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1 - NATIONAL GOVERNMENTS AND GLOBAL CAPITAL: A RECASTING

Published online by Cambridge University Press:  14 January 2010

Layna Mosley
Affiliation:
University of Notre Dame, Indiana
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Summary

More recently, however, as the downward-ratcheting logic of electoral politics has placed a death grip on their economies, they [states] have become – first and foremost – remarkably inefficient engines of wealth distribution. … Moreover, as the workings of genuinely global capital markets dwarf their ability to control exchange rates or protect their currency, nation-states have become inescapably vulnerable to the discipline imposed by economic choices made elsewhere by people and institutions over which they have no practical control. … Second, and more to the point, the nation-state is increasingly a nostalgic fiction.

For creditor states, global finance is an opportunity moderated by a measured risk. For debtor states, it can be the new tyrant.

When throngs of protestors mobilized around the Free Trade Area of the Americas (FTAA) summit in Quebec, the World Bank/International Monetary Fund (IMF) meetings in Washington and Prague, and the World Trade Organization (WTO) ministerial meetings in Seattle, their target was economic globalization. Although these activists represented a variety of interests and viewpoints, they shared a refrain: a narrow set of political elites, corporations, and investors were directing globalization and global economic institutions, making them unaccountable and inherently undemocratic. In the financial realm, protestors contend that government economic policies are chosen largely by an “electronic herd.” This herd represents the twenty-first century analog to the British prime minister Harold Wilson's “gnomes of Zurich” (an epithet for Swiss currency traders, said to necessitate the 1967 devaluation of the pound) and to the 1980s' “bond market vigilantes.”

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Publisher: Cambridge University Press
Print publication year: 2003

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