Conclusions: 'So what?'

What does all this mean? And what are we able to say about the core problem of IPE—the actual or potential structural mismatch between a formal state-system based on territory (i.e. nation states) and an economic system that is increasingly non-territorial and globalized? As we have already dis­covered, the meaning and implications of the developments traced in the last section are far from agreed—the interpretation of whether we are still in an essentially 'international' economy or whether we now have a 'global' economy is a highly con­tentious matter. What is clear is that these changes have affected different people in different situa­tions and in different countries in different ways. It is not sufficient to generalize on the basis of which country we live in—the gap between rich and poor has been widened not only across the world but within 'nation states' as well, and wealth has become even more concentrated in the hands of a small percentage of the population. This is world­wide and also within the countries of the Triad regions—in the US around 17 per cent of the popu­lation control over 85 per cent of the total wealth, and these figures broadly represent the global distribution of wealth also. It also matters what sec­tor of economic activity we are in. Some sectors, like finance, have become 'global', operating in a real­time global market, but others are predominantly inter-national or sub-national. Finally, it matters what firm or organization we are in—some firms/organizations are built on the basis of a world market and international production, others not.

The net result is that it is no longer sufficient (even if it ever was) to analyse political economy at just the two 'levels' of international and national. Apart from anything else this sets up the state as the universal basis of economic life in space and time, and this ahistorical view is not only wrong, but has the important political consequence of disqualify­ing any other forms of political economy from legitimate consideration. We should consider at least four levels and the interactions between them (and note that within the EU this should be five levels with the addition of 'regional'). These are: global, international, national, and local. And the key to the developments we have discussed is that the global links directly to the local.

To what extent, then, has the national state 'lost' control of the economic (and political) activity within its territorial boundaries? Well, it is clear that the state is having a hard time—the very com­plexity of the world system means that policy is dif­ficult to make and to implement. And the pace of technological change, particularly in the sectors of communications and computer technology, is making the policy context even more complex. Moreover, a whole new range of issues is emerging as a result of the focus on traded services and this will make the problems of managing the domestic economies of the Triad countries even more the basis of international negotiation. Amongst all this activity, the state is facing a growing threat to its legitimacy (Horsman and Marshall 1995). Citizens are realizing that national governments are not able to deliver their election promises in the face of the plethora of changes we have described. And this realization is linked into a questioning of the 'nation state' as the natural unit of political com­munity and the given unit of international rela­tions. It might be that a more globalized economy will allow smaller political communities to exist in terms of local-global links: that is it may make pos­sible the economic independence of, say, Quebec. Certainly, the importance of knowledge in the global technological economy effectively delinks any territorial state from the necessity to depend on natural resources—although it is questionable as to how many 'Singapores' the world economy could support.

The key to understanding these changes is to understand the changed nature of the world polit­ical economic system as a whole. This does not mean that states are no longer important or that national governments are no longer relevant or competent. This point has been well made by one of the first researchers to identify the changes tak­ing place in the world economy and it is more important today in the context of the current debate:

Affirming the greater importance of the world economic system over that of the nation-states should not be interpreted as showing that the latter are eclipsed: they continue to exist but their structure and their relations are determined by the whole of which they are a part. (Michalet 1982: 50).

Whatever our conclusions, it is clear that there are fundamental changes taking place which will have significant long-term implications for the nature and substance of international politics. Change in the IPE does not mean smoothly moving from one stable situation to another as conven­tional economics indicates—change will involve disruption and gains and losses. 'Who benefits?' remains the key question of IPE at a time when the dominance of neo-liberalism, institutionalized in the global economy of the Triad regions and the TNCs, has already begun to bring about counter-responses. The resolution of these growing tensions will be the focus of IPE for the twenty-first century.