The Hollowness of State Authority

Susan Strange writes her article mainly focused on her opinion on the current Global World Market and how it is diminishing the power of the state. Strange begins her argument by showing the disillusionment in the current world when she says that the people no longer believe in the politicians who believe they have the answers to the economic and social problems. Strange even gives examples of states that have been brought down by the citizens becoming unsatisfied with leaders as what happened in the Soviet Union and some central European States. Strange shows the possibility of collapse to exhibit her severity in her argument.
Strange's possibilities of how even the state should be run is fueled by her faith in the common man. "Perceptions of ordinary citizens are more to be trusted than the pretensions of national leader and bureaucracies that serve them." She even states that the commonsense of the common people are a better guide than the theories taught in unversities. This bold statement is Strange's somewhat rebellion against the globalized market that looks over the commoner and focuses on the corporation.
Strange argues that the world markets are now more powerful than the states to whom the political authority over society and economy is supposed to belong. Even that the markets are now masters of the government states and not the other way around.

Strange goes on about her three paradoxes that exist in this economy. The first being that the state intervenes with the everyday life of people in different ways, whether it be laws for health, transport systems, etc. But the state's power is still diminishing. Fundamental reason for the state is the need for political authority of some kind. Something the market cannot give but apparently the state can't either.
Paradox number two involves the governments of the developed states suffering due to the loss of real authority while at the same time there is an increase in the minority societies to become their own nation. The idea of autonomy for such ethnic or cultural societies is not possible in the world market so the best given to them, if it is given, is statehood.
The third and final paradox is the idea that this issue of diminishing authority is only a western phenomenon. The examples are given from the Asian states who are not facing the same issues, whether that is because of historical occurrences, market freedom, etc., but soon will pressured more. The need to open their economy to competition, even foreign, is rising to benefit their consumers and producers. These authoritarian states will be susceptible to the market and lose their power just like other nations have.

Strange's point of view on the constant change of technology is that it illuminates changes in the power of states and the power of markets. And the increasing change, then increases the market which in turn gives the market more power. The inevitable part is also that there is no reason to believe the advancement of technology will ever stop.

My point of view of Susan Strange's argument is one of not complete compliance. I agree with much of what she argued but where can we go from here? The fact that the 100 wealthiest nations includes 49 corporations is very close to home especially in the current issues facing the United States economy. But the hope is that someone can change that, that someone could hold us above sea level before we drown.
I really agree with the severity that Strange brought to her argument, and that we can't just take all of this lightly, but the reader is left with no solution. I fear that the only way to be once again prominent is to start over but to be able to do so would mean that something would have to fall. And falling may be easier done then we, as happy citizens, are willing to admit. Just like the Soviet Union fell, the disbelief in our politicians is already a strong characteristic in our economy and that loss of hegemony could mean the replacement with something else. Commonly when there is a lack of hegemony, there comes a rise in force. Would America rise and change the situation by force before the all is lost or will we still pray to our hegemonic society that the elites somehow can pull us onward to a better World?

-Aaron Price

"The Modern World-System as A Capitalist Economy"

I believe Immanuel Wallerstein’s main objective in writing “The Modern World-System as A Capitalist World-Economy” was to inform readers of the economy being implemented around them. This article does not show enough bias to be considered opinion in my eyes but more to let the reader decide for or against such an economy.

Wallerstein starts his outline of the Capitalistic Economy by stating that the Capitalist model cannot work without a world economy. Capitalism, having the objective of gaining as much capital as possible, needs the widest scale in order to benefit from the capital collected. Wallerstein is also sure to point out that the market is considered the essential feature in the capitalistic economy and without it the system cannot perform. Wallerstein also provides his definition of the market in which that “a market is both a concrete local structure in which individuals or firms sell and buy goods, and a virtual institution across space where the same kind of exchange occurs.”

Wallerstein shows the reader what work in a capitalistic economy and what regulates it by saying that there is a need not for a literally free market but a virtually free one. The idea of a totally free market is just that, an idea, a myth. If the market were to be totally free then profit from the economy would be miniscule which is considered uninteresting to producers which is then considered removing basic social underpinnings of such a system. What the sellers prefer over an actually free market is a monopoly because you are free to create a relatively wide margin between the costs of production and the sales price, thus making higher profits.

To best use the monopoly part of the capitalist economy, producers set up quasi monopolies that are somewhat easy to create due to many things: Patents, protectionist measures, state subsidies, tax benefits, etc. Also the strong states can set up such monopolies by suppressing the weaker states’ counter-protectionist measures and then states acting as large scale buyers willing to pay excessive prices. Without these interferences the capitalist system could not thrive and therefore could not survive.

Other main factors of this economy mentioned by Wallerstein were the fact that there are two in built anti-monopolistic features in the capitalist world economy. In this way the quasi monopolies are self liquidating, but lasting long enough (30 yrs) to ensure considerable accumulation of capital. Once one monopoly ends, the producers then move on to the next leading product.

Firms also play a large role in Capitalism because of their fierce competitiveness. Firms’ cycle of bankruptcy makes bankruptcy the daily bread of a capitalistic economy.

The ideas displayed by Wallerstein are very true and he presents it in a way that bias isn’t present, but allow me to infer my own opinion. Wallerstein has neglected to comment on the hypocrisy that takes place in such an economy. Producers supposedly wanting free markets but really do not. Producers best option are monopolies but their exists regulations to liquidate them, which then in turn benefits them. There is a giant cycle of fad chasing which may accumulate the wanted capital but also deteriorate a set up economy. The overuse and abuse of such an economy has got to be taking a toll on the big picture of what value is itself. Wallerstein also neglects to show the reader the side effects of the measures at which producers go to to gain capital. The use of subsidies ends up inflicting upon other small economies, like the NAFTA trade agreement among North America. America can very freely use their machinery and farm techniques to overproduce crops like corn and then sell them to Mexico for less than it takes to produce them. Mexican farmers living off of their vending of corn crops find their once lived economy in utter depression giving them no other option but to find other work. Other work may mean moving legally or illegally into another country. All this is a result of the need for more capital put in place by this tyrannical economic system.