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The Retreat of the State: The Diffusion of Power in the World Economy. By Susan Strange. Cambridge: Cambridge University Press, 1996. 218p. $49.95 cloth, $16.95 paper.
Susan Strange ends this provocative and thoughtful book with a reference to "Pinocchio's problem." Not his nose growing when he lied-a metaphor better left alone-but the lack of strings to guide him once he turned into a real boy. The diffusion of state power, and a more general systemic entropy of authority, has left us with "a ramshackle assembly of conflicting sources of authority" (p. 199). We all share Pinocchio's problem: The strings that bound us unambiguously to state and nation have snapped, and we are left adrift in a world of multiple authorities, allegiances, loyalties, and identities.
Strange's central argument is that the authority of all states is diminished as a result of changes in technology and finance and of the integration of national economies into a global world economy. In part, authority has shifted to non-state actors, most notably transnational corporations (TNCs). Yet, some authority in the system has been "lost" in the sense that it has shifted from states to impersonal markets; some of the fundamental responsibilities of the state are not being exercised by anyone. "The diffusion of authority away from national governments has left a yawning hole of nonauthority, ungovernance it might be called" (p. 14).
The state is not disappearing; Strange does not argue for the "end" of anything. She does argue forcibly (no surprise here!) that the state is in the midst of significant change-a "metamorphosis"-brought on by structural change in the world economy. It can no longer make exceptional claims; it is now one source of authority among several.
The Retreat of the State follows logically from Rival States, Rival Firms (1991), in which Strange and John Stopford argued that competition for global market shares has replaced competition for territory. Here, the shift in authority from states to markets is seen as "probably the biggest change in the international political economy to take place the last half of the twentieth century" (p. 43). At this point, "there is not much left of the territorial basis of authority" (p. 45). Territoriality is neither the sole source of political power and authority nor...