Nation States : the paradox of globalisation

Curiosity and the pursuit for knowledge are the bulwarks of modern science. The scientific journey so far has yielded tremendous insights; from the specifications of the early universe to genetically modified plants. However, a precise understanding of human society remains elusive. This is despite the fact that just a few hundred generations cover humanity’s attempts to create order, beauty and happiness on the face of the earth; the first humans walked out of Africa only seventy or eighty thousand years ago. At the very least this means that the tale of human civilization has been one of incredible drama and the biggest ideas.

Understanding and explaining human society is a fascinating endeavor; it would be however, to put it mildly, an ambitious target for this paper. Therefore, the aims of this paper will be rather modest and limited to some specific aspects of the society. The attempt will be to evaluate the affect of globalization and the rise of supranational corporations on the pre-eminence of nation states as the highest level of aggregation of society. In order to briefly illustrate the importance of such a study, it might be useful to consider a specific implication of globalization. While precise definitions shall be elaborated later, in layman terms globalization is understood to imply increased inter-national interactions. However, by enabling the birth and growth of supra-national entities it might undermine the necessity and importance of nation states, which are axiomatically the essence of any inter-national interactions.

Each one of the three primary constructs mentioned are very vast and the subject of immense amount of work and literature. Thus, given the limitations of space most of the arguments and analysis in this paper would be drawn from or at least based on the works of great people who have studied the area is much greater detail. The effort will be to define the key concepts of state, globalization and supranational entities; explore the relationships between them; evaluate them in the context of current observations and eventually draw some positive inferences.

1. The Prelude

The systemic evaluation of any system, man-made or otherwise, requires a well-defined framework. Given the complexities and the dynamic nature of the human society, there is no dearth of ideologies and accompanying frameworks in the social sciences. All of them have their own way of categorizing social formations and their own specifications of the relationships that exist in and across them. As in most cases, the most satisfactory description is obtained by combining the best features of many different theories.

The inherent features or qualities of a system can be better appreciated if the forces that combine to create it are known and understood. In this case, these would be the fundamental organizing forces of society; economic, political and cultural (religious)¹. Almost all other forces can be identified as being a manifestation of one of the fundamental forces. While force is not a term usually used when referring to society, it provides a functional context for this description, although referring to them as different realms or domains would hardly effect the implications of the arguments. However, it is not always possible to clearly demarcate the boundaries and the differences among the three forces. They tend to fuse into each other with significant overlaps.

The interplay of the organizing forces leads to social formations that can be characterized as unstable equilibria. Further, these equilibria are characterized by a complex dialectical relationship between the social formation and the causal forces, and among the forces themselves. The relationship and the power to influence are reciprocal, so as the forces mould social formations, the formations also affect the forces. The society therefore would experience constant changes, where contradictions emerge and dissipate cyclically. When the internal contradictions become irreconcilable, the equilibria would fail and new one would emerge which adjusts way for the change in the nature and direction of the fundamental forces.

In every new equilibria, the balance of power is likely to shift and one of the fundamental forces is likely to take precedence. In the modern society, it is not be unreasonable to say that economic considerations and logic should be accorded a central position (just as political in feudal societies and cultural kinship in tribal societies). The capitalist system, with its rationality of profit maximization, is therefore not just a name for the system of market place interactions, but rather the centrality of capital and its growth is inherent even in institutions and beliefs that lie outside the ambit of the market. This implies the presence of a capitalist regime². Consequently, all theoretical constructs, like nation states and supranational corporations, will be evaluated in the framework of a capitalist society.

2. Definitions

2.1 Nation State

The concept of nation states, although all pervasive can be tough to grasp, especially because the terms nation and state are used interchangeably. However, while epistemological details are hard to come by, there are differences in the connotations of the two terms. Nation refers to a geographic entity whose identity and existence is derived from the acknowledgement of its existence by other nations. State on the other hand is the functional manifestation of the concept of nation. State power however is not exclusive to modern nations, so to distinguish modern states from older systems, the term nation state is preferred.

Theoretical definitions of the nation state are very useful from a strictly academic viewpoint and do serve the general purpose of encapsulating the observed properties of institutions that exist today, but they are too complicated to be useful when evaluating the functioning of nation states. For this purpose it is more advantageous to define nation states as biological sciences define life; by elaborating its salient features and characteristics. But to gain more precision, general appeal has to be sacrificed and many of the existing institutions have to be excluded from the scope of the definition. Thus only expected characteristics of democratic constitutional welfare states will be taken into consideration in developing this functional definition:

· A state enacted policy is binding on all its citizens. Even the exceptions to the policy are described by the state³.

· States derive their legitimacy by being the representatives of the citizens and thereby are expected to act to secure their welfare. The notions of fairness and justice are expected to be important guiding principles of governance.

· The power of governance is concentrated in the state officials, although powers are not given to individuals but to positions that individuals occupy.

· As a corollary, concentrations of power outside the state can derive legitimacy of their own and therefore threaten the internal stability of a nation. The state is therefore likely to act to prevent such an eventuality.

· The legitimacy of most other intra-state and inter-state actors is derived from the state. It implies that if need be, their rights can be taken away⁴.

· The right to legal violence and relations across states is the sole preserve of the modern state.

At this point it might be useful to draw an analogy to clarify the characteristics of a state mentioned above. If a nation is a very large hotel, the hotel management is the state. The brief of the management is to maintain and provide services that cannot be otherwise provided for by individual action. The management also imposes rules on the residents, however, transactions among the residents is mostly left to the devices of the concerned individuals, although the ambit of these transactions is defined by the rules of the hotel.

To distinguish between the state and non-state actors, the individuals in the hotel that are not a part of the management would be non-state actors, all of whom are interested in their material well being. If the hotel residents are part of a capitalist society, as is expected of them, they are concerned about increasing the amount of capital available for consumption and reinvestment.

While this simple illustration is a mere caricature of the real world, it does provide a fair overview of the characteristics, functions and responsibilities of a modern nation state. Other features of the nation state will be posited as arguments are developed in paper.

2.2 Globalization

Globalization is a phenomenon as opposed to an institution. It is, however, defined by interactions between institutions. While, it creates new institutions and empowers them, it also weakens some other institutions. It is difficult to come up with a concrete definition of this phenomenon. So, as opposed to nation states whose expected characteristics are defined by the constitutions from which they derive the legitimacy of their existence, globalization can only be defined as it is observed.

Globalization can take various forms; at its essence it is integration of institutions and individuals across nations, at a global scale. While it is reasonable to describe these interactions as international, the participants are not limited to states, thereby limiting the efficacy of such a definition.

The specific type of globalization that is observed today is more or less what would be expected from integration in a capitalist setup. Its underlying logic, that of increasing reach and size to increase profits is concurrent with that of capitalist systems in general. Therefore, the most important features of the phenomenon are economic in nature. It is prudent here to distinguish between integration and cooperation. Globalization does not imply the later, while the former is possibly its most important consequence. Moreover, the integration mentioned here refers mostly to market integration, leading to a free flow of goods and services across national borders.

To draw on the analogy mentioned earlier, globalization would mean that the hotel described earlier would open its gates to goods and products produced by the residents of other hotels and simultaneously also allow its own residents to send their produce to other hotels. Changing dynamics of production might also require these hotels to start having an open door policy for potential residents.

2.3 Supra-national Entities

In common parlance the term multi-national corporations is used for production firms that operate across national borders. However, the term reveals an implicit acceptance of the hegemony of the state. The terms, a supra-national on the other hand implies that these entities are above state power. As will be argued, it is very likely that the first supra-national entities will be corporations with global markets. Market integration in the absence of cooperation and cohesion among states brought about by globalization, will enable these giants to grow exponentially unfettered by state regulations and taxes.

The supra-national corporations are likely to be driven by a strong profit motive. This is a moot point, but an important one nonetheless, as it is contradicts the directives of a welfare state. In the hotel example a supra-national corporation could be a laundry service provider, which started life in one hotel but now supplies its services to all hotels. It is likely to have greater resources that any one hotel and given the importance of services can afford to play truant.

3. The Postulate

In pre-capitalist orders, it is difficult to discern any distinctive division between realms of the society directly concerned with either politics or economics. In this regard the major difference in the capitalist system is that there are formal boundaries that restrict or exclude the exercise of state power over organization or direction or distribution of production. The modern nation state has given up some of its powers to individuals (and organizations formed by them) and it maintains a symbiotic relationship with the economic sphere, i.e. Physical and social undertakings necessary for survival and material well-being.

The basis of this symbiotic relationship is being threatened by the changes brought about by globalization. That concentration of power in non-state actors brought about by corporate capitalism is a threat to democratic nation-states is not a new idea. The urgency of the situation can be better appreciated in the context of global corporate capitalism.

The nation states have very little say in or control over the new global financial system. Enormous amounts of money, commonly called ‘hot money’ moves across national boundaries looking for the best returns. The sheer size of these ventures makes it impossible to regulate them. Moreover, not only is it difficult to regulate these supra-national corporations, it is not yet clear if it is desirable to do so.

To summarize, the basic postulate is that mammoth corporations brought into existence by globalization threaten or at least will threaten the integrity, the need for and indeed the very existence of nation states.

Moving forward, the restricted role of the state in a capitalist regime and key characteristics of its symbiotic relationship with the productive sphere will be elaborated. Following this, the changing nature of capitalist firms will be put in a global context with specific reference to ‘hot money’. Following these expositions recent examples will be posited to depict the nature of the challenges posed to nation states.

4. Role of the State and its Symbiotic existence

The nature of state power has changed over time. While the changes have been multi-faceted, the most notable has been the withdrawal of state from the productive sphere of the society. The productive sphere is a reference to the pursuit of material well-being or in crude terms business. The days of massive state owned monopolies are passé and liberalization has been the buzzword in policy circles for some time now. In the modern capitalist society, even though the hand of the state is generally exercised on behalf of the regime of capital, its active participation is limited to market failures and maintaining the edifice within which firms (and individuals) carry out their business.

The lack of a distinctive productive sphere separate from the state in pre-capitalist societies has been noted before. As the state gradually yielded its control over businesses, a new partially autonomous republic of commerce and production emerged with national boundaries. This had profound implications for the internal balance of power within nations. The state lost its right of direct access to surplus, the right to tax notwithstanding. The surplus became the private property of the individuals that owned the factors of production used to generate it. The power to tax is much striped down version of the kind of power enjoyed by states in pre-capitalist societies. In feudal societies production was carried out in the name of the political head; even the part of the produce that was left with the producer was not his private property. Taxation however presupposes the existence of a working economy outside the state apparatus and the right over the surplus is inverted, it belongs to the producer who then decides to part with it in accordance with the laws of the land.

The productive sphere has even taken over some tasks that are not necessarily economic by nature. The organization of the labor force, control over flow of goods and distributional powers are all tasks usually attributed to a government but in a modern society is performed by non-state entities, primarily business firms. The central organizing economic structure of a society is driven by the logic of capitalist production and lorded over by the firms that implement it.

The state retains direct access to the means of violence and probably more importantly moral authority. It also provides important provisions of law, military, public works, infrastructure etc. It may seem that states still retain a lot of their old power, however, most of these are economic functions necessary to provide inputs for the capitalist structure to sustain itself (for capital to grow). For example, public works, like roads, railways etc, serve the most useful function of nationalization of losses. These undertakings are financed by public money as the returns are low and they are not likely to be taken up by privately owned firms. However, the benefits accrue as much to the non-participants as to the public that financed the project.

Thus, the functions of a state have been limited in a capitalist society. The state apparatus has to rely on the productive sphere of the society for the nourishment of its revenues. Such is the functional dependence that it is in the self-interest of states to support and advance the accumulation of capital. Although the regime of capital exercises an active and overbearing influence on the workings of the state, it is not unreasonable to mention that the M-C-M’ logic circuit of capitalism would fail without state acting as a mediator and arbiter to maintain the rule of law. It is a highly unstable symbiotic relationship, which relies on the relative size of the actors. The size considerations here is that if the firms are small and numerous, they need the state to play the role described earlier. On the other hand, if the firms are huge and few in numbers, the symbiosis would be seriously threatened. Few big firms would control all revenues and might even be in a position to take over last vestiges of state power.

All of this is not to say that state does not act in public interest. That would not be a tenable position in a democratic society. Rather, it is likely that at least perceived public interests coincide with the demands of the productive sphere.

In this respect, it is also prudent to examine the mechanism by which demands of the economic sphere is placed on the state. If public interests and the demands coincide, then the choice is not difficult. However, in the complicated economic system of today indentifying such concurrence is very difficult, moreover the ramifications vary over time ranges that economists call short and long run. Whatever be the level of concurrence between the needs of the business class and the public good, the owners of means of production are very important for a capitalist society. The material well being of the society as a whole increases as M-C-M’⁵ circuit elongates and produces ever more returns. In more practical terms, firms provide employment; they produce goods that are used by the public and they are considered the source of the economic health of a society.

For the M-C-M’ circuit to expand, the owners of capital will have to reinvest. Without reinvestment, growth peters out and the economy will stagnate. Further, the pre-requisite for investment is what is called business confidence⁶. If the business (producer) community does not have enough confidence in the policies of the state, they will not invest. Given the importance of investment, low business confidence is usually an unacceptable situation. Thus giving the productive sphere its greatest bargaining card. They can thereby force the state to ensure the right investment climate is made available.

The drawback of this mechanism is the inherent contradictions in the logic of capitalism. The effort to increase profits, by increasing prices and reducing wages, inevitably leads to overproduction related problems (usually recessions).

Full employment an important expectation from the productive sphere, would never be in the favor of the capitalist setup. But the major conclusion from this is that, despite the state being the sole source of moral authority, it cannot make the moral decision to act in public welfare. This aspect will be explored fully in the examples taken up later.

The state is, therefore as subservient to the logic of capitalism as any other institution of the society. In its symbiotic relationship with the productive sector it has the bad end of the deal, almost like an old banyan tree riddled with massive creepers. It can be inferred in the light of these arguments that the logic of capitalism points to a society that would not need a state or at the very least states would end up being like monarchs of present day UK and the Netherlands. What remains to be seen is how this will change will materialize.

5. The productive sphere – Firms, capital and globalization

5.1 Firms

In the typical description of a capitalist society, firms are the focus of attention. Firms are the social entities that produce goods and services. The owners of firms are also owner of the means of production employed in the production process, although in most modern legal systems they don’t have ownership rights over labor. The individuals, who do not own any capital, rent out their labor to firm owners. It is firms that perform the tasks attributed to the productive sphere in the previous section. It is therefore reasonable to start any study of the changes in the capitalist system by evaluating the change in the nature of firms.

Small and numerous firms marked the early phase of the capitalist regime. As opposed to largely state intervention in the mercantilist era, these firms were relatively independent of state intervention and served their part of the symbiotic relationship. The relatively small size of each individual firm ensured close to perfect competition and thereby little market power, not only in the market space but also in the quest to determine power share between state and the productive sphere. As a single firm could not consciously change the pattern of goods/services distribution or the shape of the market, the collective bargaining power of the businesses was very limited. Further, small firms meant small revenues per firm and little financial might, implying that the state with its large reserves drawn from many firms and individuals was much more in control.

Over a few short decades, the surpluses generated by these small firms grew and the era of monopoly capitalism started. Strangely enough, the first monopolies were brought into existence by state legislation. As a consequence, while the interests of some groups were realized, possibly even the individuals who were a part of the state apparatus; the supremacy of state power was threatened. Lesser firms meant greater market power and financial might. It also reduced the spread of the resources available to the state; fewer firms in the market also encourage collusion and cartelization. The question of the power yielded by monopoly institutions in society has been a disputed area among social scientists for some time now. In 1942, J. Schumpeter in his Capitalism, Socialism and Democracy⁷, mounted a very aggressive defense of monopoly capitalism⁷. The gist of his arguments is that monopoly capitalism is a result of natural progression in capitalist societies. The relative merits and demerits of this form of capitalist enterprise can be argued, but for the purpose of this paper it would suffice to point out that this massive change in the size distribution of firms altered the relationship between state power and the influence of the productive sphere.

This marked a notable change in the social order. The European mercantilist firms, that dominated most parts of the world from 1500-1850s, although privately and operated on capitalist principle of capital accumulation were still manifestations of state power. They drew their legitimacy from the state. In essence political sanction was required for economic exploitation. The order of priority of the two logics was reversed at the dawn of monopoly capitalism.

5.2 Capital

As the name suggests, capital is at the centre of the logic capitalism. There are many theories as what led to this particular social formation where capital accumulation takes precedence over almost all other considerations. Most of them deal with is power to uplift the standard of living of the people in the society, average global incomes have gone up by the order of 1000s in the last century and a half. Its strength was beautifully explained by Adam Smith ‘invisible hand’ – all people working in self –interest leads to improvements in lives of all member of society. Despite the elegant expression, the invisible does fail often enough and probably the greatest achievement of capitalist society has been innovation and rapid advances in technology made in the previous century.

Defining capital is a difficult proposition as it means different things in different contexts; here the economic meaning should suffice. Capital refers to all factors of production except labor, which is a human input. In a monetized society, most other factors can be bought in the market and hence capital usually refers to money capital.

The logic of capitalism rationally economizes to enhance capital accumulation. The capital accumulated is re-invested to increase its value. The natural progression mentioned by J. Schumpeter (1942) stems from this idea. If enough capital is invested the returns will be very high, which would then imply the need for larger places to invest. So either, the small firms that existed in early capitalism folded up due to lack of competitiveness or acted consciously to consolidated the market by mergers and acquisitions. It is tough to say if the critical amount of capital required to kickstart the process of was arrived at by simple accumulation in small firms or was helped by the creation of state owned monopolies.

The greatest direct manifestation of the idea of capital accumulation is the modern day financial sector. The product of this industry is ways, means and ideas of accumulating money capital. It also seems to be a result of natural progression, with the massive amounts of money available with the monopoly firms, simple banking methods of safekeeping would have been no longer useful. Today the global financial system is gargantuan web, capable of grinding the world economy to a halt of something goes wrong.

With such large amounts of money available, mega investments are the order of the day. This ‘hot money’, which roves around the world looking for the best possible returns has been the cause for great concerns among national governments across the world. It can ruin the economy of a nation by altering the business confidence of other investors, starve a country to death by refusing to lend money or even transform the lives of many millions in very short spans of time. The thing with money capital and therefore with ‘hot-money’ is that it does not have any national allegiances. It does not belong to any nation state or owned by any individual, it is a monster without a body. The web of ownership behind these capital rich firms is so complicated that it is almost impossible to figure out without compromising the integrity of the whole system.

The logic of capital accumulation as exercised by financial institutions has two major characteristics. Firstly, it is not based on any product with any functional use. There is no material good created by the capital that does the rounds in financial circles. So the accumulation stems from difference in valuation. Secondly, capital attracts capital. So the tendency to have monopoly institutions is built into the system here too. Monopoly financial institutions are even more threatening to the power of the state, as they cannot be regulated without affecting the valuation of their money capital assets. In case the valuation falls, the state in attempting to cut the firm to size could end bankrupting the nation.

5.3 Globalization

The inevitability of globalization and the integration of markets stems from the same underlying logic that gives rise to monopoly markets and massive financial institutions. All social formations have in-built unifying pressures, although the strength may vary. In capitalism this force of agglomeration is reinforced by the need to invest capital on an ever-increasing scale.

The need to find new sources of raw materials and markets led to the mercantilist age. In the capitalist phase, while the functions remain the same, but the scale is even larger and perhaps more importantly, new markets don’t have to be won over by force. The mercantilist phase saw the first multi-national corporations, but these firms as noted earlier shared strong allegiances with the state. The capitalist globalization phase has seen the rise of supra-national firms.

In a globalised world, capital, that arises within nations and exists originally as it has state sanction, become increasingly capable of defying or of existing above the state. The network of goods, services and capital flows that form the skeleton of global capitalism does not recognize national boundaries as impediments. It operates in accordance with its own logic (that of capitalism), with scant regard for the concerns of nation states. The sheer size of the network, the value of its produce and the amount of money involved makes it capable of eluding all constraints of state boundaries and power⁸.

6. Frictions Substantiated

So far the frictions in the capitalist regime have been described, mostly theoretically. The society, however, does not only exist in theory, there are empirical examples that fit the pattern that has been developed so far. Providing conclusive evidence for any framework of society is almost impossible. The best that can be done is to try check if fit is close enough for the postulate to be useful. The other unfortunate part is that, checking all the observed events would require enormous resources. So while arguing by examples is not the perfect method, it is the only one feasible.

The examples mentioned will correspond to the characteristics of the nation state stated in 2.1. While the results in the examples are a subject of empirical observations the arguments used to explain them will be the ones that have been developed in this paper.

· Globalization and binding policy – The footprints of Supra-national corporations are almost by definition across national boundaries. Unlike citizens they don’t hold passports to prove their citizenship. International corporate law is separate that deals with the problems that such entities pose for states and the implement of laws enacted by them.

With a global presence, means no single nation can claim to have its policy to be binding on such entities. A striking example of this was the case of Union Carbide in Bhopal, India in 1984. The policies to be followed were clearly laid out, so was the judicial procedure to be followed in case of a mishap. Thousands died the day methyl iso-cyanide leaked from the tanks of the Union Carbide factory. Close to 26 years have passed and despite repeated attempts by the courts and international NGOs, no one has been convicted. The Government of India paid the compensation to the victims. This is an example from the days when the Indian economy was relatively closed and foreign investment required a slew of permits from the state. Today the problems would be much worse.

· Welfare State – Most constitutions mandate that the state should act to increase the welfare of the citizens of the nation. The recent global recession and the response of states all over the world brought out the dichotomy in the situation very well.

The faulty processes adopted by large global financial institutions brought about the financial crisis. To start with, the crisis spread as quickly as it did because of the nature of global capital. Bad instruments spread throughout the global financial system network crippling economies worldwide and drastically reducing the amount of the money capital available in the system. The drastic fall in asset valuation was caused by a collapse in business confidence. It left many millions unemployed; savings of many others were destroyed overnight. The ability of banks to give out credit was hampered, which in turn adversely affected the consumption and production patterns.

The scale of the problem necessitated, nations across the world act cooperatively to control the damage and put the lives of millions back on track. Free market principles would imply that unsuccessful ventures have to collapse for new ones to emerge, so the financial system should have been abandoned. Instead, the US government, beset with a large trade and budget deficit pumped in billions if dollars to keep the firma afloat.

Prima Facie this makes little sense, as such actions by the state encourage future risk taking by the firms on the promise that any future losses would also be socialized by imposing the costs on citizens. However, as noted earlier, the existence of the state itself is incumbent on the presence of functioning and health economy run on capitalist principles. Further, the collapse of the global financial system would have been a body blow to the very basis of modern economy. Apart from convulsions that this would bring about in the current world order, it would also directly affect the individuals across the globe.

In this case, the welfare function of the state thus implies that the state should act to support the reckless activities of the financial firms. Not only does this signify the centrality of capital accumulation in the modern, it is also as plain an example of the subordination of state power as is possible.

There exist many other instances where this true hierarchy in the state-business relationship is visible. The fiscal policies of nation states are guided by the concerns of the supra-national investors. This is not just to attract investment in physical infrastructure development, but also to ensure a steady supply of credit when it is needed. Most nation states borrow heavily from global financial network; nation states are even rated on their credit worthiness. It is therefore imperative that states surrender at least part of their sovereignty to make sure they don’t end up in a situation like the one Greece faces today. Interestingly, while these financial concerns have the power to modify state policy, it is not liable for any damages if anything goes wrong.

· Geo-political behavior – Typically geo-political decisions, interactions and behavior is a characteristic trait of nation states. But with firms being both buyer and seller; operating across international boundaries, this preserve of state power was bound to be breached. In the global society, firms from across continent can affect dramatically affect political outcomes by supplying resources. The diamond trade in parts of western Africa was used to finance the rebel uprisings. An Australian oil company negotiating and then buying oil/gas from Somalian rebels can dramatically shift the balance of power inside the country.

The negotiations for global trade in WTO are also guided by geo-political concerns of businesses more that individuals. For example, despite the stance of the Dutch government at the WTO meet it is tough to imagine that a Dutch citizen would object to suspensions of intellectual property rights in case of medicines for lethal diseases. This radically lowers prices and enables a much larger proportion of affected patients to avail its benefits.

· Right to legal violence and concentration of power – For more that a decade now the words of wisdom in development economics has been that, states are no good at business. So nation states all over the world with have or are beginning to withdraw from the productive sphere. This restricts the income options available to the state, as also practically mandating that parallel centers of power with greater economic will emerge.

While this is difficult to imagine in relatively large states, in smaller countries it is already the case. Large swathes of South America, Africa were carved up by firms based in other countries. There have been instances where the elected government has been overthrown to ensure the interests of the firm are protected.

This issue can become even more serious if the state willingly gives up its right to legal violence. An example of this was observed in the recent black-water scandal, were the government of the USA hired private contractors to carry out jobs usually restricted for the military of a country. Despite, the hue and cry that followed the expose, reports continue to pour in that the US continues to use private contractors.

7.Conclusion

There are many other aspects of this observed paradigm shift, but covering all of them is beyond the reach of this paper. Even this rather limited evaluation of the nature of the relationship between the states and the productive illuminates some very striking characteristics. Firstly, it shows the primacy of the logic of capital accumulation in the modern society. Secondly, the logic of capitalism does not seem to require a state like institution. It could very well do without it. Thirdly, the disappearance of the state seems to stem from the logical progression of capitalist societies. Lastly, the mechanism for this change in guard will in all likelihood have its origins in the phenomena of globalization.

The disappearance of the state does not need any normative analysis at this stage. It is difficult to predict the nature of the institutions that will grow in its place and thus almost impossible to say if it will be for the better or vice versa.

Bibliography

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