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Abstract
Most discussions of the role of the state in an emerging neo-liberal, globalised world pay little or no attention to the constraints on state action linked to the operation of liberal representative democratic regimes. A discussion of the nature of representative democracy identifies those temporal and spatial constraints, and illustrates them with examples from four policy areas: freedom of labour movement; exporting jobs; subsidising and protecting producers; and promoting places. Those constraints are much more effective in some types of country than others, however, and in some it has proved possible to circumvent them by moving policy decisions outside direct government purview.
The authors are grateful to Trevor Barnes, Kevin Cox, Peter Dicken, Roger Lee and Becky Mansfield for comments on a draft of this essay, and to delegates at a session on ‘Bringing the state back in’ at the Association of American Geographers' Annual Meetings at Philadelphia, March 2004, the Second Summer Institute in Economic Geography held at the University of Bristol, July 2004, for early discussions on these ideas and a session at the Royal Geographical Society (with the Institute of British Geographers) conference in August 2005. Thanks also to two anonymous referees for very useful suggestions.
Notes
1. The core of this ‘doctrine’, as promoted in the US, has recently been crystallised as the ‘Washington Consensus’ (on which, see Williamson, Citation1999).
3. Harvey Citation(2005) goes further and sets the two up as a binary pair of ideal types: the neo-liberal state is associated with the second task and the social democratic state with the third.
4. Notermans Citation(1996) writes explicitly about social democracy, but does not discuss its operations, let alone their fundamental geographical constitution.
5. The Civil War, of course, was a major challenge to that constitution, focused on the role of slavery (labour outside the ‘normal’ marketplace) in the southern states.
6. Of course, the outcomes may not always be what was wanted: some democracies may be viewed in some quarters as ‘better’ than others—usually because the governments then elected don't follow the policies which other countries' rulers would have preferred. In other cases, actions that are condemned in some quarters might be ‘defended’—as with Israel's invasions of Lebanon which some ‘Western’ governments have been prepared to condone publicly because Israel ‘is a democracy’. Interestingly, although the US has pressed for democracy in many countries, it rarely promotes its own form, and particularly its electoral system, seemingly unconcerned with the details of government formation. Most countries that have adopted democratic constitutions in recent decades have indeed not adopted the US electoral system, particularly the first-past-the-post method of electing legislators (Colomer, Citation2004).
7. Recent developments towards the centralisation of power in Russia indicate that such a development is not confined to relatively underdeveloped countries.
8. Ideology has played major roles at certain times in American political history, not least in the past five years with the growth of the neo-Conservative, religious right.
9. On the impact of ‘Rogernomics’, see special issues of GeoJournal (2004) and Geographical Research (2005).
10. There are clear signs that it is now being diluted in France, as illustrated by the 2007 contest for the Presidency between Ségolène Royal and Nicholas Sarkozy, representing the main ‘left’ and ‘right’ wing parties respectively.
11. There are considerable debates regarding the ‘death’ of class voting and its replacement by issue-based, responsive voting: see Evans Citation(1999).
12. The upper houses of many legislatures have longer periods of office—for life in some cases, such as the UK House of Lords—but few have more than residual power and those that have more tend to be the ones subject to relatively frequent election, such as the US Senate.
13. There are also issues in some states, where the legislature is not sovereign, regarding the separation of powers between various arms of the state apparatus—basically, the executive, legislature and judiciary.
14. In France in 2007, for example, President Chirac, who was not seeking re-election, distanced himself from his party's candidate—Nicholas Sarkozy. In the US, presidents in the last two years of their second term may be deemed ‘lame ducks’ although they may actively promote policies to assist their favoured successors (often the incumbent vice-president). Others may feel able to press ahead with an agenda, although they may well be constrained by Congress in this.
15. Of course, a potential danger can be marginalised by excluding a latent radical element from the electorate—which is what occurred with blacks in the southern US for over a century after the Civil War, despite the passing of the 14th Amendment to the Constitution.
16. And it is very likely that those who suffer are predominantly in the ‘working class’: for an excellent analysis of policy in this context, see Westergaard and Ressler Citation(1975).
17. A leaked report commissioned by the UK Conservative party in 2004 suggested that only applicants with annual incomes in excess of £25 000 should be allowed to settle in the UK; they would have to demonstrate that they had a ‘good university degree’ and would be ineligible for state benefits (The Sunday Times, 5 September 2004, p. 4; The Financial Times, 7 September 2004, p. 5). The policy was announced—without details of the points system—in a speech by the party leader on 22 September 2004 as well as in a policy announcement on 23 January 2005 (http://www.conservatives.com/news/article.cfm?obj_id = 115780). For the UK government's currently proposed points-based immigration system see http://www.workpermit.com/news/2006_03_07/uk/government_reveals_immigration_points_system.htm.
18. Indeed, the UK ‘popular press’ carried ‘scare stories’ predicting massive influxes on accession day and ‘reporting’ block bookings of planes by agents for such expected migrant workers.
19. On arguments regarding the impact of immigration on wage levels, see the papers (discussed in The Economist, 8 April 2006, p. 86) at www/economist.com/finance.
20. The speech is at http://www.number-10.gov.uk/output/page5708.asp. Mr Blair was also quoted as saying that “We will neither be fortress Britain, nor will we be an open house” (The Times, 28 April 2004, p. 2). Official estimates suggest that 300 000 migrants entered the UK from the newly-acceded countries in the first year (Dench et al., Citation2006)
22. As with proposals in the US not only to make illegal immigration a felony but also to make it a crime for others to assist illegal migrants, as well as building a wall along much of the US–Mexico border—the Bensenbrenner–King bill (see http://www.immigrationforum.org/documents/PolicyWire/Legislation/SenseKingGlance.pdf).
23. An interesting insight to the importance of migrant labour to their home countries is the claim that their remittances—estimated to be US$93 billion in 2003 by the World Bank—exceeded what those countries received in either aid or capital investment (The Economist, 31 July 2004, p. 70).
24. An alternative argument is that setting minimum wage levels will accelerate the flight of jobs to lower-cost locations—although there is little evidence that this was the case after the UK signed the relevant EU directives (the so-called social chapter) and introduced its own minimum wage: similar arguments are made in the US, where minimum wage levels have been introduced by Democrat administrations in some states (Ip, Citation2004).
25. The Confederation of British Industries claimed in November 2004 that “the benefits of off-shoring outweigh the drawbacks … the process will increase productivity, profitability and economic growth” and suggested that this will continue, making the UK a predominantly highly skilled labour force economy (http://www.cbi.org.uk/ndbs/press.nsf/o363c… 8.11.2004).
28. Interestingly, industry analyses find little evidence of widespread loss of call-centre jobs from either the US or the UK, and indeed show that some Asian companies were outsourcing IT and back-office work to the US (The Economist, 29 May 2004, p. 67); on the other hand, another industry source—Forrester Research—was reported as estimating that the EU would ‘export’ 1 million jobs over the next decade, one-quarter of them from the UK (The Financial Times, 16 August 2004, p. 8). Schultze Citation(2004) argues that, contrary to ‘conventional wisdom’ the US ‘jobless recovery’ of 2000–2003 was not a result of off-shoring but rather major increases in worker productivity, even though he estimates that in business, professional and technical services alone this involved a net loss of 155–215 000 jobs over the 4-year period: he concluded that “offshoring, and more broadly import competition, while clearly having an important effect on some industries, workers, and communities, were not significant causes of the ‘jobless recovery’” (Schultze, Citation2004, p. 8).
29. This is an excellent example of the prisoner's dilemma. Within a neo-liberal framework, if one corporation—a supermarket chain, perhaps—is cheaper than others, then to compete the others have to reduce their costs, for which outsourcing is a good solution. So outsourcing continues (with negative impacts for local workers). If it was restricted, the cost-cutting ‘arms race’ might not be terminated, but it could be constrained.
30. As, for example, John Kerry did throughout 2004 in his campaign for the US Presidency. On the wider implications for trades unions, see Glassman Citation(2004) and Moses Citation(2005).
31. There were counter-implications, however, such as the decline in trade at the port of New Orleans, through which much imported steel entered the US. In some situations a government cannot win! US trades unions claimed that Chinese manipulation of wage rates and currency markets was disadvantaging American producers, but the Bush government declined to act on such claims within the World Trade Organisation rules—and thereby allowed his presidential challenger, John Kerry, to claim that he, unlike Bush, would “fight to keep US jobs in America and I'm not going to sit idly by when China or any other country pursues policies that hurt our economy” (The Financial Times, 30 April 2004, p. 10). The Bush government's counter-argument stressed the long rather than the short term, claiming that American exports to China had increased by 76 per cent over the previous 3 years, thus contributing substantially to job-creation and -protection. Two of the states—Ohio and Pennsylvania—were crucial ‘swing-states’ on which the result of the 2004 Presidential election hinged.
32. Such policies, as Glasmeier et al. Citation(1993) indicate, have been used to promote political as well as economic US goals: the Caribbean Basin Initiative, for example, not only protected some of the interests of the US textile and apparel industry but also advanced US geopolitical goals involved with the building of US hegemony in the region.
33. Such pork-barrelling is more common in the US because of the role of its legislature in the allocation of federal moneys, and especially the power of individual Senators and Representatives on key Congressional committees, than is the case in the UK (see Johnston, Citation1983).
34. Brazil had asked the WTO to declare these subsidies illegal. Under the WTO's ‘Uruguay Round’ negotiations, countries agreed not to file complaints against other countries' subsidies, so long as those subsidies did not exceed their 1992 levels. Brazil claims that the US has violated that agreement, and The Economist (1 May 2004) reported that the WTO might have upheld that claim in an unpublished decision, although it was unclear to what extent that would affect all forms of US subsidy for cotton farming. The Financial Times (6 August 2004, p. 9) reported an estimate from the International Cotton Advisory Committee that if cotton subsidies were entirely abolished, production could fall by 90 per cent in the EU and one-third in the US.
35. According to The Economist (5 June 2004, p. 10), OECD figures suggested that EU agricultural subsidies represented a tax of US$646 per annum on every household in the 15 member-countries prior to the accession of 10 more in 2004. In the US, the figure was US$366 per household, whereas in Japan—'the champion food-taxer'—it was US$1000.
36. This is not an isolated example. The African Trade and Development Act 2000 limits duty-free imports of apparel made in Africa to products made with US yarn and fabric, if those are available (see Mandle, Citation2003).
37. Other lobbyists are similarly successful. The US Southern Shrimp Alliance claimed that six countries were illegally dumping shrimps on the American market. The Federal International Trade Commission accepted the case that this was damaging the domestic industry—prices of shrimp fell by some two-thirds in Louisiana over a four-year period—and tariffs of 93.13 and 112.81 per cent were placed on imports from Vietnam and China respectively (The Economist, 10 July 2004, p. 44). As a result, it was estimated that the price of shrimps in the US would rise by 44 per cent.
38. Information in The Economist (4 March 2006, p. 69 and 25 March 2006, p. 83) and The Financial Times (22 March 2006, p. 15).
39. Such arguments are regularly presented against large investments in infrastructural projects associated with major events—such as the Olympic Games—whose proponents argue that the new facilities will stimulate economic growth: the Greek government incurred a debt of some US$8 billion, for example, in order to stage the 2004 Olympic Games, which probably meant that its debt exceeded the limit allowed under the EU's Stability and Growth Pact associated with the introduction of the Euro as a common currency.
40. Although Oza's (Citation2004) interpretation of the election result is largely consistent with that presented here, that it represented a “rejection of neo-liberalist policies of reform that largely ignored the plight of the poor” (p. 637) is probably an overstatement, in that it assumes a more sophisticated, better-informed electorate that was almost certainly the case: the poor rejected the BJP governing party because it had not delivered for them, but were probably entirely agnostic as to whether those policies were neo-liberal.
41. On pressures within the WTO from the OECD countries to prevent the development of offshore financial centres—and their impact on tax collection—see Vlcek Citation(2004): their rapid growth is much facilitated by developments in information technology (Herrera, Citation2002).
42. US economic policy is also linked to its foreign policy: the African Growth and Opportunity Act 2000 contains a clause requiring recipient governments not to oppose American foreign policy, which was used when seeking allies for the invasion of Iraq in 2003. Other governments have acted in similar ways. In the 1990s, for example, the New Zealand government made continued aid to the Cook Islands contingent on major changes in that island state's welfare system: large cuts in education and other programmes were the result, along with reductions in public-sector salaries.
44. The voting structures of the IMF and the World Bank have been the focus of much debate: see, for example, Buira Citation(2002), van Houtven Citation(2002) and Woods Citation(2001).
45. See http://web.worldbank.org.
46. See http://www.federalreserve.gov/fomc/.
47. The MPC's website notes that “However, the legislation provides that if, in extreme circumstances, the national interest demands it, the Government will have the power to give instructions to the Bank on interest rates for a limited period” (http://www.bankofengland.co.uk/mpc/).