Sovereignty under Siege?

Globalization and New Zealand

Chris Rudd, Robert G. Patman, Robert G. Patman

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351898904
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: International Relations
• Index: Politics & International Relations

This collection of invaluable essays explores, analyzes and critically evaluates the interaction between globalization and New Zealand sovereignty. The volume is the first to seriously address this subject in a systematic fashion. It pursues three interrelated lines of enquiry: the impact of globalization on the policy making machinery of the New Zealand state; the development of New Zealand political culture, including its sense of national identity; during the globalization era; and New Zealand's role on the international stage in a globalizing world. The book reveals the paradoxes of New Zealand's encounter with globalization. It will provide essential reading for specialists of globalization and for general readers interested in the complex national experience of New Zealand.

Part I
Political and Economic Engagement

Chapter 1
Globalization and the Shift in Policy-Making from Keynesianism to Neoliberalism: The Decline of National and State Autonomy?

Brian Roper

This chapter is part of a larger research project in which I describe, explain and critically evaluate the historic shift in New Zealand politics from Keynesianism to neoliberalism and the Third Way (Roper, 1991, 2001, forthcoming).¹ The central concern here is to lay the conceptual foundations for an empirical and historical investigation of the impact of global forces on this historic shift in New Zealand politics. In doing so, it necessarily addresses the related issue of the extent to which the New Zealand state does actually possess an autonomous capacity to formulate and implement policy, including the capacity either to foster national autonomy or more fully to integrate New Zealand into the global capitalist order.

Accordingly, the chapter proceeds as follows. First, the question of state capacity is addressed through a brief engagement with theoretical interpretations of state autonomy (Section 1.1). Much of the literature on policy change in New Zealand assumes, rather than convincingly demonstrates, that the state actually does have an autonomous capacity to formulate and implement policy, including those policies that shape the changing configuration of New Zealand’s integration into the global order. Often a largely descriptive account of policy change in a particular area is provided without any attempt to draw upon contemporary social and political theory in order to conceptualize the sources, extent and limits of the autonomy of the New Zealand state. In contrast, I argue that accurately identifying and explaining major changes in the autonomy of the New Zealand nation-state within the global order requires, among other things, theoretical analysis, empirical research and a social-scientific research methodology that clearly specifies the role played by theory in guiding empirical research.

Second, in order to identify and analyse the societal forces that impact upon the state, it is necessary to understand the extent to which these forces are generated by capitalism. Furthermore, it is generally recognized that capitalist expansion is central to the process of globalization — a process that involves, among other things, the increasing integration of nation-states within the global capitalist economy. Hence we consider, albeit very briefly, some of the central features of capitalism in Section 1.2. Third, any assessment of the impact of global forces on New Zealand society and politics necessarily must clarify and consider what ‘globalization’ is, and the manner in which the process of globalization has impacted upon New Zealand. In this vein, the major dimensions of the process of globalization are identified in Section 1.3. Having clarified conceptually how one might investigate major changes in national and state autonomy in Sections 1.1-1.3, I then seek to clarify whether or not and, if so, then how and why the state fostered greater national autonomy from 1935 to 1984 and more fully integrated the New Zealand economy, society and polity into the global capitalist order from 1984 onwards (Section 1.4).

State Autonomy

According to Weber (1946: 78), the ‘state is a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory’.² In a seminal volume entitled Bringing the State Back In, Theda Skocpol vigorously argues for a neo-Weberian state-centred approach to political and sociological analysis centrally concerned to explore ‘the explanatory centrality of states as potent and autonomous organizational actors’ (1985: 6). Neo-Weberians contend that the state has an independent structural and organizational capacity to ‘formulate and pursue goals that are not simply reflective of the demands or interests of social groups, classes or society’ (1985: 9). This autonomous organizational capacity enables the state to influence and shape ‘the formation of groups and the political capacities, ideas, and demands of various sectors of society’ (1985: 21).

This approach has been further elaborated and refined in an expanding and rich body of literature that has identified a broad range of sources of autonomous state capacity.³ As mentioned, the modern state possesses a monopoly of legitimate coercion over the population inhabiting a clearly demarcated geographical territory. Mann argues that military organization is an independent source of social power and that ‘those who monopolize it, as military elites, can obtain collective and distributive power’ (1986: 26; see also pp. 10-11). Surveillance and intelligence-gathering capacities are an important aspect of state power because ‘informational storage is central to the role of “authoritative resources” in the structuring of social systems spanning [large] ranges of space and time’ (Giddens, 1985: 2; see also pp. 41-7, 172-80). Giddens also emphasizes that ‘Nation-states only exist in systemic relations with other nation-states’ (1985: 4). In a similar vein Evans (1985: 192) observes: ‘States as institutions have always had to look outward as well as inward, not just because success in political and military competition with other states has been a prime requisite of survival, but also because markets have always been transnational’. The resulting transnational linkages of individual states can greatly enhance the capacity of states to implement policy domestically because external support for policy change can strengthen the position of the state in relation to internal resistance. Examples include membership of international bodies such as the United Nations, WTO and OECD; being a signatory to international treaties such as the GATT; and maintaining bilateral and/or multilateral defence arrangements with allies.

The state is, among other things, a centralized concentration of bureaucratic organization. According to Weber (1946: 80) the exertion of state power, or of ‘organized domination’ as he puts it, ‘requires control of the personal executive staff and the material implements of administration’. In possessing these ‘implements of administration’ the state has at its disposal a multitude of highly trained personnel to formulate, implement and evaluate policy. In order to fund its activities the state creates considerable revenue-raising powers, primarily but by no means exclusively in the form of sophisticated taxation systems. Further, the state has a constitutional and institutional capacity to engage in the legislative regulation of interest-group formation and activity, and more generally to set the overall legal and judicial framework for the economy and society.

Governing and opposition parties, key political figures, and central agencies involved in policy-making, have significant ideological and policy agenda-setting capabilities, including regulation and manipulation of the media. In common with other neo-Weberians, Block argues that state actors possess non-reducible interests and that they vigorously pursue these interests since they ‘collectively are self-interested maximizers, interested in maximizing their power, prestige, and wealth’ (1980: 227). For all of the reasons outlined here, neo-Weberians argue that the state possesses an autonomous capacity to implement policy even against resistance of groups in civil society.

The Neo-Weberian analysis accurately and comprehensively identifies the major factors that contribute to, enhance, and maintain the state’s autonomous capacity to make policy. However, in being so determined to emphasize state autonomy, Neo-Weberians exaggerate the extent of this autonomy. While most scholars acknowledge that the state possesses a degree of autonomy with respect to policy formulation and implementation, key questions arise with respect to the nature and extent of the societal limitations to state power. For example, how does one ascertain whether the adoption and implementation of a particular policy is determined by economic and social forces or is instead due to the independent activity of state actors? Neo-Weberians have responded by arguing that this is something that can only be determined empirically. As Skocpol puts it, ‘ “state autonomy” is not a fixed structural feature of any governmental system. It can come and go’ (1985: 14). Somewhat more delicately Mann suggests: ‘Societies are not self-contained units to be simply compared across time and space. They exist in particular settings of regional interaction that are unique even in some of their central characteristics’ (1986: 30). According to Giddens (1985: 5), ‘there are four institutional clusterings associated with modernity: heightened surveillance, capitalistic enterprise, industrial production and the consolidation of centralized control of the means of violence. None is wholly reducible to any of the others’.

Insightful as these remarks may be, it is difficult to see much scope here for an empirically grounded critique of the central theoretical claims being made, given the heavy emphasis on the existence of a high degree of historical contingency in the relationships referred to, such as the relationship between economic and political power.

Capitalism

All of these Neo-Weberian accounts of state autonomy fail to provide a rigorous, fruitful and convincing critical analysis of capitalism. For this, one must engage with the sophisticated critical analysis of capitalism developed by the Marxist tradition. Furthermore, for reasons that will become apparent shortly, an understanding of capitalism is a necessary prerequisite to developing an adequate understanding of globalization.

Perhaps the strongest, and most neglected, empirical support for Marx’s critique of capitalism is the general historical realism of his theory of capitalist exploitation. For one of the truly great paradoxes of capitalism is the fact that it evidently has an historically unprecedented capacity to generate an enormous social surplus product (surplus product over and above the subsistence needs of the workers who generate it) while creating phenomenal forms in which it appears that the production of this surplus product does not involve a process of exploitation. In other words, the apparent prevalence of freedom and equality in the sphere of labour market exchange obscures capitalist exploitation. As Shaikh (1990: 167) puts it: ‘The historical specificity of capitalism arises from the fact that its relations of exploitation are almost completely hidden behind the surface of its relations of exchange’.

Marx’s (1967) achievement in the first volume of Capital is to demonstrate that labour-power is the only commodity input to the production process that, on a system-wide basis, adds new value from the beginning to the end of the production cycle. This new value is termed ‘surplus value’ and the major phenomenal form which surplus value assumes in the capitalist mode of production is profit. It is this underlying process of exploitation, in which workers produce surplus value and capitalists appropriate it, which ultimately generates and sustains the highly unequal distributions of market income and economic wealth in capitalist societies. Consequently, this process of exploitation is central to the historical formation of social classes in capitalist societies (Roper, forthcoming, ch. 2). It endows these classes with complex and differentiated, yet still identifiable, sets of conflicting and antagonistic interests. Class interests propel individual and collective actors to engage in the continuing struggle between classes. Class struggle encompasses not just industrial conflict between employers and workers, but also the political mobilization of classes, class fractions, and class-based interest groups in order to exert influence over the state (Roper, 1993: 151-64; 2004: 23-5).

Marx not only developed an analysis of the process of exploitation central to the social structures of capitalist societies, he also provided an analysis of the ‘laws of motion’ of the capitalist mode of production. According to this analysis, capitalist development is characterized by a persistent generalized drive to accumulate capital by maximizing profits in conditions of market competition. The resulting competitive pressures force firms to ‘constantly revolutionize production techniques and the organization of labour through a form of technical progress whose fundamental thrust is labour-saving, that is substituting machines for living labour’ (Mandel, 1986: 14). This involves the increasing capitalization and mechanization of production to produce commodities at lower cost price, with equivalent or superior quality to competitors, in order to boost market share and profit. Ultimately this generates an increasing ratio of constant to variable capital within the capitalist economic system.4 Because variable capital is the ultimate source of surplus value in the capitalist system, over the long run the rising ratio of constant to variable capital undermines the average rate of profit. The long-term tendency for the rate of profit to fall eventually gives rise to generalized economic crises because profit rates directly influence patterns of investment behaviour such that a decline in profitability eventually leads to a decline in investment and output growth (Cronin, 2001; Mandel, 1995; Moseley, 1991; Shaikh and Tonack, 1994).

The onset of these generalized economic crises, characterized by stagnation, intensified market competition and mass unemployment, accelerates the tendency for capital to become increasingly concentrated and centralized. Larger firms take over their struggling competitors and, simultaneously, more intensively seek out cheaper sources of raw materials, more advantageous locations for production facilities, and new markets. Crises also intensify class conflict as capitalists strive to counter falling profits by cutting labour costs. Finally, they increase the pressures on class-based interest groups more vigorously to exert influence over government.

Capitalism has generated alienation and undermined democracy in the social and economic spheres si...