Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top

2020 | Book

Dismantling the Westphalian System in Today’s “Age of Reason” Read chapter Read first chapter

The Sovereignty Game

Neo-Colonialism and the Westphalian System

Author: Will Hickey

Publisher: Springer Singapore

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft" , Springer Professional "Technik"

Login to get access
insite
SEARCH

About this book

This book explores the change and continuity in the idea of the nation state. Since the Westphalian treaties and the political thought of Thomas Hobbes, the nation state has been the denominator of all geopolitics. In an era of populism, economic globalization, digitalization, and the Chinese party-state, scholars of sovereignty have been struggling to understand whether the nation-state remains relevant as a necessary heuristic. This book will be of interest to scholars, policymakers, investors, and citizens navigating a fast-changing world.

Table of Contents

Frontmatter
Chapter 1. Dismantling the Westphalian System in Today’s “Age of Reason”
Abstract
The Peace of Westphalia in 1648, after centuries of warring discord among countries, sought to bring regional exclusivity to differing ideas, cultures, and religions, in the noveau concept of the “nation-state”, not for a common good, however, but for the good of then-vested interests. Westphalia is the foundation of all of today’s global governance frameworks. It is a European concept by derivation, specifically Germanic, that utilized secularism to subjugate monarchy, dynasticism, and all ethic/religious forms of governance. How Westphalia can congeal into any “synergetic” force to confront today’s global issues, (refugees, climate change, non-state actors, and extreme economic imbalances), without any overarching directive is difficult to see. Otherwise, sovereign governments, couched in an insular Westphalian dystopia, will continue to default, debate, deny, bicker, and obfuscate what real actions need to be taken to confront global problems in exchange for protecting what is most important to them: self-interest. Political unions, trade agreements, climate agreements, and international law are not capable on their own to enforce multidimensional solutions required for global “public goods” problems. However, the US dollar, a flawed currency, with proscribed enforcement via its reserve currency status, possibly might be. Technology and economics change, it is time for outdated systems underpinning the global order to change or be dismantled also.
Will Hickey
Chapter 2. Climate Change and Westphalia
Abstract
Climate change is the most pressing global issue facing mankind today, arguably in history. Unanswered, it will cost our planet trillions of dollars and millions of lives. It is driven by burning excessive amounts of fossil fuels to create energy. However, the Westphalian construct of 1648 precludes a unified and enforceable approach to this issue despite any “feel good” political rhetoric, such as the Kyoto, Copenhagen, or Paris Accords. Certain developing countries are allowed to keep polluting without significant changes to their domestic economies, while developed countries are held to a higher standard, indeed even expected to fund their developing neighbors transition to “green” energy. Many developing countries despite their Westphalian framework, are not Democratic nor driven by the rule of law, but by elites seeking self-interest, creating corrupt and authoritarian conditions. Leakage of emissions thus is the most critical problem, and cannot be dealt with without an enforceable and audited carbon emissions framework. Simply, Climate change, and a growing plastic waste problem, will ultimately prove insurmountable if we do not dismantle Westphalia, and soon.
Will Hickey
Chapter 3. Universal Basic Income: Populism Comes to the Fore
Abstract
Westphalian systems of sovereign nation-states have a vested interest in preventing “beggar thy neighbor” economic issues, where poorer neighbors exacerbate economic push/ pull factors, such as illegal immigration in the former and higher paid employment (Polish plumbers in the UK) in the latter. However, this is all oversimplified. Countries with large populations of the underemployed, but overly educated citizens, such as the US, U.K., Spain, Turkey, and even India, have spoken of creating a UBI, or “Universal Basic Income” in the face of automation, robotization, AI, 5G, and overcapacity wiping out so many semi- and unskilled jobs. Yet some of these countries border on poor, large population countries with many unskilled workers, such as Mexico, Myanmar, and sub-Saharan Africa. Can a UBI really be universal and address cross-border needs? Further, does demotivating populations create more problems than solve them, and will rich countries be willing to subsidize their poorer neighbors in a UBI scheme?
Will Hickey
Chapter 4. Economic Migrants and Passports
Abstract
All political problems are rooted in economic ones and vice versa, argued Douglas North, who received the Nobel Prize in Economics for his theory on “natural state” of human existence. While there are push/pull factors for immigration, the largest pull factor is seeking a better life, pushed from either persecution or poverty. A better life is considered as better economic alternatives and opportunity. The Westphalian system by its nature creates imbalances that exacerbate, not solve these factors. People are still enumerated by “the passport” (or lack of it), which is their Westphalian document of passage and not their skills, value added activities, and abilities. This is costly, racist, and discriminatory for societies to maintain, creating tremendous social conflict. Changing the Westphalian system to one of inclusion and acceptance, as opposed to exclusion and rejection is in order, but this will also meet tremendous resistance from current stakeholders who derive their power and pleasure under Westphalia.
Will Hickey
Chapter 5. Reforming State-Owned Enterprises
Abstract
State capitalism is just that, the government controls all major capitalist and economic activity, usually by way of its main production and control entity: the monopolistic state-owned enterprise or SOE. State capitalism is endemic in many former communist and postcolonial countries, such as India, Indonesia, and Brazil, but particularly in China. State capitalism presents an existential threat to its nations progress and at times Western economies, such as via product dumping, and sensitive technology investment. Yet, state capitalism can comfortably hide behind the mantra of “nation-state” exclusivity, against world competition, and without undertaking reforms to promote necessary structural changes in governance, labor, and economy to deal with global problems, and local ones, such as proper business formation, corruption, pollution, and overregulations. Trade policies and tariffs cannot solve these issues in aggregate, only singularly, and are not holistically effective against a determined exporter anyway. Without reform, state-owned enterprises further a public goods dilemma that is unsolvable. To get to acceptable convergence, smaller interlocuters, such as SMEs and legitimate entrepreneurial activity become necessary practices to get to political acceptance in host nation-states.
Will Hickey
Chapter 6. Westphalia and Finance: The “Cramdown” of Devaluation and Sovereign Bonds
Abstract
Finance underpins the legitimacy of the Westphalian system, as it is integral to its domestic control. Currency derives its value from the sovereign system under which it exists, or in a shared system such as the European Union. Nonetheless, even shared systems can generate severe economic problems such as with weaker EU economies like Greece or Portugal using the euro. Both devaluation and bond issuance is an elitists game at its core, using the levers of the Westphalian state to effectively force a “cramdown” for their largess and fiscal irresponsibility on uneducated and marginalized populations. In the age of social media and instantaneous information, currency devaluations fool no one anymore. Similarly, bond issues, euphemistically, called “sovereigns”, are loans to investors borrowed against a country’s people’s future such as in Argentina, or Venezuela, usually without their consent and dictated on the terms of the foreign lenders. Recent financial innovations such as cross border tax transfer pricing, social media platforms, and crypto or virtual currencies are now presenting an existential financial threat that simply cannot be countenanced under Westphalia.
Will Hickey
Chapter 7. Westphalia in the Age of Social Media and Instant Communications
Abstract
Westphalian governance enhances its power by controlling information. Technical innovations of the Internet and social media have challenged this control. The atomization of individual communications has given everyone the opportunity to observe, comment, or criticize ongoing events, no matter how totalitarian the country. Westphalian governments can no longer fool all the people some of the time. People now demand accountability in government decisions and transparency is demanded, though not always accorded. The implications of instant communications have vast influence on people’s thinking in all the problems bedeviling the globe, especially on issues that affect them directly.
Will Hickey
Chapter 8. The Blockchain and Westphalia: Digitalization Crosses Borders
Abstract
The blockchain offers a secure and impartial IT platform that can store vast amounts of transactions for any asset or item that can be digitized. It cannot be manipulated due to its long hash codes and legacy of transactions that promote continuity of any object by node consensus. This has significant value in eliminating any and all bureaucracy involved in governance if ideally applied. If contracts, land registry, social insurance, taxes, voter identification, education and census records can be placed on the blockchain and accepted legally as a valid medium of recognition, much bureaucratic meddling, inefficiency, and opportunities for corruption could be mitigated. This is important for developing countries with politically placed bureaucracy, and a history of corrupt practices. Blockchain’s unbiased realm confronts Westphalian norms directly.
Will Hickey
Chapter 9. Tax Policy and Westphalia
Abstract
Under the rubric of state sovereignty and non-interference, nation-states are allowed to set their own tax policies. In theory this is correct, but the reality is quite different. Tax policies of one nation-state can undermine the tax policy of a neighbor, creating an uneven economic playing field. The US and high tax countries such as in northern Europe seek extra-sovereign disclosure on their citizens and residents residing in other countries to keep their systems going. Nonetheless, a deeper issue is why do people seek to avoid paying taxes in their home countries, while trusting another country? The best systems, such as in Scandinavia, are based on social capital and transparency. While China seeks to develop a worldwide system of taxation similar to the US. This chapter posits nation-state incompetence, corruption, and financial rules that create severe economic imbalances between countries, and how some countries are forcing compliance. Restructured playing fields with reducing inequality and having transparency with national economic regimes will eventually bring about a uniform playing field, until that happens, standards and enforcement methods will vary considerably.
Will Hickey
Chapter 10. The Endgame: Enforcement and Acquiescence to a US-Led World Order?
Abstract
In theory, colonialism ended in the latter half of the twentieth century, but it still is very much alive and well by the usage of the US dollar, the world’s real exchange medium. The entire Westphalian system is underwritten by finance. Yet, can the blind lead the blind? Despite being more than $22 trillion in debt (and technically impossible to ever repay this, even with roaring economic growth year-on-end) the US dollar, US financial system access, and US debt obligations all underpin the world’s finances. Those who have the gold make the rules is an appropriate saying. All ascriptions to US dollar-denominated debt instruments, such as bonds and stocks, are subject to US rules and laws, which have a global reach. As most countries’ sovereign debt holdings are in US dollars, the US then becomes not only the world’s de facto economic ruler, but also its enforcer. It is only logical then that any global solution for public goods problems (i.e., climate change, plastic waste, etc.), cross border finance, or economic policies priced or funded in dollars would be subject to US rules. Will the US take on this mantle beyond Westphalia, but even further, will a world of diverging politics acquiesce to it?
Will Hickey
Chapter 11. More Sovereigns Not Less?
Abstract
With the issues of rising global problems that can only be solved by collective effort and enforcement outside of the Westphalian identity, the recent trend has been even further atomization towards sovereignty, not convergence. Meaning even less faith in centralization and more toward individualism despite the fact that cultural and economic homogeneity is dead in a digitalized world. Several emergent or existent independence-minded efforts come to the fore: Kurdistan, Catalonia, Scotland, South Sudan, Kosovo, Taiwan, Tibet, Trans Dneper, Western Sahara, etc., and now, Brexit. Given these new trends for more sovereignty, any binding collective agreements become difficult, promoting more leakage, more exceptions, and thus compromised global outcomes. It is highly doubtful that expansion of Westphalian countries will lead to better world solutions, yet are there other reasons to create more sovereigns?
Will Hickey
Backmatter
Metadata
Title
The Sovereignty Game
Author
Will Hickey
Copyright Year
2020
Publisher
Springer Singapore
Electronic ISBN
978-981-15-1888-1
Print ISBN
978-981-15-1887-4
DOI
https://doi.org/10.1007/978-981-15-1888-1