks, which in turn forced them to grant foreigners access to their own.

Another effect of advancing technology was to put an increasing number of environments which had previously been inaccessible to mankind within its reach. Some of these environments, such as the air and the bottom of the sea, had long been known to exist and, in small part, were explored and exploited; others, such as the electromagnetic spectrum, were recently discovered and turned out to be of an entirely new nature. Their effective use, even whether they could be used at all, often depended not on the whims of this country or that but on international cooperation. For example, without rules, procedures, and organizations which are responsible for allocating air space and coordinating communications, navigation, security, emergency services, and a whole host of other mat­ters, the international civil transport aviation industry could not exist. Much the same is true for operations in outer space, underwater space, and of course electromagnetic space. Whether because the spaces owned by each country are too small, or because of the danger of mutual interfer­ence, all require that they be regulated on a scale, and by organizations, that are capable of looking beyond the needs of individual states.

Finally, a third way in which modern technology compelled gover­nments to work together grew out of the ecological problems that it created." As Charles Dickens' Coketown and the black satanic mills remind us, already during the nineteenth century industrialization was capable of polluting entire districts, spoiling their drinking water and filling the air with black smoke. But these problems were as nothing compared to the ones which made their appearance after 1945, and, even more so, since the rise of modern mass consumer societies in the most advanced countries. To the wastes, many of them toxic, created by industry itself - smoke, ashes, slag, and effluents of every sort - were added the emissions of automobiles, the lead from discarded batteries, the glass and aluminum from throwaway food and drink containers, and of course vast amounts of plastic and styrofoam used for packaging all sorts of products and, having served their function, left to litter the country for ever and ever.

Some of the pollutants went into the air, others into the ground, others still into the water - the oceans included - where not even fish were safe from them. While some remained strictly local nuisances, others were capable of making their effect felt hundreds and even thousands of miles from their point of origin. For example, global warming - the name speaks for itself- and the destruction of the ozone layer are caused by the emissions of power plants, factories, and automobiles, and represent planetary problems. Smoke generated by US industry will cause acid rain to fall in Canada. Poisonous materials poured into the Rhine by chemical plants which are located in Switzerland and Alsace will reach down the river all the way down to its mouth near the Hoek of Holland; and oil slicks developed in Egyptian territorial waters, for example, are liable to end up on the shores of Israel. The list of problems, once one thinks about it, is endless. However, perhaps the most dramatic demonstration of the global effects that pollution can have was given by the explosion that took place in the nuclear reactor at Chernobyl in 1986. From its place of origin near the Ukrainian city of Kiev the resulting radioactivity spread over much of the northern hemisphere, including Belarus, Poland, the Baltic states, Scandinavia, and Canada.

" See J. Vogler, ‘‘The Politics of the Global Environment,” in C. Bretherton and G. Ponton, eds., Global Politics: An Introduction (Oxford: Blackwell, 1996), pp. 194-219; and M. S. Soroos, Beyond Sovereignty: The Challenge of Global Policy (Columbia: University of South Carolina Press, 1986), chs. 8 and 9.

With technology simultaneously creating the need for, and (by facilitat­ing transportation and communication) encouraging the establishment of, international bodies it is not surprising that the first such bodies, appeared around the middle of the nineteenth century. Previously there had often been bilateral and multilateral alliances, some of which were intended to be permanent. A good example is provided by the ‘‘Concert of Europe,” a loose association of states whose purpose was to prevent any individual member from expanding at the expense of the rest while simultaneously cooperating in suppressing Jacobinism wherever it might raise its head.¹⁰⁰ However, the International Telegraph Union represen­ted something else. Its foundation, which tookplace in 1865, marked the first time when states created an organization in which they themselves were members but which at the same time had a legal persona of its own as well as a permanent staff and a permanent headquarters at which it could be reached. Within its own limited field, the organization was authorized to make decisions that were binding on states. It is true that no mechanism for enforcing those decisions was provided either at the time or afterward. But then one reason for this is precisely that, as experience has shown, in view of the very considerable disadvantages that resulted from remaining aloof, this and similar organizations could function toler­ably well even without such a mechanism.

During the first forty years of its existence the ITU helped increase the number of international telegrams from 5 million to 82 million a year;¹⁰¹ but even this only provided a glimmer of the future as technology began to invade additional sectors of the electromagnetic spectrum. Partly over­taken by the introduction of radio, in 1932 the organization was transfor­med into the International Telecommunication Union. In 1947 it was made into a specialized UN agency, and in the next year its headquarters were moved from Bern to Geneva. As constituted at present, the or­ganization is anchored in a number of conventions that have been signed by member states. Its most important organs are the Plenipotentiary Council, which meets every five years, as well as the annual Adminis­trative Councils. In addition it has a permanent secretariat and a variety of technical organs that are concerned with the allocation of radio fre­quencies, offering technical advice to member states, and the like.

Serving as a model for others to come, the ITU was followed by the International Postal Union (1874)¹⁰² and the International Bureau of

¹⁰⁰ See A. H. Kissinger, A World Restored: Metternich, Castlereagh and the Problems of Peace 1812-1822 (London: Weidenfeld and Nicolson, 1957), chs. 11 and 13.

¹⁰¹ F. S. L. Lyons, Internationalism in Europe 1815-1914 (Leiden: Sijthoff, 1963), p. 41.

¹⁰² For its history, see M. W. Zacher, Governing Global Neworks: International Regimes for Transportation and Communication (London: Cambridge University Press, 1996), pp. 182ff.

Weights and Standards (1875). A landmark of sorts was reached in 1884 when geographical space was standardized by making Greenwich into the prime meridian; previously Krakow, Uraniborg, Copenhagen, Ter-Goes, Pisa, Augsburg, Tierra del Fuego (in the Cape Verde Islands), Rome, Ulm, Tübingen, Bologna, Rouen, St. Petersburg, Washington, DC, Phil­adelphia, Munich, Brussels, Rio de Janeiro, Amsterdam, Christiana, Lisbon, Pultowa, Cadiz, Madrid, Warsaw, Paris, and Stockholm had all competed for the honor.^[442] Hard on the heels of the meridian came Greenwich Standard Time, long resisted even in Britain (‘‘an aggression more insidious in its advances than the papal one,” complained an anonymous author in 1848) but made necessary by the railroads and now transmitted instantaneously by means of the telegraph. One by one those who objected - France, Haiti, Brazil and, in the United States, the city of Detroit - capitulated. Late nineteenth-century commentators expected a lot from these organizations. As one of them put it, ‘‘the victories of Alexander and Napoleon are cast into the shade by the triumphal proces­sion of the tiny postage stamp around the world.”^[443]

By 1984 the number of intergovernmental organizations, which had stood at 123 in 1951 and 280 in 1972, reached 395;^[444] in Europe alone thirteen selected states sent 391 representatives to regional organizations in 1988, as against only 101 in 1950.^[445] Such organizations covered almost every conceivable field of human activity, from the regulation of air transport - the International Air Transport Association, IATA, was probably the only organization which counted more member states than did the United Nations itself - through the conservation of wildlife and the exploitation of the seabed all the way to the establishment of measures and standards and the disposal of hazardous materials. From Interpol to the International Customs Union, most of them had established their own headquarters and were employing their own bureaucrats. Though the latter continued as citizens of their states of origin, they were at the same time the servants of the organizations themselves. Like other bureaucrats they tended to develop a common outlook and common interests which often differed significantly from those of the member states; and indeed for them to do otherwise would have resulted in a loss of credibility. While individual states did their best to manipulate the organizations in question, clearly there were limits to what could be done. As the accession to the World Trade Organization of such formerly isolationist states as China indicates, to stay away from ‘‘the cobweb of agreements”¹⁰⁷ was tantamount to condemning oneself to something like a preindustrial existence.

While not itself the product of technological needs - by origin it was simply a coalition of states established to fight Germany and Japan in World War II - the UN has tended to take over many of these or­ganizations and put them under a single roof. Like other international organizations, it has developed its own legal persona, well-established identity, and bureaucratic mechanism. The latter is by no means identical with that of individual member states whose interests it serves; if there is any correspondence at all, it is only to a very limited extent - witness the constant bickering between it and the United States as the strongest single member. In many ways its position resembles that of the medieval papacy: vox populi, vox dei (the voice of the people is like the voice of God), as the saying goes. Like the papacy, it is swerving from one financial crisis to another and is forever negotiating with members (for­merly princes) who refuse to pay their debts. Like the papacy, its practical impotence is offset in part by the considerable moral authority which it wields.

If only because the UN is capable of offering a forum for a state's opponents to voice its grievances, to oppose it usually means incurring substantial costs in terms of public opinion. Being subject to UN sanc­tions can also be expensive - as is shown by the fact that, within a year of the ones against South Africa being lifted, the country's foreign trade leaped by no less than 38 percent.¹⁰⁸ Furthermore, as of 1995 the total amount of funding that was being channeled through the UN or its affiliated organizations stood at $10.5 billion. Of that sum, approximately $3.5 billion was used to maintain about 100,000 disciplined, well-armed troops, wearing blue helmets and scattered in seventeen different flash­points around the world. Compared to the resources even of a second- rate member state, none of the three figures is terribly impressive. On the other hand, they are figures that cannot be matched by many, possibly even the majority, of UN members.

The organization responsible for wielding these resources for the com­mon good is the Security Council. Acting as a sort of global executive, since the end of the Cold War it has become increasingly willing to invoke Chapter VII of the UN Charter and use force to police such states as either upset the international order or engaged in ‘‘intolerable'' acts

¹⁰⁷ Zacher, Governing Global Networks, p. 230.

¹⁰⁸ World Link, March-April 1994, p. 99. against their own populations: cases in point being, besides Iraq, Somalia, Bosnia, and most recently Rwanda. To back up its activity the General Assembly, playing the role of a global legislative, has adopted a whole series of resolutions dealing with basic human rights. In many ways these resolutions represent a return to seventeenth-century ideas of natural law. Expressly designed to put limits on sovereignty, theoretically they are binding not only on such governments as subscribe to them but on others as well.

Unlike the old League of Nations, which from the beginning did not include the most important power of all and which during the 1930s witnessed the withdrawal of other important powers, the UN has never been deserted by any country. Only once did any state walk out, as far back as June 1950, when Stalin ordered his delegation to leave the Security Council. Its absence, far from damaging the organization or benefiting the USSR itself, was used by the United States in order to push through a resolution that put UN troops into Korea; no wonder that, since then, not a single country however weak or strong has cared to repeat the experiment and leave its seat in New York unoccupied. In fact, so important has the UN become as a debating forum - occasionally, as a forum where practical resolutions are adopted and enforced - that the diplomatic services of most countries include few, if any, posts which carry greater weight than an ambassadorship to its headquarters along First Avenue; conversely, the representatives of the UN (and other inter­national organizations) are known as ambassadors and granted diplo­matic status just like those of sovereign states. All this adds up to a simple fact. In the late twentieth century, for any state to ignore the UN would be analogous to a commercial firm liaising with each of its competitors but failing to keep an eye on the stock exchange where the fate of all is determined.¹⁰⁹

If, on the one hand, modern technology has done much to encourage the founding of international organizations that do not have territory and are not states, on the other it has forced and still is forcing states to join together into blocks whose territory is larger than that of individual members. To date, the best-known and most successful of these blocks is the European Union, which provides a tangible expression of the fact that the economic relationships generated by modern technology are on too large a scale to be dealt with effectively by individual countries. Originally the European Common Market had only six members and constituted no more than a free trade zone for coal and steel. Later the agreements were

¹⁰⁹ On the UN as a success story, see Report of the Commission on Global Governance, Our Global Neighborhood (Oxford: Oxford University Press, 1995), pp. 227ff., 266ff., and 305ff. extended to other products as well, and common tariffs vis-a-vis the rest of the world were established.^[446] Driven by the need to achieve econo­mies of scale - often in direct competition with that other superstate, the United States^[447] - the EEC has expanded, until it has become the unit with the third-largest number of people (after China and India) and the largest GNP on earth.

As important to our purpose, from the start the EEC represented more than a mere temporary arrangement between sovereign states. Like the other type of international organization just discussed, it was intended to be permanent. Like them, it has its own legal persona and institutions. Over the years it has developed its own legislature (the European Par­liament, located in Strasbourg), its own high court, and its own execu­tive. All three, but the last named one in particular, still fall far short of what one would expect from a unified sovereign state. Yet since 1963, when Community law was declared to be directly binding on the mem­ber states,^[448] all three have certainly made their influence felt in the daily lives of people in all the member countries. Often this is done in entirely unexpected ways: as when the European Court ruled that the govern­ment of Ireland could not prevent its citizens from traveling abroad to have an abortion, or when the European Commission fined the British steel industry to the tune of £100,000,000 (1994), or when the same commission decided that Dutch clogs did not meet European footwear standards and that their manufacture should cease. By allowing the citizens of member states to move, live, and work freely - in some cases, also to have equal access to the social services offered by fellow members - the union has gone a considerable way toward creating a common citizenship. In 1979 it was provided with a permanent source of revenue in the form of 1 percent of value-added tax receipts, which is paid to it by each of the member states. Since then the union has become the first non-state organization in modern history to issue a currency of its own, and in the year 2002 that currency is scheduled to replace that of the member states.

Whether the European Union can or will grow into a single, sovereign United States of Europe is moot.^[449] Some of the smaller member states strongly support such a development; as of 1996 discussions were under way concerning the possibility of them surrendering the liberum veto which, until now, they have enjoyed. Others, particularly those with an imperial past and extra-European interests to consider, are more skep­tical. In this context one should by no means overlook the fact that, in some ways, Europe is already more integrated than that other great federal entity across the Atlantic. For example, whereas US state univer­sities routinely charge students originating in other states higher fees than those required of their own residents, such discrimination is expressly prohibited by a regulation issued by the European Commission and confirmed by the European Parliament. Also, the European banking system is more integrated than the American one, with the result that a German bank may find it easier to operate, say, in Sweden than a New York bank in neighboring New Jersey. A nucleus for a European defense force has been set up by Germany and France, and in some respects is already stronger than the armed forces of Britain, for example, on their own. In the future it will probably be joined by additional members.

On the other hand, development toward a single European superstate is hampered by the existence of other international organizations, whether smaller ones, such as the Nordic Council, or larger ones such as the North Atlantic Treaty Organization. Having established no fewer than 112 Nordic institutions, and counting 450 ‘‘Nordocrats” (1985), the Nordic Council forms an organization inside an organization. In practice it has put few obstacles in front of European integration; but in principle its continued existence (and that of similar groupings among other countries) within the context of a closer European Union is no more acceptable than, say, a formal alliance between Virginia, North and South Carolina, and Georgia would be in the United States. NATO for its part includes three non-European members, i.e., the United States, Canada, and Turkey. At the same time it excludes three European countries which are Union members, i.e., Austria, Sweden, and Finland. As the French in particular have repeatedly stated, the existence of NATO in its present form is clearly incompatible with continued movement toward European integration in what has traditionally been the most important field of all: namely, that of providing a common defense against outside aggression. Generalizing from this case, one might perhaps conclude that the obstac­les which individual states such as Britain put in front of European unity are significant enough. However, in the long run even greater opposition is likely to come not from states but from other international organiz­ations whose membership and purposes do not overlap.

Whatever the future of the European Community, its economic suc­cess has encouraged states in other parts of the world to create similar organizations. To date, none of them has progressed nearly as far as their model in creating common institutions and imposing a common law. On the other hand, multilateral arrangements aimed at reducing obstacles to trade, eliminating tariffs, achieving integration (as, for example, between the US and Canadian electricity grids and telephone networks), setting up a common economic front vis-à-vis the rest of the world, and dealing with ecological problems now number in the dozens and may be found in every continent. To list some of the most important ones only, 1959 saw the establishment of EFTA (European Free Trade Association) all of whose members later joined the European Union. In 1960 this was followed by LAFTA (the Latin American Free Trade Association, which incorporates Mexico and all Latin American countries except Guyana) as well as CACM (the Central American Common Market). UDEAC (Union douaniere et economique de l'Afrique centrale, with Cameroon, the Central African Republic, Congo, and Gabon as its members) was founded in 1966, ASEAN (Association of South East Asian Nations, made up of Indonesia, Malaysia, the Philippines, Thailand, and Sin­gapore) in the next year. An Andean Common Market (ACM), with Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela as its members, has existed since 1969 and was later followed by MERCOSUR which includes Brazil, Bolivia, Paraguay, Uruguay, Argentina, and Chile. In 1975, the Economic Community of West African States (ECOWACS) was founded by Benin, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo, and Upper Volta. In 1994 the ratification of the North American Free Trade Agreement (NAFTA) by the United States, Canada, and Mexico showed that not even the largest and most productive economy in history can exist in isolation. Admittedly there are some exceptions, particularly in the Middle East where, since Nasser's death, state sover­eignty has gained the upper hand over pan-Arabism.¹¹⁴ Elsewhere, how­ever, the list of agreements which already exist or are being negotiated is all but endless.

The declared purpose of all these agreements has not been to abolish political borders. Instead, those borders having been fixed in place (theor­etically for all time to come), the goal is to reduce their economic importance, make it easier to move across them, and promote trade between the signatory states. Mindful of the experience of total mobiliz­ation in 1914-18, during the interwar years most of the great powers in particular had attempted to build trade empires in order to be as self-

¹¹⁴ See M. Barnett, ‘‘Sovereignty, Nationalism and Regional Order in the Arab States System,” in T. J. Biersteker and C. Weber, eds., State Sovereignty as a Social Construct (Cambridge: Cambridge University Press, 1996), pp. 148-89. sufficient as possible; that, after all, was the declared aim of German, Italian, and Japanese imperialism. However, from 1945 on the most successful states have been those which, like Germany, Japan, South Korea, and Singapore, integrated into the world market. The larger the fraction of GNP that a state exported and imported - in other words, the better it used modern technology in order to maximize its comparative advantage - the greater by and large its economic success.^[450] During the 1980s, even economic statistics, which are normally conservative, began to recognize the change by separating gross domestic product from gross national product. Other things being equal, the gap between the two provided a good index for the economic performance of any particular country; simultaneously, the very same figures tend to emphasize the fact that to calculate economic success in terms of individual countries is becoming less and less meaningful. For example, over 40 percent of all ‘‘Japanese” goods are now being produced outside Japan, in places as far apart as the United States, Europe, and Indonesia; and the figure keeps rising all the time.

Given this emphasis on international trade - as reflected in the doub­ling, between 1965 and 1990, of the percentage of world product which was exported^[451] - it is perhaps not surprising that trading organizations which were represented in different states were often better positioned to use the opportunities provided than were states themselves. Unlike the latter, multinational corporations did not have citizens to protect, wel­fare payments to make, frontiers to cover, or sovereign territory to worry about. Free of these responsibilities and limitations, they were able to seize economic opportunities wherever they presented themselves, as soon as they presented themselves, and - a very important consideration - for only as long as they presented themselves. They could do so either on their own, by setting up branch offices, or else by forging alliances with their counterparts in other states. The methods used included common research and development; a division of labor in manufacturing so that parts provided by one firm would go into the products of another; shared access to distribution and service networks; the mutual acquisi­tion of each other's stock; and, of course, outright mergers of the kind that took place in May 1998 when German-based Daimler Benz married American-based Chrysler.^[452] Moreover, in most cases it was the mul­tinationals, rather than states, which were the first to develop and deploy the most modern technologies in fields ranging from aircraft through computers to telecommunications.¹¹⁸ Both for this reason and because they were in a better position to make use of them, it was in their hands that such technologies really took off.

As has often been pointed out, multinational corporations need the state to provide stability and defense; also, the threat to sovereignty that they present is limited by the fact that those of their parts which operate within the jurisdiction of any given state had to obey that state's laws just as surely as national firms. Concerning the first point, I shall argue that, as some states at any rate become less capable of providing defense, parts of that task may themselves be taken over by the multinationals.¹¹⁹ Concer­ning the second, the internationalization of business and the opening to foreigners of one stock exchange after another mean that a greater per­centage of the assets belonging to the citizens of each state was likely to be located beyond its borders; and that vital economic decisions which affected such things as investment and employment inside each state were likely to be made by people over whom it had no control.

As the United States found out when it tried to protect its industry against imported Japanese automobiles, in many cases the measures contemplated to counter the trend were useless because the ‘‘enemy'' was already within the gates, even assuming that the term fits at all, given that the vast majority of people employed on US soil by firms such as Honda, Mitsubishi, and BMW are themselves American, and sell their products to American customers. States that tried to resist the trend and went too far in their attempts to reimpose control risked finding themselves bypas­sed by prospective investors and abandoned by existing ones.¹²⁰ In a world where the role of interstate war was declining, the position of political leaders became increasingly dependent on their ability to deliver material prosperity. The latter itself was now being defined less in terms of welfare services, as during the years 1945-75, than in terms of attrac­ting investment, providing jobs and creating growth. Special meeting places, such as the World Economic Forum in Davos, have even been set up where politicians are able to approach the multinationals cap in hands and launch their requests.

Another development implicit in the shift toward international trade was that governments, in the words of former British secretary of the treasury Denis Healey, found their ability to control their own currencies

¹¹⁸ See J. H. Dunning, Multinationals, Technology and Competitiveness (London: Unwin Hyman, 1988), particularly ch. 6.

¹¹⁹ See the section on ‘‘The threat to internal order” in this chapter, pp. 394-408.

¹²⁰ For an example of these developments as they affected two specific countries, see V. Dela Sala, ‘‘Capital Blight? The Regulation of Financial Institutions in Italy and Canada,” Governance, 7, 3, July 1994, pp. 244-64.

‘‘savagely crippled.”^[453] If a nation was to participate in international trade, its currency had to be convertible, as free as possible from unilat­eral administrative controls and capable of being exported anywhere without permission and at an instant's notice. But freedom from adminis­trative controls put it at the mercy of the international market, par­ticularly in a period when new computer technology enabled foreign currency transactions to be carried out instantaneously, twenty-four hours per day, and on a scale ($4 trillion a day in 1996) that not even the largest and richest states could match.

Gone were the days when, as during the period 1914-45, many impor­tant governments tried to create closed monetary systems and, at any rate insofar as their own citizens were concerned, lay down the value of their currencies by fiat. Gone, too, were the Bretton Woods Agreements which lasted from 1944 to 1971 and which pegged the various currencies to a US dollar which was itself pegged to gold.^[454] Since 1971, when President Nixon in what he modestly described as ‘‘the greatest monetary reform in history'' took the dollar off gold, all currencies have effectively been floating against each other. But whereas, before 1944, they were pegged to gold, now even that prop is gone and all that there is to support them is, often enough, the statistics which are compiled by economists.

To be sure, governments did not lose all influence over currencies. They could still manipulate the money supply, either balancing their budgets or failing to do so; too, they retained control over some key interest rates such as the discount rate (the rate at which the Central Bank lent money to the rest) and that which they paid on their own bonds. Furthermore, it has been pointed out that those involved in currency speculation might just as well be, and often are, not foreigners but the state's own citizens.^[455] But that is precisely the point. Under the new liberal economics, the difference between the two is being eradicated in many ways. Citizens and foreigners act with equal ease, ignoring their respective governments while moving money in and out of any given country by pressing a button. Consequently the value of many currencies, including some of the most important, became subject to wild fluc­tuations which were often beyond the power of central banks, or even combinations of central banks, to regulate. From the point of view of nonstate actors these fluctuations put a premium on hedging, which may be done by holding some of one's own assets in foreign currencies, or by borrowing in them.^[456] And so the merry-go-round, also known as ‘‘ca­sino capitalism,''^[457] continued. It was subject to control, if at all, only by the IMF, itself a non-state actor.

Finally, the unprecedented development of electronic information ser­vices seems to mark another step in the retreat of the state.^[458] Tradition­ally no state has ever been able to exercise complete control over the thoughts of all its citizens; to the credit of the more liberally minded among them, it must be added that they never even tried. The invention of print greatly increased the amount of information and reduced the cost at which it could be disseminated, but the ability to move that infor­mation across international frontiers remained limited by the need to physically transport paper (or set up printing presses), as well as language barriers. The latter in particular were important. Their existence meant that, small diplomatic and commercial elites only excepted, information tended to be distributed very much on a country-by-country basis.

In the event, the first of these problems was solved by the introduction of public radio broadcasting during the 1920s - leading to a situation where, in German-occupied countries during World War II, listening to enemy radio stations became a capital offense. The introduction of televi­sion, which relies on pictures instead of words, to a large extent elimin­ated the second. During the 1980s, cable and satellite television, as well as videotape, became widely available. Soon it began providing near-instan­taneous coverage of events on a global scale; a decade later the advent of the Internet, which enabled individuals to communicate with each other instantaneously, at all places, at all times, and regardless of distance, time of day, or any other factor, presented an even greater revolution. As with the economy, individual states found themselves forced to relax their control over information in favor of people and organizations which were not sovereign, did not have territory, and were not states. It is certainly true that some media moguls, such as Ted Turner and Rupert Murdoch, have more influence over international affairs than do the majority of heads of state and their foreign ministers; but even the most powerful governments now tend to make policy very much with the so-called CNN factor in mind.^[459]

Though the role of the various information services in bringing down the former Eastern bloc cannot be measured, it was certainly very large.^[460] In East Germany alone, 15 million out of 18 million people regularly watched West Germany television. Basing themselves on state­ments made by travelers, Western radio stations such as RFE, the VOA, the BBC, and DW claimed to have almost 100 million listeners in 1989; whether or not that figure was accurate, their role in helping move the USSR toward glasnost and perestroika was subsequently acknowledged by Mikhail Gorbachev.^[461] Conversely, states such as China, Burma, Iran, and Saudi Arabia which attempt to put blinkers on their citizens' eyes and prevent them from accessing international information services will find that the price which they have to pay for their self-enforced isolation is considerable. In the long run, their struggle will almost certainly be hopeless.

Thus, and George Orwell in 1984 notwithstanding, as of the last years of the twentieth century it seems that modern technology has not ushered in an age of hermetically sealed empires, Engsoc, and thought control. To be sure, the obstacles to ‘‘globalization'' remain formidable. They include not just the kind of nationalism and xenophobia found in many parts of the developing world in particular; but also the type of regional or­ganization which, so far from opening countries up to world trade, tends to build blocks of them that are relatively closed to it. Regardless of whether it is globalism or regionalism which wins the struggle, the effect on individual states is similar.^[462] The more important any state, the more likely it is to participate in a very large number of international or­ganizations, be they global, regional, or merely technical. By so doing it gives up parts of its sovereignty in return for a say in its neighbors' affairs; meanwhile, its control over both its economies and its citizens' thoughts has undoubtedly declined.

Under such circumstances, the best that states can do is to swim with the trend. They must see to it that their citizens study foreign languages as well as the new international languages of data processing; join inter­national organizations so as to make sure that their interests are not neglected; develop their communication and transportation networks, which in most cases means integrating them with those of their neighbors; and exploit the new trading opportunities by lowering tariffs, providing stable and convertible currencies, opening financial markets, and provid­ing ‘‘transparency’’ by allowing the free circulation of information about themselves, their economies, and their societies. Should they do so, they are likely to prosper; whereas those which, whether for religious or ideological or other reasons, refuse to do so have fallen behind and, to all appearances, are doomed to continue to do so. The days when a single state, however large and powerful, could hope to pull itself up by its own bootstraps, set up its own self-contained empire, and use its power to make a bid for its neighbors’ territory or even world domination seem to be over.