Nationalism and Globalisation: The Politics of Losers?

John Etherington Department of Political Science and Public Law,

Universitat Autònoma de Barcelona

Abstract

Globalisation is usually understood, however implicitly, to operate according to a

deterritorialising logic that undermines the specific spatial configuration of power and identity

proposed by nationalism. While at an abstract level, this position is probably correct, this paper

argues that we must go beyond a crude opposition between globalisation, the nation-state and

nationalism if we are to develop an approach capable of fully understanding the complex

interrelationship between these phenomena.

In this respect, we should not obviate the historically important role of states in the development

of world capitalism, nor should we overstate the power of globalising forces. By stressing the

twin dynamic of deterritorialisation and reterritorialisation, the paper stresses that these

interrelated processes come together in specific spatial and historical contexts, and thus it is

more useful to talk of nationalisms in the plural as a means of capturing this diversity.

Introduction

Since the decade of the 1980s 'globalisation' has become an increasingly ubiquitous term to

describe what are perceived to be fundamental changes to social life across the planet. The

vast volume of literature on the subject reflects often diverging understandings of globalisation,

although most accounts revolve around the idea that the world is becoming smaller and more

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interconnected. This phenomenon, it is generally claimed, is relatively recent, dating from the

1970s, and would be impossible without the introduction and development of new information

technology, such as satellites and the internet. Geopolitical considerations, particularly the end

of the Cold War, have also contributed to the process of constructing a truly global space.

With regards to the consequences of globalisation for nations and nationalism, opinions differ. In

many accounts, it is argued that globalisation undermines nationalism in two basic ways: on the

one hand, the ultimate goal of nationalists, state sovereignty, is increasingly worthless as global

flows of goods, services, finance, people and so forth overcome nation-state boundaries and

thus nation-states’ capacity to regulate daily life; on the other, it is argued that place-based

identities, such as national identity, are increasingly difficult to sustain in the context of the

emergence of transnational and even ‘post-national’ identities (see, for example, Appadurai

1996; Bauman 1998; Harvey 1989; Kaldour 1996). This is not to say that levels of nationalist

political mobilisation are necessarily declining, but rather that it becomes a defensive strategy

against global cosmopolitanism, the ‘politics of losers’ (Hirst and Thompson 1996:180).

Yet contemporary nationalism is a more complex phenomenon than such accounts would have

us believe: it is alive and well both in the developed West - as the current debates in Scotland,

the Basque Country and Catalonia demonstrate - and also in regions with long histories of

ethnic territorial conflict such as the Caucasus. Authors such as Anthony Smith (see also

Tomlinson 1999; and Friedman 1994) accept that

there is, after all, plenty of evidence of growing cultural and economic uniformity in all

sorts of spheres and products. The advance of American mass culture, of the English

language, of pop culture, of the visual mass media and computerised information

technology clearly represent significant global cultural trends. These are, in all likelihood,

here to stay, at least for some decades. (Smith 1995:22)

However, he immediately begs the question ‘[b]ut what do they add up to? Can large numbers

of men and women live by them as well as with them?’ (Smith 1995:22). The answer is a

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resounding ‘no’, since the emerging globalised culture is historically shallow, it has no memory,

it is value-neutral and traditionless. People need ‘irreplaceable culture values, and the particular

symbols rituals, ideals and traditions of those who forged and participated in them - which is

what many particular cultures of the past and present sought always to preserve (Smith

1995:23).

Rather than denying the transformative power of globalisation with regards nations and

nationalism, in the 1990s a series of authors began to stress the opportunities that globalisation

offered sub-state, regional political units, including historic nations without states. Based on the

proposition that ‘contemporary nation-states are now too small for the big problems of

contemporary social life and too big for the small problems’ (Lash and Urry 1994:279), 'new

regionalist' theories highlighted several overlapping factors behind this development: state

restructuring or 'hollowing out' (Jessop 1992); a move away from the Fordist mode of

accumulation to one based on 'flexible specialisation or accumulation' (Harvey 1989; Piore and

Sabel 1983; 1984; Scott and Storper 1987); accelerated European integration including a new

'multilevel' policy-making style with greater input from the regions (Marks 1993; 1997; Marks et

al. 1996). In this new scenario traditional conceptions of nation-state sovereignty became

redundant as goals for territorial political movements, which led some scholars to consider sub-

state nationalism as a subcategory of regionalism (Keating 1996). This is not to say that a

distinct cultural identity is not considered important; rather it became a means of developing the

kind of social solidarity that helped in the production and reproduction of social goods, while

helping such regions to market themselves as special places to live, work, invest and visit.

So does globalisation reduce nations and nationalism to expressions of impotency? Or on the

contrary, does it favour the rise of historic, sub-state nations? Or are expressions of national

belonging left unchanged by the historical shallowness of the kind of alternatives that

globalisation offers in terms of identity? In order to address such questions, this paper focuses

on the political economy of globalisation, since changes in economic organisation would appear

to be the main dynamic behind the phenomenon in general, having a direct impact on the

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nation-state and thus on nationalism as a form of political mobilisation around the nation-state.

Hence, the starting point of this paper consists of understanding the driving force behind

globalisation to be the deterritorialising logic of capitalist accumulation. From the basic premise

that capitalism is inherently prone to crisis of overaccumulation, Harvey suggests that, as a

means of overcoming or postponing such crises, the history of capitalism has been marked by

‘successive waves of time-space compression generated out of the pressures of capital

accumulation with its perpetual search to annihilate space through time and reduce turn over

time’ (Harvey 1989:306-7). He forcefully argues that the last two decades have been witness to

a particularly savage bout of time-space compression, which has led to the emergence of

networks of production, distribution, marketing and consumption of goods and services on an

increasingly global scale.

Nations and nationalism, on the other hand, can also be understood spatially, although unlike

globalisation, they are very much linked to the fixity of territory: the most significant claim made

by nationalists on behalf of the nation - in political terms at least – concerns the exercise of

political power over a given space. In order to justify such claims, the nation is conceived as

being intimately bound up with ‘its’ territory.

Overall it can be argued that as increasingly global networks of capitalist accumulation emerge

that transcend contemporary territorial configurations of power and identity, such as the nation-

state, so they accrue structural power, the power of movement, over territorial fixity, thus

undermining the bases for nationalist territorial mobilisation. However, if we are to fully

understand the complex interrelationship between globalization and nationalism, then we must

avoid establishing a crude opposition between the respective logics of state territoriality and

capitalist accumulation. From an empirical point of view, states themselves have played an

important historical role in the global expansion of capitalism, while in the contemporary world

nation-states continue to be relevant actors and the focus of political mobilisation, suggesting

that we should not overstate the scope and scale of current globalisation. From a theoretical

perspective, although deterritorialisation is key to understanding globalisation, there are sound

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reasons for arguing that territory can never be completely overcome, and that deterritorialisation

must necessarily be accompanied by the process of reterritorialisation, whereby different spatial

scales may retain or even increase their importance as the context in which social relations take

place. Finally, the paper argues that rather than reifying globalisation and nationalism as ‘out

there’ phenomena that operate independently of each other, a dialectical approach that involves

detailed analysis of specific spatial and historical contexts is more useful as a means of

understanding the interrelatedness of globalisation and the different forms of nationalist political

mobilisation taking place in such contexts.

The State and Globalisation in Historical Perspective

Overstating the novelty of contemporary globalisation, and the extent to which it is destined to

transcend the nation-state, rather obviates the contributions of distinguished scholars (Arrighi

1994; Braudel 1982; Mann 1986; 1993; Tilly 1990; Wallerstein 1974) to the question of the

related rise of capitalism as a world system of accumulation on the one hand, and the modern

state and the world system of states, on the other. Historically, there is a clear temporal

coincidence between these two phenomena, suggesting that even though they might function

according to different spatial logics at an abstract level, there actually exists a more dialectical

relationship of mutual influence. Indeed, Wallerstein argues that ‘capitalism has been able to

flourish precisely because the world economy has had within its bounds not one but a

multiplicity of political systems’ (Wallerstein 1974:348). In turn, this is explained by the view that

states, on the one hand, have competed for mobile capital, while, on the other, capitalist groups

have sought to mobilise their respective states in order to gain competitive advantages in the

world economy. A relatively recent addition to this literature is the acclaimed account by

Giovanni Arrighi (1994), Long Twentieth Century: Money, Power and the Origin of Our Times,

which offers a slightly more nuanced approach to the question. In the Preface the author

comments that his original aim was to understand current developments of the capitalist world

system within the context of the development of capitalism dating back to the end of the

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nineteenth century. His thesis is that just as a the late nineteenth century saw the decline of a

British-dominated cycle of capitalist development in favour of a new cycle dominated by the

United States, so the 1980's had begun to witness the decline of the latter and the potential rise

of Japanese and East Asian hegemony. However, following Braudel,

the long twentieth century now appeared as the latest of four similarly structured long

centuries, each constituting a particular stage of development of the world capitalist

system. It became clear to me that a comparative analysis of these successive long

centuries could reveal more about the dynamic and likely future outcome of the present

crisis than an in-depth analysis of the long twentieth century as such (Arrighi 1994:x).

Subsequently, he identifies the Venetian, the Dutch (United Provinces), the British and the US

'long centuries', during each of which the scale and scope of the global capitalist system

increased. However, beyond the differences and similarities between these cycles, Arrighi

makes a very clear statement with regards the relationship between capitalism and the state,

namely that the expansion of capitalism and state power are two very closely related processes

that require explanation.

Arrighi’s point of departure is that capitalism is not synonymous with the market economy and

nor is state power antithetical to capitalism. Rather, historically capitalism is ‘absolutely

dependent for its emergence and expansion on state power and constitut[es] the antithesis of

the market economy’ (Arrighi 1994:10). More specifically, capitalism is presented as a three-

tiered structure: on the bottom is the tier of subsistence, the elementary and self-sufficient

economy in which capitalism ultimately takes root. Above this tier,

comes the favoured terrain of the market economy, with its many horizontal

communications between the different markets […] Then alongside, or rather above this

layer, comes the zone of the anti-market, where the great predators roam and the law of

the jungle operates. This – today as in the past, before and after the industrial revolution

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– is the real home of capitalism. (Braudel 1982:229-230, quoted in Arrighi 1994:10)

This second tier of the market economy, Arrighi argues, had been in existence since at least the

thirteenth century, and connected Europe, Asia and Africa on well-worn trade routes. Thus, from

this perspective, the important historical transition is not from feudalism to capitalism, but rather

what he calls from ‘scattered to concentrated capitalist power. And the most important aspect of

this much neglected transition is the unique fusion of state and capital, which was realized

nowhere more favourably for capitalism than in Europe’ (Arrighi 1994:10).

This is not to say that state power is indistinguishable from capitalism, nor that the two operate

according to necessarily complimentary logics: the power of the state ultimately depends on its

ability to achieve exclusive control over a delimited space known as territory, which may or may

not coincide in its spatial extent with networks of capitalist accumulation. Thus, according to

Arrighi, ‘in our account, the division of the world-economy into competing jurisdictions does not

necessarily benefit the capitalist accumulation of capital’. (Arrighi 1994:32). In this context, the

role of the hegemonic power in any one age is to reconcile the ‘recurrent contradiction between

an 'endless' accumulation of capital and a comparatively stable organization of political space’

(Arrighi 1994:33).

From this perspective, how can we understand contemporary globalisation and its effects on the

nation-state? The first thing to mention here is that contemporary globalisation has been marked

by the rising importance of speculative financial capitalism vis-à-vis capitalist investment in fixed

assets, which historically has tended to reflect the end of a 'long century' of hegemony, in this

case of the US. If we are witnessing the passing of an era, what will replace the US in its role as

hegemonic power within the world system? Historically, previous hegemonic powers

appear to have been great powers of a different and increasing order […] the

metropolitan domains of each state in this sequence encompass a larger territory and a

greater variety of resources than their predecessor. More importantly, the networks of

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power and accumulation that enabled the states in question to reorganize and control the

world system within which they operated grew in scale and scope as the sequence

progresses. (Arrighi 1994:14)

Thus, if historical trends, as identified by Arrighi, continue, two potential scenarios emerge. The

first is that a new hegemonic power will emerge, more powerful than its predecessors, to fulfil

the role of reconciling global capitalist accumulation with the existence of territorially fixed

political jurisdictions in the shape of nation states. At the time of writing, Arrighi focussed on the

rise of Japan as the potential new hegemonic power, although hindsight tells us that this

potential has been unfulfilled. China would be the current candidate to fill this role, especially if

we take into account its enormous population and the growth potential that this would seem to

imply. However, like Japan in the 1980s and unlike previous transitions, US financial capital is

not flowing into China to take advantage of its increasing importance as a manufacturing centre.

Rather the reverse is true: the Chinese authorities have been generating huge current-account

surpluses that have been invested in the US, principally in Treasury bonds, which means that

US consumers have been effectively financed by the Chinese authorities.

This apparent break with history opens the door for a second scenario in which US hegemony

represents the last attempt by a particular state at governing the world system. Such has been

the global expansion of capitalist accumulation in recent years, it could be argued, that no single

state has the capacity to be hegemonic and perform the role of reconciling such accumulation

with the continued existence of a political order of nation-states. In such a scenario, a world

government, in one form or another, would be the only solution. Indeed, Arrighi himself talks of

the increasingly important role of the IMF, World Bank and other multilateral organisations of

governance such as the G8.

If we view both scenarios as extremes on a continuum, the space between can be seen as

being occupied by more complex scenarios in which state sovereignty becomes more diffuse,

but not to the point where it ceases to exist, and in this respect the current financial crisis is

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instructive. On the one hand, the crisis has revealed the size of global, or at least transnational,

markets for financial products such as credit derivatives. These markets, whose turnover

represents trillions of dollars, have largely grown parallel to more traditional financial markets for

stocks, currencies and so forth, and as such are unregulated by nation-states. However, on the

other, states have rarely been more active in economic terms over the last three decades,

whether setting up banks for 'toxic' assets, nationalising individual banks, propping up the

financial system, or stimulating consumption as a means of overcoming the crisis. More

generally, states have become key actors and spaces of conflict as the struggle begins to 'share

out' the huge losses accruing from collapsing asset prices.

Whatever the outcome of the current financial and economic crisis, we should not forget that the

modern state and capitalism have been intertwined for almost five centuries, and as such, the

existence of increasingly global networks of capitalist accumulation does not necessarily mean

that there is no need for state institutions, acting on the ground, to guarantee the conditions for

that accumulation.

The Modern State and Contemporary Globalisation: an empirical analysis

Towards Economic Integration: some data

One of the assumptions that informed the preceding discussion was that economic activity is

now increasingly organised in transnational networks of capital accumulation, and that such

networks enjoy structural power over nation-state attempts to regulate them. Turning to the first

claim, by almost any measure, the extent to which economic activity is increasingly organised

transnationally is difficult to ignore. As Table 1 demonstrates, cross-border trade in goods and

services has in increased notably in recent years as a proportion of world GDP, affecting all

categories of nation-state economies, from low-income ones to high-income ones. The increase

in merchandise trade is particularly marked in the case of middle-income economies, such as

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China and Brazil.

Table 1: Global Economic Integration Foreign direct investment

% GDP Merchandise

trade % GDP

Trade in services % GDP

Gross private

capital flows% GDP

net inflows net outflows

1995 2005 1995 2005 1995 2005 1995 2005 1995 2005 Low income 23.6 41.1 6.2 9.8 2.4 6.7 0.4 1.5 0.0 0.2 Middle income 34.5 62.1 7.1 10.5 6.6 13.3 0.9 3.1 0.1 0.5 High income 32.3 43.9 7.9 11.1 11.0 37.2 1.0 2.1 1.4 2.4 World 32.3 47.3 7.8 11.0 10.3 32.4 1.0 2.2 1.2 2.1 Source: World Bank (2006)

Furthermore, foreign direct investment – both inflows and outflows – have doubled in the same

period, and again the rise is significant for middle-income countries, although as Figure 1 and 2

show, such flows continue to be concentrated in developed economies.

Figure 1. FDI inflows by economy, 2002-2007 (billions of US$)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2002 2003 2004 2005 2006 2007

year

Developed EconomiesDeveloping economies

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Figure 2. FDI outflows by economy, 2002-2007 (billions US$)

0

500

1000

1500

2000

2500

2002 2003 2004 2005 2006 2007

Developed EconomiesDeveloping economies

A further measure of increased economic integration concerns the ownership of shares. Share

ownership has also become increasingly transnational over the last decade or so: in 1995

eleven per cent of French stock market shares were in the hands of foreign investors, eight per

cent in the cases of the US and Japan, while just four per cent of British shares were under

foreign ownership (The Economist 1997). By 2003 the figure had risen to 34.8 per cent for the

case of France, ten per cent for US, 23.7 per cent for Japan, 32.3 per cent for the UK (Edwards

2006). Indeed, perhaps one of the most important dimensions of contemporary economic

globalisation has been the rising importance of transnational financial markets and actors.

Figure 3 shows the six-fold increase in the turnover of currency markets over the last two

decades, most of which is due to speculative finance, rather than to cover increases in world

trade.

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Figure 3. Global foreign exchange market turnover1 (daily averages in April) 1989-2007

0

500

1000

1500

2000

2500

3000

3500

1989 1992 1995 1998 2001 2004 2007

Billions US$

1 Includes spot transactions, forwards and swaps of up to seven days. Source: BIS (2002; 2007)

Persistent nation-state divergence

Overall, as noted, it is difficult to ignore what appear to be very clear trends towards economic

activity being increasingly organised as a transnational level, but does this necessarily mean

that nation-states have lost the power to regulate? A common argument, used by academics,

politicians and journalists alike, is that nation-states have indeed lost economic sovereignty and

as a result are obliged to embark on a neo-liberal race to the bottom (NLRTB), that is, to

converge macro- and micro-economic policy around low wages, low taxes, low public spending

(particularly on social policies) and low deficits in order to attract 'footloose' capital flows and

investment. Garret (1998) has produced a most interesting empirical and theoretical critique of

such predictions by examining the empirical evidence from OECD countries. Official data

suggests that between 1960 and the mid-1990’s, government spending basically doubled as a

percentage of GDP in OECD countries, with significant differences persisting and even

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emerging between countries. Public spending deficits also rose over the period studied, as did

tax rates on capital: 'the overall trend in effective rates of capital taxation has been upward,

quite strongly so' (Garret 1998:818). Again comparing trends across countries, there is little to

suggest convergence on deficit stances or on capital taxation rates. By the beginning of the

present decade, more evidence was found among advanced capitalist economies for 'a trend

toward lower inflation rates and smaller budget deficits', particularly among EU countries

seeking to comply with the Maastricht criteria for access to the Euro, although ‘substantial

cross-national diversity remains in areas such government consumption spending, government

transfer payments, public employment, and public taxation’ (Mosely 2007:112).

Thus, the analysis presented here would appear to belie the proposition that globalisation

inevitably forces states to adopt similar low-tax, low-spending economic policies, with all that

that implies. Of course, it could be argued that the lack of economic policy convergence in the

terms described here is due to a lack of market integration, thus it could be argued that when

this process of integration is complete, as it inevitably will be, predictions about the neo-liberal

race to the bottom will be fulfilled. However, once more empirical evidence casts doubt on such

an hypothesis: in the case of the United States, where there exists no effective barriers to the

movement of capital across state lines, tax rates were in fact more divergent between the fifty

states of the USA than between the countries of the OECD.

This suggests a rather more complex rationale for the location of FDI than simply criteria based

on lowest costs. One the one hand, Krugman (1998) highlights the importance of productivity in

TNC calculations, as opposed to raw costs, while on the other, FDI decisions are increasingly

aimed at gaining access to markets, especially in developed capitalist states, and as such

location decisions go beyond criteria of costs of production. Even where TNCs decide to locate

production facilities in lower-wage countries, Garret argues that this does not necessarily mean

that business activity at ‘home’ is reduced, as there might be an increasing specialisation in key

functions, such as R&D, in the country of origin. Overall, Garret concludes that decisions

concerning the location of production sights will be the fruit of cost benefit analyses, in which

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economies with high levels of government spending may benefit, if such spending is

accompanied by high productivity rates, high human and capital stocks and political stability. He

finds very little correlation between FDI outflows and government spending levels, budget deficit

positions and capital taxation levels, suggesting that nation-state governments have more

autonomy in this respect than is predicted by many.

In terms of the possible effects of more integrated financial markets on nation-state political and

economic autonomy, Garret concludes that ‘there is no evidence that the financial markets

attach interest premiums to the expansion of the public economy per se’ (Garret 1998:823), as

long as such expansion is financed by taxes and not by running a deficit, which would seem to

increase the interest rates charged by the markets on loans to government, while provoking

currency devaluations in the market. However, this must be qualified by evidence from two

European countries: Belgium has financed public spending through debt to the extent that, in

terms of GDP, it has the highest ratio of public indebtedness to GDP among OECD countries.

However, until its absorption into the Euro the Belgium franc had ‘long been stably pegged

against the deutsche mark, with very small interest-rate differentials between the two countries’

(Garret 1998:804). Similar conclusions can be reached in the case of Italy.

Overall, if globalisation implies a significant increase in economic activity on a transnational

scale, then empirical evidence leaves little doubt that this is an important feature of the

contemporary world. However, this does not necessarily mean that globalisation necessarily

forces nation-states to merely serve the interests of transnational networks of capitalist

accumulation; among developed economies at least, persistent macro-economic policy

divergence suggests that internal socio-economic and political considerations are important

components in shaping nation-state macro-economic policies, which in turn leads us to question

the extent to which the socio-economic dimension of state sovereignty is really a thing of the

past.

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Deterritorialisation and Reterritorialisation

As we have seen, to the extent that capitalist accumulation is increasingly said to take place on

a global scale, it signifies deterritorialisation. ‘Deterritorialization’, Ó Tauthail proposes, ‘is the

name given to the problematic of territory losing its significance and power in everyday life.

Territory, the concept suggests, is no longer the stable and unquestioned actuality it once was.

Rather than an assumed given, its position and status is now in question’ (Ó Tuathail 1999:139).

It has come about, it is argued, ‘as a consequence of the technological, material and

geopolitical transformations of the late twentieth century’ (ibid.) which threatens to overcome the

exercise of territorial political power and territorially-based identities.

However, deterritorialisation must not be seen as an absolute process for there are sound

theoretical reasons for arguing that territory can never be completely done away with, and that

deterritorialisation must necessarily be accompanied by the process of reterritorialisation. In this

respect, Robins, for example, talks about globalisation as the ‘achievement of a new global-local

nexus, about new and intricate relations between global space and local space’ (Robins

1991:34-35), and from this point of departure, several factors have been identified that, taken

together, would appear to add up to an increased degree of salience for sub-state regions as

spaces of governance with respect to nation states.

The first factor concerns changing modes of territorial management in advanced capitalist

democracies since the 1980s, which came about through wider changes in the way in which

states regulate capitalism, and is generally referred to a state restructuring. This process of

state restructuring took place after a period in which for some the nation-state reached its

golden era in the form of the policy instruments of the Welfare State, ‘under which collective

bargaining and monopoly pricing were institutionalized, policy instruments were deployed to

maintain and manage aggregate demand, and norms of mass consumption ... were generalized’

(Peck and Tickell 1994:289). In this respect, it is argued that the importance of the state rested

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on its role as a means of correcting market dysfunction and, above all, of maintaining stable,

increasing levels of internal demand, a vital consideration for a regime of accumulation,

Fordism, which was based on mass production, consumption and productivity gains derived

from economies of scale (see, for example, Aglietta 1979; Boyer 1986). As part of this system of

social regulation, central governments began to turn their attention to regional development

policies in the form of grants, subsidies and transfer payments to encourage the formation of

satellite economies in the ‘periphery’. The ‘purpose was simply to make central planning more

efficient and was thus an extension of the central state’s power and had no necessary

connection with decentralization or popular participation’ (Sharpe 1993:13).

The crisis of the Fordist-Keynesian mode of regulation of the 1970’s and 1980’s led central

governments to abandon their commitment to social and territorial wealth redistribution. In the

context of the emerging global economic order, Western nation-states increasingly turned away

from demand-management policies in favour of supply-side policies that sought to promote

overall levels of competitiveness independently of the consequences for the territorial

distribution of wealth (Jessop 1992). In terms of territorial management, the strategy of the

carrot and stick was applied, whereby

the stick was a reduction of subsidies to distressed firms and social welfare and

vocational benefits for displaced workers. The carrot was partial devolution of authority

over vocational training, economic development, and social welfare programmes to local

or regional authorities. (Sabel 1994:127).

Within this context, Keating talks of how ‘policies and institutions for governing regions became

increasingly contested’ (Keating 1996:24), as the impact of economic globalisation began to be

felt. With the retreat of the state from territorial management, in many cases it was left to the

individual regions to develop their own economic strategies in the face of the demands made by

a globalising economy, and regionalist movements no longer framed their demands solely within

the context of the nation-state: ‘the context for the new regionalism is not merely, as in the past,

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the nation state; it is the continental, and even global economy’ (Keating 1996:25).

State restructuring fed into what can be considered as a paradigm shift in economic

organisation, from a Fordist regime of accumulation, which as we have seen was based on

economies of scale and mass production, to ‘flexible specialisation’ or ‘flexible accumulation’. As

turn-over times were reduced, so greater emphasis was placed on the ability to respond to ever-

changing market demands – flexibility – a characteristic of small- to medium-sized forms.

Studies began to emerge from central and north-eastern Italy highlighting the setting up of an

economy based on hi-tech, flexible workshops and small firms1. However, such firms on their

own are unlikely to be able to meet the costs involved of constant innovation and training, nor

the size required to achieve minimal economies of scale. Consequently,

Firms had a low degree of vertical integration and depended on each other for a wide

range of specialised activities. A dense system of subcontracting lay at the heart of the

local economy. The ‘extraordinarily rich and complex relationship’ (Brusco 1989: 261)

between clients [...] and subcontractors [...] kindled innovation and enhanced adaptability.

[...] Collaboration went further. Firms passed on orders to each other and shared in the

costs of expensive equipment. They pooled their resources to set up local associations of

specialists for the collective provision of marketing, accounting and technical services

(Kumar 1995:39).

At the same time, a whole range of public and semi-public regional institutions were created,

such as development agencies, training and research facilities, and marketing agencies, as a

means of providing individual firms with the necessary services that, on their own, the latter

would be incapable of supplying.

Post-Fordist theories of endogenous development and the resurgence of industrial districts are

essentially based on networks of co-operation and collaboration between small firms and TNC

filières, semi-public development agencies etc., characterised, above all, by the sharing of

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resources and in particular information. For these actors to collaborate and co-operate in this

way, trust is vital, and in order to generate multiple sources of trust, social solidarity, based upon

a series of factors, from shared professional experiences to shared ethnic and linguistic

identities, must be present. In the case of the Third Italy, a new kind of ‘social compromise’

based on the various local subcultures - Socialist and Communist in the central regions and

Catholic in the north-east has been fostered (Kumar, 1995: 39).

Post-Fordist theories of regional development bring us full circle back to theories of regionalism.

The important thing to note here is the positive role which place-based culture can have in

generating public goods such as trust. In addition, cultural distinctiveness may also be useful as

a ‘a resource, giving a region a specific niche in the international market place’ (Keating, 1996:

32), which is particularly important at a time when regions and localities must increasingly

compete for scarce resources such as inward investment, or to become important sites of tourist

consumption. Harvey (1993), for example, notes that more often than not, local consensus is

achieved between representatives of capital and labour, together with representatives of local

and regional political institutions, interested in saving or creating jobs and businesses

respectively. Thus, in many cases cross-class coalitions are established, allowing us to talk of

local/regional mobilisation that may seek to highlight the unique advantages of investing in the

particular place, that may go beyond the strictly economic factors to include other distinguishing

local features such as distinct cultural identity. Thus, in this new scenario, communities that are

relatively fixed in place seek to attract productive investments by presenting themselves as

‘business friendly’ environments, offering well-trained, well-disciplined workforces, local/regional

institutional support, good physical infrastructures, and even pleasant places for top

management to live. At the same time, places might also seek to become sites of consumption,

to attract, for example tourists to ‘historic sites’, ‘cultural centres, a pleasing urban or regional

landscape and the like’ (Harvey 1993:8).

18

The Dialectics of Globalisation and Nationalism

Beyond questions of whether the Fordist post-Fordist paradigm is a useful framework to analyse

the development of capitalism over recent decades2, the question arises as to the balance of

power between these emerging spaces of economic regulation and transnational economic

networks and flows. In this respect, Harvey (1993) opposes space and place, in which the

former is increasingly dominated by capital flows, while the latter are examples of fixity and

immobility; and Castells talks of the new ‘Information Age’ characterised by the struggle

between the fixity of ‘spaces of places’ against the mobility of ‘spaces of flows’, or in terms of the

‘disjunction between the local and the global’ (Castells 1997:11. See also Ruggie 1993).

In practice, and returning to the the subject of regional economic, political and social

development, while it is clear that some regions have indeed prospered, it is less apparent that

all regions can be ‘winners’ at the same time, and as such regional and local prosperity under

conditions of globalisation might be better considered as a zero-sum game in which they may

resort to ‘beggar-thy-neighbour strategies’ (Peck and Tickell 1994:281) in order to attract and

retain investment. Indeed, rather than promoting difference,

what is striking about local strategies is just how unlocal they are. Workforce training, the

erosion of social protection, the construction of science and business parks, the vigorous

marketing of place and the ritual incantation of the virtues of international competitiveness

and public-private partnership seem now to have become almost universal features of so-

called ‘local’ strategies (Peck and Tickell 1994:281).

In effect it is a question of asymmetry, local versus local versus global. Thus, many see the

whole idea of regional economies based on flexible specialisation as the means by which capital

avoids the rigidities of Fordism and secondly plays region off against region (see Swyngedouw

1992; Harvey 1989; and Dunford and Kafkalas 1992). Thus, in a world in which global spaces

are dominated by the needs of capital accumulation,

19

the global-local nexus does not create a privileged new role for the locality in the world

economic arena. Of course local economies continue to matter [...] We should however,

treat claims about new capacities for local autonomy and proactivity with scepticism. If it

is, indeed, the case that localities do now increasingly bypass the national state to deal

directly with global corporations, world bodies or foreign governments, they do not do so

on equal terms. Whether it is to attract a new car factory or the Olympic Games, they go

as supplicants. And, even as supplicants, they go in competition with each other: cities

and localities are now fiercely struggling against each other to attract footloose and

predatory investors to their particular patch (Robins 1991:36).

These positions offer a timely reminder of the structural limits to place-based economic and

political developments, but does this necessarily mean that we should ignore place-based

strategies when trying to explain outcomes related to globalisation? Ash Amin thinks not:

to think of the global flows of dominance and transformation and the local as fixities of

tradition and continuity is to miss the point, because it denies the interaction between the two

as well as the evolutionary logics of both. Thus, for example, whether a city or nation is

threatened or not by globalization is likely to depend upon the terms of interaction between

evolving ‘in here’ identities and capabilities and ‘out there’ influences, rather than upon the

capacity of the city or nation to avoid global connection or ‘contamination’. Thus a place in a

world of ‘stretched and deepened’ time-space connectivity might now be more a matter of

how this connectivity is negotiated or worked to your advantage, rather than resisted or kept

out. (Amin 1997:129-130).

Amin, I think, is right in two respects: first, in that he proposes that we see the relationship

between globalisation and place as an interaction, rather than granting causality exclusively to

the former. Second, outcomes are consequently said to depend on individual place-based

strategies, which effectively accords agency to place-based actors, such as local political and

economic elites. However, we should not underestimate the power of structural changes in the

20

scale of economic activity to construct the limits within which these actors operate. In other

words, global actors have increasingly set the rules within which local strategies must fit, as

when the latter are made to depend on the attraction of investment flows. But if we do bare in

mind thisqualification, then the points Amin makes can be used to construct a dialectical

approach, capable of understanding questions of not only of structure and agency, but also of

how politics, culture and ethnicity, for example, essentially interact with economic processes,

such as globalisation3. At the same time, this interaction does not take place in a vacuum, but

rather in specific temporal and spatial contexts, hence understanding these contexts is central

to any analysis of globalisation and nationalism. Thus, we might wish to analyse the nature of

local economic structures, and the role of politics, ideology and ethnicity, for example, in the

reproduction of them or resistance to them within the context of globalisation.

Concluding Remarks

This paper has sought to qualify the proposition that globalisation necessarily implies greater

power for global networks of capital accumulation over territorial strategies of power and the

political mobilisation that takes place around them. These arguments are aimed at merely

suggesting the basis of an approach to the question of the relationship between globalisation

and nationalism. Perhaps the most important conclusion to be drawn is that globalisation,

whose inherent logic is deterritorialising, and political power based on and mobilised around

territory, such as nationalism, ultimately exist in a dialectical relationship of mutual influence.

Current globalisation may in part be the result of the structural needs of capitalism to overcome

its crises of overaccumulation, but at the same time, globalisation itself has been shaped by

state policies – neoliberal deregulation, for example – and territorial political mobilisation, which

in turn must operate in the changing environment of capitalist accumulation. Globalisation is a

spatially and socially uneven process, or set of processes, and as such, in order to capture the

different ways in which transnational actors and processes interact with a particular form of

place-based political mobilisation – in this case nationalism - we might be advised to talk of

21

nationalisms in the plural as a means of recognising the fact that how different groups interact

with globalisation will depend on, for example, the political, economic and ideological resources

available to them, and on struggles for power in those places To place all nationalist movements

in the single category of ‘nationalism’ rather reduces our analysis to a necessarily general

discussion of abstract categories, a discussion which by its very nature would be incapable of

understanding the impact of each on the other, precisely because it fails to deal with specific

historical and spatial contexts within which the two come together.

22

Notes 1 For a good overview of such work, see Kumar (1995). 2 Jessop, among others, is rather sceptical about the extent to which Fordism, understood as a mode of

production, regime of accumulation, regime of regulation and even a mode of societalization, existed

outside certain sectors of the economy and outside of certain territorial limits. For example, in the paradigm

industry of Fordism, automobiles, outside certain US and French manufacturers ‘several recent studies

demonstrate how Fordist mass production has been blocked (in this sector) by such factors as skill

structure, managerial capacities, market size, labour market conditions, and union organization’ (Jessop

1992:54). See also Amin and Robins (1990) and Cooke and Morgan (1995).

3 This dialectical approach has been developed by Jim MacLaughlin (1986; 2001), although applied to the

emergence of nationalism, particularly in Ireland, in the nineteenth century.

23

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