in times of terror, only the state will do

The Australian Financial Review, 31 October, 2002


In the late nineteenth century, workers began to look to the state for protection from market forces which, according to political economist Karl Polanyi, if left unregulated would have annihilated industrial society. Legislation covering working hours, public health, factory conditions and trades unions were acts of community self-defence against the onslaught of unfettered markets.

During the current phase of globalisation, many states have relinquished the sovereignty that once insulated their workers from global markets. Significant power has been surrendered to an unaccountable foreign investment community comprising transnational corporations, bondholders, funds managers, currency traders and speculators. States seem to be either unwilling or unable to provide their populations with protection from exposure to the world economy.

In the early twenty-first century, the citizens of Western democracies are again looking to the state for protection from transnational forces which imperil their security. On this occasion the threat is global rather than national and private sector rather than governmental - it's retail terrorism.

The irony of globalisation's cheerleaders in Canberra, Washington and London substantially increasing the size and reach of their governments in response to the threat of terrorism should not, therefore, be lost on anyone. Whether it is sweeping new powers of surveillance and detention for security agencies or a massive boost to military spending, John Howard, George W. Bush and Tony Blair have discovered a latent love for the overarching state.

It's hardly surprising. The victims of the Bali bombings, together with their friends and families, instinctively looked to the state to provide them with urgent humanitarian relief in Kuta. Market forces aren't much use in medical emergencies of this kind, nor are they going to be any help in tracking down and prosecuting those responsible for the atrocity. Again, only the state will do.

Far from withering away as both Marxists and liberals had predicted, the state has made a remarkable comeback in recent years. As political scientist Stephen Krasner has written, "globalisation and state activity have moved in tandem." Just ask John Howard. It was his ability to champion the role of the state in "border protection" which secured him victory in last year's federal election. And don't expect to hear much from him or his friends in the White House and Downing Street about how free trade will disarm Iraq of its weapons of mass destruction. The threat of old fashioned state violence is preferred.

In recent years the issue of free trade has even struggled to make the agendas of those fora specifically established to negotiate trade liberalisation. In 1999 the APEC heads of government summit in Auckland was salvaged by the militia attacks in East Timor. In Shanghai last year it was 9/11 which gave the meeting relevance. This year in Los Cabos few were talking about free trade targets in 2010 and 2020, instead the scourge of terrorism in the region after the Bali bombings was the focus. All issues for the state, not the market.

Most terrorism is of the state variety - Russia in Chechnya, Turkey in Kurdistan, Israel in Palestine, and Indonesia in Aceh and West Papua. But when the culprits are employees of privately-owned networks like Al Qaeda, as appears likely in the case of the Bali attacks, don't expect mercenaries to be sent to Indonesia looking for them.

As if guided by the aphorism that 'it takes a thief to catch a thief', Defence Minister Robert Hill has indicated that he wants the ADF to work with Indonesia's own state terrorists - Kopassus - on counter-terrorism across the archipelago. It may be a morally bankrupt strategy, but in the absence of any market-based solutions to terrorism, it has a certain appalling logic to it.

Weak states such as Afghanistan, Sudan and Indonesia are always going to be vulnerable to terrorists groups looking for a distracted or sympathetic host. The solution to this problem involves the kind of nation-building which 'drains the swamp' of fertile ground for recruitment to extremist causes, and a realisation that 9/11 and Bali are part of a revolt against the dominating power of Western culture. Only concerted action by the West which supports failing states and seriously addresses Third World claims for justice, will undercut the appeal of fundamentalism.

Far from bringing an end to the nation-state, globalisation has enhanced its contemporary relevance and increased its authority.