The Declining Authority of States Susan Strange Today it seems that the heads of governments may be the last to recognize that they and their ministers have lost the authority over national societies and economies that they used to have. Their command over outcomes is not what it used to be. States where once master of markets, now it is the market which, on many crucial issues, is the masters over the government of states.
And the declining authority of states is reflected in a growing diffusion of authority to other institutions ands association. The need for a political authority of some kind, legitimated either by coercive force or by popular consent, or more often by a combination of the two, is the fundamental reason for the state’s existence. While the governments of established states are suffering this progressive loss of real authority, the queue of societies that want to have their own state is lengthening.
The desire for ethnic or cultural autonomy is universal. Besides the accelerating pace of technological change, there has been an escalation in the capital cost of most technological innovations- in agriculture, in manufacturing and the provision of services, and in new products and in new process. The input of capitalism has risen while the relative input of labor has fallen. It is this increased cost which has raised the stakes, as it were, in the game of staying up wit the competition.
The escalating costs of technological change are also important for more fundamental reasons, and not just because it explains the changing policies of host states to TNC’s. It has to do with change in the world system. The escalating capital costs of new technologies could not have been covered at all without, firstly, some very fundamental changes in the volume and nature of credit created by the capitalist market economy; and secondly, without the added mobility that in recent years has characterized the reated credit. The supply of capital to finance technological innovation has been as important in the international political economy as the demand from the innovators for more money to produce ever more sophisticated products. These supply and demands changes take place and take effect in the market. There are three premises underlying the argument: •Politics is a common activity (not confined to politicians and their officers). Power over outcomes is exercised impressionably by markets and often unintentionally by those who buy and sell and deal in markets. •Authority in society and over economy transaction is legitimately exercised by agents other than states, and has come to be freely acknowledged by those who are subject to eat. The authority of the government of all states, large and small, strong and weak, has been weakling as a result of technological an financial changes and all the accelerates integration of national economies into one single global market economy.