The article The Nation State and the Globalization of the Economy by Gritsch lay the foundation of the fundamental impact that globalization has on the sovereignty of the state. The emergence of an international organization such as the World Bank, European Union, and International Monitory Fund characterize the trajectory of global economies through regional integration. The debate raised in The Nation State and the Globalization of the Economy holds the view the relationship between the global economic, through the lens of Marxist theory and the functional theory of international organization, shapes the reduced ability and sovereignty of the state to control its economic dynamics.
The impact of globalization on the domestic and international state capture the aspect of reduced autonomy and power. The advancement of capitalism in the world actively promotes the globalization of economics. As a result, the author addresses the critical point of the influence of geopolitics as the main platform on which states use to associate their political interest with economic globalization. The theoretical implication of economic globalization shapes the trajectory of the state using the geopolitics and economic means to acquire the hegemonic advantage. This draws the implication of economic globalization as a representation of strategic direction through which capitalist states such as China and the United States advance the politics of accumulation and gain control of the greater inter and intrastate economic insulation. To quote Gritsch “Even as states and capitalists reluctantly share power with citizens, and grant entitlements, they continuously attempt to rescind these concessions through a wide range of political and legislative tactics designed to increase their own political and economic power” (p6).
The economic globalization strategy, process and structure in the contemporary global environment is the inherent associated with the presumption of the autonomy and independence of the state influence. The Nation State and the Globalization of the Economy address the picture of increased affinity to foreign policy as a tool of negotiation in the transactions of the global economics (p.3).This set of ideology informs the support that global economic goals and activities achieve through the agenda of infrastructural development of accumulation beyond the states’ border. This school of thinking represent the role of international bodies in decreasing the dependence of states on national factors of demand and supply and thus rely on the strategic centrality of global accumulation of resources and market in a stable manner. As a result, states have relied on the capitalist leverage of globalized economic.
The construction of the capitalist philosophy to guide the activities, transaction and regulation mechanisms of the global economics constitute the emergence of a new order that formulate the organization of resources procedure to use the global governance institutions such as World Trade Centers as influential actors in the global market and economic landscape. The Nation State and the Globalization of the Economy presents a concise view of the reduced power of states in controlling economic shape, form, process, and outcome. This has shifted the political and economic decision-making away from citizens, thus increasing the executive power. The effect of such criterion are evidenced in the devolution of a domestic fiscal provision of governed and private sector to enhance accountability in the state (p.3).
The perspectives of the author construct the argument of the integration of world economies as well as the continued development of systems of international economic liberalization. The principle of this argument supports the intensification of economic integration owing to the expansion of systems of production, finance, and global commerce. The glue that bind together the fortunes of the state is the market economy that continues to emerge. This is an effect of integration understood from the economic liberal theory as the insulation of the contagion effect of economic capitalism.
The increase in transnational trade, factors of foreign direct investment and the growth of transnational and Multinational Corporation attribute the focus of Gritsch in The Nation State and the Globalization of the Economy. While terms of production and exchange of market factors have continued to intensify, factors of deregulation and liberation have allowed a new order of economic globalization to influence the behavior of transnational organizations in driving the economic globalization. The thesis of Gritsch supports the conclusion that the ability of international and Multinational Corporation to invest in the integrated global economy has significantly reduced the capabilities of domestic states in advancing their economic agenda. Empirical evidence shows that trans nationalization of markets and production continue to cause inevitable demise to the state in terms of autonomy and capacity. Despite the advancement in technology, transport and communication innovations, the economic activities of the world have been effectively taken over by transnational corporations.
The power and roles of the state continue to change. However, based on the territorial ability, the state continues to be a major factor in global economics. Gritsch underscores that while the multinational corporations and other international organizations are motivated by capitalist ideologies, their focus is driven by the market factors and cost of production. In view of this, it emerges that the relationship between states and the economic globalization portends a complex integration of international organization to foster the distribution of benefits amongst a combination of factors including improved infrastructure, availability of skilled labor and completion. The prosperity of geopolitical processes distinguishes globalization as an economic process that must be regulated by the government. This shapes the perspective that states can influence their performance in the global economic space by formulating policies that manipulate the international competitiveness. To illustrate, the aspect of the trade, as a concentrated process among the industrialized state must be liberalized to allow the involvement of transnational institutions in enhancing value addition and quality spectrums.
The mercantile argument establishes the existing relationship between the state and other players in the global economic environment. The Nation State and the Globalization of the Economy outline that the instruments for states in the economic expansion are the transnational corporation. This is arguably the enhanced argument if the shared interests as the gains of economic globalization have been between the states and the supranational bodies. “Advanced capitalist states' role - in promoting contemporary economic globalization, the formation of supra-national regulatory institutions, and the dismantling of Keynesianism - can be interpreted in longer historical perspective” (p.4).
The overlapping interest between the state and the economic actors at the international level constitutes a complementary power maximization and global profit strategy that gives the state the authority and influence over home-based transnational corporations. As a result, the role of the state in the global economic activities have been increased and exerted to other states in the global environment. This belief ca be attributed to the fact that irrespective of the nature of operation of the transnational corporation as well as their presence in multiple countries, they have a country they attribute their origin to. This country is where they retain a large number of their assets, sales, production, research and development activities and well as employment. In light of this, the article suggests that
The W.T.O, which the U.S. was instrumental in founding, and whose rules, policies, and protocols are patterned after the U.S.' own trading guidelines, constitutes one example. Through the W.T.O., dominant states conduct and arbitrate competitive inter-state commerce among themselves and with less advanced states; enact and enforce trade and tariff regulations; and promote and govern market liberalization (p10).
States have established international organizations as a measure to regulate the global economy. According to the foundation of The Nation State and the Globalization of the Economy, the reflection of the interests of capitalist states in the globalized market is designed on the trade agreements and the establishment of international organization to support he economic and political globalization. The instruments of shaping the global economic decision policy inclined to the interest of the states are supported by international organizations. This strategic acumen has enabled the state to access markets. For example, the characteristic reconstruction of the international economy was founded on the influence of the industrial states to come up with Breton Woods’s institutions such as the World Bank and the International Monetary fund. Such an establishment influenced the liberal global capitalism that is market oriented and pressured other state and national economies to liberalize their conditions through the conditionalities created by Breton Woods’s institution to deregulate and liberalize trade.
Gritsch, Maria. “ Nation-State and Economic Globalization: Soft Geo-Politics and Increased State Autonomy?” Review of International Political Economy, Vol. 12, No. 1, Aspects of Globalization (Feb., 2005), pp. 1-25