A Future Perfect: The Challenge and Promise of Globalization

by John Micklethwait

  Power Goes Up . . .

  It is tempting at this point to conclude that the argument is over: Capitalism is not destroying government. But that still leaves open the question of whether the nation-state is yielding power to other sorts of government. Once again, nobody denies that this is happening; the questions are how much and to whom.

  States seem to share just about everything, beginning with physical infrastructure. Virtually every country in the world seems to be building a bridge, a road, or a tunnel to its neighbor. The French, German, and Swiss cities of Mulhouse, Freiburg, and Basel share the EuroAirport (which has a Eurobar, where the currency one uses depends on which side you are being served on). Proud young Estonia wants to improve its railway to Russia and to build a “Via Baltica” linking it to Finland and Latvia.

  Bureaucrats are also building bridges. After Enron and WorldCom, accountancy regulators in Washington and London now compare their work. Sports ministers agree on common standards for drug testing. Fishery ministers squabble about the numbers of cod in the North Atlantic. Telecommunications officials try to set international-call rates. The past two decades have seen an outbreak of transborder networking between different branches of nation-states—courts, regulatory agencies, various bureaucracies, and legislatures—as they have struggled to deal with problems that seep across borders, such as pollution, illegal drugs, and terrorism.

  This creeping “transgovernmentalism,” as Ann-Marie Slaughter has dubbed it, encompasses everything from the citation by German courts of p. 151 precedents from American law to the decisions of the Basel committee on banking standards and is confined largely to the more developed states.[9] An influential argument put forward by Robert Cooper, a British diplomat, holds that since the death of traditional balance-of-power politics in 1989, the world has divided into three sorts of states: premodern ones such as Somalia, the Congo, or North Korea, which are in states of chaos not dissimilar from that in medieval Europe before the rise of nation-states; modern states such as Iran, Brazil, Indonesia, and China that still want to flex their nationalistic muscles; and mature, rich, postmodern ones such as the members of the European Union, which have grown past such concerns about sovereignty and for whom the distinction between foreign and domestic affairs is fading fast.[10]

  Yet nation-states remain much more than mere cogs in some global machine; even the most postmodern of them can and do opt out. Indeed, at times it seems that French diplomacy ever since Charles de Gaulle has been built upon that privilege. This independence becomes much more noticeable in the more formal supranational organizations, such as the UN and the EU. By and large, governments have not ceded sovereignty to such bodies as shared it with them on the basis of carefully defined rules that are packed with out clauses. They treat international organizations as instruments of national policy rather than harbingers of some misty new world order. They join lots of different organizations—military alliances as well as economic ones, regional trade organizations as well as global ones—rather than handing power to a single omnipotent body.

  This helps explain why the putative organs of world government such as the United Nations and the IMF are such messes. It is certainly true that some power has seeped up to such global institutions (see chapter 9), but it is a patchy affair; national governments have tended to hold on to the most important areas of sovereignty. For every Republican congressman who worries about the UN’s black helicopters spying on him, there are several million dollars’ worth of UN initiatives that lie stillborn because Congress has not bothered to pay its dues in full.

  By contrast, governments have been much freer in ceding sovereignty to regional bodies. Every continent bar Antarctica now has its own frontier-lowering trade pact. In most cases, these pacts have led to other sorts of integration, too. For instance, thanks to Mercosur, children in Rio Grande do Sul, Brazil’s southernmost state, now have to learn Spanish, and there are even a handful of Argentines who now admit to being Latin Americans. Meanwhile, organizations that have long just been talking shops have begun to extend their reach. The Association of South East Asian Nations, tradip. 152tionally little more than a brief annual golfing holiday for local leaders, has begun to talk—albeit in fairly elaborate code—about regional problems such as Indonesia’s penchant for burning down forests (and thus shrouding its neighbors in smog).

  The foremost regional economic organization, of course, is the European Union. For a decade now, there has been a single market among its members that allows people from one state to work in others. At the beginning of 2002, eleven European countries took this a step further when they gave up their own currencies, replacing them with the Euro. Their monetary policy is now set by the European Central Bank. The Maastricht Treaty speaks loftily of “ever closer union” between countries, and some in Europe will not rest until they have created a United States of Europe.

  But will they get their way? Some Benelux countries seem happy to merge their national identities in a wider regional identity. In the Netherlands, long more dependent on trade than bigger European countries, signs tend to be in English, French, and German as well as Dutch.[11] The Belgians seem to think that turning themselves into Europeans will help resolve long-standing ethnic hatreds between the Flemish and the Walloons (and also provide Brussels with a huge economic stimulus).

  But these are the exceptions. Even the most enthusiastic devotees of the European project are haunted by nationalist passions. The Dutch do not mind ceding power to Europe, but they still harbor deep resentments against the Germans. A recent Belgian film called The Wall fantasized about building a Berlin Wall–type structure between the Flemish and the Walloons. The French threatened to wreck the final stages of preparation for monetary union if a Frenchman did not become head of the new European Central Bank at the earliest possible opportunity. Unsurprisingly, opinion polls show no great enthusiasm for the bureaucrats in Brussels; the only Europeans who say they identify strongly with the European Union are those trying to join it, such as the Czechs and the Hungarians.

  European states often hang on to much of their sovereignty. For instance, while the signatories of the Schengen agreement have surrendered some frontier controls, they have looked for ways to replace them, such as increasing the number of spot checks on trucks behind borders. And further attempts to integrate or expand the union might meet greater resistance. One well-placed Eurocrat reckons that the union’s coming attempts to harmonize external immigration policies could present “the next big row after the Euro.” In Austria, whose main cities are within commuting reach of five million foreign workers, calls for strong borders have become rallying cries for the right.

  . . . and Power Goes Down

  p. 153 Arguably, the most serious challenge to nation-states is not from above but from below. After all, the former Soviet Union reluctantly disintegrated into its constituent republics; it did not dissolve into Comecon. The federal government in the United States has willingly handed power (notably over welfare programs) to individual states. Spain is deliberately trying to turn itself into “a nation of nationalities.” Great Britain has given the peoples of Scotland and Wales their own regional assemblies. The Quebecois have succeeded in maintaining a francophone enclave in anglophone Canada, and many would like to go further and create a separate nation-state.

  This independence is not just limited to tribes. Around the world, cities and states have started to develop economic policies of their own, often in direct competition with other parts of their countries. In the European Union, cities and regions have taken to lobbying multinational companies directly, in order to get around EU rules that discourage nation-states from indulging in such special pleading. Many American states have even imposed their own sanctions on bits of the world that they disapprove of, with Massachusetts far outscoring Washington, D.C., in self-righteousness. Meanwhile, cross-border economic clusters in places such as San Diego–Tijuana seem to ignore national boundaries.

  Nongovernmental o
rganizations (NGOs) are invading areas that used to be reserved for national politicians. Some NGOs, such as the Soros Foundation, Amnesty International, Doctors Without Borders, and Alert International, already command resources that dwarf those available to the states in which they operate; and the imbalance is likely to get bigger still, particularly given the fact that first-world activists are rather more technologically savvy than third-world bureaucrats.

  Many NGOs have also become enthusiastic converts to the ancient idea that universal human rights are more important than national sovereignty, adding their voices to the growing clamor for the expansion of the role of the International Criminal Court. The highly contentious case of the former Chilean dictator, Augusto Pinochet, who spent months trapped in England, the subject of a tussle between various NGOs and the Chilean government, not only suggests that international law is gradually moving in a direction that undermines national sovereignty; it also raises the possibility that bizarre coalitions of international civil servants, professional human-rights activists, and international lawyers will increasingly set the agenda for national governments.

  p. 154 In America, there is a particular fear that recent immigrants are becoming harder to assimilate, at least in the old, uncompromising way. Many of the Irish and Italians who came to America in the late nineteenth century never saw their native countries again. Nowadays, Mexican immigrants can frequently visit their motherland. Cheaper air travel and telecommunications mean that immigrants can keep in close touch with their homelands; the proliferation of Spanish-language television channels allows immigrants to entertain themselves without leaving their linguistic ghetto; and the ever-expanding range of ethnic products in the supermarkets means that they do not have to change their diet, either. Add to this the official fashion for multiculturalism and you have a recipe, at the very least, for cultural pluralism.

  This is giving rise to a new class of Americans who might be dubbed not hyphenated Americans (Mexican-American) but ampersand Americans (Mexican & American). In 1998, Mexico started allowing its nationals to hold American passports and even allowed naturalized Mexican Americans to reclaim their Mexican passports. About five million Mexican Americans are eligible to vote in Mexican elections—a development that has turned Los Angeles into one of Mexico’s most important political stamping grounds. At the same time, a growing number of native-born Americans of European descent are acquiring a second passport, often in an attempt to acquire the privileges that go with European Union citizenship. In 1998, a retired federal employee, Valdas Adamkus, was elected president of his native Lithuania.

  The resurgence of identity politics—what Karl Popper called “the return to tribe”—would appear to be antiglobal. After all, there are today 192 independent nation-states, compared with 74 in 1946.[12] But, in recent years at least, political separatism has been nevertheless linked to globalization, at least to the degree that a world so fluid and fast moving encourages some people to take comfort in local identity. There is also a direct link between the relative success of regional institutions such as the EU and NAFTA and the renewed vigor of separatist movements in places such as Scotland, northern Italy, Flanders, and Quebec. For example, now that power is seeping from Rome to Brussels, many Venetians see the opportunity to create an independent city-state. Conversely, the EU habitually bypasses national governments in making regional grants to relatively deprived areas such as Wales or Barcelona. These deprived regions respond by agitating for more EU intervention.

  But how far will this process go? When their prospects are laid out by a good critic such as the late Raphael Samuel, even the most ancient nations can seem doomed. For example, Samuel argued that the British Isles, far p. 155 from being a permanent United Kingdom, were unified for fewer than two hundred years—from the battle of Culloden Moor in 1746 to the Irish treaty in 1921. As the Celts leave the English, “the word ‘Britain,’ ” Samuel concluded, “may become as obsolete as ‘Soviet’ is in post-1989 Russia.”[13]

  This is alluring rhetoric, but there seems to be a limit to how far nation-states are prepared to stretch. Limited devolution for Scotland enjoys considerable support on both sides of Hadrian’s Wall. But giving too much power to the Scottish parliament risks provoking the “West Lothian question”: Why should the Scottish MP for West Lothian be able to vote on English issues if English MPs cannot vote on issues that affect West Lothian? In another instance, California, despite its Hispanification, voted recently to ban teaching in Spanish as a first language—a change that many immigrants supported, some because they want to be Americans and others because they do not want to be put at a disadvantage by speaking a different language than most. Even in Canada, the nation-state has turned nasty. If Canada is divisible, Canadian federalists argue, so is Quebec. About fifty municipalities, representing about one in twelve of the rebel province’s citizens, have gone to the trouble of saying that they would rather stay Canadian.

  Indeed, the modern nation-state is usually very hard to break down. While states may be blurring a little at the edges, they only collapse when the relationship between the state and its nation or nations is untenable. Both the USSR and Yugoslavia were federations. For all its arbitrary borders, Africa has seen remarkably few secessions, largely because of the difficulty of redrawing the map. Dividing up Rwanda between the Hutus and Tutsis would be even bloodier than the present arrangement. The same applies to Kurdistan. Despite all that Serbia has done to the inhabitants of Kosovo, countries as far afield as China have worried about the precedent that an independent Kosovo would set. The general presumption remains that borders, like rivers, tend to stay in their places yet do the most damage when they wander.

  Lines That Matter

  In the end, many of the debates about the future of the state come down to a simple battle between common sense (often economic, sometimes humanitarian) and emotion (anything from nationalism to fear of the unknown). The citizens of a particular country might be better off if they did not see their economic interests in national terms. In some cases, they would surely live much more peaceful lives if they were prepared to yield ground to either minorities or their neighbors. But they do not, and it is best to act accordp. 156ingly. The best place to see this obstinacy in action is where we started: the border.

  Far from fading away, borders are still fought over. Virtually every region of the world has a border dispute of some sort or another, often over territory that is economically meaningless. In the Middle East, Saudi warships opened fire on a Yemeni island in the Red Sea in 1998, killing three people; the two countries have been having border disputes since the Treaty of Taif in 1934. Most of the main borders in Asia—including those between China and Russia, India and Pakistan, and the two Koreas—are disputed. In Latin America, Argentina nearly went to war with Chile in 1978 over its southern tip and actually did with Britain in 1982 over the Falklands. Peru and Ecuador came to blows in 1995 over their disputed territory. Most of the disputes about Bosnia come down to different ideas about where lines on the map should be drawn.

  In many cases, people’s idea of their territory has its roots in centuries past. Saddam Hussein came up with some excuse having to do with the Ottoman Empire when he grabbed Kuwait; some Israelis maintain that the west bank of the Jordan is theirs because the Bible says so.

  Nevertheless, many Westerners claim that in “advanced countries” borders are disappearing. This is correct only up to a point. Consider the two borders of the most advanced country in the world, the United States. The Mexican-American border has certainly been made easier to cross by NAFTA, as long as you are inanimate or heading south; Mexicans still have a problem. The United States has already built a “tortilla curtain” along more than sixty miles of the Rio Grande. Guards in “hot” areas such as Tucson-Nogales now wear bulletproof jackets. The Border Patrol’s budget has been rising steadily, and the events of September 11 will only increase the level of security.

  Far from destroying the border, NAFTA has
often reinforced it by creating a community that relies on it. The number of people living along the Mexican-American border has increased from 3.5 million in 1980 to 12 million. Some four thousand maquiladoras employ nearly one million workers in Mexico, contributing seven billion dollars to the local economy (the second biggest sector after oil). Although many of these factories are becoming relatively high-tech affairs, they exist because wages remain highly sensitive to the border: Mexican workers cost about a quarter of their counterparts in America. The border also matters to a surprising extent within the cross-border towns themselves. Take El Paso-Ciudad Juárez. El Paso certainly has a more Latin feel than, say, Houston, but it also feels different than Juárez. The Mexican side is much poorer (two million people, no sewage system), p. 157 but the attitude is what most sets the two towns apart: El Paso is a backwater; Juárez feels like a boomtown.

  This could be an unfair example: After all, Mexico and the United States are in different economic leagues and have different principal languages. Neither of these distinctions applies to America’s northern boundary. After retreating to Canada following the battle of Little Bighorn, Sitting Bull noted dryly that “the meat of the buffalo tastes the same on both sides of the border.” People have been holding the Canadian-American border up as a model of compatibility for years. In 1939, Churchill hailed it as “an example to every country and a pattern for the future of the world.”

  At first sight, that border does indeed seem to be disappearing. Nowadays, one billion dollars in goods and services flow over it every day. The city of Buffalo, which long kept its gaze focused southward at the rest of the United States, is now beginning to look at itself as the southern tip of a golden horseshoe stretching around Lake Ontario to Toronto. The customs and immigration chiefs from both sides greet each other as old friends.