States, markets and power: plus ça change?

Mark Beeson, University of Queensland

Keylor, William R. A World of Nations: The International Order Since 1945 New York, Oxford University Press, 2003 (432 pp). ISBN 0-19510-602-4 (paperback) RRP $75.00.

Moore, Mike A World Without Walls: Freedom, Development, Free Trade and Global Governance Cambridge, Cambridge University Press, 2003 (304 pp). ISBN 0-52182-701-9 (hard cover) RRP $59.95.

Weiss, Linda (ed.) States in the Global Economy: Bringing Domestic Institutions Back In Cambridge, Cambridge University Press, 2003 (378 pp). ISBN 0-52181-913-X (paperback) RRP $59.95.

Anyone taking even the most perfunctory interest in current affairs might be forgiven for thinking that we live in a time of profound, perhaps unprecedented, change. The emergence of the United States as the world’s first ‘unipolar’ power, the re-emergence of security as the key concern of policymakers across the industrialised world, and the desire of American policymakers to assert themselves unilaterally, both militarily and economically, seem to have fundamentally transformed contemporary international relations. For those of us who thought that the end of the Cold War meant that geo-economics had decisively and permanently trumped geo-politics—in the ‘developed’ world, at least—these are sobering and surprising times.

In retrospect, the 1990s are beginning to look like something of an anomaly. Many of that decade’s preoccupations already seem weirdly anachronistic, partly because of the apparent resurgence of the American economy and the relative decline of much of East Asia’s. Whether America will continue to grow and Asia to decline is a moot point. What we can say is that many of the defining issues of the ’90s—the intensification of ‘globalisation’, heightened concern about economic competition, and debates about the appropriate role of the state—remain critical. Recent events have not diminished their importance; indeed, these issues are more significant precisely because they are simultaneously being redefined and downplayed as a consequence of the current obsession with security. What the current historical juncture does usefully remind us of, however, is the need to place debates about economic development and political organisation in a wider historical and geopolitical framework.

William Keylor’s World of Nations provides just such a framework. The book promises to provide ‘an analytical narrative of the origins, evolution, and end of the Cold War’. It does that and more—all in around 400 pages. There’s a surprising amount of detail given the size of the book and the fact that Keylor does not confine his analysis to the main arenas of Cold War conflict and contestation, but devotes separate chapters to a consideration of the period’s impact on the Middle East, Latin America, Asia, and Africa. What emerges is a comprehensive introduction to a critically important, if somewhat doom-laden period. Keylor is principally concerned with the systemic, the geo-political, and the elites who influenced high profile ‘events’. It is remarkable, revealing, and slightly optimism-inducing to remember that for many of the ordinary people conspicuously absent from this sort of history, the Cold War was suffused with the background fear that the world was, at best, locked into an endless Manichean struggle for dominance between two overbearing, over-armed superpowers and, at worst, headed for a collective sticky end. That fate, at least, seems less likely, even if some of the underlying strategic dynamics are proving more durable.

Keylor explains the evolution of the Cold War and the largely unforeseen demise of the Soviet Union that brought it to an end.

Keylor explains both the evolution of the Cold War itself and the abrupt, largely unforeseen demise of the Soviet Union that brought it to an end. The book’s strength is in detailing the sort of shifting geopolitical forces that underpinned this pivotal event. Keylor is less concerned with—and so less convincing about—the ‘low’ politics of economic development and interaction; ‘globalisation’, for example, appears only briefly in a short epilogue. Similarly, the ‘end of the Japanese miracle’, merits slightly more than one page, while ‘Afghanistan under siege’, warrants nearly ten, and clearly reflects the author’s view about the importance of the unfolding ‘war on terror’ and military matters more generally. These are, of course, matters of judgement and not necessarily a serious criticism of what is an impressive, useful and concise introduction to the post-war period. However, the fate of the Japanese economy and its impact on both the economic and strategic development of Northeast Asia will be, I would have thought, of greater long-term significance than anything that happens in Afghanistan.

The other books reviewed here, by contrast, are mostly concerned with the ‘economic’ issues that explain both the decline of Japan and the resurgence of the United States, although both place them in a much wider canvass than such a description might imply. As an ex-Director General of the World Trade Organization (WTO), Mike Moore’s A World Without Walls is, perhaps unsurprisingly, a paean to the merits of trade liberalisation and greater international economic integration. Moore regards the WTO, which he calls ‘the crown jewel of multilateralism’ (p. 109), as a crucial force for promoting economic development across both the developed and developing world. He dismisses criticism of the Doha round of trade negotiations (which he oversaw) from an increasingly prominent and active sector of transnational civil society as ‘a cruel self-serving lie orchestrated by selfish observers and self-appointed critics who need to maintain the rage of their supporters to raise funds’ (p. 134). It is painfully clear from such remarks that, despite Moore’s devoting a chapter to the importance of ‘engaging civil society’, this will not be an easy task.

To his credit, Moore makes a detailed and persuasive case for greater economic integration. At one level there’s not much to argue about: the merits of greater economic interdependency seem simply overwhelming. Whether it’s simply the benefits that flow from greater economic specialisation or the—arguably even more important—impact increased economic integration appears to have on the behaviour of states, there are powerful arguments for transnational economic integration. The European Union remains the quintessential exemplar of the potentially pacifying effect of economic cooperation. But the EU also reminds us that the rich world is frequently prepared to use its power to create ‘indefensible’ (p. 170) trade barriers to the detriment of the developing world and the international economic system more generally. The real debate, therefore, has always been about the rules, both formal and informal, that govern the international economic system: who makes them, and who do they benefit? Moore recognises that international financial institutions, including the WTO, suffer from a lack of legitimacy and popular support, and are consequently unrepresentative and in need of reform. But his proposed solution—for ‘a small group of leaders to catalyse the issue of democratic deficit’ (p. 232)—looks like part of the problem rather than the solution.

The rich world frequently uses its power to create ‘indefensible’ trade barriers, to the detriment of the developing world.

A theme linking all three books is the role of the state. The last line of Keylor’s book, filled as it is with the actions of states and their leaders, would have us believe that ‘reports of the demise of the state are premature’ (p. 418). Moore, too, is conscious of the continuing importance of states, but is much less sanguine about it. For Moore, ‘What has given government a bad name is corruption, short-termism and poor delivery systems’ (p. 214). Consequently, public-private delivery systems are ‘the way of the future’. Although Moore is clearly enamoured of the benefits of market forces, he does recognise that states remain important. Just how potentially important states remain is made clear in the collection States in the Global Economy, edited by prominent Australian academic Linda Weiss.

Weiss’s book is much more theoretically informed and sophisticated than either of the other two, and builds on her widely acclaimed earlier work The Myth of the Powerless State. The central thesis of the previous book and one of the key ideas explored in the new volume is that the state remains a powerful institution and a central determinant of comparative economic outcomes—even in the sort of ‘globalised’ economy Moore so enthusiastically describes. Indeed, Weiss goes further, arguing that ‘the global economy does not preclude a role for national governance, but tends to increasingly demand it’ (p. 245). Where Moore sees states as potential obstacles to economic development, Weiss and her co-authors argue in compelling detail that states still have a surprising degree of autonomy or ‘room to manoeuvre’, and that if they fail to use such opportunities, their respective national economies will be at a competitive disadvantage.

States in the Global Economy is important because it links theoretical claims with detailed case studies across a range of economic sectors and countries. Weiss contributes three chapters, providing both the theoretical backbone of the book and a persuasive riposte to those who claim that the state is in terminal decline. Weiss concedes that earlier forms of ‘statist’ rule are being replaced by forms of ‘governed interdependence’, characterised by ‘public-private partnerships and alliances, policy networks, information exchange, and self-regulation under the state’s goal-setting auspices’ (p. 308). But she argues that these new ways of doing things are restructuring, not negating governmental influence.

Weiss and her co-authors develop this basic model of domestic reconfiguration in response to global competitive pressures through case studies of France, Thailand, China, India, East Asia generally, and of the telecommunications and finance sectors. The collection also includes important analyses of the taxation and welfare systems of Europe and East Asia, which suggest that states retain the capacity to raise and spend money in distinctive ways that are sharply at odds with the idea of a ‘race to the bottom’ and an inevitable loss of policy autonomy.

Weiss argues that the global economy does not preclude a role for national governance, but tends to increasingly demand it.

Valuable as this collection is, however, there are some noteworthy gaps. The Japanese and American experiences are briefly examined as part of a discussion of telecommunication sector reform, but both merited much more extensive consideration in my view: the United States is, after all, the key exemplar and champion of an alternative market-driven model of economic development, while Japan pioneered the interventionist model that is apparently in serious trouble and which has—to some extent, at least—become a self-serving obstacle to much needed reforms. Likewise, some consideration of the Australian and New Zealand experiences might also have been useful for comparative purposes given their enthusiastic and pioneering adoption of neoliberal reform; at the very least it would have boosted the book’s appeal in Weiss’s own country.

The key continuity in the post-war international order that all these books implicitly or explicitly highlight is that states still matter. No surprise there, perhaps, especially at a time when the making and unmaking of states is of critical concern to international policy-making elites. But other continuities emerge from these volumes which, while less dramatic and visible than recent events in Afghanistan and Iraq, remind us of both the continuing importance of political and economic power, and of the encompassing geopolitical context within which states operate. China is the most striking example of all these possibilities. A long-term, systemic analysis of the sort Keylor provides illustrates the international factors that have constrained and enabled China’s seemingly inexorable rise. The more nuanced analysis Tianbiao Zhu offers in the Weiss collection, by contrast, helps us to understand how world-historical forces are mediated domestically, as China’s increasing ‘openness’ exposes the economy and the political system to new pressures.

But Mike Moore is most alert to the way this long run dialectical process is affecting the world’s most populous country and the wider international system of which it’s a part. China’s accession to the WTO marks the last gasp of major alternatives to the highly institutionalised, rule-governed capitalist international order the United States effectively created—and benefited from. And yet, Moore fails to draw the big lesson from all this as forcefully as he might: institutionalised international economic integration is an important—arguably desirable—force in international affairs, but it has more than simply economic impacts. China may be becoming more powerful as a consequence of its rapid economic development, but the United States has been the principal beneficiary of China’s abandonment of socialism and its incorporation into an American-dominated international order. Power, in other words, may still be inextricably linked to underlying economic strength, and states may still play a part in determining how it develops, but power can be a more subtle, diffuse, and institutionalised part of the international system, the impact of which may take decades to reveal. At a time when more dramatic, short-term displays of power are in vogue, it is useful to remember that there are other, more sustainable ways of asserting and accumulating influence.


Weiss, L. 1998, The Myth of the Powerless State, Ithaca, Cornell University Press.

Mark Beeson is Senior Lecturer in the School of Political Science and International Studies at the University of Queensland. His latest book is Contemporary Southeast Asia: Regional Dynamics, National Differences, to be published by Palgrave in mid 2004.

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