Studium Generale, Wageningen University

1. Studium Generale, Wageningen University Lecture Series: States, Nations and Sovereignty in a Globalised World Second Session: Do States Matter? Jeffrey Harrod University of Amsterdam 16 September 2014

2. DO STATES MATTER? Introduction - the lecturer the lecture – part 1 – the states and their relations part 2 – corporations and other sub-state organisations Basic Arguments 1) Yes, states matter and more than ever but not as they did in the 19 and 20th centuries 2) the 21st century begins as a period of neo-imperialism 3) so-called “non-state actors” - corporations, international non-governmental organisations , rich individuals - are part of the new dynamics and structure of global relations. 4) the new role of the state is to interact with the new players in a regulating, assessing and monitoring role.

3. The States Today There are between 189 and 196 independent countries/states in the world today. So, human beings divide themselves into distinguishable units based on: Ethnicity - distinguished by ethnicity (language, race, culture) Religion – distinguished by religion Civic – distinguished by values, governance Ideological – distinguished by a formal ideology

4. What are the collective/elite motivations of these units? Three Modes of Operation Imperialism One unit seeks to exploit another through territorial expansion, economic extraction (finance, labour, resources); - leads to: military invasion and/or politico-economic intrusion Security/belonginess to be able to live a life with the expectation of stability and peace and free from perceived foreign domination/ to satisfy the sense of belonging to a unit; – leads to: military preparedness, unit-based cohesion Cooperation Cooperation between units for common interests; – leads to:- international organisations, agreements,negotiations

5. What are the connections between these units? THE FIVE GREAT TRANSACTIONS People - migration, refugees Goods -trade in manufactures, raw materials, food Money – investment, loans, transfers War – military invasion, occupation and domination Ideas/advocacy – religious and civic organisations

6. How Important Are These Transactions? People – not so important as usually stated - International Migration report 2013 = 232 Million - United Nations High Commission for Refugees = 10.4 million - World Population 2013 7.2 billion 3.2 percent of world population live outside of their country of birth Trade – important for some not others - trade dependent countries – eg Germany, mono export countries of Global South - Less trade dependent – USA , Japan , - Energy dependent countries , Japan, Germany, China? India? Trade in energy at the core of international politics Money - Investment (FDI) – the sectoral power game - multinational investment mainly between rich countries - most sectors controlled by 4-7 large corporations - economic advantages versus political problems Multinational corporation investment as extension of state power Money – - the power of creditors - financial transactions only real material indication of globalisation - IMF as debt collector - debt as means of extraction Finance and debt involves external manipulation of internal politics

7. Who Controls these Transactions ? The State until mid 20th century -the imperial mode - migration - trade and investment– tariffs, quotas bans, imperial corporations - finance – currency manipulation and controls The States from the mid-20th century - cooperative /security mode - end of direct colonialisation - rise of USA as dominant state/economy - creation of inter-state organisations – UN Agencies, Regional Groups - rise of corporate power The State and Corporation in 21 Century - the neo-imperial mode - multinational corporations hold 95% of global foreign investment and control 75% world trade - transnational banks control 70% of national sovereign debt

8. Where do Multinational Corporations ComeFrom? Usually large corporations with foreign branches therefore usually from large economies

9. Where Do USA Corporations Invest? Source: U.S. Bureau of Economic Analysis: K. B. Barefoot and M. Ibarra-Caton “Direct Investment Position for 2009: Country and Industry Detail” July 2012, p19

10. How Can the corporation Challenge the State? Basics of Corporate Power - the nature of the sector – natural resources, socially strategic - need for investment and technology transfer – Global South and development - weakness of governing elites – acceptance or rewards - promotion of values and culture – mass persuasion How Corporate Power has Increased - 20 years of concentration – global sectors now almost all oligopoly - the IMF, World Bank,WTO promotion of corporate-friendly investment climates - merger of corporate and business elites in headquarter countries - legitimization of activities of rich individuals – Gates, Soros, Trump etc Multinational corporate power now faces greater opposition

11. How Can the State Respond ? - Use of internal political mobilization - control for security, environment, national interest - nationalisation of foreign assets - threat of debt defaults Recent examples Bolivia – water and Bechtel Argentina – oil and Repsol…. Venezuela – cement corporations India – Gujarat and power corporations Sweden - Dole Main resistance to corporate power is from the global south

12. Are International Non-Governmental Organisations a Counter-Force ? - two sides of international civic organisations – - support of hegemony organization cements presence, values and practices of country of origin - help with opposition organization works with local population to control activiies of foreign corporations and banks - most ingo’s limited in funds budget of Greenpeace $150 million Budget of Shell $450 billion Global Union Federations - limited to publicity by sector - churches as INGO’s religious values and ideas and politics - Pentacostal churches in Brazil - increase in criminal non-governmental organisations through drugs networks Ingo’s do not constitute yet a counterforce but some begin to impact

13. Conclusion and personal note • The diversity of peoples and places in the world prevents any long-tem harmonisation and uniformity. • The core of imperialism and colonialism was the forced import of people goods , finance and institutions which and who were formed or constructed for another place. • This produced “imperial dysfunction” - when something imported does not “fit”, perform, or work properly in the new circumstance and produces stress, rejection and conflict. Neo-imperialism suffers the same dynamic. • The conflict will be resolved by resort to a new form of state. • Globalisation is the ideology of corporate power and as it fails it will be replaced by cooperation based on inter-state arrangements, coalitions and organisations which recognise, respect and work with diversity • The period of dominant globalisation will however leave behind networks and practices which will be positive in the reconstruction of a more peaceful, just and environmentally sustainable world. • But only if we work at it.