Nowadays we often hear that in this era of globalisation the nation-state has lost much of its traditional role and relevance. This assertion rests primarily on three observations : (a) the massive growth of MNCs which operate across state boundaries, (b) the mind-boggling volume and speed of cross-border flows of finance capital, (c) the growing domination of multilateral institutions like the IMF, WB and WTO. However, on closer examination all three arguments fall apart.

The MNCs or TNCs are still heavily rooted in their home countries. A 1993 study of the world’s 100 largest companies showed that only 18 companies maintained the majority of assets abroad. The internationalisation of shares was even more restricted. All the companies benefited from industrial and trade policies of their own countries and at least 20 would not have survived if they had not been bailed out by their respective governments. A meagre 2.1% of the board members of the top 500 US companies were foreign nationals, with only 5 of the top 30 US companies listed having a foreigner on their boards. (Financial Times, 5 January, 1996 and The Economist, 24 June, 1995). It is well-known that powerful corporations and their respective home states serve each other in innumerable ways, with the latter engaging themselves very actively in business wars amongst the former. According to the UNCTAD World Investment Report 2003, 79 of the world’s 100 biggest non-financial TNCs are controlled by the G-7 powers while another 16 are headquartered in other European countries and in Australia.

As regards the trans-national flow of finance, is this an IT marvel technologically beyond the control of individual states? Such an impression is sought to be created by the votaries of globalisation to pre-empt any possible attempt on the part of any country to check such flows in the national interest. The fact is, technologically it is quite possible to impose controls, just as it is to arrange all kinds of checks in the cases of online use of credit cards and the whole gamut of e-commerce. But the ruling classes are usually not willing, in their narrow selfish interests, to impose such restrictions on international financial transactions. So it is a matter of state policy — not an evidence of a general retreat of the state.
International bodies like the IMF and WB are nothing new. If in recent years these have become excessively domineering, that only expresses the hegemonic trends of certain member states like the US and its allies. In other words, globalisation has only served to further accentuate the old economic (as well as political and military) disparity between states, with a handful of them trying to dominate world affairs ever more blatantly in the name of the multilateral institutions.

In fact, like many other instances of asymmetric development of capitalism and its political institutions, here too we witness the aggressive advances of some states like the USA vis-à-vis the collapse of some states like the former soviet Union and the retreat of the states in Eastern Europe; and moreover in the case of one and the same state, hyper-activity in certain domains (like pushing forward the policies of liberalisation, privatisation and globalisation) juxtaposed against withdrawal from certain others (e.g., employment generation, education, health). This is something the anarchists and right opportunists fail to appreciate. So in the name of fighting globalisation, they tend to downplay the all-important struggle against the real, active agents of globalisation: the domestic ruling classes and the state.