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States, Global Markets and Social Sovereignity
Social Science Research Council
April 1997
Prepared for SSRC conference, "Sovereignty and Security," Notre Dame, IN, April 1997.
Once again we have entered an age when sovereignty is seen to be teetering on the edge of evaporation. Ever since sovereignty came into its own in the twentieth century, its demise has been observed or predicted. As early as the first decades of the century political theorists like F.W. Maitland (1900) and L. Duguit (1913/1921) argued that sovereignty was on the way out. Similar observations emerged in the 1920s, 1930s, 1940s, and the 1960s and 1970s, when faith in the leveling effects of international interdependence reached new heights. 1 Today, it is the impact of forces associated with globalization that is seen as casting doubt on the fate of sovereignty. Are we condemned to a recurring ebb and flow of faith in the reality and relevance of sovereignty?
Of course, it is not just sovereignty per se that has been at the center of these periodic losses of faith, but the state. 2 Since the nineteenth century the power and effectiveness of the state has been treated by some as a function and by others as generative of sovereignty. In the recent questioning of the viability of sovereignty it is difficult avoid the conclusion that these are just so many gleeful attacks on the state. However, in the current assault on sovereignty it is a rare and unsophisticated position that argues that the state in itself is a dying political form (Colchester, 1994). Threading its way through arguments about the demise of sovereignty has been the more nuanced view that the fate of the state and sovereignty are not inextricably bundled together, and that if sovereignty is evaporating it does not necessarily imply the end of the state (Ruggie, 93). In effect, states could continue to provide order for local and national social spaces without being sovereign in any robust sense of the term (there is always the confederation model or European visions of "multilevel governance" to guide thinking along these lines). The point is made that the stakes in the waning of sovereignty is a transformation of the state, mostly toward a form less able to preserve blood and collect treasure (Cerny, 1995). In our current fixation on globalization, we can perhaps more readily accept the idea of a post-sovereign state. For many observers states are now embedded in webs of transnational identities and functions (global civil society/global governance/world markets) that are taken to be more powerful and effective than ever.
Should we just be content with the notion that the sovereign state is only a particular type of state, both in form (or identity) and function? In conceptualizing the state theoretically it has not been necessary to rely on sovereignty as a defining characteristic. For example, Charles Tilly (1992; 1-2) defines states simply "as coercion-wielding organizations that are distinct from households and kinship groups and exercise clear priority in some respects over all other organizations within substantial territories." So-called sovereign nation-states are taken by Tilly to be a particular species within this genus. 3
But if the sovereign nation-state is a particular form of state, why cannot the state be a particular form of sovereignty? Underlying reflection on sovereignty is the assumption it is an attribute of states. In this essay I want to suggest that there are good reasons to call into question the supposed monopoly of sovereignty by the state. I will argue that sovereignty is so deeply imbricated with modernity that to argue that we must now look beyond sovereignty for a new "post-sovereign" politics is to, in essence, argue that this politics would also be beyond modernity altogether (rather than just being post-modern, which is, according to sophisticated readings, always a state of things profoundly intertwined with modernity). I think sovereignty represents an important key for understanding the terms and basis of modern political and social organization what ever the fate of contemporary states. Even further, I will argue that rather than being at the end of the age of sovereignty, in some ways we are only at the beginning.
This essay will unfold against the background of recent concerns with the impact of globalization on sovereignty. The globalization-sovereignty nexus is typically taken to be a negative one, with the former eroding the basis of the latter. Rather than enter this debate on its own terms I will try to show that the whole way this nexus has been conceived rests on an understanding of sovereignty that--while it has very powerful precedents--is far too limited. I will explore how we might think again about what sovereignty is, so that we can consider the extent to which globalization (especially its economic dimensions) is really a form of "sovereigntization."
Sovereignty as a Constitutive Domain
Despite the many different ways sovereignty has been construed across the centuries, sovereignty is generally now taken to be an attribute or condition of an agency. Historically, there is no mystery that this agency has been taken to be the state, to an extent that "state" and "sovereignty" form a cognate pair (Onuf, 1991). States are, not surprisingly, often designated as the true bulwarks of modernity operating at the heights of organized agency ( Giddens, 1987; Ruggie, 1993: 144). And it is the capacity to act sovereign that helps give the state its special status as the exemplar modern agent. Sovereignty is thus something a state agent possesses as a status relative to other agents within or outside its purview (corresponding to the internal versus external sovereignty distinction). It, in part, defines what that agent is. It can be exercised, claimed, or violated. Some theorists of sovereignty (Hinsley, 1986:26) have defined it, internally, as a condition wherein a state qua political agent possesses "final and absolute political authority in the political community." Others (James 1986: 40) have focused, externally, on constitutional independence as the essential marker of a sovereign political agency. 4 Even in constructivist approaches to sovereignty in the field of international relations (see, for example, Biersteker and Weber, 1996: 11-14) it is typically the identity of the state agency--tied to reiterative forms of recognition or its failure--that is taken as central to understanding what sovereignty is about.
This agency-focus has generally foreclosed the possibility of understanding, in far broader terms than is typical, what is at stake in sovereignty. If we take seriously the point that sovereignty refers ultimately to the existence of a final, highest, or supreme authority or power over a set of people, things, or places, then sovereignty should not refer to a condition of agency per se. It should refer to the construction and maintenance of a domain of relations that sets the terms--or is constitutive--of a dimension of social existence. For example, a national system of law constitutes a legal world of rights, courts, and criminality; and a structure of educational institutions, codes, and principles undergirds the realm of education both locally and nationally. A given political actor or ensemble of authorities could be an agent of that sovereignty and we might even call that actor (such as a government) or ensemble (of bureaucractic agencies) sovereign. But that which has sovereignty, or that which is actually sovereign, is the domain of relations that is effectively structuring practices and agency in a given area of social life. I distinguish this understanding of sovereignty as social sovereignty.
There is no reason why a constituting structure within a domain (like a legal system) cannot be thought of as part of the state. To do so, we must adhere to a definition of the state that is broader than that of a government or ensemble of bureaucratic agencies. The state would need to be understood as "the enduring structure of governance and rule in society." 5 But this definition treats the state as a structure rather than an agent. 6 Along these lines a state can serve as an organizational structure that sets the terms for politics for a given set of peoples and places, thereby constituting the realm of politics for a society. The distinctive point here is not that a given social and political structure needs a supreme center or final authority, but that a given structure can be that center or authority. Its very status as "the" structure is what makes it sovereign.
I believe the early modern political theorists who helped develop the agency-focused understanding of sovereignty can be read from a social sovereignty perspective. Machiavelli, writing before theories of sovereignty were articulated, in The Prince (chaps. 5 and 6 especially) is famous for his insights into the agency and creativity of a ruler that is necessary in a newly acquired or established state. But the key to rulership for him was the construction of a new order and its maintenance. The ruler must use the new order to establish his reign, and in effect is dependent on the constructed political domain. The question is what, in this case, is sovereign, if by that term we mean final, determining, or last. The ruler is, by definition, always dependent on the order established. From the very opening of his treatise Machiavelli made it clear that it is the political domain established by a commonwealth that rules (or "holds sway"), not the rulers per se, whether they are monarchs or assemblies. ("All states and dominions which hold sway or have held sway over mankind are either republics or monarchies"[chap. 1: 1].)
Even for Bodin (1992: 1), the putative progenitor of the theory of sovereignty, his concern with the fate of monarchy did not deter him from defining sovereignty as "the absolute and perpetual power of a commonwealth." Like Machiavelli, Bodin was concerned with how the power of that commonwealth was concentrated in a prince's hands. While his theory was profoundly agency-focused, he did make it clear (1992:55-57) that a monarch was only sovereign to the extent that he could use his power to constitute, in effect, a domain of law within which to operate (to judge, to issue coinage, and to tax).
But far more explicit about this relationship was the theorist Johannes Althusius whose treatise, Politics, written at the beginning of the seventeenth century, helped free up political thought from the unitary implications of Bodin's theory, which did not easily apply to the confederations of the Swiss and Dutch. Althusius was interested in how an association of "many cities and provinces obligate themselves to hold, organize, use, and defend, through their common energies and expenditures, the right of the realm (jus regni [fundamental law of the realm]) in the mutual communication of things and services (1964: 63)."
The right of the realm has as its purpose good order, proper discipline, and the supplying of provisions....Towards these purposes it directs the actions of each and all its members, and proscribes appropriate duties for them. Therefore, the universal power of ruling (potestas imperandi universalis) is called that which recognizes no ally, nor any superior or equal to itself. And this supreme right of universal jurisdiction is the form and substantial essence of sovereignty (majestas) or, as we have called it, of a major state. When this right is taken away, sovereignty perishes (1964:64-65).
Althusius was clear that "by no means can this supreme power be attributed to a king or optimates, as Bodin most ardently endeavors to defend (67)." Rather, supreme power is to be attributed to "the associated political body (68)." While commentators since the seventeenth century have read Althusius as an early formulator of ideas about popular sovereignty, they have generally overlooked how he was actually vesting sovereignty or supreme power in the domain(s) of relations that shape the possibilities for agency across a body politic ("good order, "proper discipline," "provisions,"and "duties").
In this way, rather than direct, authoritative control over some realm, we can understand "rule" to mean a prevalence of something that shapes outcomes and relations (as when we say something "rules supreme"). I am using the word "prevalence" in both of its common senses, to denote presence and predominance. 7
Understandably, the political theorists of early modernity like Hobbes focused on agency. They were, after all, struggling with legitimizing the new form of agency, the state, that had emerged out of feudal Christendom. Domains of law and administration were not just in formation, their maintenance and governance were severely contested. It made practical political sense to view sovereignty from the perspective of its agency. But we should not be misled into thinking that sovereignty is this agency. Rather, it is the predicate of this agency. It is the deployment of forces that make a domain of relations that shape social existence. Even with Hobbes (1968)--who penned, for many, the most masterful sovereignty/agency theory--there is embedded a sovereignty/domain perspective. The "essence of sovereignty" is defined not by the will of a supreme authority over subjects, but by various rights to constitute a political domain (e.g., by establishing administration) and to act within domains of law and organized violence (chap 18). 8
In general, as the work of the early theorists of the state formed into a canon of political theory, the possibility of reading sovereignty in this way was lost. As a result, sovereignty came to be treated as something which was attached to an agent. It became a kind of mysterious force or status since agents in themselves could never be the final, last, or highest authority. They always remain dependent on the authoritative operation of a domain such as law. 9
In this view, the theoretical and doctrinal search for a legitimate political center--the sovereign--which could even be located in the citizenry (as popular sovereignty), can be viewed in terms of the endeavor to establish an authoritative political domain and structure of relations. Arguments over the location of sovereignty--Hobbes versus Rousseau--first of all rest on the assumption that there is a domain producing the capacity to be supreme, from which follows the question of "to what or to whom" shall one turn for its legitimation and governance. While Hobbes answered the singular ruler, Rousseau answered the singular body politic. These ideas were part of a long contest over the terms of how sovereignty would be politically configured (along democratic, monarchical, or oligarchical lines). And the questions that surround that contest are begged by constitutive sovereignties that make possible the very tasks of governance and responsibility in the first place.
Privileging the State
How did the state become the privileged site of sovereignty? I cannot possibly address the complex answer to this question in this limited context. However, I can briefly discuss some broad changes that bear on the state's claims to a monopoly on social sovereignty. Consider, first, the ways that sovereignty was applied in the Middle Ages to that other master political form, the church. Theorists such as William of Ockham, who challenged papal supremacy in the fourteenth century, did not seek to place lay rulers over and above the pope. Rather, they sought to place the (natural) law over all forms of human agency. To them, the body of law was sovereign. (Wilks, 1952: 288) This was the way the pope's power could be contained and limited, not unlike the way modern governors of the state would be limited by the popular will or parliamentary power, both of which rested ultimately on the self-evidence of natural law theory. It was only a short step for the defenders of papal power to locate the argument that "society itself, seen as an abstract entity, is the sole possessor of supreme power," and that the pope as representative of all of Christian society had relatively greater power than all others. (ibid.: 317) Thus, although sovereignty rested in the Christian universitas, the pope as its agent could attach power to himself.
While the arguments back and forth between opponents and defenders of papal supremacy were complex across the late Middle Ages, they shared a common view that sovereignty ultimately rested in a social entity and that sovereign agency was derivative of that. As Michael Wilks, the student of papal sovereignty put it:
The modern doctrine of the State, which still retains its fictitious personality, as the embodiment of right living and the supreme power for good, is thus seen to be a direct inheritance from medieval political thought with its emphasis upon the reality of that abstraction, the rightly governed Ecclesia, which embraces all the essentials of the Christian way of life. It is here that we must seek the genesis of the theory of State sovereignty....[T]here was little questioning of the general assumption that society itself was the possessor of sovereignty....the whole was in one sense or another prior to its parts. Where controversy raged most fiercely was over the problem of precisely which group within society had the practical exercise of this sovereignty. (525)
Wilks himself, writing in 1952, failed to grasp that while there were and still are profound mythic dimensions to the states and macrohistorical/ideational contexts like Christendom or modernity, there are also real deployments of codes, representatives, and organizational apparatuses that hold these myths in place. There are, after all, parishes and priests, deputies, and magistrates. It is in the domains of codes and relations yielded by these deployments that sovereignty lies.
However, because the church's geographical realm was never as circumscribed as a state's, the notion that sovereignty could be ascribed to it was problematic for state-focused commentators like F.H. Hinsley (1986: chap. 3). Hinsley could never see that it was not the papal center per se that sovereign. Rather, the system of the church was a uniquely powerful agent of sovereignty in the organized domains of religion, law, and politics that operated across Europe until the rise of the modern state.
In grasping the implications of that rise for changing understandings of sovereignty, we should be suspicious of the close association of sovereignty with territory prevalent today. This association developed only as a function of more basic political transformations bearing on the state's relationship to sovereignty. State-based territoriality emerged only after centuries of states deploying forces in the organization of judicial, administrative, constabulary, and military realms. 10 In England, by the thirteenth century, the system of feudal loyalties to local powers and the church were operating in the context of an emerging English state with its courts, officials, taxes, codes, records, and symbols. In effect, what was happening was that the English state was constituting itself as a sovereign domain, within which increasingly other agents and domains were embedded, including those traditionally associated with the church (Strayer, 1970: 45-6). The French state, along a different but related trajectory, deployed representatives to monitor and preside over local judicial institutions and increasingly absorbed local domains into an emerging state context (ibid.: 51-2). It seems clear that these kings, before achieving this absorbtion, did not truly threaten the papacy or universal church. That is, it was not until it became possible for the king, through organizational deployments, to concentrate or "stack" a number of important domains around his political "office" in a new system of agency (as the state) could anything like a real challenge emerge. 11
This challenge was occuring at the same time that new systems of knowledge were being formed, allowing for far more flexible domain constitution than had been available in the past (see Bartelson 1995; 218; and Ruggie, 1993). 12 Especially important was the fourteenth century individualist doctrine, notably articulated early on by Ockham. It challenged the concept of the Christian universitas by focusing on the individuals that constitute it (Ockham is famous for his dictum: "every whole is nothing other than the sum of its parts taken together"). This doctrine opened a conceptual space for ideologues of royal power to justify the development of the individual power of kings as legitimate rupturers of the hegemonic social context of Christendom. Individual kings constituted monadic torque points of agency that could refract whole new domains of practices and significations.
But we should not erect a teleology regarding the formation of social domains around the state. The process--which I would label inclosure--of an increasing strength of claims over peoples and places on the part of kings and the states they built in various dimensions of social existence took centuries. 13 European states, for example did not easily constitute national economic domains. Most internal economic relations and practices in Europe were controlled by local authorities before the nineteenth century, despite some early efforts to regulate foreign trade (e.g., by forbiding the export of certain goods) and to establish kingdom-wide coinage.
Modernity and Agency The above discussion should make it clear that a core claim of this essay, that sovereignty is integral to the organization of modern social and political life, does not imply that sovereignty cannot exist prior to modernity. Social and political domains--especially in empires--were constituted long before what we have come to think of as the modern era. What distinguishes this constitution within modernity is, first, its shear magnitude, pervasiveness, and differentiation across the modern social fabric. Second, it is in modernity that such constitution is problematized as an ever-ready possibility and project (thus, the rise of ideologies and theories of revolution, enlightenment, progress, etc.). This, of course, has been central to recent work in sociology by Ulrich Beck and others (1994) on the self-reflexivity of modernity. But more than this, what has developed in modernity is the mechanisms for this constitution, such as positive law, communications systems, constitutions, and organization structures like political parties. More generally, the capacity of agents like states to project presences that are constitutive (via the deployment of armies and bureaucracies) developed considerably since the sixteenth century.
Thus, agency is central, rather than being tangential to sovereign domains. Sovereign domains, in effect, generate and are generated by various agency-engines. Generating engines represent the action helping to constitute or maintain a sovereign domain of relations (such as the passing of legislation, the construction of classification systems, and the collection of statistics). Generated engines represent the structures of agency that emerges as a function of the operation of a domain, typically manifested in the roles and assigned places articulated by a domain (such as taxpayer, patient, immigrant, or consumer).
The relationship between agency-engines and domains is complicated by the frequent intertwinement of one domain with another. The practices and codes established in, for example, a national structure of law can circulate as agency-engines within other domains, such as the economic. Law can provide agents, such as state organs, with the capacity to act within and shape a domain (in effect, to be "agentful"). However, law itself constitutes a domain as a legal system with its deployments of courts, police, and professional cadres. 14
Bear in mind that when, for example, medieval kings successively built systems of tax collection they were constructing administrative structures that served both as agency-engines and as the basis for states constituting political domains themselves (with codes and rules of compliance, allegiance, and political legitimacy). This move from engine to domain is not a universal process but uniquely marks systems as complicated as the state. 15
No other thinker has written more incisively about the relationship between modern domains and agency than Foucault. He emphasized that the agency necessary to establish and maintain a domain can be dispersed within it. For Foucault (1980a) the forces constituting a modern domain like sexuality have been deeply diffused within the social body. Sovereignty, understood traditionally as a supreme agency situated at the summit of society, according to Foucault (1980b: 92-108), became less central across the nineteenth and twentieth centuries in the constitution of social domains. Increasingly, the micropower of institutions, experts, and citizens to constitute or maintain domains of relations (through mechanisms such as self-regulation and local surveillence) intersected with the development of new capacities in states to administer social relations within populations (through mechanisms such as statistics and planning) which Foucault labeled, "governmentality" (1991:87-104). To my mind, Foucault drew far too sharp a line between sovereignty and governmentality/micropower by taking the agency-focused view of sovereignty at face value. 16 He failed to note how the early modern state rested not just on the individuation of the king, but on the construction of domains within which administrators and burghers were deployed across the social fabric (however less dense the deployment was relative to the nineteenth and twentieth centuries). As states developed into the nineteenth and twentieth centuries, their very capacity to be "governmental" required that their codes, procedures, statistics/knowledge, and designations could take hold within a given domain such as education and thereby help set the terms for that dimension of social existence, contributing to the sovereignty of those terms.
Markets and Sovereignties
The historical privileging of the western state is in part due to its ability to build a complex of domains that overlap unevenly around a central political authority. This has indeed given the western state its special commanding appearance at the heights of social power. (The state becomes in this sense an agent of multiple sovereign domains.) The pre-modern state, in this western model, can be distinguished by its relative lack of domains, with the juridical domain representing its first major entry point into sovereignty. 17 But the increasing differentiation of states and societies into sub-systems (or domains) as sociologists such as Talcott Parsons, Jurgen Habermas, and Niklas Luhmann have focused on, represents not only an intensification of sovereign agency on the part of the state. It also represents, as Foucault made clear, a diffusion of authoritative agency throughout society (e.g., the emergence of the medical domain relies on the authority of doctors, academic experts, corporations, popular writers, as well as government administrators).
Differentiation of this sort--of not just domains, but also sites of agency--implies that the constellation of domains closely associated with the modern state (e.g., law and politics) share their status as sovereign with domains that are often society-centered like religion. But why should that status be limited to domains that are national in scope? A web of codes, practices, and agency-engines, whose scope is transnational and that criss-crosses national territories, can form a domain in its own right, especially if it generates a field of relations that would not otherwise be there. I want to argue that the formation of a web of global markets represents the mapping out of a whole distinct social terrain, with specific types of currency transactions, financial instruments, and modes of information and knowledge (analogously, the early state constituted webs via law, taxes, military systems, and currencies). This domain has been constructed and is maintained by a plurality of agents such as states, international organizations, corporations, experts, and individual investors. Thus, we need not assume that transnational flows and exchanges are forces that decrease the usefulness of the concept of sovereignty. Sovereignty and exchange--or flows, more broadly--need not be treated as exclusive of one another. 18 I believe that the opposite can hold.
From Place to Plexus
To understand how this is possible we can begin by considering one of best of the many recent manifestos on the virtues and opportunities inherent in globalization, Richard O'Brien's Global Financial Integration: The End of Geography (1992). O'Brien (5) distinguishes between the terms "international" ("activities taking place between nations"); "multinational" ("activities taking place in more than one nation") and "global" ("operations within an integrated whole"). O'Brien, an employee of American Express Bank and perhaps abstracting from corporate goals and strategy, went on to claim:
A truly global service knows no internal boundaries, can be offered throughout the globe, and pays scant attention to national aspects. The closer we get to a global, integral whole, the closer we get to the end of geography.Ultimately, he writes the "end of geography is all about the reduction of barriers" (Ibid: 70).
At first sight O'Brien appears to offer a version of the longstanding story--made famous by Marx and Engels--of the emergence of a "world market." All things, everywhere, are subject to sale and capitalists are able to purchase, trade, produce, and market in any feasible locale around the world. 19 Over the last decades, so the typical story goes, this market has become increasingly integrated or globalized as flows of capital, goods, information, and identities have smashed old limits and barriers, even in the face of sometimes resurgent protectionism. But O'Brien is different. He argues there is a world full of barriers, despite the potential for some global market integration based on global level regulation and coordination. For him (Ibid: 100), Kenichi Ohmae's (1990) notion of a "borderless world" unrealistically assumes that states will "not interfere" as this world forms. Despite the recent strides of liberalization easing market transactions across boundaries, there remain over 180 separate regulatory regimes (i.e., states). The intricacies of European integration underscore how formidable the construction of anything like a global common market would be. Yet O'Brien speaks the language of the end of geography. How can "a global, integral whole" form in a world of barriers? O'Brien unwittingly avoids contradicting himself because for him it is not the single world market per se that is forming into "a global, integral whole." What he describes is the emergence of separate networks around foreign exchange, securities, debt, investment, and financial services. 20 These networks constitute distinct markets. In O'Brien's (1992: 32) own words:
[W]hat we can observe here is the development of global networks as links between markets [that] develop even where barriers still exist. A global network in effect seeks to offer a global service but does not depend on integration of markets. Advancing technology is offering more ways of developing global networks in addition to the base of a physical presence in each market.
Rather than look to one giant world market space being formed, we are able to purchase, trade, produce, and market in anyto see multiple networks of enormous proportions forming distinct market spaces, integrating as wholes across the globe. Readers experienced in the Internet will instantly grasp the analogy with the formation of a cyberspace that crosses traditional national communication system barriers. A worldwide integration of global communications and information is not necessary for the continued expansion and consolidation of cyberspace across the globe. The market network for foreign exchange likewise does not depend on the integration of national currency systems. We thus move from a place-based understanding of markets (or "marketplace") to a network-based understanding (or "marketplexus").
Unfortunately, one of the paradoxes of globalization understood in this way is that, on the one hand, the making of market networks rests on constructing relatively barrier-free global spaces within which to operate. On the other hand, that very construction requires that powerful boundaries--ideological or otherwise--be placed around the action and capacities of states to interfere in those spaces. Thus, globalization is not about the withering away of boundaries, but their construction. Globalization implies not less but more boundaries. In the developing world, the impact of these new boundaries, imposed most visibly through structural adjustment programs, is far greater since most states, facing an often hostile international economic environment and rampant internal corruption, have only had historically limited capacities to order the material life of their societies. (We might ask then if the whole neo-liberal attempt to construct separate exchange spaces rests on the sovereign model of "keeping out," of excluding agents from constituting practices, principles, and relations?)
The move from marketplace to marketplexus reflects not only the growth in transterritorial circuits but also an increase in boundaries as the openness of place is replaced by the closedness of tight circuits of entry, membership, and technological access and know-how. This runs against the common view that markets constitute "unbounded exchanges," (Kratochwil, 1986:43) eroding proper political boundaries. This misses the containedness of a market network or plexus which is based on the narrow band or scope of practices that compose them. Marketplexus boundaries are based on the necessity of an equal access to information and an equivalence of skills (excluding those who do not have the skills or the potential for access); a system of risk assessment (not subject to the political will of communities); and limited national controls. They also rest on specific agency-engines. For example, the emergence of currency options and the currency options market was a crucial financial change that opened up a new form of agency for corporations and capitalists. More generally, one of the key elements of the new financial markets is the fluid convertability of capital (e.g., across all sorts of currencies and securities). This makes agency within them very different from the real goods markets. (If there is any analogue to the state in its history, it might be the development of positive state law, which permitted states to convert social transactions into legally-defined categories within a common framework of juridical meaning.) These engines empower participants, but leave clear lines between insiders and outsiders. It also keeps states out via boundaries that emerge from new and evasive practices that are not subject to the reach of the state (e.g., offshore corporations). In the end, there is restricted access and membership, a limited range of allowable actions, meanings, codes--the very limit of which establishes the identity of the network in the first place. The formation of a marketplexus entails a bounded commitment to doing things one way and not another regarding currencies, securities, and capital flows. Who can act over these values and why is also severely limited based on available capital, authority, and access. One might even argue that state-bounded societies (or nation-states) are more permeable: with their territorial markers they not only allow easier boarder crossings, but once inside they contain a far greater range of practices and phenomena: there is simply more room to move about. In a plexus the communication channels, mediums, codes, and actors form a narrow constellation in themselves, relative to say the differentiated character of a modern national society. This condition may stem from the way that a plexus is almost exclusively dependent on the relations that comprise them, which forces a certain level of boundedness. States have territorial space, in addition to broad swaths of social space creating far greater openness (which stems from the way they stack domains). While a plexus can have porous boundaries, the choices and room to move within it is typically predetermined by its rules and codes. Innovation takes place through the construction of new agency-engines, which add new layers of rules and codes.
The concentration of a marketplexus belies one of the notorious arguments for the superiority of markets over states and planning is that the former offers more and is better at choice (more efficient). In effect, markets are taken to have more powerful and effective agency-engines. However, the implication of the above is that it is the contrary. It can be argued that it is exactly the organization of the state and its boundaries around domains on a territorial basis that makes possible far more options in agency than domains organized around specific ensembles of practice like markets. 21
Sovereign Implications
Nigel Thrift (1996: 213-255) asks the question whether we can view the global financial system as a "phantom state" with "discursive authority" over the deployment and distribution of resources, meanings, and related practices. He has little to say about the question of sovereignty, except to point out the possibility that a network can be a "self-governing (although not sovereign) entity" (Ibid.: 230). But it is sovereignty, understood as the very capacity to constitute a domain of relations, discursive and material, that is the common element between markets and states and that allows for the very possibility of labeling the financial system as a state, "phantom" or otherwise (although it should be clear I object to the state analogy, as opposed to sovereignty). 22
Markets and international finance have been with us for some time. 23 What may be unique about late twentieth century markets relative to their nineteenth century ancestors, besides magnitude, speed and technology, is the extent to which their reach is global rather than mostly regional (e.g., intra-North Atlantic). As a result, without the common international society of Europe as its backdrop, these markets concentrate to a far greater degree around new systems of value representation (e.g., investment opportunities) and technology rather than the norms of a transnational European capitalist class. But more importantly, the markets of today can draw up into their web factors like currencies that in the nineteenth century remained more frequently within the web of the state's stacked agency.
However, markets, local or global, are not intrinsically sovereign. Only those are sovereign that form a field of relations and practices that otherwise would not exist, a context for agents to operate in, and a set of agency-engines. When does the web of global financial markets--or any given domain for that matter--constitute a sovereignty? There is no ready indicator of this status, short of self-reflexive claims to being sovereign, as in the case of the state. But there is one key marker of a over the deployment and distribution of resources, meanings, andsovereign domain or social sovereignty. The degree to which upon entering the domain an agent is assigned or feels compelled to occupy or resist a role or place within the webs of codes, practices, and significances that constitute the domain. Thus, constitutive capacities rest exactly on the capacity to mark and code phenomena--from bodies and materials, to communications and values--that enter a relevant domain. Indeed, this is one way to read Carl Schmitt's definition of sovereignty (1985: 5) as the capacity to rule on the exception. It is the capacity to at least attempt to dispose of that exception: that is, to try either absorb it, integrate it, expel it, or even ignore it. It means the capacity to police the borders of a domain and, by doing so, being able to set the terms for the domain and dispose of its elements. This might be what we understand to be the fate of undocumented workers for example. Their entrance into sovereign domains does not represent a challenge to--or decay of--sovereignty but the very stimulus necessary for its continuation. They confront the border guards and legal processes of the state, as well as the wages and labor of a national economic domain. 24
The type of markers I have designated as indicators of domains has not escaped the notice of social theorists like Habermas and Luhmann. It is most succinctly expressed in Luhmann's (1995) concept of "autopoiesis" that describes systems that are self-contained, autonomous, and essentially self-propelled with their own codes, practices, and principles. Luhmann uses the example of a national legal system as an instance of autopoiesis. Despite being bounded, the autopoietic system can take in forces from its environment, which it codes and assigns within its webs. And it is exactly the capacity to absorb forces entering a domain because of porous boundaries that distinguish a domain as sovereign. 25
I do not want imply that domains are by necessity fixed and fully surveyable. As we saw above, there is room for rupture and invention within domains. 26 And there is every likelihood that even a constituting agent like state cannot "get itself around" a domain: that is, contain or subsume it. Consider how contemporary international markets for securities, options, currencies permeate one another and how the flow of capital between them is relatively easy. The rules are often not even grasped by corporate participants. 27 There is, in effect, no way to grasp or survey these market systems from a masterly gaze; no way to sit above them in a postion of supreme authority, setting the terms of economic practices and outcomes. 28
Who is Constituting Whom?
Whether or not a market domain can be mastered, the issue raised above of who or what is central in the constitution of economic relations has often been a charged one. Karl Polanyi (1957: 253) showed us that, across the nineteenth and twentieth centuries, no matter how central the powerful western European states were structuring their own national economies, this centrality was deeply contested. What was always troubling to observers like Polanyi was that the power of international markets increasingly set the terms for economic life in Europe. The issue for Polanyi (ibid: 250-58) was whether states and societies, in collaboration, could construct a state and society-centered sovereign domain over material life on a global basis.
In general, it is always tempting to view the formation and maintenance of domains in dialectical terms. The existence of a large socio-historical context like Christendom is seen as being populated by various forms of medieval political authorities and boundaries, ultimately leading to the development of separate and autonomous state units. Alternatively, it was the world economy for social theorists like Immanuel Wallerstein that constituted the field against which states began to cohere into the modern form we now take for granted. Today, we might think of the broad grid of states across the globe as composing a large socio-historical context (Meyer, 1980). Out of this context, grounded in a relatively universal territorial form of organization and order (the state), new functional boundaries around transterritorial networks might be seen as forming. Unfortunately, we do not have the analytical tools to break out of these simplistic dialectical models. The cost of that lack is the continued legitimacy of ideological battles such as the one that is being waged over the possibility of forcing states to operate on "market terms" (Bryan and Farrell, 1996: 99, 184).
We should, therefore, not automatically assume there is an "either/or" of state versus market in play here. Nor should we assume transterritorial networks are new. States have been and will continue to be crucial agents--especially via central banks--in the constitution of market domains. The question is, is it essential to ask whether states--in the construction of these domains--are reinforcing the centrality of their own agency-engines or those of others (such as TNC's). In other words, does it make sense to ask whether state-agents are relegated to operating within a global market domain, as opposed to the reverse (a market domain being subsumed by the context of a state or the state system)? By viewing the web of financial markets as a sovereign domain we can, I believe, begin to move beyond the simple "either/or" logic implied by these questions to gain a greater sense of the political stakes in the operation of a sovereign market domain. To do so it is necessary to consider how sovereign market domain boundaries are formed; how relations and codes are determined; and how agency engines are articulated.
Conclusions
It is sometimes conveniently forgotten that the rising lay power of kingdoms did not automaticallly seek to destroy papal authority, but only to construct a separation between the two "realms." They sought to limit that power and erect autonomous "spheres of competence" (Wilks, 1952: 70,76). However, this co-existence has been seen in the eyes historians of dialectic and progress as ultimately doomed. The underlying principle being that there could only be one field of ultimate social authority in answer to the question, ‘to what community do we belong?' Either there is a fabric of lay kingdoms that constitute the ultimate social context of European communities or there is the ecclesia. (The capitalist world system would be third contending context.) Historical and political tradition tries to instruct us that a "struggle between two systems of universal monarchy" could not be avoided (Ibid: 82) What is often overlooked is how long they did co-exist, albeit through overlap, tension, and longstanding conflict.
Today, the universal monarchy of the state system is taken to be under assault by new authorites, by a new universal monarchy of global civil society, understood in the broader sense of the term, within which we might include corporations as well as NGOs (capitalism as a category of analysis has generally been submerged). However, it is far from clear that this neo-Hegelian dialectic must play itself out in the near future in such neat terms. Indeed, I am arguing that it never did even at the end of the Middle Ages. But the broader point is that when we view power and authority in modernity from the perspective of social sovereignty, the necessity of posing either/or's in terms of universal monarchies falls away. One loses sight of an endpoint (such as the imagined universal monarchy of the just political state). It vanishes across a sea of constitutive domains, which together lean on and over one another, not necessarily in any neat meta-order.
The temptation to look back to the Middle Ages as a model (neo-medievalism) for the future is to be resisted. 29 Feudal relations, so crucial to social and political power then, were based on allegiances and loyalty tied to a system of chivalry. Loyalty and allegiance are not likely to be the essential forces undergirding social and political relations in the twenty-first century. What I believe is just as likely is a system of hyper-gesellschaft relations where there are tightly defined and delimited practices defining domains of social existence like capital markets and security provision. Thus, rather than overlapping concentrations of agency around states, there is growing diffusion of agency in the production and maintenance of sovereign domains across territorial boundaries. States are increasingly taking on the role of something like a "local gendarme," providing order--political and economic--within a specific territory and within the context of one global plexus or another. Of course, states continue to be able, negatively, to disrupt relations and markets and to constitute sovereign domains (we still need to link states and sovereignty). But to the degree that states are becoming actors within wider networks subject to their logic of operation of networks rather than their own, this opens the way for a new kind of elegant political reconcilation of the universal and particular as theorists such as Michael Walzer (1990) and R.B.J. Walker (1993) have described the state system to be. This emerging system would be domain-bounded, with fixity established by forms of reification rather than territorial limits.
There is a growing number of observers suspicious of the state and state system as forces advancing the well-being and security of individuals and communities across the globe. And the powerful attachment of sovereignty to the state implies for them that sovereignty is irrelevant or even counterproductive as a means to make normative claims on networks of power and authority. But this meditation has sought to challenge this suspicion. Sovereignty, not just as an attribute of the state but as a basic dimension of modernity, serves as a compass for directing attention to questions about accountability towards, responsibility for, and authority over setting the terms of social existence. While a market on its face can appear to be a self-regulating system operating over the heads of its participants and subjects, recognizing the sovereign status of a market identifies it and those who participate in it as responsible and potentially accountable. 30
The political implications of recognizing sovereignty as derived from constitutive domains are far from simple. Should accountability flow from or to the constituents of the domain (i.e., those who are affected by it)? If we are all caught up in domains--the troubling political implications drawn from Foucault's work--then can we ever look to any one set of agents as accountable, and then to whom and why? Is the answer to make the domain itself accountable? To ask of it that it constitute justly? 31
I am aware of the inherent risk in joining the words market and sovereignty. But it has been the goal of this paper to show that they already are joined in practice. I thus seek to make political the power of market capitalism so as to critique it. The notion that politics is lodged in the state and that it should be over the market too neatly reproduces the separation of politics and economics that is very much to the advantage of capitalists who have sovereignty over our existences without the responsibility that should be incumbent with it.
Is the alternative suggested by this approach that communities should constitute their own sovereign domains? What type of power to deploy organization and ideational forces exist for this? Might we think of the developing domain of international human rights as one potential global domain within which it will be possible to contest outcomes in other domains such as the global financial market? The implication for a potential sovereign global domain of human rights is that we need not depend on states as the only agency relevant to this domain's formation. There is also the so-called bottom-up claims and assertions of communities and movements and the efforts of institutions such as international courts. It will take all of these agencies to form this domain. But how it would operate is not clear (that is, how it would constitute an identifiable domain of its own rather than be a part of states). One could imagine human rights becoming the basis upon which many of the political relations within and between communities are constituted, such that to be political, to contest and determine, could only be done through the practices, language, and codes of human rights.
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Footnotes
Note 1: See Krabble (1922), Keeton (1939), and Jessup (1949). Back.
Note 2: On the loss and return of faith in the state see Biersteker (1981). Back.
Note 3: We need not assume that the exercise of "clear priority" sneaks sovereignty back in. Back.
Note 4: Although I will focus mainly on what is understood to be "internal" sovereignty--and its interface with international forces--it should become obvious that I posit internal and external sovereignty along a continuum. Back.
Note 5: Benjamin and Duvall (1985: 25) clearly distinguish these different understandings. I will use the term state sometimes to denote a structure and othertimes an agency--assuming these are two different perspectives on a very complex social form. Back.
Note 6: However, it would be a mistake to assume that all such structures and domains are part of the state, even when the state is understood as a "structure of governance." As we shall in the discussion below of market domains, state structures can be one of a number of constituting forces from society more broadly. How much the state constitutes relative to other forces is a well-known core tension of state-society relations. Back.
Note 7: In some respects viewing sovereignty as a social domain moves the concept closer to understandings of hegemony, especially as developed by Gramsci. Interestingly, prior to the nineteenth century hegemony was sometimes understood to mean a sovereign, preponderant presence that could set the terms of existence. The Compact Oxford English Dictionary, p. 753, shows from 1567, "Aegemonie or Sufferaigntie of things growing upon ye earth." I would argue that sovereignty is actually one pathway or form of power toward hegemony. That is, the capacity to contruct, maintain, or even govern a social domain can undergird a hegemony of one form or another. Hegemony as such is a condition and status of predominance for a class, set of agents, a social order, or social formation over a configuration of people and places. However, as will become clear, a sovereign domain is not necessarily an integrated social and political order, national or otherwise, as Gramsci implied hegemony entailed. Back.
Note 8: Hobbes can be read from this perspective as working out the first notable theory of how the state could and should constitute "the" political domain for a society. Back.
Note 9: Today, what we have in international relations theory is the attempt to displace sovereignty with authority as the central term of political life (Rosenau, 1990: 40). According to this view, in an increasingly post-[state] sovereign world we are witnessing a diffusion of authority to nonstate actors. Strange (1996:91) takes authority to mean the capacity to set the terms for the choices of other actors in a given domain. I would argue that we need to pull back to ask upon what basis this capacity arises. For Strange this capacity rests on the possession of power over the structures that configure international life, which create the choices or their absence for others. If we push this one step further, where Strange does not go, we can see that it is the construction and maintenance of a domain of relations that generates this structural power, which I have argued is what sovereignty is. I offer this distinction not to stake out claims with words--sovereignty versus authority--but to point out that the finality, lastness, and boundedness we associate with the history of sovereignty is a part of these new authority formations. They are not open, loosely bounded forms. Authority is distinguishable from sovereignty as the ability to place action, practices, symbols, and institutions into a meaningful social frame or context: i.e., to subject something or somebody to the operation of a system of meaning, significance, and power. This describes clearly what religious organizations and agents do regarding human action, from reproduction to death. In terms of law, authority derives from the very capacity to draw social existence into its web of definitions, principles, and articulations. In this context, authority emerges as a function or effect of sovereignty, in that the capacity to constitute a domain of relations opens the way to subject peoples and places to the resulting web of signification. Back.
Note 10: I am using the term territioriality to denote the self-reflexive organization of a territorial system, signalled most powerfully by formal if not guarded boundaries, of symbolic ascriptions to land, and by political systems of governance resting on spatial orderings. The point here is that states did not emerge, de novo, with a form territorial system in place. On this point see Kratochwil, 1986. Back.
Note 11: On the crucial play at the time between the king's "office" and his "personage" see Kantorowicz (1957). For distinct but intersecting views on the "origins" of the modern state see Strayer (1970), Tilly (1992), Spruyt (1994), and Ertmann (1996). Back.
Note 12: Think of the charismatic orders described by Weber (1947: 363-69) that depend on the cult of the ruler, but which, if successful, became routinized into a post-charismatic order of administration, codes, etc. Back.
Note 13: From this inclosure eventually a system of territory emerged in earnest across the eighteenth and nineteenth centuries. Analogously, colonization preceeds the territorial organization of empire. Back.
Note 14: The general point is that sovereign domains can integrate forces and practices from other domains into their own webs of codes and significances. But this intersection can cause tensions and conflict. A good example of this is the intersection of the juridical and economic domains. While a regime of human rights sustained by state law can become part of the market via property rights, it can also conflict with it via workers' rights. Back.
Note 15: Increasingly, we might count large corporations in this category (if, like states, the dispersal and deployment of offices, production systems, codes, and knoweldge constitute an identifiable and distinct domain of relations). Back.
Note 16: The alternative would have been for Foucault to have explored the continuities between sovereignty and his conception of power, which were only teasingly hinted at (1991). Back.
Note 17: The term "quasi-states" is an unfortunate label (Jackson, 1990) applied to states in the developing world which are viewed as being able to do little else but constitute formal boundaries and terrorize the people and places within them. Their designation as "quasi" can only be sustained upon the presupposition that the western vision of a Hegelian state (maintaining an economy, society, and polity) is the benchmark of what transpires in a given national space. What is overlooked is the extent to which different types of domains are being constituted by all sorts of local and regional actors--including those of the "international community--in different ways (for which western political theory does not possess the intellectual to gauge. Back.
Note 18: One recent restatement of this opposition is in Shapiro (1993: xxxv). See also Kratochwil (1986). Back.
Note 19: Though this is only a small part of Marx's critique of capitalism. Marx can be read, I would argue, as contending with an emerging capitalist sovereignty where circuits of exchange become dominant over society. Back.
Note 20: We might also included emerging networks of production--subsuming both intra- and inter-firm trade--where maximum flexibility of location and staffing are central. Back.
Note 21: The key difference, is the stacking of multiple domains around a single agency structure like the state precluding forms of specialization that might otherwise limit possibilities. Geographers John Friedmann and Clyde Weaver (1979: 7) argue that territorial and functional organization are in part distinguishable by the former's tendency to greater liberty because territorial organization must incorporate a plurality of disperate places and communities into a single, reciprical political framework. This assertion does have some validity in the history of European state-formation, and it seems to be consistent with my viewpoint. But I am skeptical of any general claims for this connection, in the least because of the long history of empire with its implication that hierarchy can be very powerfully imposed along territorial lines.
The contrast between territorial organization and functional organization is a relatively longstanding one, emerging in the political theory of David Mitrany (1966) and regional science in the field of geography (the administration of things on an international basis could be organized around specific functions such as the management of resources). Its appeal resurfaced in the 1970s Club of Rome thinking (Tingbergen, 1976: 82-84), where even a concept of "functional sovereignty" was introduced. More recently, advocates of a global governance approach to the world's problems have once again resurrected a form of functionalism. See Commission on Global Governance (1995).
I would argue, more generally, that territorial organization was always a form of functional organization. It was the function of the management of terrain, locales, regions, and borders. And this was one of a number of functional domains that was dependent on state agency. The implication is of course that other forms of functional organization can be liberating as I will argue at the conclusion of this essay. Back.
Note 22: One way to read the whole history of economic liberalism is as a proto-sovereignty argument (the sovereignty of the market that is). Back.
Note 23: A comparison of international markets in the late nineteenth and twentieth centuries has yet to be written. Back.
Note 24: One notable aspect of--especially illegal--migration is the way that migrants may enter a set of domains based on the incentives or logics of other domains like global markets. They are examples, par excellence, of the intersection of state and nonstate-centered domains. Back.
Note 25: Not all sovereign domains need to be autopoietic, and autopoietic domains can be viewed as a subset of sovereign domains. A domain qualifies as sovereign if there is a constitution of a distinct configuration of social existence that takes place within it. A given sovereign domain can be far looser, more thinly coded, and less bounded than the complex and differentiated subsystems of late modern states and societies. Early modern states are an example. Back.
Note 26: This room exists because invention and rupture can occur against the background of a domain's broad structure of relations, codes, and practices. This structure does not necessarily disintegrate because of shifts that become part of a domain's path of historical development. Back.
Note 27: In contrast, the Bretton Woods system was for the most part compartmentalized into financial functions, like currency exchange, and possessed rules which were relatively transparent to its participants. For a contrary, sanguine view on the possibilities of mastering global markets see Gill (1995). Back.
Note 28: The notion that sovereignty stands above or even outside the body politic--traditionally associated with Bodin's notion of a sovereign not subject himself to (his) laws of the land--was misconstrued long ago by one well-known critic of the concept of sovereignty, Jacques Maritain (1957: 28-53). He failed to grasp that Bodin's point was not that sovereignty was in an external position above the body politic, but that it could not be subsumed by the body politic, or any portion of it. As I pointed out above, even the arch agency-focused Bodin understood that a sovereignty is realized only in and through its articulation in a polity. Back.
Note 29: Its appeal is obvious for those looking for precedents for a world were states are not as pervasive as they have been in this century. See the description of this concept in Bull (1977: 254-55). Back.
Note 30: This of course is very different from the more longstanding normative claims associated with sovereignty as popular sovereignty. Back.
Note 31: Michael Walzer (1983) cleverly turned the possible nightmare of social differentiation into a liberal virtue in his notion of there being separate spheres of justice within the social fields comprised by a given state and society. Back.
