Page 35 - Global Political Economy_Understanding The International Economic Order

CHA PTER O NE
and ethnic nationalisms were tearingat the economic and political
foundations of the nation-state. Yet the nation-state remains of su-
preme importance even though there is no certainty that it will exist
forever. Like every human institution, the nation-state was created to
meet specific needs. The state arose at a particular moment in order
to provide economic and political security and to achieve other de-
sired goals; in return, citizens gave the nation-state their loyalty.
When the nation-state ceases to meet the needs of its citizens, the
latter will withdraw their loyalty and the modern state will disappear
as did the feudal kingdoms, imperial systems, and city-states that it
displaced. However, there is no convincingevidence that such a trans-
formation in human affairs has yet occurred. On the contrary, the
world is witnessinga rapid increase in the number of nation-states
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accompanied by creation of powerful military forces. Moreover, if
and when the nation-state does disappear, it will be displaced by
some new form of formal political authority.
Economic issues certainly have become much more important since
the end of the Cold War and have displaced, for the United States
and its allies, the prior overwhelmingconcern with military security.
It is misleading, however, to draw too sharp a distinction between
international economic and security affairs. While the weight placed
on one or the other varies over time, the two spheres are intimately
joined, always have been, and undoubtedly always will be. Although
the two policy areas can be distinguished analytically, it is extremely
difficult to isolate them in the real world. Their intimate connection
was set forth initially by Jacob Viner in his classic “Power versus
Plenty as Objectives of Foreign Policy in the Seventeenth and Eigh-
teenth Century.” 23
As the British economist Ralph Hawtrey demonstrated in his im-
portant Economic Aspects of Sovereignty (1952), the relationship of
economic affairs and national security, at least over the longterm, is

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In 1945, there were about 50 states in the UN. At the end of the century there
were nearly 200. They all seek to possess the accoutrements of nationhood: currency,
airlines, and national armies. Obviously, statehood is attractive.
23
Jacob Viner, “Power versus Plenty as Objectives of Foreign Policy in the Seven-
teenth and Eighteenth Centuries,” in Jacob Viner, The Long View and the Short: Stud-
ies in Economic Theory and Practice (Glencoe, Ill.: Free Press, 1958). More recent
writings on economics and security are discussed in Michael Mastanduno, “Economics
and Security in Statecraft and Scholarship,” International Organization 52, no. 4 (au-
tumn 1998).

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