The Westfailure System: State Centrism and International Governance

Susan Strange's Argument

1. Susan Strange argues that the Westphalian state system had failed as a mode of governance internationally with respect to three key areas: (1) environment, (2) economic and financial institutions and markets, and (3) addressing the gap between the “haves” and the “have nots.” Discuss each area with reference to the examples provided by Strange. Are you persuadedn by her arguments?

2. What does Susan Strange's argument tell us about “state centrism” as a way of thinking about international relations?

3. Strange says: “The more I look into the politics of international business, the more I am struck by the growing divide between ... so-called multinationals and the people running and employed by small and medium business enterprises. These enjoy few of the perks and privileges of the big corporations.” What are the implications of her observation for understanding the idea of a transnational capitalist class?

4. Robert Cox, concurring that the Westphalian state system has failed, is quoted by Strange as saying the new multilateralism “will not be born from constitutional amendments to existing multilateral institutions but rather from a reconstitution of civil societies and political authorities on a global scale building a system of global governance from the bottom up.” What does Cox mean by this? What are some of the pros and cons of this vision? Are you persuaded by Cox’s argument?

From: Susan Strange (1999) ‘The Westfailure System’, reprinted in Juergensmeyer, M. (ed.), Thinking Globally: A Global Studies Reader,
Berkeley: University of California Press, 223-227

From a globalist, humanitarian and true political economy perspective, the system known as Westphalian has been an abject failure. Those of us engaged in international studies ought therefore to bend our future thinking and efforts to the consideration of ways in which it can be changed or superseded. That is the gist of my argument. The system can be briefly defined as that in which prime political authority is conceded to those institutions, called states, claiming the monopoly of legitimate use of violence within their respective territorial borders.

It is a system purporting to rest on mutual restraint (non-intervention); but it is also a system based on mutual recognition of each other's 'sovereignty' if that should be challenged from whatever quarter. But while we constantly refer to the 'international political system' or to the 'security structure' this Westphalian system cannot realistically be isolated from - indeed is inseparable from - the market economy which the states of Europe, from the mid 17th century onwards, both nurtured and promoted.

State Centrism

To the extent that the powers of these states over society and over economy grew through the 18th, 19th and 20th centuries, they did so both in response to the political system in which states competed with other states (for territory at first but later for industrial and financial power) and in response to the growing demands made on political authority as a result of the capitalist system of production and its social consequences. The label 'capitalist' applied to the market-driven economy is justified because the accumulation of capital, as the Marxists put it, or the creation and trading in credit as I would describe it, was the necessary condition for continued investment of resources in the new technologies of agriculture, manufacture and services. As I put it in States and Markets, the security structure and the production, financial and knowledge structures constantly interact with each other and cannot therefore be analysed in isolation. The point is 'kid's-stuff to social and economic historians but is frequently overlooked by writers on international relations.

When I say that the system has failed, I do not mean to say that it is collapsing, only that it has failed to satisfy the long-term conditions of sustainability. Like the empires of old - Persian, Roman, Spanish, British or Tsarist Russian - the signs of decline and ultimate disintegration appear some while before the edifice itself collapses. These signs are to be seen already in the three areas in which the system's sustainability is in jeopardy. One area is ecological: the Westfailure system is unable by its nature to correct and reverse the processes of environmental damage that threaten the survival of not only our own but other species of animals and plants.

Another is financial: the Westfailure system is unable - again, because of its very nature - to govern and control the institutions and markets that create and trade the credit instruments essential to the 'real economy'. The last area is social: the Westfailure system is unable to hold a sustainable balance between the constantly growing power of what the neo-Gramscians call the transnational capitalist class (TCC) and that of the 'have-nots', the social underclasses, the discontents that the French call les exclus - immigrants, unemployed, refugees, peasants, and all those who already feel that globalisation does nothing for them and are inclined to look to warlords, Mafias or extremeright fascist politicians for protection.

Transnational Capitalist Class

The point here is that until quite recently the state through its control over the national economy, and with the fiscal resources it derived from it, was able to act as an agent of economic and social redistribution, operating welfare systems that gave shelter to the old, the sick, the jobless and the disabled. This made up for the decline in its role - in Europe particularly - as defender of the realm against foreign invasion. Now, however, its ability to act as such a shield and protector of the underprivileged is being rapidly eroded - and for reasons to which I shall return in a while.

In short, the system is failing Nature - the planet Earth - which is being increasingly pillaged, perverted and polluted by economic enterprises which the statesystem is unable to control or restrain. It is failing Capitalism in that the national and international institutions that are supposed to manage financial markets are progressively unable - as recent developments in ast Asia demonstrate - to keep up with the accelerating pace of technological change in the private sectors, with potentially dire consequences for the whole world market economy. And it is failing world society by allowing a dangerously wide gap to develop between the rich and powerful and the weak and powerless.

The fact that the system survives despite its failures only shows the difficulty of finding and building an alternative. No one is keen to go back to the old colonialist empires. And though Islam and Christian fundamentalism make good sticks with which to beat the western capitalist model, the myriad divisions within both make any kind of theocratic-religious alternative highly improbable. So the old advice, 'Keep hold of nurse, for fear of worse' is still widely followed even while faith in her skill and competence is more than a little doubted.

The two commonest reactions to the three failures of the system I have briefly described are either to deny the failures and to defend the dual capitalism-state system in panglossian fashion as the best of all possible post-Cold War worlds, or else fatalistically to conclude that, despite its shortcomings there is nothing that can be done to change things. Only quite recently has it been possible to detect the first tentative indications of a third response.

It is to be heard more from sociologists than from international relations writers, perhaps because sociologists tend to think in terms of social classes and social movements rather than in terms of nation-states. As a recent collection of essays around the theme,' The Direction of Contemporary Capitalism' shows; there is little consensus among them either about current trends or about possible outcomes. A good deal of this thinking has been inspired by the rediscovery of Antonio Gramsci and his concepts of hegemony, the historic bloc and social myths that permit effective political action. A common assumption is that the present system is sustained by the power of a transnational capitalist class (TCC).

Robert Cox's Vision

I have no doubt that such a class exists and does exert its power over the market economy and the rules - such as they are - that govern it. Nearly a decade ago, I referred to it as the dominant 'business civilization'. I think Gill was mistaken in seeing evidence of its power in the Tripartite Commission, which was more a club of well-meaning has-beens than an effective political actor, a mirror rather than a driver. But he was right in spotlighting the emergence of a transnational interest group with powerful levers over national governments including that of the United States and members of the European Union.

Recent research in telecommunications, trade negotiations concerning intellectual property rights and a number of other spheres where international organisations have been penetrated and influenced by big-business lobbies all point to the existence of such a TCC. Yet to call it a class suggests far more solidarity and uniformity than in fact exists. The more I look into the politics of international business, the more I am struck by the growing divide between big business - the so-called multinationals - and the people running and employed by small and medium business enterprises.

These enjoy few of the perks and privileges of the big corporations yet have to conform to the rules and agencies created by them. For them, globalization is something to be resisted, if only because it so blatantiy tramples on the democratic principles of accountability and transparency.

The environmental issue area is a good example of the fissures in the TCC. On the one side are the big oil companies, the giant chemical combines, the vested interests of the car manufacturers and associated businesses. On the other are firms in the vanguard of waste disposal and clean-up technologies and interestingly - the transnational insurance business.

Fear of the vast claims that might be made against their clients on environmental grounds is putting insurers increasingly in opposition to the polluters. Their opposition, of course, is predicated on legal systems that are sensitive to public opinion. The power of the latter meanwhile is also evident in the growing sensitivity of some elements in business to shareholders and consumers.

Thus, the notion tentatively posited by some of the neo-Gramscians that while there is some sort of TCC there is also an emerging global civil society is not lighdy to be dismissed. To quote Leslie Sklair:

Pros and Cons

No social movement appears even remotely likely to overthrow the three fundamental institutional supports of global capitalism [...] namely, the TNCs, the transnational capitalist class and the culture-ideology of consumerism. Nevertheless in each of these spheres there are resistances expressed by social movements.

 Similarly, Rodolfo Stavenhagen, writing on 'People's movements, the antisystemic challenge' in the collection of essays edited by Bob Cox, finds the growth points of a nascent transnational opposition, or counterforce to Sklair's three institutional supports sustaining the Westfailure system. Not only, he says, are such social movements non-governmental, they are popular in the widest sense of that word; they are alternative to established political systems, and therefore often at odds with national governments and political parties and they seek 'to attain objectives that would entail alternative forms of economic development, political control and social organisation'.

In his introduction to this collection of essays, Cox does not predict the imminent demise of the 'fading Westphalian system'. The future world, he observes, 'will be determined by the relative strength of the bottom-up and top-down pressures'. The contest may be a long one and no one should underestimate the power of big business and big government interests behind these top-down pressures. Yet at the same time there is no denying that as Cox says, 'people have become alienated from existing regimes, states and political processes'.

Witness the recent amazing, unforeseen turn-out - a quarter of a million in Paris and the same in London - in anti-government marches by country dwellers of every class and occupation. Everywhere, in fact, politicians are discredited and despised as never before.
The state is indeed in retreat from its core competences in security, finance and control over the economy; and this retreat is not inconsistent with its proliferating regulation of many trivial aspects of daily life. The new multilateralism Cox predicates 'will not be born from constitutional amendments to existing multilateral institutions but rather from a reconstitution of civil societies and political authorities on a global scale building a system of global governance from the bottom up'.

For international studies, and for those of us engaged in them, the implications are farreaching. We have to escape and resist the state-centrism inherent in the analysis of conventional international relations. The study of globalisation has to embrace the study of the behaviour of firms no less than of other forms of political authority. International political economy has to be recombined with comparative political economy at the sub-state as well as the state level. It is not our job, in short, to defend or excuse the Westphalian system. We should be concerned as much with its significant failures as with its alleged successes.

Working in subgroups of 3-4 students, explore one of the Discussion Questions listed at the beginning of this topic. (Nominate a notetaker/spokesperson who will share the responses of the subgroup) [15 minutes].

The nominated spokesperson shares their subgroup’s responses with the whole group [15 minutes].

Conclude the session with a full group discussion on the keys points and arguments of the week’s reading(s) [15-20 minutes].