New Left Review I/67, May-June 1971

Robin Murray

Internationalization of Capital and the Nation State

Liberal models of the international economy, as of international relations in general, still spring predominantly from an early utilitarianism. The nation state is treated as the basic category in the world: the atom of the system. States are assumed to be rational, self-conscious, self-determining units, analogies of economic man. International relations, whether political or economic, are above all relations between these independent states whose conduct is assumed to be based on the principle of maximizing their own net benefit subject to internal and external constraints. Developments in the structure of economic organisations since 1945, especially the rapid growth of international firms, have bought into question the solitary concern of international relations with international state relations. International institutions have grown up, like the imf, the World Bank or the largest of the international corporations themselves, which have a greater significance than many national states, developed or underdeveloped. Raymond Vernon, the head of the Harvard Business School Research Programme on the international firm, puts the point in this way: ‘the advanced world, carried ebulliently on the crest of a technological revolution in transportation and communication, has absentmindedly set up a virile system of international institutions and relationships that sit alongside the system of nation-states.’ [1] R. Vernon, ‘Economic Sovereignty At Bay’, Foreign Affairs, October 1968, pp. 119–120. Moreover, together with the appearance of these international institutions comes a weakening of the nation states themselves: Kindleberger for example argues that ‘the nation state is just about through as an economic unit.’ [2] C. P. Kindleberger, American Business Abroad. Yale 1969, p. 207.

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