Introduction
Background Information
The World Trade Organisation (herein referred to as WTO) traces its roots back to the late 1940s. It was formed by the General Agreement on Tariffs and Trade (herein referred to as GATT) between various countries. The agreement was signed in the year 1948 (Tarr, 2011). The agreement was replaced by the World Trade Organisation on January 1 1995 (Cooper 2012). This was following the Marrakech Agreement under which the members agreed to replace GATT with WTO.
The World Trade Organisation is one of the most influential institutions in the world today. According to Osakwe, Tarr, Collins, Shishayev & Dadush (2009), the major role of the organisation is to regulate international trade taking place between the member states. The organisation provides the member states with a policy framework through which they can negotiate and formalise trade agreements between them. It also provides the member states with a mechanism for resolving trade disputes that are likely to occur in the course of such negotiations (Osakwe et al. 2009).
Other organisations are as influential as WTO in the world today. These include the United Nations, the International Monetary Fund and the World Bank among others. These organisations have emerged as a result of globalisation which has turned the world into one huge village. Globalisation has created the impetus for global institutions to govern the relationship between the various countries coming together for trade or such other forms of interactions.
Analysts within the international relations’ field have tried to analyse the impact of such international organisations on the world’s economic and political landscape. The issue that has occupied the minds of most analysts is the effects of such organisations on the sovereignty of the nation-state. It is a fact beyond doubt that these organisations have affected the way the nation-state and the governments operate. For instance, it is noted that nation-states are not as powerful as they used to be. Local governments no longer control the prices of commodities produced locally on the market. Rather, this role has been left to international bodies such as the World Trade Organisation. Nation-states no longer control the supply of money in their economy independently. On the contrary, they have to take into consideration the stipulations put forth by organisations such as the International Monetary Fund and the World Bank (Ricardo, 2002).
Scholars such as Alston (1997) acknowledge the fact that “state sovereignty is not what it used to be” (p. 435). In his article titled The Myopia of the Handmaidens: International Lawyers and Globalisation, Alston (1999) argues that the change in state sovereignty can be attributed to globalisation. The scholar acknowledges the fact that sovereignty is to a large extent an abstract phenomenon. Many issues affect such an abstraction. The issues are not simple; rather, they are complex and multi-faceted. Globalisation is one issue that has affected sovereignty. It has affected legislations by the nation-states given that such legislations have to take into consideration the location of the state on the global arena and the impacts they are likely to have on the local affairs (Korten, 1999).
In light of the developments in the global arena and their impacts on state sovereignty, the issue of “…….who is (really) running the present global political economy” (Denryuu, 2009) can no longer be ignored. The relevance of the nation-state in the contemporary world comes to question. Scholars such as Alston (1997) have made efforts to determine whether the nation-state is as robust today as was the case in the past.
But perhaps one of the most influential scholars to have made contributions in the field of globalisation and geopolitics is Susan Strange. Cox (2004) describes Strange as an eminent grise in the field of international political economy. Most of her works have critically analysed the transition of the international economy. This is especially so in the context of the new global economic system (Drezner, 2002).
One of Strange’s most popular and influential works is her book The Retreat of the State which was published in the year 1996 (Cox, 1997). In this book, she talks about the relationship between globalisation and sovereignty. In the book, she argues that multinational corporations, crime syndicates, international bureaucrats and other- spins of globalisation continue to encroach on state sovereignty. She addresses this rivalry and makes recommendations for future international relations, international politics and international trade (Underhill, 2000).
In this paper, the researcher is going to critically analyse this book in the context of the World Trade Organisation. This is given the fact that WTO is a classical example of an international organisation that has encroached on the sovereignty of nation-states around the world. The researcher will especially focus on Russia’s accession process to the World Trade Organisation. To this end, a critical analysis will be made on how this accession reflects Strange’s argument of international organisations and their implications on state sovereignty (Shuman, 1998).
As already indicated, Russia’s accession to the world trade organisation will be used as the case study for this critical analysis. The researcher will try to link Strange’s arguments as far as globalisation is concerned to this case study. World Trade Organisation as a whole was not used as the case study given that it is a large organisation that is both complicated and multi-faceted. The case of Russia’s accession is aimed at making the study as specific as possible.
The researcher will also look at theories that have been proposed by Strange in this book. These theories will be tied in with the World Trade Organisation as a representative of globalisation and specifically Russia’s accession process.
The hypothesis of the Study
This study will revolve around one major argument. This argument is going to form the study’s hypothesis statement. The hypothesis reads:
A critical analysis of Strange’s ‘Retreat of the State’ in the context of Russia’s accession to the World Trade Organisation reveals that the government lost its control over the country’s economy to the World Trade Organisation.
Russia’s Accession to the World Trade Organisation
Overview
Before embarking on the critical analysis of Strange’s writing, it is important to first take a look at Russia’s accession to the World Trade Organisation and why it is significant for this paper. This will provide the reader with background information on the whole process and how it is related to globalisation and geopolitics.
Russia made a formal application to join the World Trade Organisation in the year 1993. By then, the organisation was still known as GATT (Osakwe et al. 2009). The processing of the application was taken up by the world trade organisation after it succeeded GATT two years down the line. It was only on 16th December 2011 that the application was formally approved and Russia became member number 153 (Cooper, 2012). The accession process took about 18 years, one of the longest in the history of the World Trade Organisation.
Analysts have given various explanations on why the accession process for this country took that long. Some are of the view that the process was mired by political interference from other members of the World Trade Organisation who were suspicious of Russia’s accession. Others are of the view that the Russian government did not take the issue of accession seriously. As such, the various economic reforms that were needed failed to take place thus prolonging the accession process (Cooper, 2008). Still, other analysts such as Tarr (2011) are of the view that Russia’s history was to blame for the delayed accession. This is given the fact that for the longest time, the country was part of the larger Soviet Union which advocated for centralised economic control. This means that under the Soviet Union, the economy was under the control of the nation-state (Ostrom, 1990). It is noted that the World Trade Organisation calls for the liberalisation of trade and the economy. This means that the national government has to cede control of the economy if it is to be part of the World Trade Organisation. Russia faced a challenge here given that the country did not have a market economy history to draw from. As such, extensive restructuring was called for. This took a long and in the process delayed the accession process.
Significance of the Accession Process
But why is the accession process so important to this paper? This question can be answered by taking a critical look at the developments that took place before and immediately after the accession process. It is to be noted that the government had a stronghold over the economy before the accession. However, several changes took place as far as this control is concerned during the accession process. The government had to cede control and liberalise the economy for it to be accepted as a member of WTO (Osakwe et al. 2009). For example, the government used to give subsidies to the country’s agricultural sector. However, during bilateral and multilateral negotiations with other countries such as the United States of America, the European Union and Brazil, the government agreed to reduce these subsidies to liberalise the sector.
The accession process also led to a reduction in tariffs imposed on imports from World Trade Organisation’s member states. Tariffs are one of the major avenues used by the government to control prices in the country. However, this power was taken away from the Russian government by the World Trade Organisation. In future, Russia’s foreign trade regime has to reflect the principles of the World Trade Organisation. To some extent, the sovereignty of the Russian state has been taken greatly reduced by the World Trade Organisation, an international institution borne out of economic globalisation.
Effects of Russia’s Accession to the World Trade Organisation
So, what are some of the major effects of Russia’s accession to the World Trade Organisation? This question is significant for this paper given the fact that it is the critical analysis of these effects that will help in tying the process to Strange’s arguments.
As already indicated in this paper, some of the major changes that arose from the accession process touched on tariffs imposed on goods and services imported from countries that are members of the world trade organisation. The table below is an indication of some of these changes in tariffs on manufactured goods:
Table 1: New Tariffs on Manufactured Goods
Adapted from: Cooper 2012
It is to be noted that the old tariffs (before accession) are a reflection of the government’s control over the economy and as such a sign of Russia’s sovereignty. However, the new tariffs (post-accession) are a reflection of the influence of the World Trade Organisation on the country’s economy. It appears that the state had to cede control and some of its sovereignty to the World Trade Organisation.
Some chances are evident on tariffs imposed on agricultural goods. As already indicated in this paper, the country’s agricultural sector was under the direct control of the state government before the accession process. Negotiations on agricultural tariffs were characterised by controversies and political innuendos. The negotiations pitted the country against other agricultural products exporters such as USA and Brazil (Cooper, 2012). The government was accused of imposing high tariffs and tariff-rate quotas (herein referred to as TRQs) on agricultural products entering the country (Cooper, 2008). Member states also accused the government of imposing sanitary and phytosanitary (SPS) controls seen as protectionist policies. These however changed when the government was forced to review its policy on local and international agricultural products. Again, the government seemed to cede control over the agricultural sector to the World Trade Organisation, in effect affecting the state sovereignty in this sector.
The table below is an indication of some of the changes that were seen in the country’s tariffs on agricultural goods:
Table 2: Changes in Agricultural Imports’ Tariffs
Adapted from: Cooper 2012
Just like in the case of tariffs on manufactured goods analysed above, it is to be noted that the government’s control over the country’s economy was affected a great deal. This is reflected in the new tariffs that were to reflect the principles stipulated by the world trade organisation.
Earlier in this paper, the researcher indicated that the accession process for this country was long and treacherous. This being the case, one would have expected the Russian government and the Russian citizens to lose interest in the process and abandon the whole accession affair. However, this was not the case. Three different regimes pushed for the country’s inclusion in the world trade organisation. This is significant given that the government and the citizenry were aware of the fact that successful accession will probably translate to reduced state sovereignty as far as the economy is concerned. The explanation for this phenomenon can be deduced from the argument given by Arrighi (1994) to the effect that globalisation has changed nation states’ attitudes towards trade. Governments are aware of the fact that unless they become part and parcel of the international market, the local economy may crumble. In the process of averting the crumbling of the economy, the nation-state will in effect cede its sovereignty to the international institutions.
Accession to the World Trade Organisation (read integration into the global economy) had both negative and positive impacts on Russia. The same applies to other nation-states that accede to this organisation. Negative impacts include for example the interference with the nation state’s sovereignty as already explained (Wallerstein, 1989). Positive impacts include an expansion of the market available for the country’s goods and services, improved terms of trade among others (Drezner, 2002).
Perhaps one of the major reasons why Russia went ahead with the accession process despite the challenges and hurdles encountered is the realisation of the fact that the positive impacts the process will have on the country will far outweigh the negative impacts. One positive impact is the projected increase in the size of the country’s GDP. On average, becoming a member of the World Trade Organisation will increase the GDP of the country by 3.3 per cent (according to a World Bank Study cited in Cooper, 2012). In the long run, the increase in the size of GDP is projected to be 11 per cent.
Strange’s Retreat of the State and Russia’s Accession to the World Trade Organisation
Overview
In this section, the author is going to look at how Russia’s accession to the World Trade Organisation ties in with the arguments put forth by Strange in her book. However, before looking at this relationship, it is important to take a look at Susan Strange as a scholar and how her writings have influenced other scholars in the field of international relations.
Susan Strange: A Brief Background
According to Brown (1999), this woman lived between 9th June 1923 and 25th October 1998. She was regarded as one of the most influential figures in the international political economy.
This woman held several major academic posts in various institutions in different countries across the globe. These included Britain, Italy and Japan. According to Brown (1999), she was the “………….Montague Burton Professor of International Relations at the (prestigious) London School of Economics and Political Science” (p. 23). This was between the years 1978 and 1988. She is regarded as the first woman to hold such a position in this institution. Strange also played a major role in the formation of the British International Studies Association (herein referred to as BISA). She was the president of the International Studies Association (herein referred to as ISA) in the year 1995.
Strange was also influential in the development of the International Political Economy curriculum in institutions of higher learning in Britain. She published various books during her academic career. These include the following:
States and Markets published in the year 1988
The rival States, Rival Firms: Competition for World Market Shares published in the year 1991. The book was co-authored by Stopford John and Henley John
The Retreat of the State: The Diffusion of Power in the World Economy published in the year 1996
Casino Capitalism was published in the year 1997
Mad Money: When Markets Outgrow Governments published in the year 1998
It is Strange’s third book (The Retreat of the State) that is the major focus of this paper. The book was praised and criticised in equal measures. It was applauded for its lucid and insightful theoretical arguments regarding international relations and the nation-state. The book was criticised for what Bauer & Brighi (2003) term as Strange’s “uneven (and inaccurate) empirical observations” (p. 34). This is especially so considering that Strange did not rely on primary data when putting forth her arguments. Rather, she made observations most of the time. These observations had been criticised as “glorified academic innuendos” by many critics.
These critiques notwithstanding, Strange made three major arguments regarding the modern state and its relationship with globalisation in this book (Bauer & Brighi 2003). These are the arguments that will inform the critical analysis of Russia’s accession to the World Trade Organisation. The arguments are as follows:
Politics are no Longer the Preserve of State Officials
The term politics as used by Strange (1996) is synonymous with the exercise of power by the government and other agents. Here, Strange (1996) argues that exercise of power is no longer a privilege of the government and its agents. It has been decentralised and controls ceded to global organisations. For example in the case of Russia’s accession to the World Trade Organisation, control of prices is no longer confined to the president and other state officials. The control has been taken up (at least to some considerable extent) by the World Trade Organisation.
Today, Global Markets are Form an “…….Autonomous and Impersonal Arena of Power” (Bauer & Brighi 2003: p. 34).
It is a fact beyond doubt that the international organisation which are formed to regulate the interaction between the various countries in the international arena are not under the control of anyone nation government. On the contrary, these institutions appear to be governments on their rights (Jessop 2002). A case in point is the World Trade Organisation. This organisation is not controlled by any government in the world. This is despite the arguments put forth by conspiracy theorists to the contrary. Such theorists argue that the World Trade Organisation is under the control of developed economies such as the United States of America and the European Union. This is one of the major concerns expressed by Russian officials during the accession process.
The conspiracy theorists notwithstanding, an international institution such as the World Trade Organisation should ideally be autonomous from any nation-state in the world. It is the organisation that should control the nation-state and not the other way round.
The international organisations are a result of the global markets. As Strange (1996) argues, these markets are autonomous and form impersonal sources of power in the world. What Strange is trying to say is that the global markets are independent of the nation-state. They are not under the control of the nation-state. For example, Russia cannot control the global market even though it is one of the largest economies in the world. On the contrary, it appears that it is the global economy that is controlling Russia and not the other way round.
Institutions other than the Conventional Nation-State “……Now Wield Legitimate (and Recognised) Authority” (Bauer & Brighi 2003: p. 34).
This argument ties in with number 2 above. Here, Strange is arguing that contemporary institutions have emerged as a result of globalisation. These institutions now wield legitimate and recognised authority that is not unlike that which was wielded by the nation-state (Strange 1996). For example, the world trade organisation now has legitimate authority over the economies of member states in the world. The organisation has the authority to control the tariffs and customs duties of member states around the world.
The legitimate and recognised authority of the World Trade Organisation and other contemporary international institutions is evident when one analyses Russia’s accession process. It is noted that the organisation gave the country conditions that had to be met before the application made to join the organisation could be ratified. These conditions included a reduction in subsidies extended to the agricultural sector and a review of the country’s Sanitary and Phytosanitary (herein referred to as SPS) measures (Tarr 2011). The measures are intended to control imports entering any country to safeguard the health and life of animals, plants and humans in the country. The World Trade Organisation felt that Russia was using these measures as protectionist policies to shield the local producers from competition. The country was required to review these policies before acceding to the organisation. The conditions set by the organisation were recognised by Russia as legitimate, and that is the reason why the country had to review the policies at the end of the day.
On recognising the legitimate authority of the international organisations, the nation-state goes ahead and formulates policies that further entrench these organisations. Strange (1996) captures this vividly when she argues that “the shift from state authority to market authority has been in large part the result of (formulation and implementation of) state policies” (p. 44). Here, Strange argues that the state retreats and cedes control over the economy to the organisation. The Russian government formulated policies that were in line with the conditions set forth by the world trade organisation in the accession process (Alston, 1997).
Susan Strange on Power and Authority
Strange (1996) begins by giving a not so strange definition of power. She defines this concept concerning the nation-state. She argues that “……..traditional capitalism operated (within a world) where power and authority was located in the (nation) state” (Held et al. 1999: p. 99). It is the nation-state that controlled the capitalist market by setting up prices, owning factories and such other things (Tonelson, 2000). But this is not the case in the modern world characterised by globalisation. Today, power and authority (as indicated earlier in this paper) have gradually shifted from the nation-state to the global market and the international institutions and organisations such as the International Monetary Fund, the United Nations among others (Rosecrance, 1999). These international organisations are beyond the purview or control of the nation-state.
Strange argues that the effects of this shift of power and authority from the nation-state and to the international organisations are visible to all and sundry. The effects include the rise of multinationals, the crumbling of national boundaries among others. For example, the results and effects of Russia’s accession to the World Trade Organisation are evident even to the Russian citizens themselves. The effects include an increase in the volume of international trade among others. But strange enough, Strange (1996) notes that “…..the heads of governments may be the last to recognise that they and their ministers have lost the authority (and control) over national societies and economies that they used to have” (p. 3). The politicians and other government agents operate as though they are aware of what is happening around them. The leaders still believe that “they have the answers to economic and social problems (and) as if they really are in charge of their country’s destiny” (Strange, 1996: p. 3). But this is not the case. People no longer trust their leaders the way they used to. Instead, their trust has also shifted to the market. They now trust international organisations more than they do their governments.
Strange (1996) also advises that the focus of scholars in the politics and political economy also has to change in tandem with the shifting power and authority. She is of the view that instead of concentrating on studying power that is to be found within the confines of the nation-state, scholars should now focus on analyzing power relations wherever they are to be found (Kobrin, 1998). In other words, there is a need to shift the focus of studying power from the nation-state to analyzing the retreat role of the nation-state today. In the case of Russia and the World Trade Organisation, Strange advises that the focus of the scholar should shift with the shifting power relations. The scholar should now focus on the power relationship between the World Trade Organisation and Russia as opposed to looking at Russia in isolation.
Susan Strange’s Theoretical Foundations and their Relationship with Russia’s Accession to the World Trade Organisation
Overview
Like other scholars, Strange (1996) provides some theoretical foundations underpinning her arguments on the relationship between the nation-state and globalisation. To this end, the scholar puts forth five theoretical foundations. These foundations touch on the following areas:
The retreating authority of the nation-state.
Patterns of power (and legitimate authority)
The limits (and boundaries) of politics.
Politics and (its relationship with) production and
The state of the state
The author will look at these theoretical frameworks in the context of the World Trade Organisation and specifically Russia’s accession to this organisation.
The Retreating Authority of the State
Strange (1996) argues that with the changes brought about by globalisation, it becomes important now to reconsider “……a few of the entrenched ideas of some academic colleagues in economics, politics, sociology and political science” (p. 22). This is given the fact that some of the existing theories in these fields fail to recognise the developments brought about by globalisation (Underhill 2000). This is for example those sociological and political science theories that assume that the ultimate authority in any given country lies with the elected government (Krasner, 1991).
As already indicated in this paper, Strange argues that the global market has usurped the authority that hitherto rested with the nation-state (Deibert, 2000). She argues that “…….the impersonal forces of world markets, integrated over the post- war period more by private enterprise in finance………than by the cooperative decisions of the government are now more powerful than the state” (Strange, 1996: p. 22). The forces of the market are more powerful than the nation-state which traditionally is supposed to have control over the political, economic and social spheres of the society.
This is what happened in Russia when the country acceded to the World Trade Organisation. The authority that rested with the nation-state as far as the economy is concerned has now shifted to the World Trade Organisation (Clark, 1999). When the country was a haven for communism under the Soviet Union’s rule, the economy was more centralised and the government had total control over events taking place in the economy. It is noted that most of the businesses in this country and most of the sectors were controlled by the government. This is for example the energy sector where the government monopolised the production and supply of energy. However, with accession to the World Trade Organisation, this has changed. Successive presidents (starting with Boris Yeltsin, Vladimir Putin and Medvedev) have changed the course of the economy and made efforts to decentralise the same. The government now has little control over key sectors such as agriculture and energy as it used to before (Shaw, 2000).
This view is supported by Strange (1996) when she argues that “where (in the past) states were once the masters of the markets, now it is the markets which, on many critical issues, are the masters over the governments of states” (p. 22). Governments (read nation-states) are now under the firm control of the market economy. The Russian government has to make policies that are in line with the provisions of the World Trade Organisation which has emerged as a result of the globalisation of the economy.
However, a critical look at the arguments put forth by Strange will reveal that there are some inconsistencies between the arguments and the reality. Strange acknowledges this when she says that there are “some striking paradoxes about this reversal of the state- market balance of power” (Strange, 1996: p. 22). One such inconsistency is the fact that the intervention of the nation-state on the affairs of the private citizen seems to be on the rise. For example, the government had assumed the role of securing employment for the citizens, safeguarding their lives and such other things by implementing various legislations (Most & Starr, 1984). It is noted that it is the Russian government that was pushing for the country’s accession to the World Trade Organisation. The government also negotiated with other governments around the world on Sanitary and Phytosanitary measures and other agreements that were aimed at safeguarding the health and life of the ordinary citizen (Haufler, 2001).
The second inconsistency with Strange’s argument is the fact that while the governments in the developed nations seem to be losing more and more of their legitimate authority, residents of developing nations seem to be propping up their nation-states by supporting the government and advocating for their state (Hardt & Negri 2000). The scholar gives the example of the former Soviet Union where the people were oppressed by a dictatorial and single-party government. The citizens of such nations have fought to ensure that they establish their state by vesting authority to democratically elected governments (Poulantzas, 1975). This is evident because Russians have continued to support their elected governments especially after the collapse of the Soviet Union.
It also seems that the loss of power and authority on the part of the nation-state is limited to the western nations and especially so the Anglo- Saxon countries. Strange (1996) argues that the loss of power does not apply to Asian nations. In countries such as China, the government seems to be the one tasked with the role of achieving economic prosperity on behalf of the citizens (Kennedy & Southwick, 2007). The economy seems to be flourishing even though the government seems to have total control over it.
Patterns of Power
Strange argues that it is important to define power and politics if one is to fully comprehend the shifting patterns of power that have resulted from globalisation. The scholar argues that a broader definition of these two concepts (as opposed to a narrower definition) is needed if one is to understand globalisation and the shifting power patterns.
Strange (1996) is of the view that it is easier to recognise power or identify it than it is to define it. She poses the question: “how can you tell which individuals or collective associations of individuals are powerful, and why?” (Strange, 1996: p. 35). This question is pertinent in analyzing the power relations between nation-states and international organisations such as the World Trade Organisation. Which between the Russian government and the World Trade Organisation is powerful when it comes to the issue of controlling the country’s economy? Some will argue that it is the world trade organisation given that the Russian government cannot control it. However, some will argue that it is the Russian government since it is the one that owns the resources that drives the economy. These include human and natural resources.
Strange (1996) notes that those individuals and parties who have to give in to power or submit to others are likely to identify and recognise it more easily than those who have and use power. According to Jones (2011), perhaps this is the reason why most people define power concerning the resources and capabilities of the parties involved. In this case, the government is said to be powerful since it is the one controlling the state machinery such as the army and other resources. When it comes to the case of the world trade organisation and Russia, the same definition of power may apply. As stated earlier, some will define the power relationship between the two parties in terms of what is controlled by who.
The Limits of Politics
According to Drezner (2002), the study of the political economy brings together two different fields that may be at loggerheads most of the time. This view is supported by Strange (1996) when she argues that the study of international political economy involves the delicate balancing of political science on one hand and economics on the other. If one leans heavily towards or tends to be biased against either of the sides, the focus of the study is lost. For example, those with a bias towards political science will tend to ignore economic factors such as the market forces, the prices and finance and its effects on the world’s economy (Strange 1996). On the other hand, those with a bias towards economics will tend to overlook the significance of legislations to the world economy, organisation of the markets and the significance of history and policymaking on the world economy (Strange, 1996).
Strange (1996) is of the view one should strive to maintain a balance between the two diverse fields. This applies to the case of Russia’s accession to the World Trade Organisation. It is noted that the effects this has on the power relations between the two entities can be analysed from a political or economic perspective. From a political perspective, one may argue that the accession led to a shift of power from the Russian government to the World Trade Organisation’s council (Jessop 2002). From the economic perspective, one may argue that the accession process led to the rise of the market economy in Russia. Both of these arguments may be factual. However, an international relations expert should not look at them as standalone phenomena. Rather, efforts should be made to analyse the arguments jointly.
In the context of the limits of politics and globalisation, Strange (1996) recognises some primary functions of the nation-state. One such function identified is the provision of security for the citizens. This is food security, physical security among others. To this end, the nation-state establishes and controls the army to provide security to the citizens and to avert incursions from enemies of the state. However, it is noted that for the state to effectively meet this objective, it has to partner with stakeholders in the private sector. To this end, the government contracts private businesses to supply the army with weapons and warfare technology. What this means is that the nation-state relies on the market forces to carry out this primary role. With the accession to the world trade organisation, the Russian government will now be able to acquire fighter jets, firearms and other items from the global market.
Another primary role of the nation-state is to regulate currency. In most countries, the government achieves this by monopolising seignorage (Strange, 1996). According to Strange, regardless of the status of the economy in the country, it is the government that regulates the printing and supply of currency. This is a reflection of the nation state’s authority over the economy. In the case of the Russian accession to the WTO, it is to be noted that the government continues to regulate the printing and circulation of currency even after joining the World Trade Organisation. WTO did not take over this role even though it appears to be more powerful than the nation-state.
Politics and Production
Strange (1996) is of the view that the change in the production structure of the global economy has impacted not only the life chances of persons around the globe but also the politics at the national and international level. The changes referred here touches on changes in the types of goods and services produced the how of producing these goods and services, the where as well as the change in those who are producing (Strange, 1996).
Strange (1996) continues to argue that these changes cannot be solely attributed to the rise of multinationals with the globalisation of the economy. Multinationals have always been in existence. For example, the changes in the production of goods and services in Russia cannot be solely attributed to the rise of multinationals in the country. It is to be noted that multinationals have been operating in the country for a long time. Foreign investors have always been involved in agricultural production, Information Technology and other sectors of the economy.
The change as envisaged by Strange (1996) is characterised by “the change from production mostly designed and destined for one local or national market” (p. 62) to production that is targeted at the world economy or the world market. Earlier, the production has been geared towards meeting the needs of the local market. With the change in production, the focus now shifts to production aimed at meeting the needs of several national markets. To this end, it is noted that arguing that the enterprises are the ones that are multinational in orientation is not only fallacious but it is also erroneous. It is the market that has shifted to become multinational as a result of globalisation.
To this end, Strange (1996) hypothesises that multinational corporations, as well as transnational corporations, have become significant political players in the world today. This is where the link between politics and production comes into play. By shifting the power from the nation-state and into the hands of the global market, globalisation has in effect turned the market into a significant political player. Multinationals or the world economy however exercise their power significantly different from the nation-state. While the nation-state exercises the power mainly through relations with other governments and direct control of the citizens, the power of the market is a bit subtle. It is evident when the MNCs and TNCs act as technical innovators, consumers of goods and services, producers as well as employers (Strange, 1996).
This link between politics and production is evident in Russia as far as accession to the World Trade Organisation is concerned. It is noted that the accession will eventually lead to the liberalisation of the country’s economy. Local producers will have to change their ways of production to meet the needs of the international market. While the aim was to satisfy the needs of the Russian consumers in the past, now the producers will have the international consumer in mind when taking their goods and services to the market. The transition from state to market will have impacts on the country’s political front. The MNCs and TNCs will become powerful. They will be the main source of employment among others. Their links and association with civil society will further increase their political clout in the country (Scholte, 2000).
The State of the State
Strange (1996) argues that the state of the state has greatly changed over the years. Some of these changes (in fact most of them) can be attributed to globalisation. For example, the collapse of the Soviet Union as a superpower after the Cold War led to the rise of the United States of America as the new superpower in the world (Haufler, 2001).
But Strange also acknowledges the fact that there are those scholars who argue nothing much has changed as far as the state of the state is concerned. Strange (1996) highlights several factors that set this school of thought from that which believes that a lot has changed in the world over time. For example, the conservatives argue that the nation-state is the major and primary actor in international relations (Cox, 1997: Cox, 2004). Other actors or agents such as the market do not greatly affect the role of the state. However, liberals (led by Strange herself) are of the view that the other agents (such as financial institutions, international organisations and others) play an equally significant role in international politics. The writer of this paper tends to agree with Strange and colleagues’ arguments. Taking the case of Russia and her accession to the World Trade Organisation, one cannot downplay the significant role that was played by the global market in transforming the political affairs of the nation.
Conclusion
Strange (1996) argues that the retreat of the state is not solely a result of the global market’s economic dynamics. Political actions (or lack thereof) have also triggered the shift of power from the nation-state to the international organisations. This paper critically analysed Strange’s arguments in the Retreat of the State about Russia’s accession to the World Trade Organisation. The researcher hypothesised that the accession process has led to the retreat of the Russian nation-state. This argument was supported by those made by Strange in her book. Russia has ceded control over the economy to the World Trade Organisation.
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