Before I begin to discuss anything, the question of what globalization is needs to be addressed, and for this, the definition as dictated by the OED will suffice: “The process by which the world increasingly functions as a single community, rather than as many widely separated communities.”  The next step would be to address what the propositions of globalization are, and they are addressed herewith.

Globalization would be benefited if the following are assumed to be true:

  1. Inequality among individuals has fallen
  2. The number of people in extreme poverty has not risen
  3. The proportion of people in extreme poverty in the world’s population has fallen
  4. The rise of the developing nations does not threaten the livelihoods of the privileged citizens

(For India – or from an India-centric vantage point – all the above are true.)

A well-managed state should be able to tax and spend as it chooses. In order to understand this notion, it is of importance to understand that states do not function as companies or as other commercial institutions do. The primary resource necessary for a state to be adjudged in terms of its “success” is its people, who are highly immobile relative to the (other) resources required by an organization, i.e. machines, materials and money.

Even though it is harder to run inflationary policies with open accounts, even though predatory taxation is harder to impose because people or money will flee, if the state is awarded a substantial freedom to manoeuvre, globalization will reorient taxes towards paying the price required to consume location-specific services.

In a globally unified economy, or something to that effect, the state will become forced to serve its people and will cease, in any strength, to own them. At the same time, however, the state continues to be as necessary as it was before because the following depend on the quality of the state (and, therefore, its existence).

  1. The ability of the people to take advantage of economic opportunities
  2. The quality of global governance

Note that a consummate provision of these interests does not necessitate, as a consequence, the dismantling of the state. In fact, they are expressed by (or as) the interests that the state embodies.

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