International commerce is hardly a recent invention. Over a thousand years ago, Scandinavian Vikings developed a trading empire that extended over most of the world then known to Europeans. But it could take them a year or more to accomplish ends that can now be achieved in a matter of hours or seconds, due to the constantly accelerating expansion of communications technology and infrastructure. It is a development which, among other things, has had the effect of weakening local and national democracy, while at the same time strengthening interests that are in a position to ride the tiger of globalization.

The latter is a process so vast, fluid and complex, that no one has yet succeeded in divining its precise mechanisms or its full implications for existing human communities. But a few preliminary conclusions seem justified, despite the present state of confusion. The most obvious is that transnational corporations are the primary vehicles and beneficiaries of globalization. It has been suggested, with good reason, that the power of the transnationals has become so great as to overshadow that of the nation-states which remain the most significant arenas of democratic practice and aspirations.

But the situation in that regard is by no means clear, due not least to the fact that transnationals have not even begun to provide the essential services for which states continue to bear primary responsibility-- basic education, law and order, transport infrastructure, and all of the other preconditions for, among other things, the successful operation of business. It has led to a curious pattern of public lobbying in which leading lights of the business community demand ever-greater degrees of freedom on the grounds that the nation-state is no longer relevant, and in the next breath complain that their respective countries have failed to provide them with adequate support in their life-and-death struggle against “competing nations”.

The global spectre

Whatever the actual nature of that case may be, the business community and its political allies have not been slow to use the threatening spectre of the global economy to advance their interests at home. In Sweden, this has meant that attacks on general welfare now focus less on its presumptive shortcomings-- which have yet to be demonstrated-- and increasingly on the problems it is declared to cause Swedish businesses in their efforts to compete in the global marketplace. Taxes, transfer payments and workers' rights are still stated to be morally reprehensible, of course, but the most popular tune nowadays is that such excesses discourage entrepreneurship and perpetuate high unemployment-- a powerful, if not especially well-documented, sort of argument.

Aggravating the use of external threats to combat egalitarian tendencies at home is the very real pressure to which most actors in the global marketplace are subjected. The ever-accelerating rate of change and the frantic demand to keep up with it seem to have created a semi-crazed atmosphere very like that of the Cold War arms race, which was also driven by essentially mindless technological innovation. In the utterances of business leaders can be detected a mounting desperation, as they struggle to meet the challenges of a steadily advancing future. It is these apprehensive souls who, as a consequence of the developments outlined above, are acquiring ever-greater influence over the affairs of the world. It is not a healthy situation.

Another conclusion that can be safely drawn about globalization is that the free flow of capital has played a crucial role in accelerating that process, and in increasing the power of principal actors. In Sweden, the most fateful policy change of the past decade was very likely the deregulation of international capital transfers-- a decision by a Social Democratic government which, like nearly everyone else involved, seems not to have grasped the fateful implications.

Take the money and run

The deregulation of capital flows in and out of the country was a concession long demanded by neo-liberal interests, including most of the business community, and it has had the desired effect, i.e. a crippling reduction of the government's ability to restrict the power of the economic elite.*

Among the effects: substantially added weight behind threats to relocate operations and investments outside the country if the government does not do as it is told: a national budget that has become hostage to the interests and limited perceptions of international money brokers; and a growing tendency for the government to favour such interests over those of the democratic majority.

All this has been interpreted by the Social Democratic leadership and others as proof that the nation-state is in decline. Palme's successor, Ingvar Carlsson, has for example postulated that, “National politicians have a formal decision-making power over an increasing powerlessness.” But such expressions of resignation may well be self-fulfilling prophecies. The question remains: Have political leaders like Carlsson been overwhelmed by the lords of the global market, or have they simply abdicated-- out of confusion, anxiety, miscalculation, or some other extraneous factor?
*One of the most effective arguments for deregulation was that the old system was no longer functioning, primarily because the large transnational companies that dominate the Swedish company were able to circumvent it. That was undoubtedly the case. But the extent of the ”leakage” was never specified, no alternatives to total deregulation were considered, and no effort was made to evaluate the consequences-- despite warnings from well-informed voices that things would turn out precisely as they now have done. It is extremely unlikely that the economic and social costs that might have resulted from retaining some form of control would have been as great as those that have followed in the wake of deregulation.

Continue. . .