Is this the end of the nation-state? . - Review Essays - book review

Naval War College Review, Wntr, 2002 by Lawrence E. Modisett

Rosecrance, Richard. The Rise of the Virtual State: Wealth and Power in the Coming Century. New York: Basic Books, 1999. 287pp. $26

Kaplan, Robert D. The Coming Anarchy: Shattering the Dreams of the Post-Cold War. New York: Random House, 2000. 198pp. $21.95

Friedman, Thomas L. The Lexus and the Olive Tree. New York: Farrar, Straus, and Giroux, 1999. 394pp. $27.50

Micklethwait, John, and Adrian Wooldridge. A Future Perfect: The Challenge and Hidden Promise of Globalization. New York: Crown, 2000. 386pp. $27.50

Like the proverbial demise of Mark Twain, rumors of the death of the nation-state may be exaggerated, but in recent years they have become rife. The end of the great-power standoff between the United States and the Soviet Union, and the ensuing surge in global economic relations, gave rise over the past decade to a flood of books and articles postulating a new age in international relations. A general theme has been that the era that began in 1648 with the Treaty of Westphalia is ending, that we are witnessing a no less dramatic transition in which both transnational and local forces will eclipse the importance of national polities. The terrorist attacks of 11 September 2001 can only reinforce this argument, having apparently been orchestrated by a globally based, subnational network that targeted the World Trade Center, the paramount symbol of economic and cultural globalization.

On the other hand, those who accept the basic premise that the importance of the nation-state is declining differ as to the implications of that development, and some scholars continue to deny it is occurring at all. For the U.S. Navy, the debate is far from academic; the image of the future that prevails will shape tomorrow's fleet and influence its employment.

Visions of a future that is no longer state-centric range from utopian to menacing. An early optimist was Francis Fukuyama, who in a seminal essay in 1989 postulated that "the end of history" had arrived: with the global triumph of liberal democracy, no further evolution of human intercourse was necessary or desirable. (1) Similarly sweeping assessments emerged from the business community. Management guru Peter Drucker wrote of a "post-capitalist society" in which the four-hundred-year dominance of the nation-state faced challenges at every level, from the transnational down to the tribal. (2) In addition, quintessential banker Walter Wriston, seeing a transition from a "material" economy to an "information economy," concluded that the ability to transfer instantaneously huge amounts of capital was undermining national boundaries and sovereignty. (3)

Of the authors whose books are here reviewed, Richard Rosecrance falls most squarely in the lineage of those with a positive view of the effects of globalization. We may call them "post-nation-state optimists."

Rosecrance, a professor of political science at the University of California, Los Angeles, is the only author reviewed here who is not a journalist. Using quantitative analysis to buttress his arguments, he bases his case upon the proposition that money and power no longer derive from land--a fixed asset--but from capital, labor, and information--assets that are mobile. Moreover, he asserts that "the most mobile--information--has created the greatest value." Because the key factors of production have become so mobile, the importance of boundaries is diminished, and Rosecrance considers this a good thing: "The theory this book offers is fundamentally optimistic. It sketches a future with an ever-widening zone of international peace."

A balanced and systematic thinker, Rosecrance presents his case in four parts. The first outlines his theory and attempts to refute the "conflict as usual" thesis. The second discusses political and international implications. The third undertakes a global tour, assessing where each major country stands in the process of becoming a virtual state, which Rosecrance defines as one where "services total as much as 80 percent of GDP [gross domestic product] and manufacturing less than 20 percent (with the remainder in primary products)." He maintains that Hong Kong, Singapore, and Taiwan are already virtual states and that among major developed countries the United States has advanced the farthest. The Middle East and South Asia, by contrast, remain part of the "old" world, where land remains the dominant economic factor, and nineteenth and twentieth-century patterns of conflict endure.

The fourth part of Rosecrance's book looks at the new international system from a combined political and economic perspective. It concludes that "worldwide economics is no longer captured by the parochial organization of nationalist states. Rather, states are trapped in the international coils of economics." This does not mean, however, that it is time to write the obituary of the nation-state. Indeed, Rosecrance predicts that in the twenty-first century, "nation-states will remain the major organizing factor in international politics." They "will continue to compete," although this competition will be economic, not about land. At the same time, the global economy will require "some form of political coherence among great states, supervising and protecting the market. If such protection succeeds, the twenty-first century will be the first epoch in history to offer the prospect of peaceful transformation and enduring global stability."