In the nineteenth century, states became larger.  The dominant political events were the expansion of empires, the unification of Germany and Italy, the emergence of the United States of America.

       In the twentieth century, states became smaller.  The century began with the collapse of the weakest and most decayed empires,  Turkey and Austria-Hungary.   In the second half of the century, the membership of the United Nations grew from fifty to two hundred.  A majority of the current members of the European Union have only recently become independent states.

       The nineteenth-century belief that economic prosperity was founded on securing political control over natural resources was mistaken.  It massively overestimated the importance of resources in economic development, and failed to recognise that market access was not inevitably bound up with political union.  Nor does it recognise that the military costs of controlling territory without the consent of the local population would come greatly to exceed any economic benefits.

       The twentieth century gave small states the opportunity to achieve prosperity  on the basis of narrow specialisation in a global economy.  Such states would also benefit from the greater capacity of homogenous communities to reconcile economic dynamism with social cohesion.  As a result, some of the small states of Western Europe would, in the course of the twentieth century, move from being among the poorest countries in the world to be among the richest.

       Economic forces were conducive to political integration in the nineteenth century and favoured political fragmentation in the twentieth century.  These changes were attributable to changes in the nature of government and government activities; to changes in the global economic environment; and to changes in the nature of economic development. 

       Max Weber famously defined government as the body which sustains a monopoly of coercion within a defined geographical area.[1]  Nineteenth-century government followed that definition.  The largest component of government spending was military expenditure, followed by debt interest which represented the costs of past wars.

       But modern Europeans rarely want their governments to kick ass.  Nor do they want to spend much on preparations for that activity.  The notion of government as a hostile, coercive force, still widely encountered in the United States, has very little resonance in Western Europe. What modern Europeans expect their government to do is to provide schools and hospitals, and to assure their physical and economic security.  The dominant items in government budgets today are not war and its aftermath, but social security, education and health. 

European government is an economic agent, like Tesco.  The ideological content is steadily draining from European politics:  European leaders proclaim their competence rather than their convictions.  As with Tesco, we judge government mainly by the quality of its output and the perceived competence of its management.  And in general, we judge it less favourably than we judge Tesco. 

       These changes in the role of the state were associated with changes in the global economic environment.  In that economic environment, economic success depends not on scale but competitive advantage.  Such competitive advantage may be held by individual firms like Disney and Coca-Cola.  More commonly in Europe, groups of related firms exploit local competitive advantages.   In the twentieth century, it became possible to build a prosperous economy based on mobile phones, on speciality chemicals, precision engineering – even to build an economy based on fish.  If that narrow range of goods is your source of competitive advantage,  then as an autarchic state you are poor, but as a state in a global trading environment, you are rich.  On this central truth of international economics have been built some of the greatest economic success stories of the twentieth century. 

       Modern prosperity changes the nature of both private and public consumption.  We require that more and more of our expenditure goes on the environment, in its broadest sense:  on making the country we inhabit a nicer place to live.  Our demands are increasingly for services rather than for goods and differentiated products tailored to our individual needs.  That is why in the richest economies such niche firms have won sales from global mass producers.  Their global success is a reminder that niche doesn’t necessarily mean local. But it frequently does, especially in services.  And services, to repeat, are what we now seek from government.  Welfare, health, education:  then we find defence:  followed by transport, internet security, environmental services.

       With privately produced goods and services, of course, the organisation of production adapts to the nature of the market.  Boeing and Airbus assemble aeroplanes for the world from single facilities at Seattle and Toulouse:  haircuts are, and always will be, locally produced and delivered.  The adaptation of the location of production to the needs of the customer is equally relevant to public consumption.  The level of organisation appropriate for elementary education is lower than the level of organisation appropriate for higher education;  most environmental issues are best dealt with at very local levels, but some at very aggregate levels.  And so on.  Trade policy needs to be handled at high level.  And so does monetary policy.  In an era of global finance small states need to be part of a trade bloc and an actual or de facto monetary union.

       That matching of service delivery to efficient scale changes what we mean by sovereignty.  Weber’s definition emphasised the coercive role of the state:  along with coercion went monopoly.  But if coercion is no longer the defining characteristic of state action, the requirement of monopoly falls away also.  We can envisage multiple layers of government operating within a single local area, each delivering the services in which they have a competitive advantage.  And that is what, increasingly, we observe.[2]

       The focus of the post-modern state has switched from internal and external coercion to service provision: and about the subtleties of determining the level at which service provision should be matched to citizen – and customer – needs.  That emphasis on the customer reasserts the degree to which government is now an economic actor, rather than a political one.  The quality of government is judged by management and consumerist criteria rather than ideological and citizen criteria. Questions about the efficiency of service delivery have replaced questions of legitimacy of the exercise of coercive authority as the questions that define the boundaries of state action.  In the future in which efficiency, as well as legitimacy, will be defined by responsiveness to local and individual needs.  It is in these terms we must address Scotland’s role in the world and its relations with Europe, the UK and the international community.

1255

Bibliography

Alesina, A., and Spolaore, E. (2003), The Size of Nations, MIT Press

Angell, R.N. (1913), The Great Illusion, Putnam

Bobbitt, P. (2003), The Shield of Achilles, Penguin

Connolly, N. (2002) Identity/Difference, University of Minnesota Press

Cooper, R. (2003), The Breaking of Nations, Atlantic Books

Gellner, E. (1983), Nations and Nationalism, Cornell University Press

Gellner, E., (1997), Nationalism, New York University Press

Hammes, T.X. (2006), The Sling and the Stone, Zenith

Kay, J.A. (2008), Financial Times, 10 September

MacCormick, N. (1999) Questioning Sovereignty, Oxford University Press

Maddison, A. (2001), The World Economy, OECD

Oates, W.E. (1999)¸ ‘An Essay on Fiscal Federalism’, Journal of Economic Literature, 37 (3), p 1120-49.

Olson, M. (1982), The Rise and Decline of Nations, Yale University Press

Smith, A.D. (1998), Nationalism and Modernism, Routledge

Smith, A.D. (2000), Myths and Memories of the Nation, Oxford University Press

Smith, R. (2006), The Utility of Force, Penguin.

Tamir, Y. (1993), Liberal Nationalism, Princeton University Press

Tully, J (1995), Strange Multiplicity, Cambridge University Press

[1] In his 1919 lecture ‘Politics as a Vocation’

[2] Alesina and Spolaore (2003) is the best source on the relationship between government function and state size