The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge Studies in International Relations) [Paperback]

Susan Strange (Author)

Book Description

ISBN-10: 0521564409 | ISBN-13: 978-0521564403 | Publication Date: November 13, 1996

Who is really in charge of the world economy? Not only governments, argues Susan Strange in The Retreat of the State. Big businesses, drug barons, insurers, accountants and international bureaucrats all encroach on the so-called sovereignty of the state. Professor Strange examines the implications of this rivalry and points to some new directions for research in international relations, international business and economics.

Editorial Reviews

Review

"The Retreat of the State is rich in detailed argument and discussion....This book deserves a very wide readership among those interested in where the modern territorial state and the modern state system are headed as we enter the twenty-first century." Stephen J. Kobrin, American Political Science Review

"...an impassioned critique of those who argue that the state's control of its currency, or even home-based multinational companies, remains intact....a refreshing pause from the political and academic attacks that attend globalization and a sophisticated interweaving of the political and economic threads that are globalization." Current History

"The Retreat of the State goes a long way to breaking the bounds of traditional analyses of the international political economy." Daniel J. Whiteneck, The Review of Politics

"...the book provides a useful discussion of some of the major dimensions of political change in the global economy....it will be useful for students who wish a good introduction to the topic." The International History Review

Book Description

Who is really in charge of the world economy? This study argues that big businesses, drug barons, insurers, accountants and international bureaucrats all encroach on the so-called sovereignty of the state. It examines the implications of this rivalry, pointing to new directions for research.

Product Details

• Paperback: 239 pages
• Publisher: Cambridge University Press (November 13, 1996)
• Language: English
• ISBN-10: 0521564409
• ISBN-13: 978-0521564403
• Product Dimensions: 8.9 x 5.9 x 0.7 inches
• Shipping Weight: 13.6 ounces (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #286,296 in Books (See Top 100 in Books)

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4 of 4 people found the following review helpful:

4.0 out of 5 stars An alternative analysis of IPE, January 27, 2008

By 

James Scott (Sydney, Australia) - See all my reviews

This review is from: The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge Studies in International Relations) (Paperback)

The late Susan Strange was a renowned academic and political thinker who took the study of International Relations in a new direction. Her book, The Retreat of the State, takes a theoretical framework developed earlier by Strange and applies it to wide variety of situations in International Relations; situations that are rarely considered by mainstream IR writers, despite their almost daily effects on our lives.

Strange challenges the key assumption of IR and international political economics (`IPE') that it is the state that is the key player in IPE and puts forward a theory outlining how other players, from business to the Mafia, can effect IPE.

The first section of the book starts by outlining Stranges' theoretical assumptions, including that the State is not the key player in international political economics that it is sometimes made out to be. She also sets out the redefine what is traditionally thought of as power in IR relationships, arguing successfully that power should be thought of as more that simply political muscle, using a much broader definition. Power and politics is more than simply military strength.

The second half of the book uses six brief case studies, including the Mafia, Big Six accounting firms and Insurance, telecoms and cartels to test her theoretical assumptions. Using the theoretical base set up in the first half of the book, Strange looks at situations where there is, as she terms in, authority beyond that state. For example, in looking at organised crime, who often have sophisticated paramilitary organisations and governance structures, she suggests that the traditional way of looking at IPE (eg neo-liberal, realist and neo-realist) may be obsolete. The same with the Big Six accounting firms, whose power is derived from the States inability or refusal to create the rules for accounting and who have a disproportionate effect on the global economy. While Strange has not sought to explain in detail each of these cases, she has pointed out potential future research in these areas, using a theoretical framework that explains better than traditional IR theory.

Overall, this book represents an important step in the development of IPE theory and indeed in IR theory in general. By allowing for actors other than the state, Strange has opened up a whole new world of analysis and assisted in solving many of the issues that traditional IR theory has failed to explain.

2 of 2 people found the following review helpful:

5.0 out of 5 stars States as Mafias, May 29, 2008

By 

Luc REYNAERT (Beernem, Belgium) - See all my reviews
(REAL NAME)   

This review is from: The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge Studies in International Relations) (Paperback)

Power
The late Susan Strange's analyses of the `way of the world' are essential readings, because based on the cardinal concept of power: `Power is simply the ability of a person or a group so to affect outcomes that their preferences take precedence over the preferences of others.'
She applies this principle in this book to the power struggle for world dominance between States, and between the States and other major players of which transnational companies (TNCs) are the most important ones.
TNCs came to occupy the centre of world power because of the global shift from States to markets and the integration of national economies into one single world market.

Evaluation of the role of TNCs
Susan Strange's evaluation of the influence of the TNCs on world matters is astonishingly fair.
1. TNCs play a crucial role in determining who-gets-what in the world system via production, sales, services, location, employment, investment, research, innovation and taxation.
2. TNCs have done more than States and international organizations to redistribute wealth from the developed industrialized countries to poorer developing ones. (!)
3. TNCs played a major role in labor relations and in managing conflicts of interests.
4. TNCs have taken over the role of the State as tax-farmers and collectors of revenues (VAT).
5. TNCs form restrictive cartels to rig prices in favor of its members, constituting `conspiracies against the public'. The official war against these cartels is pretty much a farce.

States as Mafias
In one word, TNCs are a mighty parallel authority, turning the State into a Mafia-like organization: `Like a State, a Mafia is an economic parasite, in the sense that it raises revenue from the civil society by demanding payment for protection. Governments call this taxation to pay for public goods when they do it, extortion when the Mafia does it.'

Centre and periphery, the US as hegemon, leadership
The result of this power struggle is a growing asymmetry of power between States and the creation of a world hegemon, based on the alliance of a (mostly US) transnational business class and a State government (the US): 'within the soft velvet glove of worldly bureaucrats can be felt the iron fist of American power, exercised on behalf of the ruling elites of transnational capital.'
The power of the TNCs is virtually unchallenged. They are hierarchies and not democracies. Their CEOs can divide and rule like renaissance Princes over shareholders, employees, suppliers, distributors and `strategic' allies.
At the heart of the international political economy there is a power vacuum, not filled by inter-governmental institutions or by a hegemon who is willing to show leadership.
Moreover, the system of global governance is lacking an opposition. `There is no force to check the arbitrary or self-serving use of power, or to see that it is used at least in part for the common good.'

Warning
`If the power of financial markets is not balanced by any countervailing power such as used to be exercised by national banks, then this change in the mix of authority is a serious matter.'

The books of Susan Strange are a must read for all those interested in the world we live in.

8 of 12 people found the following review helpful:

3.0 out of 5 stars Recent past performance is no indication of future outcomes, October 26, 1998

By A Customer

This review is from: The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge Studies in International Relations) (Paperback)

Susan Strange offers an excellently argued understanding of how the recent emphasis on national and global market forces has ham-strung political actors. However, as recent events in Russia and S.E. Asia have shown, political actors may still have the upper hand. While the book is marvelously presented, its thesis places too much emphasis on the here and now in its efforts to understand the future of political systems. My three star rating belies the great joy that this book must bring to economists who gain an opportunity to see the world as their domain.