The Competitiveness of Nations in a Global Knowledge-Based Economy

The Competitiveness of Nations

The Past Present Future

Harry Hillman Chartrand, April 2002

0.0 Introduction                                                                      

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.


1.0 What is a Nation?

1.01      There are many kinds of nations.  Some are folk- or language-based such as Germany, Japan and various ‘nations’ of aboriginal peoples around the world.  Some are based on religion like the Islamic Nation [1].  Some are geographical entities resulting from the colonial experience of Western European countries over the last five centuries, e.g. Australia, Canada, Ghana, Indonesia and the United States.  Such geographical nations have, in some cases, become stable nation-states and ‘multicultural’ through large scale immigration while others have become unstable due to the historical splitting apart and mixing of preexisting tribal or folk nations by former colonial powers

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 Australia, Canada, China, Russia and the United States.  Others are geographically tiny like Andorra, Monaco and San Marino.  Some have populations in the hundreds of millions or even billions like China and India.  Others count their citizens in tens of thousands.

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.

1.05      The First World includes member countries of the Organization for Economic Cooperation and Development (OECD).  These are advanced industrialized countries with well-developed market economies enjoying political democracy.

1.06      The Second World includes countries of the former Communist Bloc which, until the collapse of the Soviet Union, formed a body parallel to the OECD called the Council for Mutual Economic Assistance (COMECON).  They had one-party political systems and command economies.  With the breakup of the Soviet Union most have, more or less, tried to adopt political democracy and introduce market economics.  Only North Korea and Cuba maintain command economies.  China, and more recently Vietnam, by contrast, retain a communist monopoly of political power but have adopted a more or less market economy.  Nonetheless, the Second World still exists.  It has relatively high levels of higher education and advanced technology in selected sectors, particularly defence.  But it also has underdeveloped democratic and market institutions as well as antiquated communications and transportation infrastructure.

1.07      The Third World includes countries of the “South”, i.e. the southern hemisphere.  They are politically diverse.  Some are political democracies with market economies; some are authoritarian; some are ruled by military regimes.  Third World economies tend to rely on natural resources and cheap labour.

1.08      Finally there is the Fourth World, which, unlike the previous three, is not made up of nation-states.  Rather it includes native or aboriginal nations of the Old and New Worlds.  They live in northern Europe, i.e. the Lapp or Suomi people; in Asia, i.e. so-called tribal or nomadic peoples (Stackhouse 1994); in Australia, i.e. the “aborigines”; and in both North and South America, i.e. the Amerindians, including those of mixed blood such as the Metis peoples of Canada.  Essentially they have been dispossessed by colonization and/or modernization.

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 – China, Russia and the United States.  Of these the United States is a so-called superpower with a global military reach.  Beneath the great powers are middle powers such as France, India and the United Kingdom and below them are regional powers like Brazil, Indonesia, Iran and Iraq.  Two nation-states are potential great powers – Germany and Japan – but they have had constitutional limitations placed on their military potential by the victors of the Second World War.

1.10      In many ways nation-states are like biological life forms [2].  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”. 


2.0 The Competitiveness of Nations

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 Third Republic is true of all commonwealths.  Being a ruler is a trade.  So we can apply to all types of ruler the judgment of Swift. “Arbitrary power is the natural object of temptation to a prince, as wine or women to a young fellow, or a bribe to a judge, or vanity to a woman.”  For the best of motives, rulers will, like courts, try to add to their jurisdiction. (Brogan 1949, xviii)

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.


a) Teleological Transcendents & Their Economy of Knowledge

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 men in Europe under arms.  The 1914 - 1918 war killed or mutilated five times as many.  And in the 1939 - 1945 war there is no counting the men, and the women and children, engaged in the struggle - as long ago those on Ariovistus’s chariots were counted.  (de Jouvenal 1949, p. 8)


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:

  • labour allying itself with government to regulate the behaviour of employers beginning with abolition of various conspiracies acts against unionization in the 1880s;

  • blacks and other visible minorities allying themselves with government to regulate 'white' behaviour beginning in the mid-1960s;

  • women allying themselves with the State to regulate the behaviour of men in the 1970s; and,

  • police enforcement shifting focus, beginning in the 1980s, from crimes against property to crime against persons, e.g., the increasing concern with wife and child abuse including international efforts to stop 'kiddie porn' on the world-wide web.

b) Immanent Hierarchies & Their Exercise of Sovereign Power

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 China and eventually in capitalist Hong Kong as well.  Japanese companies have regularly held study groups to seek insights from the Art of War that may be implemented as corporate strategy.  Koreans, enduring intense international pressure to revalue their currency, open their markets, and submit to trade limitations just when prosperity is attainable, are discovering strategies for international business warfare in these books.

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 Japan.  The ubiquitous salaryman may be seen reading them while commuting to work, and there are even comic-book editions of the Art of War and novels about Sun-tzu to satisfy those so inclined. (Sawyer 1994, 15-16)

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 Wilson”: “In statesmanship get the formalities right and never mind the moralities.”  Secondly, it was the object of government to preserve that which had been acquired.  Of the administrative measures necessitated by this I shall speak presently.  It may be premised here that, by comparison with Kautilya (to quote Butler):

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, Alliance and “Doppelspiel.  All these are thoroughly, not to say laboriously, considered.  (Gowen 1929, 180)


c) The Foundation of Competitiveness

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.

Since ancient Athens taxed its empire to raise a fleet against Sparta, there has always been a strong connection between wealth and military power and, therefore, in the most simple and direct way, between economics and national security. (Friedberg 1991, 265)  

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 ancient Greece (Macedonia) the greatest Power in the known world.  This reflected the success of his father, Phillip, in constructing the best organized and efficient military institution of the ancient world.  Similarly, a Genghis Khan could take tribes of nomads whose economic strength was negligible and convert them into an empire stretching from the Pacific Ocean to the gates of Warsaw.  Thus while economic strength usually serves as the foundation for military Power it has not always, is not, and may not in future necessarily be the case.  Thus:

[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 Iraq, that number has now increased substantially.  Drawing on assistance from friendly governments, the services of foreign scientists and corporations, and, increasingly, their own domestic resources, a lengthening list of states has acquired the capability to manufacture everything from tanks to fighter aircraft to ballistic missiles.  The number of nations able to assemble weapons of mass destruction (whether nuclear, chemical, or biological) has also been increasing, as has the ability of even less developed countries to provide themselves with secure channels of communication (through the use, among other things, of fiber optic cables and commercially available encryption devices) and advanced intelligence (through access to satellites, whether nationally or privately launched). (Freidberg 1991, 270)


3.0 Changing Environments & Emergent Processes

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 exception of Antarctica, the entire planet.  The nature of competition has, accordingly, adjusted, adapted and evolved reflecting the changing nature of the environment.  

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)


Exhibit 1

Competitive Environment






Type I

Placid Random

goals and noxiants distributed randomly and independent through environment

availability of environmental relevancies and approach-avoidance tactics

hunter gather

Type II

Placid Clustered

placid environment with clustering of goals and noxiants

choice of strategies more adaptive than choice of tactics

first civilizations

Type III

Disturbed Reactive

placid clustered environment with more than one system and environment relevant to one relevant to survival of other

each system account not only for others when meet randomly, but has to consider that what it knows about environment can be known by others


Type IV


dynamic processes arise from field itself creating significant variances for the component systems

dynamic field processes emerge as an unplanned consequence of actions of constituent systems


Type V



sheer survival tactics including “playing dead”

collapsed civilizations


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)


(a) The Past

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., Egypt along the Nile, Sumeria around the Tigris and Euphrates, Harrapa around the Indus and China around the Yellow River.  While focused around clustered resources these early civilizations were widely separated and seldom came into competition with one another, i.e. the environment was still placid.  Hence this second type of environment is called Placid Clustered.  Conflict, when it did occur, was generally the result of nomadic societies functioning in what they considered a Placid Random environment coming upon a placid clustered civilization and plundering its resources, e.g. the Aryan invasion of India and the destruction of the Harrapan civilization about 1500 B.C.E. and the Germanic invasion of the Western Roman Empire about 500 C.E.  In some cases, however, nomadic societies having gained power were, in effect, absorbed by the more advanced placid clustered civilization, e.g., the Mongols and Manchurians in the case of China. 

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 called the Middle East.  This type of ‘strategic’ environment was the norm up to the Industrial Revolution.

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)

(b) The Present

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)


(c) A Possible Future

3.09      Type VVortex: 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 Soviet Union had larger booster rockets and the Americans had to ‘miniaturize’.  The result was the micro-circuit and the entire modern electronics industry as we know it today – and ultimately the Internet.  Emery and Trist did not examine this type of environment in any detail because:

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)

(d) Emergent Processes

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)

3.14            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 civilizations (Huntington 1993), cultural sovereignty and the rise of the ‘Brand State’.  The fourth involves the near total urbanization of the human population into what has been called the ‘Ecumenopolis’ (Dioxides 1976).


i - The Hybrid Parts of the State

3.15      In a comparative analysis of the constitutions of the United Kingdom, the United States, France, Germany and Austria, three British constitutional lawyers concluded their findings in the title of their work: Government by Moonlight: The Hybrid Parts of the State (Birkinshaw, Harden and Lewis 1990).

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.

3.18            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 Austria and Germany that make explicit provision for the constitutional accountability of private interests serving the public good.  Concentrating on the least evolved or formalized, the ‘unwritten’ constitution of the United Kingdom, the authors demonstrate off-loading ranges far and wide - from accounting standards, financial markets, industrial strategy, land-use planning, labour relations, national defense, professional self-regulation, R&D as well as art, education, health, housing, voluntarism and welfare.

3.19            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 Soviet Union.  The authors argue that through bargaining, cooptation and threat of legislation, the State has effectively transferred various public responsibilities to a spectrum of public/private institutions.  It has done so in order to reduce costs, increase effectiveness and simplify its policy environment.

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.

3.21            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 least in Britain, the exercise of public authority by private interests.  These include free market rhetoric, failure to develop a body of administrative law comparable to that on the Continent or even in the United States and a self-serving conspiracy of silence between the State and recipients of public authority.  Ministerial accountability, while no longer functional, is a powerful incantation in a parliamentary democracy and has blinded citizens to the changing nature of democracy.

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 in Canada highlights the accountability problems associated with these hybrid parts of the State.  In March 2001 the Canadian Institutes of Health Research (CIHR) announced preliminary guidelines for stem cell research (a culturally and political controversial issue) due to the failure of Parliament to do so.  In April 2002 a political outcry was heard in Parliament when the CIHR was about to fund research according to these guidelines (Laghi Apr. 30, 2002, A1).


ii – The Sublimation of Power

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 United States.  Under the hegemony of the United States, Power in most other nation-states is being sublimated from military into economic competitiveness.  This has been the case for both Germany and Japan following the Second World War and the constitutional constraints on their military imposed by the victors.  Whether this emergent process of sublimation will continue is an open question but at present there is no major power including China and Russia that appear able or willing to threaten American military predominance.

3.25      Beneath the protective military umbrella of a Pax Americanus, the U.S. sponsored, first during the Cold War and then after, a complex web of international institutions including the United Nations.  In addition to political and cultural affairs, economic competition between nation-states is being formalized and structured through a range of international institutions – some regional, some global - the most important of which is the World Trade Organization (WTO).  Unlike its Cold War predecessor, the General Agreement on Tariffs and Trade (GATT), the WTO not only establishes rules for economic relations between nation-states, it also includes a dispute settlement mechanism with the power to grant retaliatory measures against offending parties.  In effect, the WTO can even limit what has been called:

“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’ (NIS) as part of a knowledge-based economy.  A number of countries have in fact undertaken audits of their knowledge resources to foster the innovation process (Malhotra 2000).  Phillips and Khachatourians (2001), quoting Metcalfe, define a NIS as “that set of distinct institutions which jointly and individually contribute to the development and diffusion of new technology and which provides the framework within which governments form and implement policies to influence the innovation process.  As such it is a system of interconnected institutions to create, store and transfer the knowledge, skills and artifacts which define new technologies.”  The OECD has formalized the NIS concept and produced a blue print for its member States (OECD 1997).  Innovation is, in effect, becoming the new ‘core’ sector intended to increase national competitiveness.

3.27      The nexus of NIS is a complex of private/public/university research centres and institutes as well as national associations and granting-giving councils.  Such centres serve as a focal point for the common interests of national governments, their grant-giving councils, universities and private sector enterprise.  This nexus has been selected based upon the past success of publicly funded research councils and specialized research institutes in supporting ‘pure’ research and developing new, commercially viable technologies.  As noted by Phillips and Khachatourians (2001) concerning development of genetically modified canola, the National Research Council of Canada played a leadership role in the 1950 to 1985 period.  In February 2000 the Government of Canada announced $160 million in funding to Genome Canada  It is a nonprofit corporation dedicated to developing and implementing a national strategy in genomics research.  Similarly in the United States, the Nanobiotechnology Center was created in June 2000 with the support of the U.S. National Science Foundation and led by Cornell University on behalf of a consortium of American universities and health institutions  The creation of these institutions is symptomatic of the rapid growth and dynamic change in public support to innovation as the chosen economic sector to enhance competitiveness.

3.28      There are number of problems associated with NIS.  First, the accountability of such ‘national systems’ is generally to ‘stakeholders’ not to the public at large making NIS another unaccountable ‘hybrid part of the State’. 

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 ‘Columbia’ (the northwest of the United States and the southwest coast of Canada) may also reduce allegiance to the nation-state by both citizens and private enterprise.  This question of ‘allegiance’ has also been raised by Robert Reich concerning ‘knowledge’ or ‘symbolic’ workers whose allegiance is increasingly to global communities of functional interest rather than to their home nation-state (Reich 1991).

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 NIS.  Specifically the need for cooperation with the ‘majors’ for the commercial innovation of new technologies and techniques may lead to the ‘appropriation’ of benefits (Patel and Pavitt 1998).  A problem related to appropriation of ‘innovative’ knowledge by multinationals is State-sponsored industrial espionage which is used as a strategic trade policy by some nation-states to acquire commercially valuable knowledge that is then made available to domestic corporations (Whitney and Gaisford 1996)

3.31      The utility of NIS is still being assessed.  The recent Government of Canada Innovation Strategy, for example, has been panned by some critics for failing to get the ‘local’ right (Wolfe 2002).  Furthermore, NIS functions under an evolving definitional umbrella of the WTO, e.g., what constitutes a subsidy?  Furthermore, the inability of WTO rules to resolve innovation issues, such as the use of growth hormones in livestock and GMO foods in general, between the European Union and NAFTA demonstrates that innovation has become a source of deep division between the two largest and most culturally related trading blocs in the world.


iii – The Clash of Civilizations, Cultural Sovereignty & the ‘Brand State

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 for U.S. policy toward the Soviet Union.  The policy was that of containment, which would remain fundamental for the duration of the Cold War.  The author, soon revealed to be George Kennan, opposed continuing appeasement of the Soviets and promoted firm opposition to further expansion of communist power (Kennan 1947).

3.33      With the fall of the Berlin Wall and the end of the Soviet Union, a new, post-modern era began.  Almost immediately, a search started for the pattern of this new, unexpected era.  One noted author, Samuel Huntington penned what may become the “X-article” for the post-Cold War world - “The Clash of Civilizations?” (Huntington, 1993).  Huntington argues that global conflict based on ideologies has been replaced by the clash of cultures.  He suggests it will be where the “tectonic plates” of different cultures meet that conflicts will erupt.  He identifies eight major ‘civilization identities’: Western, Confucian, Japanese, Islamic, Hindu, Slavic-Orthodox, Latin American and African.  The chaos in the Balkans during the 1990s, where Catholic Croats, Orthodox Serbs and Moslem Bosnians (all of whom are ‘Southern’ Slavs sharing the same Serbo-Croatian language) were at each others throats, lends weight to his argument.   

3.34      Events since publication of the article, specifically the September 11th, 2001 attack on the World Trade Center and the subsequent international war against terrorism, also support his argument that it is not just nation-states that are in competition but rather cultures.  In many ways, the Al Quieda is the type of emergent process identified by Emery and Trist – starting small and parasitically attached to the Afghan Taliban and other regimes of the Islamic Nation.  

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 Canada having been introduced into the public policy vocabulary during the 1970s at the height of the ongoing struggle for Quebec independence.  Since that time, and with the collapse of the “Communist threat’, it has reached the global diplomatic stage.

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 Canada, France and Sweden, among others, are pressing for the World Trade Organization to exempt ‘cultural goods and services’ from free trade restrictions.  These countries are also at the hub of a web of international film and television co-production agreements intended to generate the high production standards demanded by audiences at home, abroad and especially in the American marketplace itself.  At home, these countries, together with the European Union, are actively engaged in manipulation of the regulatory environment to ‘engineer’ a financially viable entertainment industry through control of the electromagnetic spectrum and other media of communications.  The announcement (December 19, 2000) by the European Investment Bank that it is making $445 million US available to help European media companies compete against Hollywood and Silicon Valley is an example. In these efforts, the Canadian experience has served to lead the way.

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 United States is not a member, the Government of Canada hosted an International Meeting on Cultural Policy, June 29-30, 1998 in Ottawa.  Twenty countries participated.  The United States, however, was restricted to sending an observer because the meeting involved national ministers of culture.  The United States has no such minister.  The meeting resulted in the formation of a new international institution: the International Alliance of Culture Ministers (IACM). 

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 Ottawa hosted the World Summit on the Arts and Culture in December 2000.  Some 300 delegates representing arts and culture funding organizations including arm's-length arts councils from 60 countries agreed to form an international federation to advance art and artists around the globe. 

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 Sydney, Australia.

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 the ‘Brand State’.  

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 this way, Singapore and Ireland are no longer merely countries one finds in an atlas.  They have become “brand states”, with geographical and political settings that seem trivial compared to their emotional resonance among an increasingly global audience of consumers.  A brand is best described as a customer's idea about a product; the “brand state” comprises the outside world's ideas about a particular country. (van Ham 2001)

3.44            On the one hand the rise of the Brand State reflects the importance of tourism as the largest industry in the world.  As well, a nation-state that succeeds in establishing itself as a quality ‘brand’ can benefit by increasing the sale of all its goods and services on world markets. 

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 England over Henry VIII's divorce.  In his argument with the Pope, Henry VIII drew on the Arthurian legend to prove the independence of the English Crown and Church.  The argument went like this:

  • Britain was named after Brutus, grandson of Aeneas of Troy, son of Venus and legendary founder of Rome.  Britain, therefore, had as noble a claim to the Imperium as Rome; and,

  • Joseph of Arimathea took the cup from the Last Supper with some of Christ's crucification blood and fled to Britain where, in 63 C.E., he founded a church in Glastonbury.  This sanctioned the claim of an English Church founded in Apostolic times (MacDougall 1982: 14).  It is from this argument that the Grail legend, originally a Celtic myth about a cauldron of immortality (Layard 1975; Squire 1975) gained quasi-Christian status, and in the guise of Perceval received even Wagnerian recognition.

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.

iv – The Ecumenopolis

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 Los Angeles, or of St. James Town in Toronto, or of Mogadishu in Somalia, low grade urban conflict between tribes of urban barbarians threatens the very foundations of the post-modern nation state.  Given that it is in such urban areas that innovation clusters are rooted, the development of widespread urban unrest has significant implications for the competitiveness of nations.


4.0 Conclusions

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.


5.0 Notes

1. The 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 United States, Canada, Australia and New Zealand that have welcomed as immigrants from varied origins, traditions and languages.  Other peoples have, however, also felt ‘chosen’ by God.  Thus the Japanese trace their national origins to the ‘Sun Goddess’ of whom the emperors of Japan claim to be direct descendents.  Unlike the ‘People of the Book’, an Islamic term used to refer to Jews, Christians and Moslems, the Japanese nation does not accept ‘converts’.  Rather the nation is racially or ‘folk’ based.

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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