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Global Capitalism, Nation State and Political Ideology

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Global expansion of the capitalist system over the last several decades has resulted in further uneven development across the world, in spite of recent economic growth in many non-western countries. Development leading to a higher standard of living for a majority of people has thus been the exception rather than the rule in most parts of the world. It is true that several countries outside the industrialized west have thrived economically lifting low income groups out of poverty and this can be explained in terms of the catalytic role that the state in these countries has played to a) develop human resources and other domestic productive capacities by way of research and development, b) facilitate domestic capital formation and c) create conditions attractive to foreign investors.

"International mobility of capital and labour has reduced the capacity of the state to guarantee the welfareof citizens within its jurisdiction in terms of stable livelihoods and social security but the state continues to be critically important for people to collectively deal with their existential problems including physical security"


The owners of foreign capital enjoy unprecedented power over human lives today. With the nation-state having little control over the global flow of capital, poorer countries have to  bend backwards to appease to both domestic and foreign capital to ensure that they do not run away with their capital and invest it in countries that provide better conditions in terms of profitability and security. Progressive and equitable labour laws and extensive social protection schemes that were introduced in much of the industrialized west after the second World War have come under increasing pressure from globalized capital. Since commodity production for export is far more pervasive across the world today, countries with higher labour costs due to guaranteed minimum wages and social protection can no longer compete with low wage countries to protect labour-intensive domestic industries. For instance, Australia has found it extremely difficult to retain domestic manufacturing and even service industries in the face of stiff competition from low-wage Asian countries.



Mobility of capital across countries in search of higher profits has blurred the old divisions among countries. The earlier division of much of the world into capitalist and socialist blocs has little meaning today as the large, former socialist, countries like Russia and China are socialist today only in name. On the other hand, the division between industrial and non-industrial countries has also become blurred as many former non-industrial nations have become leading industrial nations today.
The spread of global capitalism from the old capitalist countries, to much of the rest of the world, however has not led to the spread of western liberalism to the non-western world. While socialism has certainly been rolled back in almost all former socialist nations, socialist ideology there has not been replaced by liberalism. In fact, there is stiff resistance to western liberalism in many parts of the non-western world. This has been at least partly due to the rise of different varieties of nationalism such as anti-western, cultural nationalism, competitive economic nationalism and ethno-nationalism, the latter often bordering on racism and tribalism. Economic and political alliances among countries are often formed on the basis of these cleavages, making the global political landscape highly complex and volatile as several conflicts raging in the Middle East, Eastern Europe and elsewhere show.

International mobility of capital and labour has reduced the capacity of the state to guarantee the welfareof citizens within its jurisdiction in terms of stable livelihoods and social security but the state continues to be critically important for people to collectively deal with their existential problems including physical security


International mobility of capital and labour has reduced the capacity of the state to guarantee the welfareof citizens within its jurisdiction in terms of stable livelihoods and social security but the state continues to be critically important for people to collectively deal with their existential problems including physical security. Yet, their ability to freely articulate their views and collectively determine their fate depends on the extent of political and social space available to them. This is where the nature of the political system becomes critically important.
As is well known, Western liberalism emerged as a dominant political ideology in the world, following the collapse of socialism in the 1980s. Even American-led invasions of Afghanistan and Iraq were justified at the time on the basis that the liberation of these countries from authoritarian regimes would pave the way for liberal democracy. In recent years, Western support for violent political rebellions in several North African and Middle Eastern countries has been justified on the same grounds. Yet, many countries around the world still do not have liberal democratic regimes that uphold the rule of law and guarantee the political and social rights of their citizens. Conflicts in many countries have undermined peaceful co-existence of different population groups, social and economic stability and democratic freedoms.

Western leaders and global civil society organizations appear to be keen to propagate liberal democratic values across the non-western world. Yet, faced with serious economic problems themselves, most western governments do not have the means to implement their global initiatives or to overcome resistance from undemocratic governments. Moreover, the credibility and moral authority of many western regimes are often questioned by their critics, while illiberal regimes tend to use well-known allegations against the West to resist external interventions. On the other hand, the question that invariably arises is whether there is a viable political alternative to liberal or social democracy. In other words, what is necessary is to separate the message from the messenger.

A recent CNN news report revealed that the American military had colluded with the British to forcibly remove the original inhabitants from the Diego Garcia, a tiny island in the Indian Ocean, to pave the way for the establishment of an American military base there. Neither of the two governments could suppress the news due to media freedom in the two countries. According to the same news report, some of the people who were displaced by the military base are now taking legal action in British courts against the authorities seeking compensation for the injustice done to them. What is important to note here is that injustices have happened at the hands of western powers, both during and after colonialism.Yet, some of these could be redressed due to social and political freedoms available in mature democracies. For instance, we see a sea change in the way the aborigines are treated in Australia today in spite of the past oppression of original inhabitants of the land. In fact, the former Australian Prime Minister publicly apologized for what had happened.


"The earlier division of much of the world into capitalist and socialist blocs has little meaning today as the large, former socialist, countries like Russia and China are socialist today"


Global expansion of capitalism under neo-liberalism is bringing about a sea change across the world. Opportunistic transfer of capital and labour across regions and countries are disrupting the lives of millions of people, particularly in the developing world. The sudden loss of jobs and increasing uncertainties coupled with increasing economic pressure make life miserable for vulnerable people even in the most developed parts of the world, let alone the poorer countries. Mass migration of labour from poorer to more prosperous countries is even more disruptive. Adverse social and health impacts of such dislocations on millions of people including the elderly, the children and women can be hardly mitigated by governments that arealready weakened due to poor governance and mounting public debts.

While there does not appear to be a more practically viable ideological alternative in sight, democracy at least could keep the options open for people to find a way out of the present global and national turmoil in the near future. Because all forms of authoritarian tendencies threaten to close off such possibilities.
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