The Declining Authority of States

Topics: Economics, Capitalism, Innovation Pages: 2 (479 words) Published: August 17, 2010
The Declining Authority of States
Susan Strange

Today it seems that the heads of governments may be the last to recognize that they and their ministers have lost the authority over national societies and economies that they used to have. Their command over outcomes is not what it used to be.

States where once master of markets, now it is the market which, on many crucial issues, is the masters over the government of states. And the declining authority of states is reflected in a growing diffusion of authority to other institutions ands association.

The need for a political authority of some kind, legitimated either by coercive force or by popular consent, or more often by a combination of the two, is the fundamental reason for the state’s existence. While the governments of established states are suffering this progressive loss of real authority, the queue of societies that want to have their own state is lengthening. The desire for ethnic or cultural autonomy is universal.

Besides the accelerating pace of technological change, there has been an escalation in the capital cost of most technological innovations- in agriculture, in manufacturing and the provision of services, and in new products and in new process. The input of capitalism has risen while the relative input of labor has fallen. It is this increased cost which has raised the stakes, as it were, in the game of staying up wit the competition.

The escalating costs of technological change are also important for more fundamental reasons, and not just because it explains the changing policies of host states to TNC’s. It has to do with change in the world system.

The escalating capital costs of new technologies could not have been covered at all without, firstly, some very fundamental changes in the volume and nature of credit created by the capitalist market economy; and secondly, without the added mobility that in recent years has characterized the created credit. The supply of...
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