Introduction
With the notion of Nation-States, nobility devised certain rules that could be respected by all others in order to avoid conflicts between them. These rules were mostly based on the principle that the princes were sovereign in their land. Their power was uncontested, exclusive and supreme within the borders of their territories, granting them authority over their subjects, the right to give laws, impart justice and even decide what religion should be followed. There was a time however when that concept was not known and rulers and kings asserted their power through terror and wits. Arming gangs or paying mercenaries to do away with potential competitors in a race for turf and technology, would allow them to extend their dominance reach ever farther, by controlling commerce and merchant routes.
Sovereignty then is a relatively recent concept through which many countries have sought legitimation for their acts. However it seems to be going through a process of erosion as the process of globalization takes more importance in the modern world. Governments invoke their sovereignty every time they see their power threatened or are about to take some dubious actions that could be widely and openly condemned. This work is divided in three parts that would cover three different aspects of sovereignty as a concept. The first part will expose how sovereignty was first defined and how its concept has changed through time. The second part will expose the origins of the sovereign State and how the concept was used to give a working framework to groups of rivaling gangsters. The third part deals with markets and globalization as forces that existed well before the formation of sovereign States, and are currently challenging their foundations once again. Most of the authors cited in this paper come mostly from the liberal side of the ideological spectrum, which has always contested the principle of absolute power and has championed the idea of individual freedom. This provides a focus under which sovereignty and State power could be seen as illegitimate and harmful, and might help find out if it is still a valid principle for defining the scope and authority of a State.
The concept of sovereignty
Sovereignty is one of those terms that appear to be widely used by many, even though its definition differs greatly among authors. Historically, the concept as it is known today is relatively new. Many of its features came into being after the westphalian peace, and before that there was no true sovereignty as emperors and religious leaders intervened in internal affairs and territories of other kings and nobles with relative frequency . It was after the creation of the Nation-State notion, and the establishment of clear boundaries determined by national customs, traditions, language, religion and expectations , where rulers had absolute and uncontested power to decree laws inside said boundaries, that there was a more defined concept of sovereignty. In 1576 Jean Bodin wrote the six books of The Republic where he defined sovereignty as a power that had to be absolute and perpetual . According to him, those who are sovereign could not be subject to the command of others in any way, and could give laws to their subjects and break or nullify inconvenient ones . That was the reason why the prince was absolved from the powers of the laws, even those he himself formulated granting him absolute powers . Since the sovereignty was intimately linked to the directing conscience of the society, in any form this could take, the princes asserted it for life and perpetually through hereditary succession . The concept had at least two parts: external and internal attributes. External sovereignty implies the right of jurisdiction over a particular territory and the people within, which also means that it can only be “answerable for that jurisdiction in international law” . On the other hand, internal sovereignty means “supreme command over a civil society” which cannot be legally contested in any court, and effectively controls the coercive powers of the government .
Since the 18th century, the decline of absolutism brought the first constitutions and international treaties as means of defining the limits of sovereign powers, establishing goals and functions for States, and taking away the sovereignty from human almighty lawgivers . This put the State as the unit of power and of authority which had the real capacity of deciding, in a definite and effective way, on every conflict that might arise in its territory . Only the State can have the supreme and exclusive power in its territory, so it must hold the monopoly of violence and the exclusive authority to decide how it organizes itself .
More recently, the Scope-Strength dimension was added as an important aspect in the definition of sovereignty. The scope refers to the functions and goals a sovereign claims as its own, while the strength refers to the ability that sovereign entity has to effectively execute those functions and goals . Some States maintain a minimum of functions, such as providing defense, law, order and property rights, while others have a broader scope offering public health and education, social insurance or wealth redistribution . According to Fukuyama , ineffective States seem to try to take ambitious goals and end up performing poorly, so from an economic point of view, the best thing a sovereign State can do is minimize its scope in order to maximize its efficiency and improve institutional quality. This calls the attention to the absoluteness of sovereignty and the supremacy of the State as its bearer, since it implies that it can be sovereign over some matters but might not be so for others.
Legitimacy of sovereignty
According to Schwartz , the modern State was formed gradually when certain groups of men became more efficient at taxing local producers in order to maintain their positions and acquire luxuries. These groups were the nobles and kings of their times. Feudal Europe, as described by Schwartz, was built on the backs of thousands of peasants who worked the land to pay in kind to an armed parasite noble class who roamed the lands on horseback and terrorized them . There was a real art in this, as nobles had to calculate how much they could extract from the peasants without pressing them to the point of revolting. Kings were just a higher level of hierarchy in the gangs, and were originally only nominated brigand leaders. Once they occupied the position of king, they would disperse the gang over the land in fiefs that had enough peasants to be exploited in order to maintain the gang, the horses and their thugs . Bureaucracy emerged from the king´s need to tax their nobles. Kings were forced to monetize the economy to buy luxuries from merchants, pay for mercenaries to protect his realm from competing kings and nobles, and to maintain a growing bureaucracy .
The concept of sovereignty was initially formulated to explain where the authority of the kings and princes came from and the limits of that authority. One can clearly see in Bodin´s work his liking for the monarch´s power . This concept of sovereignty was widely used to justify the existence and legitimacy of absolute power that was initially asserted by plundering unarmed peasants. The wealth obtained was used to acquire exotic goods from merchants who happened to be free to trade globally but were increasingly being extorted by States. Kings were gradually gaining control of trade routes and competed among themselves for turf, while merchants were taxed in exchange of protection or elimination of rival merchants (Schwartz, 2000; Steil & Hinds, 2009).
This description of the formation of the State and its growth as a form of organized crime could put the legitimacy of the sovereignty of the State to doubt. The modern State could be seen as a mutation of the old system as nobles were progressively forced to start providing certain services, enlarging their scope, in order to keep their privileges and maintain the fine equilibrium that keeps their subjects from revolting. It can be said then that governance, or the process through which government set goals for society, provided incentives for their achievement and controlled compliance , has changed through time. Contemporary democratic governments are elected by the people and have gained a greater acceptance, so they can hardly be seen as criminals or gangsters. Western developed countries have limited their governments so now they have no absolute power and people want them to fulfill certain expectations . It should be noted that the concept of sovereignty has a very narrow scope now in some of those countries, but it is still widely accepted that the State should be the exclusive and supreme regulatory power in the territory it occupies.
This change of governance can be seen more profoundly in the European Union multi-level system, where some transnational organizations have even acquired regulatory powers in sovereign States, and lower level institutions can influence the decisions and choice of goals at superior levels . The comitology system, presided by the European Commission, has gradually been granted regulatory powers on certain domains of public life, and decisions are made in informal committees where technical elites discuss, propose and oversee the application of new regulation in member countries . That could raise questions about their legitimacy as well, on the grounds that these committees are not formed democratically, and are a departure from the generally accepted representative democracy principles . However, it seems that this system has proved to be largely efficient and respected because it is shielded from national political struggles, and it gives low-level units, such as local ministries and regulatory authorities, the freedom to advance their goals as they see fit taking into account local particularities .
It remains unseen whether sovereignty is being eroded in the European Union, or it is simply changing into something else. Defense is still an exclusive and uncontested prerogative of governments, but regulation of markets, social inclusion policies, environmental protection, pension reform and a wide range of other typically public issues, are being regulated by committees that are not part of any State in particular, and are not under any sovereign control, be it a ruler nor the people .
Globalization and sovereignty
Globalization, as a process where the international community integrates by exchanging products and ideas through the use of advances in transportation and means of communication, is something that has happened since the beginning of history. The creation of roads, the commerce between distant lands, the advances in navigation and the constant migrations were all part of a gradual and slow globalization process that never seems to stop . The concept of sovereignty is something that collides with the idea of globalization, as it appears to have been invented to stop free trade among nations, or at least make it less free . It is now commonly accepted that States must have the power to control, define and enforce the norms that organize the market, and it is accepted that governments, judges, parliaments and sovereign leaders alter the rules of commercial exchange .
Monetary sovereignty hinders trade. Under the guise of monetary sovereignty, governments create inflation or control interest rates , which makes central banking one of the preferred tools States use to try to control trade. However, this was not always the case. “Monetary power essentially lay with individuals, who created money which was valuable only to the extent that others esteemed the substance it was made from” , but States took over the power of making money by forcing their subjects to accept money that had no real value and stopping others from offering money that retained its value better . Money now has no value and people are forced to accept it. As an example of this, countries like Iran or Venezuela have restricted their subjects to acquire better alternative monies, and now face high inflation rates (Bahmani-Oskooee, 2005, p. 16-19; The World Bank, 2013), thus restricting trade among their subjects.
Ever since 1971 money has lost all intrinsic value and all of it is just paper, giving the government great fiscal resources . This coincided with the rise of world nationalism driven by the cold war and the tension between world powers. Every time there is a tendency towards mercantilism, the protection of internal markets, it comes with a subsequent crisis caused by governments devaluing their coins in order to isolate their economies. The other way around is true: when there is a tendency towards free international trade and economic growth, usually States tend to favor universal money standards, based on gold, which prevents others from exercising any kind of monetary sovereignty that could be harmful to all .
Commerce was not something that came with the creation of Nation-States or laws, in fact, law was firstly made around generalized and accepted practices among trading people . With the Nation-State, there came the notion that trade and movement of people should be regulated by sovereign States , under the assumption that this authority is based on a natural law , thus causing a gradual disintegration of natural economies, and creating an ever present tension between States . Now some supranational institutions, which have come with the new multi-level European governance system , have taken huge steps to integrate the market economies of their member States and reverse the disintegration brought by statehood. Market integration is now being sought by many countries as it reduces uncertainty in trade by letting people know the cost of goods in any point of the territory covered by the union, and trade goods that are not discriminated for belonging to any national State. This has greatly minimized the incentives for using violence against neighboring States. Governments are no longer in full control of what comes in or out of their borders, they are no longer fully sovereign.
As stated before, this erosion of sovereignty has brought the elimination of incentives for violence among States, which means it has brought a reduction of conflicts. Mises said that with the elimination of restrictions and the dependence of external markets, States would no longer seek to conquer new territories or impose their patriotism to other countries, nor try to absorb land without consulting their inhabitants as it used to happen throughout the history of statehood . Although this remains to be proven, it appears that violence among economically integrated States is very unlikely to happen at this point.
Conclusion
The multi-level governance of the European Union, which does not depend on States forcefully exerting sovereign power over their subjects or neighboring countries, might cause the concept of sovereignty to lose its appeal as a principle for ruling a country or legitimating a government. The evolution of the concept, from something that granted absolute power, to a relative and selective principle; the source of its legitimacy as a justification for unjust plundering; and the pressures created by a relentless globalization process, are undermining its foundations and rekindled the search for a more precise definition. At present, there is a tendency for governments to reduce their scope of actions favoring the appearance of private actors who take over some functions that were traditionally performed by the State. If trade, movement of people, generation of consented institutions, environmental protection, health and education, are given back to their original creators, it would seem that it is now time to find another definition for sovereignty or replace it as a principle for defining the power of the State altogether.
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