The sovereign state is indispensable – especially in a globalised economy

by Dr iur. Marianne Wüthrich

Some contemporaries find the term “nation state” difficult to use: Adherence to one’s own state in a “globalised”, unbounded world is nowadays sometimes associated with narrow-mindedness, isolation towards the outside world and even rejection of other nations and cultures. However, such a negative definition of the term does no justice whatsoever to the real meaning of the nation state. We can also call it a “sovereign state”, by the way, then the aversion of certain circles becomes clearer. A small state like Switzerland, for example, whose population holds on to sovereignty, the greatest possible independence in foreign policy and the optimal freedom of its citizens with strong direct-democratic instruments makes it difficult for major powers like the USA and the EU to impose their power policies or the interest policies of their corporations. It becomes embarrassing when Swiss politicians, law professors, diplomats and think tanks declare the sovereignty of their own country obsolete in a “globalised world”, i.e. want to cut off the branch on which they also sit comfortably.

It is therefore all the more pleasing to hear other voices that attach particular importance to the sovereign nation state, especially in this day and age, as the Swiss social scientist and publicist Beat Kappeler and Harvard professor of economics Dani Rodrik said in the Schweizer Monat of March 2018, whose results are very similar from very different points of view.

“The freedom of citizens and their prosperity are increasing at an above-average rate with decentralisation and with small states. This is as historically proven and experienced a fact as competition from a wide variety of national solutions has brought progress. The union of ‘ever closer union’ in Europe as a supposed expression of the old spin [EU as a peace project] is an abuse. It also eliminates competition between solutions, that is, progress.” (Beat Kappeler)

“Freedom and progress depend on the order of the nation state”

Beat Kappeler defines the state as “the binding of a population through history and will, on bounded territory “1. This corresponds to the three classical elements of state people, state territory and state authority as prerequisites of the state: a population that lives on a territory with fixed borders and is – in the case of Switzerland at least – “by history and will” (or a “social contract”, as Jean-Jacques Rousseau called it) subject to a state authority whose supreme control in the democratic state is exercised by the people themselves, the sovereign.

Kappeler explains the necessity of the nation state as follows: “The nation state is the guarantor of fundamental rights, enforcement before courts, legislation and pensions, the organisation of the territory, social policy, education, infrastructures and their supply and disposal.”

The most urgent task of the state is therefore to protect the legal and social security of its population – and not the interests of foreign powers and corporations. The sovereign constitutional state then decides for itself which treaties it wants to conclude with other states: “It (the nation State) does what no supranational organisation can do. Supranational regulations are only necessary if one sovereign state acts on other nations.”

Why the small state of Switzerland is superior to a large entity like the EU

“The freedom of citizens and their prosperity are increasing at an above-average rate with decentralisation and with small states. This is as historically proven and experienced a fact as competition from a wide variety of national solutions has brought progress. The union of ‘ever closer union’ in Europe as a supposed expression of the old spin [EU as a peace project] is an abuse. It also eliminates competition between solutions, that is, progress.” According to Kappeler, a prosperous coexistence also includes the “solidarity” of the citizens, which should not mean “all-round welfare state care”, but that “everyone has to contribute according to his or her strengths, and not that some only receive, others only pay”.

The principle of solidarity understood in this way also functions far more fairly and controlled in the small-scale community, especially in the communes, than when distributing with the large trowel of billion-euro funds in Brussels. But in Switzerland too, for example, entitlement to social benefits such as invalidity pensions or unemployment benefits must be increasingly strictly controlled in order to prevent abuses at the expense of taxpayers and insurance premium payers as far as possible. This is hardly possible in a large centralist state or a bureaucratic colossus like the EU.

The economic, social  and political progress is closely linked with the nation state

The clear statement by Dani Rodrik in the same issue of Schweizer Monat2 is particularly gratifying - not a matter of course for an economics professor at Harvard University and the London School of Economics and Political Science. He is convinced that the nation state is indispensable in a global capitalist economic world. It is true that “within the intelligentsia […] the majority dismissed it as unsuitable – morally irrelevant, even reactionary – to meet the challenges of a globalised world”. This is a fatal mistake for Dani Rodrik: “A well-founded defence of the nation state would begin with the assumption that markets need rules. Everything that goes beyond a simple exchange between neighbours needs investment in transport, communication and logistics, needs enforcement of contracts, provision of information and precautions against fraud, a stable and reliable means of exchange, arrangements for a social distribution of income and much more”. According to Rodrik, markets also need institutions that “fulfil critical functions with regard to regulation, redistribution, monetary and fiscal stability and conflict resolution. So far, these tasks have mainly been carried out by nation states”. If these requirements are not met or cannot be enforced by the individual sovereign states, we know that this can have terrible consequences for the population, and local companies cannot survive because it is not possible to operate without a minimum degree of legal certainty.

“Where nation states fail, are economic collapses and civil wars”

If we continue to spin Rodrik’s idea, it means the other way round: great powers that deliberately cover well-functioning states with wars and chaos do not aim at prospering international trade from one to the same, but pursue other interests (arms and drug trafficking, access to sought-after resources, land grabbing, etc.). On the territory of states whose governments, parliaments and courts are weakened by paramilitary gangs and warlords and cannot enforce their rights, there is much room for foreign powers and corporations to use themselves in contravention of national and international law and in violation of the most basic human rights. By contrast, economic companies that want to trade honestly from country to country and from continent to continent depend on strong constitutional states.

“A lack of appreciation of the nation state leads to a dead end. We scale markets beyond a size that can still be controlled; we establish global rules that mock the real diversity of needs and preferences; we weaken the nation states without taking their place. The deeper cause of the neglected injustices of globalisation and the health problems of our democracies lies in the misunderstanding that nation states are the foundation of the capitalist order”. (Dani Rodrik)

Advantages of discordant world community

Professor Dani Rodrik points out that the individual nation states have different approaches not only to the regulation of financial markets and trade, but also to the creation of important social compromises: “The world does not agree on how to balance equality and opportunities, public health and environmental risks against technological innovation, stability against dynamism, profits against social and cultural values. A divided world community “enables experiments and competition between different institutional concepts as well as mutual learning”. Here the reader involuntarily thinks of the fundamental differences between Switzerland, a small, direct-democratic, federalist state, and the centrally regulated and authoritarian EU. In the competition of institutional concepts, Switzerland scores better in practically every area, for example in terms of national debt or unemployment rates and especially in terms of  the population’s satisfaction due to its strong co-decision rights.

Lack of appreciation of the nation state leads to a dead end

Finally, Rodrik criticises the circles that dismiss criticism of international trade agreements by saying that critics are not open-minded enough to enter into an open discussion: “To hide behind cosmopolitanism is only a weak substitute for winning political debates at the factual level. His conclusion: “A lack of appreciation of the nation state leads to a dead end. We scale markets beyond a size that can still be controlled; we establish global rules that mock the real diversity of needs and preferences; we weaken the nation states without taking their place. The deeper cause of the neglected injustices of globalisation and the health problems of our democracies lies in the misunderstanding that nation states are the foundation of the capitalist order”.     •

1  Kappeler, Beat. Das Recht auf alles verdirbt das Recht. (The right to everything spoils the right). In: Schweizer Monat 1054 of March 2018; Beat Kappeler is lic. sc. pol. Hautes Etudes Internationales, studies at the University of Geneva and in West-Berlin, Dr h.c. of the University of Basel, long-time secretary of the Swiss Federation of Trade Unions SGB, today freelance publicist and author.

Rodrik, Dani. Der unterschätzte Nationalstaat. (The underestimated nation state). In: Schweizer Monat 1054 of March 2018.
Dani Rodrik is an economics professor at Harvard University and a visiting professor at the London School of Economics and political science. He deals with questions of globalisation, political economy, economic growth and development. The topic discussed here has been published: The Globalization Paradox. Democracy and the future of the world economy. German Edition Munich 2011. ISBN 978 3 406 61351 7

A bond with your own country

mw. The sovereign state - especially in direct democracy - lives through the active participation of us citizens. It is up to us adults, parents and teachers to guide our youth to this responsible and beautiful task.

In this way, an inner bond to the pillars of sovereign Switzerland can develop and grow:  direct democracy, federalism, permanent armed neutrality, the freedom and independence of Switzerland as a whole and its citizens. On this foundation, we can also pass on to our young people the openness to the world which has always been true to the Swiss simply because of their location in the middle of Europe: the willingness to live in peace and cultural and economic exchange with our neighbours and with all people and peoples of the world, the obligation of neutral Switzerland to contribute and provide help in a world full of need. This does not include the participation of the Swiss army in NATO manoeuvres and EU military missions, which must be ended as soon as possible! This would release further funds for the worldwide work of the ICRC, for calling for compliance with the Geneva Conventions, for development aid such as that provided by the SDC: on the ground together with the people. Of course, this also includes granting the right of asylum to people who are under political persecution. And last but not least, a consistent policy of neutrality would make Switzerland once again more credible for its offer of good services.

Equal sovereign states as a basis for a peaceful world

mw. The greatest, indeed vital task of the sovereign states for humankind is their contribution to peace in the world. Every state is obligated by the UN Charter to maintain its order against the outside world, to defend itself against infringements by other states, to refrain from attacks against them, and not to interfere in their internal affairs without being asked.

The mission of the UN is to initiate and accompany all necessary and possible steps to maintain peace. To this end, however, the treaty of all sovereign states as equal members of the world community, as laid down in the Charter, would be indispensable. Today, the fundamental mistake in the United Nations system stands in the way: the special status of the five veto states.

The Great Powers China, France, Great Britain, Russia, and the United States can use this instrument on the one hand to approve wars of aggression contrary to international law and, on the other, to prevent the condemnation of affiliated aggressor states because the UN system does not impose any obligation on them to abstain from the vote.

Only a fundamental revision of the UN system can remedy this scandalous unequal treatment of states. To promote peace and thus for the benefit of all peoples, a more just world order must be considered and discussed
everywhere.