The left is naturally suspicious of globalization. This is of no great surprise considering the harsh treatment it has received at the hands of the revitalisation of classical economics over the past few decades.

In the minds of many, neoliberalism became synonymous with efficiency and growth, the only system able to deal with the demands of globalization. Even if the current crisis has now discredited l'aissez faire doctrine, the neoliberal ideologues of contemporary globalisation had largely succeeded in casting the ‘Keynesian Statism' of the Fordist era, that the left was so comfortable with, to the dustbin of history. For much of this time most leftist analyses were underpinned by a sober realism, even pessimism and concern at the state of affairs (e.g. Hobsbawm 1994).

Going back to 1996, with the fall of the Socialist bloc still fresh in the mind and despite neoliberal globalisation's acquired aura of inevitability and beneficence, Hirst and Thompson cast a refreshing defence of the nation-state. Horrified by the accommodations made to the neoliberal logic by swathes of the European social democratic parties, they reaffirmed the state's enduring potential to mediate and even direct economic processes contending that the accommodations made to neo-liberalism were founded upon an illusion that presented globalisation as an ‘objective reality', when in actual fact it is an ‘ideological category' existing only in the minds of those who are willing to believe in it.

To illustrate their argument, Hirst and Thompson pointed to the extremely high levels of trade integration prior to World War One, noting that the world then was at least as integrated as it is now without the pejorative effect upon the nation state's "ability to govern" which globalisation is deemed to have today. From this viewpoint, globalisation is not a new phenomenon but a quantitative intensification of already existing tendencies. The perceived corrosion of state sovereignty in the face of ‘intensified globalisation' becomes an illusion caused by the unprecedented popularity of neoliberal doctrine and its inherent tendency to deregulate, privatize and commodify all aspects of social and economic life.

At first sight, the current economic crisis could be taken to vindicate Hirst and Thompson's analysis. The last crisis of this scale in the 1930's teaches us that we should expect a contraction of globalism and a rise in economic nationalism. States throughout the world are becoming much more active. Right-wing parties in the opposition around the world have been wrong-footed by the crisis as their general lack of a theory on state intervention corrodes the credibility of their proposals to manage the crisis. Those in governance, on the other hand, have come to a reluctant acceptance of the need for state intervention. Even former US Treasury Secretary Henry Paulson -who had been the most vehement proponent of l'aissez f'aire capitalism- found himself admitting that his economic philosophy was "fundamentally flawed" as the former Republican administration begged the American legislative chambers to approve the most "un-American" of acts - what amounted to a nationalisation of the institutions of finance.

Such events have led to expectations for the renewal of the active, progressive state in an era akin to that which grew out of the received wisdom afforded by the great depression of the 1930's. However, there are a few key differences between then and now which the left better learn if it is to propose a credible and even desirable alternative to emerge from the crisis. For most of the 20th century the accumulation of capital was largely constrained by state boundaries. In the ‘world economy' of the of European colonialism, the inter-war era and for much of the cold war, economic processes occurred within established national circuits of production, linked internationally to each other through the exchange of commodities, raw wealth and capital to support what were overwhelmingly national productive systems. The shift to a ‘global economy', enabled by developments in technology and communications, entails the transnationalisation of the productive process itself. It fragments previously national production systems and functionally integrates them into a global circuit of accumulation.

A plethora of previously nationally based industries such as automobiles and textiles and "modern" industries such as information technology, electronics and even services have been globally integrated. In the global economy distinct national economies are absorbed and cast into a global system by international production and exchange. In the inter-national economy production is overwhelmingly determined at the national level. Politically, International phenomena are caused by differences in performance of national economies. In a global economy these are caused by the different national relationships to the world market which is developing its own political regulation - thereby continually corroding the sovereignty of the nation-state. Transnational regulatory structures emerge, creating a tendency towards the effective coincidence of world market and state.

The thing to keep in mind is, as Arrighi has pointed out, when "systemic chaos increases, the demand for ‘order' - the old order, or a new order - tends to become more and more general among rulers or among subjects or among both. Whichever state (in our case the transnational state) is in a position to satisfy this system-wide demand is presented with the opportunity to become hegemonic ". After considering this, the danger of a leftist strategy derived from Hirst and Thompson's analysis becomes clear. A more active state is certainly a great thing but the world economy has integrated to such a point that a return to Keynesian national regulation is both undesirable and unlikely. This crisis may deliver a retraction of globalism in the short term, but the main point to keep in mind is that, as global capital regains confidence it will realize that global structures are needed to mediate and stabilise accumulation. The left must involve itself in the battle of ideas pushing for transnational regulation. We must keep in mind that, in the long run, this crisis will crystallize the transnational regulatory system which took embryonic form at the treaty of Versailles and has remained fragmented and incomplete up until now.

This has negative consequences for leftists and progressives around the world. For we have traditionally looked upon the nation-state to attenuate the social effects of capitalism (at least) and construct a better society. An active nation-state is needed to achieve such ends and the nation-state will remain a key locus of action, even to push for influence in the transnational system. However, if the left reverts to the comfort zone it naturally finds within statist discourse it is surrendering its chance to influence the reformation of the transnational state structures within which capital is continually entrenching its dominance.

It is of crucial importance that progressives and the left realise this. Organized labour, acting within the nation state framework, has proved structurally incapable of combating the increased transnational coordination of capital. Improvements in communication and technology have enabled capital to tap into reserve armies of poverty stricken workers around the world, pitching their governments against each other to become more "competitive" in what amounts to a regulatory race to the bottom. In the West, this has began to dissolve the myriad of rights gained through centuries of class struggles and has created a huge downward pressure of wages. Stagnating wages led to increased debt, feeding the capitalist systems' fetish for consumption, laying much of the groundwork for the present crisis.

Globalization has engendered a qualitatively new epoch which in many ways is beginning to transcend the nation state system. Global markets create a global playing field and the nation state system is structurally incapable of acting as a vehicle for Labour to compete with Capital on this scale. A global civil society is emerging in embryonic form, with the emergence of transnational social movements opposing neoliberal globalisation we have witnessed the world's first global trade union and transnational political party. Parallels can be drawn between the present and the emergence of organised labour movements with the consolidation of national capitalism in the 19th century - when labour was dwarfed by capital's dominance. During capitalism's "rosy dawn" poor education, subhuman living conditions, rampant disease and the existence of huge reserve armies of workers desperate for work thwarted labour's bargaining power.

With the consolidation of global capital and the transnationalisation of social relations the power balance has again shifted dramatically in capital's favour. The globalisation of production has enabled capital to adopt a footloose approach, creating "reserve armies" of workers in poverty-stricken nations with low worker's rights and low levels of unionisation. Nevertheless, it is pertinent to remember that oppressed workers have proved to have a dogged determination throughout the ages, winning some impressive victories against all odds; it is easy to forget that the history of the left is not full of defeats - throughout class struggles unfolding in the West throughout the 20th century, the left secured in the welfare state the pinnacle of societal development thus far.

Nevertheless, it is crucial that the left stops living in the past. Ultimately, any alternative that does not incorporate a strategy based upon the new dynamics created by a global playing field, incorporating an analysis of globalization's effects upon state sovereignty is surrendering the prospects for long term change. In exchange it attains short term gains that will be lost once the crisis is over and Capital regains confidence, shaping the emerging transnational state system in a way that suits its needs.

As long as true leftists, proposing an alternative based on social justice, democracy and equality, remain stuck to the comfort provided by the "regulatory nation-state discourse" -like Keynesian and old socialist dinosaurs emerging from the woodwork to say "I told you so"- without developing a strategy to influence the emerging transnational state structures, we will not deliver meaningful change - even if the crisis has increased the credibility of this discourse temporarily. Moreover, those in the "left", who over the years have justified perverse accommodations to neoliberal doctrine in reference to the need for "modernization" and whose respect for Keynesian economics is limited to the provision of a quick, surgical fix to return stability to the system, shall provide the only option to a bewildered electorate. The ground will remain open for these people to "modernize" the left into another version of the right, ‘the alternative' will disappear and our planet shall be left to foot the bill.

Adrian Bua-Roberts