Nations Losing Their Relevancy

September 4, 2003

This is one of those trends that really annoys many groups for many reasons, but we all might as well get used to it. Nations are becoming increasingly irrelevant. That's not to say that there are not any nations, nor that they won't be acting and fighting over their respective national interests for many years to come. But in the end, commerce will dictate the rules; and increasingly commerce is not recognizing national borders.

Considering first the obvious, there is the Internet. Government after government has struggled with the fact that the Internet really does not recognize borders. Some countries are run by corrupt tyrants who continue to try to keep the Internet out - or at least limit access. But that is a losing battle. And with wireless technologies increasing, monitoring Internet usage will become increasingly difficult. Commerce takes place over the Internet among peoples of different nations on a routine basis, with a great deal of e-commerce on a business to business level. Given the tremendous efficiencies involved, it is unlikely that any government will successfully limit its nation's commerce in this regard.

Every company wants to purchase goods and services at the best possible price. Increasing productivity is the mantra of today's commercial world. As of this writing the United States is seeing economic recovery by traditional standards, but without job growth. How is this happening? Simply put, the job growth is happening elsewhere. Mexican manufacturers who would supply auto parts to U.S. manufacturers are hard-pressed because their labor costs far exceed those of their Far East competitors. Daimler-Chrysler's shareholders (to use one multinational example) will insist on its management finding the best prices it can get - anywhere in the world. If a given nation refuses to play, adopting prohibitive trade laws or tariffs, then commerce will flow elsewhere and its population will go unemployed.

We will increasingly see multinational corporations have nations bid for their favour, the way cities compete to have professional football teams locate in their towns. If the tax structures are unfavorable, they will simply move somewhere else.

Increasingly the laws we live by will be negotiated in multinational treaties, then implemented by enabling legislation and agency regulations in the various signatory nations. Nations will thereby agree to relinquish pieces of sovereignty to multinational organizations. Witness, for example, the World Trade Organization's levying of fines for the erection of trade barriers. In turn our state and local governments will find themselves restricted by these same treaties, a rather frustrating and humbling experience.

And if this were not enough, as has been made all too clear, even our enemies are ceasing to be nations. Unfortunately fiction has again predicted reality, with Ian Fleming foreseeing a world where superagents would be needed to save us from powerful villains operating across borders without loyalty to any nation. Today national security requires 007's as much as ICBM's. The world's nations will soon be divided into two groups: those working jointly for their mutual defense and those paying protection money to and/or essentially controlled by terrorists. It will not always be clear to which group a nation belongs, with some maintaining feet in both camps depending on current circumstances.

What is clear is that nations must be prepared to relinquish substantial sovereignty, or put more politely - coorperate to an unprecedented degree, in order to work together in a way which would deny well-organized international terrorist organizations sanctuary.

All in all this is an extremely complicated game being played by big players. Some of the big players are sufficiently enlightened to care about the lives they affect. Some are not. And unfortunately, many big players remain clueless. In democracies, even we little players should learn enough to cast an intelligent vote now and then.

  © 2003 Daniel A. Krohn