The Competitiveness of Nations
The Past Present Future
Harry Hillman Chartrand, April 2002
0.1 As noted by Stéphane Garelli, Director of the World Competitiveness Project, some scholars believe that nations do not compete, rather, their enterprises do (Garelli 2002). Such an opinion is based on a very narrow definition of competition and flies in the face of history. The sovereign nation-state is the most complex form of human organization yet attained. It functions in an environment populated by other States and has been involved in competition with its fellows since the beginning of recorded human history, often the most violent form of competition known as war. Even in times of peace, nation-states constantly defend and strive to extend their influence and power through diplomatic and other means including State-sponsored industrial espionage (Whitney and Gaisford 1996). War has in fact been called nothing but the extension of diplomacy (Clauswitz 1832). To believe that nations do not compete is to believe in the tooth-fairy.
0.02 In this essay I will examine what is a nation and the nature and foundation of competitiveness between nations. I will also examine the changing environments in which such competition takes place and the emergent processes that are likely to affect the nature of that competition in future. As will be seen in many ways, the competitiveness of nations today is an example of an “overlapping temporal gestalten” (Emery and Trist 1972, 24). In effect, the past is present in the future and the future is present in the past.
1.01 There are many
kinds of nations. Some are folk- or
language-based such as
1.02 Some of the above are also ‘nation-states’ a word that, according to the Merriam Webster Collegiate Dictionary, did not enter the English language until 1918. While the aspirations and ‘competitiveness’ of minority folk nations subsumed within the borders of nation-states can be intense and materially affect the well-being of their host nation-states, e.g. the independence campaigns of the IRA in North Ireland and the Basques ETA in Spain, such competitiveness is not the focus of this essay. Rather attention is concentrated on the competitiveness of nation-states.
1.03 While the term
‘nation-state’ is less than one hundred years old, the institution has become
‘locked in’ as the dominant form of nationhood today. Only nation-states can become members of
international organizations such as the United Nations (UN), the World Trade
Organization (WTO) and various special international organizations such as
copyright and patent unions. Among
the current 189 members of the UN some are vast continental nation-states like
1.04 Beyond geographic size and population, nation-states can also be classified according to their level of economic development. From a Cold War past, we have inherited a global village with four neighborhoods, three of which are populated by nation-states - the First, Second, Third and Fourth Worlds.
1.08 Finally there is
1.09 Beyond geography,
population and economic development, nation-states can also be classified
according to their military power or potential. Today there are three great powers in
the military sense –
1.10 In many ways nation-states are like biological life forms . They have semi-permeable membranes called borders that separate them from an environment populated by other nation-states. They are always in competition and sometimes in conflict with one another for control of environmental resources. Sometimes they are symbiotic, sharing and exchanging resources and sometimes combining to form larger geopolitical entities like the European Union. Each has a nucleus called a national government; each has structures (institutions) including those generating the economic resources required to fuel, build and maintain the nation, much like the mitochondria of a living cell.
1.11 In addition, the competitiveness of nations is dynamic, i.e., it has changed over time and will continue to change into the foreseeable future. In fact, competitiveness can be characterized as a form of ‘emergent evolution’, i.e., what the Merriam Webster Collegiate Dictionary calls “the appearance of new characters and qualities at complex levels of organization (as the cell or organism) which cannot be predicted solely from the study of less complex levels”.
2.01 The competitiveness of a nation has traditionally been called its ‘Power’. The dictionary provides some thirty-nine definitions of ‘Power’. For purposes of this essay, Power is alternatively defined as: “possession of control, authority, or influence over others”; or, “the one having such power; specifically a sovereign state”. Conventionally Power reflects the ability (or potential) of a nation to organize its resources to engage in military conflict with other nations and impose its will upon them. I will examine the competitiveness or ‘Power’ of nations in three ways.
2.02 First, I will examine Power as a disembodied concept (a teleological transcendent) separate and distinct from those wielding it, i.e., rulers, and those subject to them. In this examination I am informed by Bertrand de Jouvenal’s: On Power: Its Nature and the History of Its Growth (de Jouvenal 1949). As will be seen, however, Power is not the only teleological transcendent in a nation. Others have been identified by scholars. They are, at one and the same time, servants of a nation and potential rivals for its Power.
2.03 Second, I will examine Power as an embodied concept, embodied its ‘leaders’. As will be seen, even in a ‘democracy’:
… power will not be in the hands of the people, but in
the hands of rulers. For they are
rulers, however chosen. “There is
more in common between two deputies of whom one is a revolutionary and the other
isn’t, than between two revolutionaries of whom one is a deputy and the other
isn’t.” And what Robert de Jouvenel
wrote of the
2.04 Third I will examine the relationship between Power and the component institutions that make up a modern nation-state. As will be demonstrated, it is the effectiveness and efficiency of domestic institutions that provides the foundation of competitiveness, traditionally, that is, the resources required to wage war.
2.05 First, if a nation is like a biological life form then Power is its purpose and can, according to the dictionary, be defined as its teleology, i.e.,: the fact or character attributed to nature or natural processes of being directed toward an end or shaped by a purpose. Further, if the life of the nation is separate and distinct from its constituent parts one can say the nation transcends its institutions and citizens. According to the dictionary, transcend means: “to rise above or go beyond the limits of”. Accordingly, a nation can be characterized as a ‘teleological transcendent’, i.e., its purpose rises above the limits of its constituent parts and is not necessarily apparent to them. Colloquially, its purpose is revealed only on a ‘need to know’ basis.
2.06 De Jouvenal has demonstrated the evolutionary process whereby the Power of the nation-state has grown from the time of the so-called ‘Absolute Monarchs’ of 17th and 18th century western Europe. This process has been characterized by the increasingly penetration of the State into the daily life of its citizens and the growing sophistication in its organization of internal resources so as to enhance its Power. He documents the resulting increase in the scale and damage of warfare. He also notes the inhibitions on Power resulting from its embodiment in the person of a Monarch. With the arrival of democracy, however, such inhibitions were removed:
[b]y a fiction, or, as some would say, by an abstraction, it is claimed that the General Will, which in reality emanates from the persons invested with political power, emanates from a collective being, the Nation, of which the rulers are nothing more than the instruments; and the rulers are always anxious to drive this idea into the heads of their peoples. They well understand its usefulness to them in making their power or their tyranny acceptable. (de Jouvenal 1949, pp. 8-9)
2.07 De Jouvenal notes how in the name of ‘the Nation’ or ‘the People’, modern government can do things of which Absolute Monarch could not have dreamed. This can be summed up in a term emerging from the Second World War – Total War - which refers to the use of all available national resources, - physical, institutional and individuals – to wage war. This goes beyond conscription to the total commitment of the entire nation’s resources to victory against the ‘enemy’. The result, according to de Jouvenal:
[a]t the end of the Napoleonic Wars there were 3,000,000
2.07 (a) De Jouvenal exposes the 'equation of power' fuelling the growth of State Power in a popular democracy, or what he calls "the Minotaur". The Marxian dialect involved a struggle between the Top and the Bottom of society leading to the revolution of the Bottom to the Top. De Jouvenal, however, argued the struggle involves the Top in alliance with the Bottom squeezing the Middle while penetrating ever deeper into the 'personal' lives of individual citizens.
2.07 (b) De Jouvenal's power equation can be demonstrated by reference to the historical rise of the labour, civil rights and women's movements. The dynamic involved can be seen in:
2.08 While a nation may be a teleological transcendent, Power is ultimately exercised by human beings, i.e., it is immanent in them. Within a nation-state, Power is exercised by the executive branch of government embodied in a chancellor, a dictator, a king or queen, a prime minister (the first among equal members of an executive oligarchy) or a president. Even in the case of dictatorship and absolute monarchy, Power is exercised through a hierarchy (defined as a graded or ranked series) of ministers and officials staring at the top of the organizational pyramid down to the bottom level of the bureaucracy. Hence one can say that Sovereign Power is exercised through a sequence of immanent hierarchies.
2.09 The exercise of supreme or Sovereign Power within a State has been the subject of concern throughout most of human history. Various guide books or manuals have been written to aid and assist the Sovereign, i.e., the one exercising supreme authority. Some began as handbooks on war; others were explicitly written to guide the civil administration, diplomatic and military activities of the Sovereign.
2.10 The most famous such text in the Occident is Niccolo Machiavelli’s The Prince (approximately 1532 C.E.) dedicated to Lorenzo the Magnificent of Florence. The apparent amorality of the text meant that for many years:
… Machiavelli himself, in quite general acceptation, bore so unsavory a reputation that the word “Machiavellian” had become imbedded in our language as synonymous with Mephistophelian. On the strength of a famous essay of Macaulay’s, the notion had become fairly widespread that the devil himself had become familiarly known as the Old Nick only because Niccolo had been Machiavelli’s first name.
… His book, therefore, is not an abstract treatise; it is a concise manual, a handbook for those who would acquire or increase their political power. As such it has a history of study and use by a long line of kings and ministers as diverse in aims and character as Richelieu, Christina of Sweden, Frederick of Prussia, Bismarck and Clemenceau. In these cases they all possessed recognized credentials to power. In the twentieth century this circle has been widely extended by those in revolt against the older forms of the state. In his student days Mussolini selected it as the subject of a thesis for his doctorate. It was Hitler’s bedside reading and we should not be taken aback when in his excellent introduction to The Prince and The Discourses Max Lerner tells us that Lenin and Stalin as well have gone to school to Machiavelli. (Gauss, 1962, p.7)
2.11 The second Occidental manual for the exercise of Power is Carl von Clauswitz’s On War (1832 C.E.). Like The Prince, it is still read and his theory – including a Neo-Clauwitzian variation – still taught in military schools around the world. However, the insights and lessons of Clauswitz have been applied well beyond war itself and serves as a guide to, among other things, political and economic competition:
Most of our present-day politicians have made their money in business - a ‘form of human competition greatly resembling War’, to paraphrase Clausewitz. Did they, when in the throes of such competition, send formal notice to their rivals of their plans to get the better of them in commerce? Did Mr Carnegie, the archpriest of Peace at any price, when he built up the Steel Trust, notify his competitors when and how he proposed to strike the blows which successively made him master of millions? Surely the Directors of a Great Nation may consider the interests of their shareholders - i.e. the people they govern - as sufficiently serious not to be endangered by the deliberate sacrifice of the preponderant position of readiness which generations of self-devotion, patriotism and wise forethought have won for them? (Maude 1908, 87)
2.12 In the Orient two parallel guide books exist. One, like On War, began as a military treatise but evolved into a guide for political and business leadership. The other, like The Prince, began as a guide for the civil administration, diplomatic and military activities of the Sovereign.
2.13 The best known is Sun-tzu’s The Art of War (approximately 512 B.C.E). Originally intended as a set of principles designed to maximize the chances for military victory and national survival (like On War), the Art of War has become a guide for political and economic competition:
In the 1980s a management book that revived Sun-tzu’s
thought and employed the revitalized figures of several ancient martial heroes
to instruct companies in the basics of business and marketing became a
bestseller in the draconian Communist environment of the People’s Republic of
In Taiwan, where companies confront a situation similar
to Korea’s, books applying the thoughts of the ancient strategists to life,
business, sports, and the stock market have suddenly surged in popularity, even
though modernists have ignored and scorned them for decades. Perhaps more astounding is the penchant
of Japanese writers to apply principles and tactics from the Seven Military
Classics to all the complexities of modern society; they use such tactics,
for example, for successful human relations, romantic liaisons, and company
infighting. In addition to at least
one scholarly translation, several new paperbacks offering simplified renditions
and popularized expansions of selected teachings are published annually in
2.14 The second Oriental text only became available in 1909 C.E. It is the Arthaçastra, or Text-book on Polity, ascribed to Kautilya, a Brahman of the 4th century B.C.E.
From the general description of the book by some Indian writers we might gain but an imperfect conception of its real scope and significance. Mr. Bandyopadhyaya, for example, says it was written “to procure peace at home and prestige abroad”, which sounds very well until we go into details of the process. Mr. Ganapati Sastri is more explicit. The book, he says, provides for “the protection of one’s own kingdom first and, when that is ensured, enterprise for the acquisition of enemies’ territories “, but his “first” is not necessarily a note of time. He says further that the Arthaçastra is “a method of government by which a king should rule for the welfare of his millions of subjects, cautious and dexterous in preventing treachery, watching over the conduct of subjects and officials”. There is a world of meaning in the two concluding participial clauses. (Gowen 1929, 178)
2.15 For Kautilya there were four objects of government:
The first was to obtain the kingdom. To this end war and conquest were among
the primary duties, and in pursuit of territory right might easily become
unright and unright right. Kautilya
would have thoroughly agreed with Mark Twain’s “Pudd’n-head
Nick Machiavel had ne’er a trick
Though he gave his name to our Old Nick.”
Thirdly, it was proper to increase what had been acquired, and this, of course, meant further conquest. Kautilya anticipates the saying of Sir Francis Bacon: “The increase of any state must be upon the foreigner.” Fourthly, there must be the proper enjoyment of what has been acquired.
For the carrying-out of these four objects there were -
to adopt the pedantic classification of our writer - six kinds of policy,
namely: Peace, War, Neutrality, Invasion,
2.16 Nation-states are composed of institutions – cultural, economic, military and social. It is the effectiveness and efficiency of such institutions that provides the foundation for the competitiveness of nations. In turn it is the abilities of individual citizens that determine the efficiency and effectiveness of institutions.
2.17 In many ways, institutions are also teleological transcendents, i.e. they have a life of their own, separate and distinct from their staff. An institution is a routinized pattern of collective human behaviour designed to minimize the costs (and pain) of decision. Institutions can be deliberately created or can simply evolve without conscious human intervention. Both have a ‘life of their own’. Thus consciously constructed institutions (e.g., those with a charter or papers of incorporation) tend to elicit popular complaint about ‘bureaucracy’ – the routinized pattern of behaviour characteristic of consciously created institutions. In this regard, bureaucracy has been called: “the only form of government for which the philosopher can find no defense” (Gowen 1929, 182). Nonetheless, bureaucracy is the modus operandi of all consciously constructed institutions of the modern nation-state.
2.18 Perhaps the best example of an institution that has evolved rather than been consciously created is the free market price system of which Fredrik A.von Hayek wrote:
Its misfortune is the double one that it is not the product of human design and that the people guided by it usually do not know why they are made to do what they do. But those who clamor for “conscious direction” - and who cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously - should remember this: The problem is precisely how to extend the span of our utilization of resources beyond the span of the control of any one mind; and, therefore, how to dispense with the need of conscious control and how to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do. (Hayek 1945, 547)
2.19 Hayek praises the price system for its ‘economy of knowledge’. It is this economy of knowledge that allows human institutions to be effective. Other scholars have identified teleological transcendents including Joseph Schumpeter, with his concept of “creative destruction” or innovation (Schumpeter 1950). Schumpeter waxed and waned on whether a socialist or a capitalist form of government would best manage this ‘unconscious’ technological teleology (one reminiscent of Marx’s technological imperative). Similarly, John Maynard Keynes identified ‘animal spirits’ as the ‘unconscious’ institution driving private sector investment (Keynes 1936). And, like the price system, the legal system has a life of its own which, particularly in the Anglo-American tradition, is not fully subject to conscious centralized control. In law, the legislature responds to changing political tides leaving resulting uncertainty to the courts wherein ‘precedent’ is set on which future disputes will be settled. The court is also the fifth wheel of a ‘transaction’ in the ‘Old Institutionalism’ (Commons 1931). The other four are: actual and ‘next-best’ buyers and sellers. The courts determine whether or not contracts will be enforced and the probability of enforcement affects the nature and outcome of all economic transactions.
2.20 It is economic institutions that generate the wealth that has traditionally fuelled the competitiveness of nations.
2.21 Historically nation-states have tended to select and favour one core economic sector whose health and development contributes most in generating national wealth. At the time of the Physiocrats, a group of French Enlightenment thinkers of the 1760s (Samuels 1962), the chosen sector was agriculture. During the so-called Classic Period of economic thought, founded by Adam Smith with his publication of the Wealth of Nations in 1776, the chosen sector was manufacturing. Today, it is the ‘high technology’ or innovation sector of the economy that receives precedence.
2.22 While the economy
provides the wealth required to exercise Power the actual success of its
exercise lays in the hands of leaders.
Thus an Alexander the Great could make a small marginalized part of
[a]t one time only a handful of countries were capable
of developing and producing the most sophisticated forms of military hardware;
but as demonstrated recently and dramatically by
3.01 Nations compete
in an arena or environment that has changed over time as the complexity of human
society has increased and as human society has spread to cover, with the
3.02 To better appreciate and understand the ways in which organizations (including nation-states) adapt to a changing environment Fred Emery and Eric Trist published Towards a Social Ecology in 1972 (Emery and Trist 1972). They developed a ‘genotypical’ five-fold taxonomy of the ‘causal texture’ of different types of environments in which organizations function (Emery and Trist 1972, 41). In Exhibit 1 I have summarized their environment taxonomy and added a category “Primacy” referring to the period of human history in which each type was (or is) dominant. It is important to appreciate, however, the Emery-Trist taxonomy is based on what they call “overlapping temporal gestalten” (Emery and Trist 1972, 24). By this they mean that simpler or ‘earlier’ types of environments can co-exist in time with later or more complex ones. Thus:
… low level of organization may frequently occur as the relevant environment for some secondary aspect of an organization and is also quite likely to occur in humanly designed environments for the reason that such simplified environments offer maximum probability of predicting and controlling human behaviour, e.g. Adler’s ‘Sociology of the Concentration Camps’ and the experimental environments of conditioning theory. (Emery and Trist 1972, 42)
3.03 In this section I will survey the evolution of the changing environment in which nations compete. I will then demonstrate the modes of competition current in the contemporary ‘turbulent’ environment of the early 21st century including what Emery and Trist call “emergent processes” especially “processes that are not recognized for what they are.” (Emery and Trist 1972, 24)
3.04 Type I - Placid Random: When humanity first emerged, hunting-gathering in small groups was the norm form of organization. The environment was one huge uncharted territory. Groups of humans were widely spread and seldom met one another. The environment was therefore ‘placid’ in that there was little conflict, i.e. competition, between groups of human and resources were, for practical purposes, randomly distributed. Hence this original human environment is called Placid Random. Survival involved doing one’s best to find resources and avoid what Emery and Trist call ‘noxiants’, e.g., dangerous animals or terrain. “The economists’ classical market comes close to this ideal environment.” (Emery and Trist 1972, p.42).
3.05 Type II - Placid Clustered: As human
society evolved with the innovation of agriculture, location of specific
resources became important, e.g., good soil and irrigation. Such resource tend to be ‘clustered’ and
it was around such clusters that the first human civilization emerged, e.g.,
The objective of a system in this type of environment also has certain characteristics. In the placid, random it could have none, apart from tactical improvement and hoarding against a rainy day. In this second type the relevant objective is that of ‘optimal location’. Given that the environment is non-randomly arranged, some positions can be discerned as potentially richer than others, and the survival probability will be critically dependent upon getting to those positions. (Emerey and Trist 1972, 46)
3.06 Type III - Disturbed Reactive: As civilization
became the dominant form of human society, the various civilizations grew into
closer contact with each other.
This meant that environmental resources were now a potential source of
competition and conflict, i.e., war, e.g., the ancient Egyptians and Hittites of
Asia Minor fighting in the 15th century B.C.E. over what is now
Co-presence makes a real difference in a placid, clustered environment because the survival of the individual systems requires some strategy as well as tactics. In this environment, each system does not simply have to take account of the other when they meet at random, but it has to consider that, what it knows about the environment can be known by another. That part of the environment to which it wishes to move is probably, for the same reason, the part to which the other wants to move. Knowing this, they will wish to improve their own chances to do likewise, but will know that they know this. In a word, the presence of others will imbricate some of the causal strands in the environment. The causal texture of the environment will, through the reactions of others, be partly determined by the intentions of the acting organization. (Emery and Trist 1972, 49)
3.07 Type IV - Turbulent: With new power sources and machinery introduced during the Industrial Revolution the scale and complexity of human activity increased dramatically. This meant that not only the actions of other organizations had to be considered and strategy developed but also that the unplanned consequences of human activity became a factor in the survival and competition of nations. The causal texture became extremely dense. Thus:
(f)airly simple examples of this may be seen in fishing and lumbering where competitive strategies, based on an assumption that the environment is static, may, by over-fishing and over-cutting, set off disastrous dynamic processes in the fish and plant populations with the consequent destruction of all the competing social systems. We have recently become more aware of these processes through the intervention of the ecologists in problems of environmental pollution. It is not difficult to see that even more complex dynamic processes are triggered off in human populations. (Emery and Trist 1972, 52-53)
3.08 This is the type of environment in which nations currently compete. The implication is:
that these fields are so complex, so richly textured, that it is difficult to see how individual systems can, by their own efforts, successfully adapt to them. Strategic planning and collusion can no more ensure stability in these turbulent fields than can tactics in the clustered and reactive environments. If there are solutions, they lie elsewhere. (Emery and Trist 1972, 53)
3.09 Type V – Vortex: The dynamic processes set in
motion by the unplanned consequences of actions taken by one or more
nation-states may develop into what Emery and Trist call “autochthonous
processes” (Emery and Trist 1972, 52).
Examples cited include the harmonic effects of a company of soldiers
marching in step over a bridge. One
not referenced by Emery and Trist is the space race. At its beginnings the
Any attempt to conceptualize a higher order of environmental complexity would probably involve us in notions similar to vortical processes. We have not pursued this because we cannot conceive of adaptation occurring in such fields. Edgar Allen Poe did go into this problem in his short story ‘Into the Vortex’. He intuited that there was a survival tactic if drawn into a whirlpool - namely to emulate an inanimate object. To strive in one’s own way was to perish. Folklore and natural history are full of similar lessons about ‘playing possum’, ‘playing dead’. For our purposes we are inclined to regard these as survival tactics rather than adaptive behaviour. In case there may be something to the hunch that a type V environment has the dynamics of a vortex it is worthwhile noting that vortices develop at system boundaries when one system is moving or evolving very fast relative to the other - like a Watt County, L.A., and between the developed and underdeveloped countries. (Emery and Trist 1972, 41)
3.10 In organizing its internal environment to enhance competitiveness any organization, including a nation-state, creates some institutions (routinized patterns of behaviour) while others evolve without conscious control. The development and emergence of such teleological transcendents constitutes what Emery and Trist called “emergent processes”.
One suspects that the important social processes typically emerge like this. They start small, they grow and only then do people realize that their world has changed and that this process exists with characteristics of its own. Granted that there are genuine emergent processes (otherwise why worry about the next thirty years), then we must accept real limitations upon what we can predict and also accept that we have to live for some time with the future before we recognize it as such. (Emery and Trist 1972, 25)
3.11 Such processes require resources. In their early stages of development their energy requirements are met parasitically. i.e. they appear to be something else. This is the major reason why the key emergents are typically unrecognized for what they are while other less demanding novel processes are quickly seen.
3.12 As they grow, so do their energy and resource requirements. They nonetheless remain hidden from view by, in effect, sharing parts of existing institutions. However,
[b]ecause it is a growing process, its energy requirements will be substantially greater (relative to what it appears to do) than the energy requirements of the maturer process which it apes. Because it is not what it appears to be, the process will stretch or distort the meanings and usage of the vocabulary which it has appropriated. (Emery and Trist 1972, 25)
3.13 At some point the energy and resource requirements of such emergent processes leads to symptoms of debility in the host structure that finds it increasing difficult to mobilize resources and meet new demands. As development continues symptoms of intrusion within the host structure appear and when the new structure becomes roughly equal in energy and resources with the host, mutual invasion occurs:
At this stage it should be obvious that there is a newly emerging system but mutual retardation and the general ambivalence and lack of decisiveness may still lead the new system to be seen simply as a negation of the existing system. (Emery and Trist 1972, 26)
In his analysis of Power,
Bertrand de Jouvenal noted the withering away, in face of the State, of
intermediate organizations of Power (Brogen 1949, xviii). With the end of the Second World War this
process seemed to continue in most Western countries with the growth of the
so-called ‘Welfare State’. In the
1970s,‘80s and ‘90s as well as the early years of the new century, however, four
changes occurred that, to my mind at least, qualify as an emergent
processes. The first involves the
emergence of ‘hybrid parts of the State’ (Birkinshaw, Harden and Lewis
1990). The second involves the
sublimation of Power into economic competitiveness. The third involves a clash of
3.15 In a comparative
analysis of the constitutions of the
3.16 While Lord Keynes is best remembered for his rules governing navigation of the ship of State in the economic ocean, the authors remind us that he also foresaw the growth of semiautonomous bodies associated with the State which, like dolphins swimming ahead, lead the way towards the public good as they understand it. In this regard, it should be recalled that Keynes was the father of the Arts Council of Great Britain, a postwar institution funded by the State but operating at arm's length from its political direction.
3.17 Written just after Margaret Thatcher left the scene and the Soviet Union had collapsed, the authors argue that contrary to orthodox Thatcherism and its North American variants, the ship of State is not returning to some mythic free market port with a crisply defined coastline separating public policy from a mainland of private self-interest. Rather, in keeping with Keynes's prescience, semiautonomous bodies have become vessels in a public/private convoy used to ‘offload’ responsibilities accumulated by the ship of State during the rising tide of the postwar Welfare State. The course of the ship remains unchanged.
From the constitution emerging after
the English Civil War of the mid-1600s to the republican revolutions of the 18th
century, first American and then French, the authors argue there has been a
progressive constitutional cooptation of private interest in pursuit of the
public good. The most evolved
examples today are the post-war constitutions of
This restructuring has been
necessitated by the inherent complexity of modern life, the limits of
rationality resulting from imperfect information and a turbulent policy
environment. This fueled a perestroika as fundamental, if not as
apparent, as that which shattered the
3.20 The authors use a body of literature concerning ‘corporatism’ to define this restructuring in terms of stable bargaining relationships between associations of private interest like the defense industry and the State. They point out that corporatism is not necessarily incompatible with, but rather potentially complimentary to, traditional geographic-based constituency democracy. While the author's suggest 'tripartism', i.e. government, management and labour cooperation is passe, an ironic legacy of Thatcherism and its legislative imposition of the secret ballot on unions in the U.K.may be the re-democratization of the union movement - final realization of Sydney and Beatrice Webbs’ dream of industrial democracy.
But public authority exercised by
private interests raises questions of accountability. With the exception of the
post-war Austrian and German constitutions, there has been no equivalent glasnost or openness. Various factors conspire to obscure, at
3.22 The authors present a range of accountability regimes to make the new public/private partnerships transparent to public scrutiny. In this regard, they define ‘constitutional’ in procedural terms such as participation by citizens in open and informed debate about the objectives, policies and procedures of public policymaking. They call not only for freedom of information but also creation of intermediating institutions to process information into forms accessible to the public.
3.23 A current example
3.24 With the end of
the Cold War in 1989 a new era began in the competitiveness of nations. Where before economic growth and
development were tools ultimately intended to foster the military
competitiveness of nations, afterwards economic growth and development became
the primary focus of competitiveness with the exception of at least the one
remaining superpower – the
3.25 Beneath the
protective military umbrella of a Pax
“benign mercantilism,” an approach to national economic policy that is designed to enable a society to “retain domestic autonomy and possess valued industries in a world characterized by the internationalization of production, global integration of financial markets, and the diminution of national control.” (Freidberg 1991, 274)
3.26 In response to WTO imposed limits on subsidies and other national measures to favour domestic producers, an emergent process is appearing – a shift from established industries towards innovation, i.e., creation of new goods, services and entire industries. This is made possible due to ‘monopoly’ rights recognized and approved under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
3.27 In response to
this opening, nation-states are in the process of creating or refining what have
been called ‘national innovation systems’ (
3.27 The nexus of
3.28 There are number
of problems associated with
3.29 Second, NIS are
generally focused on geographically concentrated “clusters” forming part of what
can be called a ‘high tech’ regional development program (a stylish name for a
perennial problem). Such clusters
tend to centre on major universities and colleges and encourage partnership with
private and public sector agents at the local, regional, national and global
levels. The importance of such
local clusters and the unique ways in which successful interactions operate has
led some observers to suggest they represent a significant limitation to the
globalization process (Dicken 1994; Storper 1992). The increasing importance of major
metropolitan areas as the hosts of innovation clusters may weaken the importance
of national government as the locality rather than the nation becomes the focus
of attention. In a similar way,
development of a shared sense of transnational regional identity like
3.30 Third, the role
of multinational corporations (another emergent process threatening the power of
the nation-state) is generating stresses and strains on the emergent
3.31 The utility of
3.32 In July 1947, the
quarterly Foreign Affairs published
an anonymous article signed “X” entitled “The Sources of Soviet Conduct.” It proposed what was to become the basis
3.33 With the fall of
the Berlin Wall and the end of the
3.34 Events since
publication of the article, specifically the
3.35 Yet more subtle
and simmering differences and disputes, long suppressed by allies and
adversaries in the coordinated bi-polar global struggle called the Cold War are
re-surfacing after a fifty year quiescence. Such differences can be summed up as the
effort to establish, maintain and/or enhance ‘cultural sovereignty’. By 1989 the term was current in
3.36 In summary, cultural sovereignty involves the struggle to be heard at home and abroad above the booming voice of the American entertainment industry that has succeeded in penetrating the cultural marketplace of every nation on earth. The one remaining superpower is thus also a global cultural colossus spanning East, West, North and South. Fuelled in part by the peculiar pricing methods used in the entertainment industry, i.e. a rate per viewer rather than the production cost of the work itself, the high production standards embodied in American entertainment programming have set the standards demanded by audiences around the world. As audience dollars flow to American programs they flow out of a country leaving the local arts industry poorer - financially and culturally in that local production is not encouraged.
3.37 The battle for
cultural sovereignty is being fought on two fronts. The first is the economic front where
3.38 The second front
of the cultural sovereignty campaign is international institution building as
part of the emerging field of what I call 'foreign cultural policy'. Three strands of foreign cultural policy
are currently visible. First,
flowing out of initiatives of UNESCO, of which the
3.39 Second, at the time of the initial meeting of ministers of culture (June 1998) a parallel non-governmental meeting of cultural representatives from 30 countries was hosted by the Canadian Conference of the Arts in Ottawa: At Home in the World: An International Forum on Culture and Cooperation. The conference concluded that each nation must have the ability, unfettered by international trade agreements, to take measures and adopt policies that maintain and enhance its culture. The conference resulted in formation of the World Coalition for Cultural Diversity that in November of 1999 was renamed the International Network for Cultural Diversity. As of today more than 160 organizations from almost 30 countries on every continent have signed the declaration of principles of the Network recognizing the need to promote cultural diversity and maintain the ability of sovereign nations to support their cultures in the face of globalization.
3.40 Third, the Canada
Council for the Arts in
3.41 The nonprofit
organization is open to agencies that support the development of arts and
culture, either through funding or advocacy. Canada Council director Shirley Thomson
was appointed as interim chair of the secretariat, which will be stationed in
3.42 Taken together these developments have placed Art & Culture near center stage of international affairs as an emergent process in the competitiveness of nations. Art and culture are also increasing at the centre of the economic competitiveness of nations.
3.43 Beyond cultural
sovereignty and the commercial viability of national ‘cultural industries’ lays
Over the last two decades, straightforward advertising
has given way to branding -- giving products and services an emotional dimension
with which people can identify. In
On the one hand the rise of
3.45 On the other hand, contemporary branding is an extension of the ancient art of ‘historiography’ practiced by dynasties during the medieval and Renaissance periods of western European history. National historiography, the origins of nations, differ between the nations states that coalesced into modern Europe out of Germanic occupation of the Western Empire. In France, it was the Chanson de Roland concerning the glories of Charlemagne's champion. In England, it was the Arthurian legend and the Holy Grail:
In the history of myths of national origins few have been as influential and have had such a curious development as those popularized by Geoffrey of Monmouth in his History of the Kings of Britain. His writings, appearing about 1138... had a marked influence in subduing the social animosities of the Bretons, Anglo-Saxons, and Normans and drawing them together into a single nation. Geoffrey's fanciful account was used by early Plantagenet monarchs to support their regal claims and for both Tudors and Stuarts it came to constitute a useful prop to their dynastic ones. Though confidence in its historical reliability had almost evaporated by the eighteenth century, as the chief source of the Arthurian legend its influence carried on ... as a spur to Celtic imagination... into our own day. (MacDougall 1982: 7)
3.46 The power of this
myth - including the images and works of art it inspired - can be seen in the
schism between the Churches of Rome and of
3.47 With Elizabeth I, this legend was played out as the Fairy Queene. It was Her Court, not that of Louis XIV a century later, that revolutionized the nature of consumption and began a consumer boom that still influences our modern sense of style and fashion (McCraken 1988). To keep Catholic and other nobles loyal, in very troubled times, Good Queen Bess exploited the hegemonic power of things and used the court to communicate the legitimacy of Her Rule.
3.48 Before her time, the family was the traditional unit of consumption. One bought for future generations. One bought that which would last because it took five generations of patina to move one's family into the “gentle” class. She, however, forced the ambitious to rise above their station by spending now, for themselves - to be the prettiest peacock at court, the most generous. Members of the court were compelled to consume their way to honor, power and gentility. This shift from long- to short-term consumption had a dramatic impact on the evolution of Western culture contributing to the breakdown of feudal society and the emergence of modern consumerism. Thus linking a nation with a myth (a brand) gave it legitimacy that could be used to organize its internal resources and thereby assist it in competition with other nation-states.
3.49 Another emergent process with significant implications for the competitiveness of nations is global urbanization. The world has experienced unprecedented urban growth in recent decades. In 2000, about 47 percent of the world's population lived in urban areas, about 2.8 billion. There were 411 cities over 1 million. In the more developed nation-states about 76 percent of the population lived in urban, while 40 percent in less developed countries. However, urbanization is occurring rapidly in less developed countries and it is expected that 60 percent of the world population will be urban by 2030 (Population Division, 2002). A global society where there is virtually contiguous urban development separated only by major natural barriers has been called the ‘Ecumenopolis’ by urban planner Constantinius Doxiadis (Doxiadis 1976, 327).
3.50 In what may also
become a new “X article”, Robert Kaplan in “The Coming Anarchy” argues that
national security in the sense of defending borders is outdated (Kaplan
1994). He argues few live in the
countryside any more. Borders are
now simply lines on a map. Everyone
lives in cities. For the first time
in history, the majority of humanity does, or shortly will be “civilized”. However, it is in the cities that the
tribes - old and new - are gathering; tribes that pose the real threat to
national security. Whether it is
street gangs of south
4.01 As a biological life form the nation-state is engaged in developing and refining its internal resources and in constant competition with its fellows for access to environment resources. Access to such resources sometimes involves cooperation and collaboration approaching symbiosis (the European Union and NAFTA are examples); at other times, it has, still does and probably will continue in future to involve violent confrontation called war. The repertoire of competitive techniques developed over the centuries continues to grow and evolve. However, all such techniques – including war – remain available to the nation state. Thus the competitiveness of nations consists of overlapping temporal gestalten stretching from the past to currency in the present and extending into the foreseeable future.
Merriam Webster Collegiate Dictionary
also defines ‘nation’ as a non-Jewish nationality based on the Biblical
reference in Psalms 2:1- why do the nations conspire. This catches another dimension of nation
as a ‘chosen people’, i.e., chosen by God without regard to common origin,
tradition or language. Thus Abraham
sealed a covenant with God naming the Jewish nation “God’s Chosen”. With Jesus, Christians believed that the
covenant was transferred forming what in medieval times was called
‘Christendom’, or, if you will, the nation of Christ. Then with Mohammed, Islamics believe the
covenant was transferred yet again, and for the last time, to the ‘nation of
Islam’. The openness of these three
religions, in a way, provided the foundation for multicultural nation-states of
today such as the
2. More formally, a nation state is like a biological life form in that:
a) it is organized like a cell separated others and from an external environment by semi-permeable osmotic borders of exchange, trade and sometimes ‘violent’ acquisition of resources from other nations (war);
b) it is fueled by an internal metabolism involving conscription, taxes and spending on its own part as well as the revenues and expenditures of its constituent institutions and citizens;
c) it exhibits homeostasis, i.e. it strives to maintain internal conditions separate from the outside environment;
d) it grows purposively by converting environmental materials into itself, refining and upgrading its institutions and citizens and in reacting to and selecting external stimuli;
f) it reproduces, traditionally, by transferring institutions and citizens to ‘colonies’ and maintains its internal structures through the reproduction and education of its citizens and the acquisition of immigrants; and,
g) it evolves, unless disturbed by external forces, towards ever more complicated structures and forms. Thus:
… the longer a society has been able to enjoy stability the more numerous will be the number of special interest groups it sustains. Revolutions, foreign invasions and dictatorships, and so on, are inimical to the slow and difficult growth of special interest organizations. (Beckerman 1983, 916-917)
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