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The Nation State in Crisis

By Peter Lewis and Michael Gadiel, Workers Online, issue 103, 20 July 2001

One of the central impacts of the spread of network technologies has been the diminution in the power of the state and the collapse of national borders. Within 100 years the Nation State has gone from being the dominant global entity to a network of mid-level players in the global economy. Today the leaders of most nation States (with the exception of superpowers such as the US and China) recognise they are interdependent and are more interested in taking down barriers, than building new ones.

To many, this phenomenon that has been called 'globalisation' has become Public Enemy Number One. People take to the streets to protest this change, attributing all the evils of modern life to the collapse of the Nation-State - forgetting that the same institution has been the author of so much misery and war over the past few centuries.

If each age reflects the technology of its time, then the Nation State era reached its high point alongside the dominance of the broadcast media. Inaccessible Heads of State presided over their subjects from on high - making universal laws, issuing decrees and dispensing public money through an intricate hierarchy of authority. Where the Head of State was a monarch, there was no need to interact with subjects. Dictators might rise to power with popular support, but once there would typically exercise power by coercion. Only in democracy was there a two-way exchange - and only here at election time.

While the National Government was the overarching structure; the ultimate hierarchy, newspapers and television were the most influential force shaping public opinion. In an information poor society broadcast media was widely consumed because it was virtually the only source of news about the world outside the local neighbourhood. They were a channel for information from the top of the hierarchy down to the populace. While the Fourth Estate fulfilled a scrutinising function in democratic countries, even here information flow could be carefully controlled, through the controlled release of information, official secrets legislation and defamation and libel laws.

The broadcast structure was effective in developing a sense of unity across nations. By creating a common pool of information, it allowed larger communities to develop a unitary national culture with the governmental structures at its apex. But it did so at the exclusion of both outside foreign influences and internal regional interests. This left the community driven by Nationalism. Populist leaders were able to gain greater authority through the manipulation of this sentiment - often resulting in open conflict with other Nations. Individuals were prepared to die for their Nation State - and did so in their millions.

The crisis for the Nation State has emerged because it is no longer able to control the flow of information across national boundaries. In a world increasingly shaped by the Internet and the electronic media, geography itself has become less important in determining perspective. If information flows freely between boarders and within Nations, governments, then the media people consume will have a more international perspective, making it difficult for a government to maintain a single culture that is hostile to outside influences. At the same time, the hierarchies that support national governmental authority are under pressure because of the better information flow - driven by new network technologies. And as the structure weakens so does its power, including a diminishing capacity to control the media, meaning more information leaks out. And around it goes.

Diverstiy Rules

Western culture is today embracing diversity rather than reinforcing the fear of difference and isolationism which characterised the Industrial Age. Private sector companies are beginning to recognise the bottom line value in maintaining a culturally diverse organisation. The different has become chic on so many levels. And as nations become increasingly prone to influence from external factors, beyond their control, then their ultimate power as the source of the mono-culture necessarily erodes.

National governments are instead being buffeted around in the global sea of ideas and influences - constantly struggling to react and adjust to the rapidly changing global environment. They are no longer the masters of their destinies - the nation is now just a constituent of the global community, struggling to influence events.

The most stark example of this is the move to economic globalisation - the net effect of floating exchange rates, falling tariff barriers, shifting trade balances. In areas as diverse as petrol prices, home interest rates and the level of taxation, the global economic performance of a nation state has an impact on the quality of life of ordinary citizens. When the economy is growing, jobs are created and prosperity is spread; when things go bad people lose jobs. But government is no longer operating in a controlled environment. It's not enough to pull a few economic levers. The economy is interrelated with that of every other Nation State, beyond the control of any one (with perhaps, a single exception, the largest Nation State of all, the United States).

This also means the integrity of national culture, along geographic lines is compromised. Culture takes on a new meaning when it is no longer an absolute, but can be constructed by and for each individual member of society. We begin to operate in a sea of cultural influences, able to pick, choose and blend - depending upon our needs and personal preference. But this can only be achieved in an environment of tolerance and mutual understanding - the cornerstones of hybrid western culture. And in losing our monoculture, we end up gaining something of far greater substance.

Critics of globalisation would argue that both economically and culturally, the demise of the Nation State has been replaced by the dominance of American corporations. In both business and culture, it could be argued that far from creating a hybrid culture, we are seeing the creation of a mono-culture. While this argument has superficial appeal, it misses a few important points. First, America is the most culturally diverse of all the traditional nation-states, a country built on immigration from the more structured societies of the Old World. Secondly, in both economics and culture, the corporations are freeing themselves of national bonds. Companies source labour from around the globe, as does Hollywood. The other important point to note is that this is occurring in a context where broadcast technology still dominates, where the mass media can still construct an American dream. As discussed earlier, it will be interesting to watch the ways the mass media attempt to defy gravity as network technologies are taken up over the coming years.

There is also a marked change in the way the nations states of the world govern themselves. In the Industrial Age, nation states based their power on their ability to conquer territory in less economically developed parts of the globe that delivered them the raw materials to generate wealth for their people. They would fight against other powerful states for even more territory, more markets or plain global superiority. The citizens would benefit from the markets, but would pay the price as fodder when competition for markets led to armed warfare. These powerful nation States would form alliances amongst themselves that would shift with self-interest. The conflict model thrived through the 20th Century with two wars and probably reached its high point in the Cold War years where the entire globe was spit between its allegiance to one or other of the two super-powers.

In the wake of the Cold War, nation states are beginning to operate in a different, more networked way. The emergence of bodies such as the United Nations has created international consensus to intervene on national sovereignty at times when the vast majority of members deem it necessary. The development of international treaties has accelerated since World War II, as leaders recognised there were more efficient ways of resolving trade disputes than killing people.

This change is approaching a high-point with the move to integration within Europe. Currently the European Union is log-jammed with nations from the former Communist bloc, seeking membership and the trade benefits this brings. In return they are prepared to submit their autonomy on a range of social, economic and environment issues in order to win membership. The EU is only the most stark of examples of the move from unitary national governments to a more complex matrix of governmental structures with detailed and strong lines of accountability between levels and back to the communities they serve. There have been similar blocs developed in North America and Asia. Individual nations submit to these broader structures because they have accepted it is in their interests.

And if globalism is putting pressure on the Nation State hierarchy from the top, so too are regional interests pulling the structure down from the bottom. A Nation State like Australia is now seen as a series of competing component communities. States bid against each other for international investment opportunities. Country and city regions argue for a bigger share of the limited pie. A cultural gap is perceived between the Sydney-Canberra-Sydney Axis and the rest of the nation. While we all still cheer for Australia at the Olympics, our political concerns are local: health resources for my area, education, an airport in their backyard not mine.

While these regional priorities have gained a higher profile amidst high levels of media concentration, network technologies promise to take the trend to a higher plane. In the information age, regions will be able to develop strong local media that serve the interests of a smaller community. The Nation State will face much more competition for community loyalty than ever before. Instead the voices of the regions will not only have to be heard, but actually be heeded.

Localised communication networks will allow communities greater capacity to share, develop and implement new ideas. They will no longer need to rely on central institutions of government or media to talk to each other. Centralised government will come under pressure to change its role from gatekeeper of information, to facilitator of activity conducted at a community level. In a way this is a return to the past - the localised village structures reactivated, only this time, a community need not be geographical - it could be based on a particular area of interest - but the network technology will help identify and create communities of common interest. Ultimately, our thesis is that the freer flow of information across a growing interconnected network is driving this process.

The One Nation Backlash

Pauline Hanson and her supporters emerged as part of the inevitable reaction against changes brought about by the Information Age, the decline of the nation state and globalisation. Even their name - One Nation - reflected their fundamental objective - the restoration of the integrity of the Nation State. They long for an era when national governments supported a single culture within its geographic boundaries, indigenous people and immigrants were assimilated or excluded.

One Nation's policies embody a return to the values of the nation state era. They stand for such Industrial Age structures as immigration control, protectionism, heightened national defense, unitary culture, government control, assimilation and Keynsianism. They represent the views of the sections of our community that have lost out in the changes driven by globalisation and the information age. In particular they represent large sections of Australia's traditional working class and rural constituencies; blue collar people whose jobs and security are most under threat by globalisation and information technology; the people to whom the Information Age poses the most uncertainty.

Their concerns are very real because they come from the people at the hard edge of the transition taking place. One Nation support game from working people who were embittered by the loss of their jobs overseas - regardless that many more jobs were being created in other parts of the economy. The base also came from the swelling ranks of middle managers, retrenched from firms after decades of loyal service. And it cam from the regions, where government had failed to manage the transition from a labour-intensive resource-based economy. From the perspectives of all these people, the changes occurring were scary, dangerous bad. They have seen the certainties of working life stripped away, while others enjoy wealth beyond their modest aspiration. In this context it was easy to find scapegoats in big business, overseas workers, even less powerful members of society such as indigenous Australians and welfare recipients.

One of the problems with this analysis is that while international markets are an aspect of globalisation -and an often an ugly face - it hast come to be confused as the phenomenon in and of itself. But in many ways the problems workers have confronted is because companies have taken up new network technologies while maintaining Industrial Age modes of thinking. While they can access information, capital, components from around the globe, they have continued to view their workers as old-style units of labour. This deskilling of the workforce, pushing them onto individual contracts so they can be shed when the economy slows have all fuelled resistance to globalisaiton. But it is not the change, but the way it has been driven by footloose capital pre-occupied with the need to extract short-term profits for demanding shareholders that has maximised the pain.

The rise in discontent was also partly driven by failure of Labor government to adequately explain the process taking place, to prepare people for the change and negotiate with corporations on the responsibilities that should go with greater market freedom. At the start of the eighties the Hawke/Keating government embraced the changes brought about by the early stages of the Information Age with open arms. By floating the dollar, deregulating finance and reducing tariffs they recognised the trend towards globalisation, accepting that globalisation could not be resisted and that in the long term it would bring enormous wealth. But it did so as if we were all on our way to a gold-rush and by the time the eighties bubble had burst, everyone had forgotten Bondy's America Cup triumph and wanted things to slow down again.

Despite the popular mythology around the 1993 election, the defeat of the John Hewson came about because the Australian population were reform fatigued. Labor under Keating had driven them too far too fast and that they needed to slow things down - Hewson lost because he promised to speed things up even further. Conversley, in 1996 the Liberals sought to minimise their exposure by proposing only moderate polices - allowing the population to punish Paul Keating and Labor as they had wanted to in 1993. John Howard portrayed himself as a conservative and by doing so was able to see his government into its second term. His strategy has been to make the reforms towards globalisation, in the economic sphere, largely pushed by business - but to play to the conservative forces on social issues such as the republic or aboriginal reconciliation. John Howard does not really embrace the information age - is happy to serve business by making the necessary economic reforms to accommodate the global era, but is not prepared to accept the effects these changes are having upon our social and cultural fabric.

Since 1996 Labor has sought to re-connect with its working class base. In doing so it has shifted its attitude towards globalisation. Recognising that it has pushed its constituents - who had borne the brunt of push towards globalisation - far enough, the Labor Party amended its platform to seek to limit the effects of change. Now, in an election year, Labor sings the praises of the Knowledge Nation, without wanting to grab the reformist ball with the zeal of Keating. All of which serves to demonstrate that while the resentment of the transition from an Industrial-based to an Information-based society have been exploited politically over the past decade, there has not been a successful explaination for what is actually going on. The Keating Government tried, but got too caught up with the alchemy of economics, as if this was an end in itself.

Kim Beazley's current packaging of the 'Knowledge Nation' is the first attempt to begin to wrap these changes into an electorally saleable story. But the difficulty he is facing in getting his message through a media itself under stress by the increasing speed of information delivery, demanding bite-sized grabs rather than a prolix analysis shows what a difficult task he faces. And Beazley's bigger problem is that he doesn't have his whole Party behind this orientation - and until he can construct a Laborist rationale that explains the need for change and pain to his constituency, he will continue to struggle here.