The New Statesman Essay - Beyond the nation state

Globalisation has killed the old politics, writesUlrich Beck. We must invent a new form

It is ten o'clock in the evening. At Berlin's Tegel airport a slick-friendly voice informs the weary passengers that their flight to Hamburg is ready for boarding. But the voice does not come from inside the airport, or anywhere near it; the speaker is a woman sitting in front of a console in California. After 6pm Berlin time, Tegel's announcement service is provided online from California. The reasons are as simple as they are understandable: in California, no extra payment has to be made for late working because it is still daytime, and indirect labour costs are, in any case, lower than in Germany.

Telecommunications have made this possible by removing what used to seem an inescapable part of the labour system of industrial society: the need for people to work together at a certain place to produce goods or services. Now employees can co-operate across countries and continents to provide services for faraway consumers. In theory, just as you could organise a world trip to experience springtime in every continent, so labour and production processes could be distributed across the globe so that the lowest wage is always paid at every hour of the day.

More than a century ago, Karl Marx, in the Communist Manifesto, wrote that "all fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away". He was celebrating the revolutionary potential of capital, and his words ring as true today as they did then. Today the "fixed and fast-frozen" is the welfare state and trade-union organisation of labour, while the "ancient and venerable" are the bureaucratic prescriptions and fiscal exactions of the nation state.

Globalisation policies are intended to shake off the fetters not only of trade unions but also of the nation state, to deprive national politics of its power. Yet politicians of all parties do not yet understand this. They call for ever freer markets without even noticing that this threatens their own lifeblood, the very source of their money and power. Surprised and fascinated by the power of globalisation to soften up institutions, they are only just beginning to suspect that - as Marx put it long ago - they are supposed to become their own gravediggers.

Without any change in laws or constitutions, an attack has been launched - in the normal course of business, as it were - upon the material lifelines of modern national societies. First, the transnational corporations exported jobs to parts of the world where labour costs and workplace obligations are lowest. Next, computers enabled them to break down and disperse goods and services, and to produce them through a division of labour in different parts of the world, so that national and corporate labels inevitably became illusory.

Then they began to play off countries or individual locations against one another, in a process of global horse-trading to find the cheapest fiscal conditions and the most favourable infrastructure. If particular countries seemed too "expensive" or "investment unfriendly", they were punished. Now, finally, the corporations can decide for themselves their investment site, production site, tax site and residence site, and play these off against one another. As a result, top executives can live where it is nicest to live and pay taxes in whichever country is cheapest.

All this has come to pass without any complaint or discussion in parliaments, without any decision by governments and without any change in the law. Over the heads of government and parliament, public opinion and the courts, the balance-of-power contract that characterised the first modernity of industrial society is now being terminated and transferred to the independent realm of economic action. The transition to a politics of globalisation has crept in on velvet paws, under the guise of normality, rewriting the societal rules of the game - all because, we are told, modernisation will happen come what may.

The national state is a territorial state; its power is grounded upon controlling the membership, defending the borders, laying down the laws for a particular place. The world society created by globalisation cuts across national state boundaries, not only economic-ally, but through a multiplicity of social circles, communication networks, market relations and lifestyles, none of them specific to any particular locality. This is apparent in each of the pillars of sovereignty: in tax-raising, police responsibilities, foreign policy and military security.

Take taxes. The levying of taxes is the principle underlying the authority of the national state. Yet companies can now produce in one country, pay taxes in another and demand state infrastructural spending in yet another. People, too, have become more mobile. If they are rich, they prove more adept at exploiting holes in the fiscal nets of the state; if they have sought-after job skills, they deploy them where they stand to gain most; and if they are poor, they set off for places where milk and honey beckon.

The gladiators of economic growth demand the state's services while denying it tax revenue, thus undermining its authority. Fortune magazine, which regularly publishes a league table of the world's top 500 companies, jubilantly reports that these have been "pushing across frontiers to capture new markets and swallow up the local competition.

"Their guiding idea is: the more countries, the greater the profits. And indeed the profits of the top 500 have risen by 15 per cent, with an increase in turnover of only 11 per cent."

"Profits up, jobs out" runs a headline in Der Spiegel. The article continues: "A special kind of economic miracle is striking fear into the nation. A new generation of corporate bosses have taken over and are embracing American-style share worship. Worst of all, the stock market is rewarding job killers."

Businessmen have discovered the road to riches. The new magic formula is: capitalism without work plus capitalism without taxes. Between 1989 and 1993, the tax yield from corporate profits fell by 18.6 per cent, and by nearly a half as a proportion of total fiscal revenue.

As Andre Gorz asked in a newspaper interview in 1997, why is it impossible to finance a reconstruction of the social security system when, in 20 years, the EU countries have become 50 to 70 per cent richer? "The economy," said Gorz, "has grown much faster than the population. Yet the EU now has 20 million unemployed, 50 million below the poverty line and five million homeless. What has happened to the extra wealth?"

He answered his own question: "In Germany since 1979, corporate profits have risen by 90 per cent and wages by 6 per cent. But revenue from income tax has doubled over the past ten years, while revenue from corporate taxes has fallen by a half. It now contributes a mere 13 per cent of total tax revenue, down from 25 per cent in 1980 and 35 per cent in 1960 . . . Developments have been similar in other countries. Most transnational corporations, such as Siemens or BMW, no longer pay any taxes at home."

Transnational corporations can escape the clutches of inland revenue bureaucracies. The small and medium-sized companies (which create a large share of new jobs) are the losers; they have to cough up more and more as the screws are turned on them. This indeed is the pattern of globalisation. The losers have to pay for everything - from the welfare state to a functioning democracy - while the winners post dream profits and steal away from their responsibilities.

But the contradictions of "jobless capitalism" are also becoming easier to see. Managers may transfer the administration of trans-national companies to southern India, yet send their children to the top publicly funded European universities. It never crosses their minds to move to where they are building up jobs and paying low taxes. For themselves, they demand costly political, social and civil rights as a matter of course, while they torpedo the public finances that support them. They go to the theatre. They enjoy well-cared-for nature and landscape. They romp around the still relatively crime-free cities of Europe. But their profit-oriented policies are doing a lot to ensure that this European way of life will fall apart. Where will they and their children want to live when Europe can no longer afford a democratic state?

The well-endowed welfare states face the worst predicament. They have to provide statutory benefits for an ever higher number of registered unemployed (fast approaching five million in Germany) and, at the same time, they lose control over taxes. The corporations have four bites at the cherry: first, by gaining the best possible access to quality infrastructure; second, by picking up various subsidies; third, by reducing their tax burden to a minimum; fourth, by externalising the costs of the unemployed.

The pressure on the welfare state results not only from a combination of dwindling resources and rocketing expenditure, but also from its inability to satisfy demands at a time when the gulf between rich and poor is growing ever wider. As the national framework loses its binding force, the winners and the losers of globalisation cease to sit at the same table. The rich no longer need the poor; they no longer need their physical labour as they did in the past. And so it becomes increasingly difficult to even out the differences between them, because there is no framework in which this conflict could be represented and regulated.

It is not hard to see what this entails. The conflictual logic of the capitalist zero-sum game has been re-emerging and growing sharper, while the state has been losing its customary means to pacify and conciliate by increasing the size of the economic cake available for distribution. The nation state has been crucial to modern cultural identity, to social cohesion and to the development of democracy. As it disappears, no new unity of humanity - a planet earth or a world state - has become visible or even desirable to large numbers of people.

The conclusion seems to suggest itself that the project of modernity has failed. The philosophers of postmodernism were the first to issue a spirited death certificate for the rationality claims of science, arguing that what passed itself off in the west as the universalism of enlightenment and human rights was nothing other than the voice of "dead old white males" who had trampled on the rights of ethnic, religious and sexual minorities. It is further argued that the social cement has grown porous through the rise of individualism, that society has been losing its collective self-consciousness and, therefore, its capacity for political action. The quest for political responses to the great issues of the future no longer has any subject or any locus.

In this pitch-dark view of things, economic globalisation merely completes what has been driven forward intellectually by postmodernism and politically by individualism. The diagnosis points towards a capitalism without work that will create unemployment on a huge scale. The historical association between market economy, welfare state and democracy, the western model that integrated and legitimated the nation-state project of modernity, is thus destined to break down. According to this view, neo-liberals are the liquidators of the west - even if they set themselves up as its reformers. As far as the welfare state, democracy and a public sphere are concerned, they are pursuing a course of modernisation to the death.

But decline begins in the head. Fatalism is also a language dis-order. And before jumping off the Eiffel Tower, one really ought to consult a language therapist. What appears as collapse might, if it succeeds in overcoming the fatal orthodoxies of the first modernity, open out into a second modernity. The debate must begin on how responsible globalisation can be politically moulded and achieved. The age of globality should bring not the end of politics but a new beginning, through the growth of transnational states such as the European Union, the development of international law, the rise of trade unions and consumer groups that cut across national boundaries, as Greenpeace and Amnesty International do. The paradoxical principle for states is one of self-empowerment through self-deprivation of power. Only by co-operating with others can post-national states renew and expand their capacity to influence events.

But this cosmopolitan republicanism must be centred on freedom of the individual. One of the main political responses to globalisation is, therefore, to build and develop the education and knowledge society; to make training longer rather than shorter; to loosen or do away with its link to a particular job or occupation. This should not only be a matter of "flexibility" or "lifelong learning", but of such things as social competence, the ability to work in a team, conflict resolution, understanding of other cultures, integrated thinking and a capacity to handle the uncertainties and paradoxes of the second modernity. Here and there, people are beginning to realise that something like a transnationalisation of university education and curricula will be necessary.

The debate on globalisation that is now shaking public life has arrived in Germany with some delay, and the shock is very great. One reason is that globalisation is mainly associated with a cutback in indigenous jobs and their relocation in low-wage countries. But there are four further reasons.

First, states and societies with a primarily economic consciousness of themselves - "deutschmark nationalism", "export nation" and suchlike - feel especially endangered by a world-market globalisation.

Second, for countries such as France or Germany, where, unlike in the US or Britain, the state is caught up in extensive social commitments, the age of globalisation represents a double bind. As economic development escapes the control of national states, the social consequences - unemployment, migration, poverty - cluster together in their welfare safety-nets.

Third, globalisation shakes to its foundations the self-image of a homogeneous, self-contained national space calling itself the Federal Republic. Great Britain, by contrast, used to be the centre of a world empire, and globalisation brings back some fond memories.

Fourth, the whole experience and challenge of globalisation conflict with the disputes surrounding the unification of the two Germanies. The unification drama (in many ways comparable to a marital drama) forced the Germans into a preoccupation with themselves. After a half-century of living apart, the question was: what remained common to "Germans" as such? It was during this phase of self-contemplation and self-questioning that the news of globalisation burst on the country. Over and above the planned transfer of powers within the EU, it seemed that the national state was to lose its sovereignty and substance in every dimension: financial resources, the power to shape things politically and economically, information and cultural policy, ordinary civic identity. The hopes of 1989 rested upon an obsolete image of the national idyll.

The idea of "national" products, firms, technologies, industries or even sports associations is becoming increasingly fictitious. The nation state can only survive if it adjusts to the realities of globalisation in every domain - in economics, military affairs, law and so on. Globality is an unavoidable condition of human intercourse at the close of the 20th century.

The bases of the first modernity must therefore be renegotiated. What does tolerance mean? What do supposedly universal human rights involve in a context of cultural difference? Who will uphold human rights in a world that has left behind the nation state? How can social safeguards that have been overwhelmingly guaranteed by the nation state be redrawn and preserved amid increasing world poverty and a decline in paid employment? If nation states crumble, will new wars of religion ensue, perhaps intensified by ecological disasters? Or are we heading towards a world without violence, finally at peace after the triumph of the world market? Are we perhaps even on the threshold of a second Enlightenment?

All this comes up in the wake of the globalisation debate. But no one knows, or can know, how such questions affecting the core of civilisation can be answered across the trenches that divide rich and poor, ethnic groups, continents or religions, each with their complex histories of violence.

This is an edited extract from Ulrich Beck's "What is Globalization?" translated by Patrick Camiller and just published by Polity Press