Everything Old Is New Again to Parag Khanna

Your humble blogger has been growing out his beard in support of the Boston Red Sox this playoff season, a decision that paid off handsomely last night. There’s a little more salt in this beard than the last time I grew it out, a reminder of time’s passing. I used to be a young, rebellious IPE scholar. Now I’m a middle-aged cantankerous IPE scholar.

One of the few benefits that comes with age, however, is acquiring the necessary experience to recognize when someone is making a retread argument — a thesis that is not terribly original or provocative. Now that’s not always a bad thing — sometimes the remake is better than the original. But sometimes not.

For example, I’ve been … let’s say less than thrilled with Parag Khanna’s insights into the global political economy. Yesterday, someone let him have the keys to the New York Times Sunday Review section, with a piece titled, "The End of the Nation-State?" Now that is an awful title that is likely not Khanna’s fault, so let’s move past that. What’s his argument?

[T]hough most of us might not realize it, “nonstate world” describes much of how global society already operates. This isn’t to say that states have disappeared, or will. But they are becoming just one form of governance among many.

A quick scan across the world reveals that where growth and innovation have been most successful, a hybrid public-private, domestic-foreign nexus lies beneath the miracle. These aren’t states; they’re “para-states” — or, in one common parlance, “special economic zones.”…

This complex layering of territorial, legal and commercial authority goes hand in hand with the second great political trend of the age: devolution.

In the face of rapid urbanization, every city, state or province wants to call its own shots. And they can, as nations depend on their largest cities more than the reverse.

So, three things. First, this sounds awfully similar to Kenichi Ohmae’s The End of the Nation State: The Rise of Regional Economies, which made an argument about "region-states" way back in … 1995. I remember because I reviewed Ohmae’s book back in the day. It wasn’t terribly persuasive then, and it’s not any more persuasive now.

Second, states have always been, "one form of governance among many" — this ain’t new. Hell, even a glance at, say, Hendrik Spruyt makes that clear. So what Khanna needs to show is that real power/authority/governance is shifting from states to subnational actors.

Third, showing that devolution or diffusion of state power in the global economy ain’t easy. Indeed, the same weekend Khanna published this essay, Greg Ip’s Economist survey on the state of globalization five years after the 2008 financial crisis comes to a very different conclusion:

A clear pattern is beginning to emerge: more state intervention in the flow of money and goods, more regionalisation of trade as countries gravitate towards like-minded neighbours, and more friction as national self-interest wins out over international co-operation. Together, all this amounts to a new, gated kind of globalisation.

The appeal of gated globalisation is closely tied to state capitalism, which allowed China and the other big emerging markets—India, Brazil and Russia—to come through the crisis in much better shape than the rich world. They proudly proclaimed their brand of state capitalism as superior to the “Washington consensus” of open markets and minimal government that had prevailed before 2008.

Now, I think Ip is overstating his case considerably, an argument I’m in the middle of developing at length — but at least he’s bringing some data to the table. And that data doesn’t support Khanna’s thesis.

Am I missing anything?