Philip G.Cerny 453these economic sectors was interwoven with political and ideological clashes across
a range of social and economic groups supporting different forms and combinations
of authoritarianism and democracy. The internal control span of the state qua
hierarchy was continually under challenge, even in the most outwardly authoritarian
of states, and failures of hierarchy to work efficiently were commonplace.
Even more important in the long run was the interaction of these endogenous
tensions with exogenous ones. On the exogenous level, the principal forms of
tension between different types of goods or asset structures were those between
the nationalization of warfare (and the production system necessary for modern
total war), on the one hand, and the gradual, but uneven, internationalization
of civilian production and exchange, on the other. Until World War I, the
dynamics of economic competition and those of military rivalry were not so
different with regard to many key issues, such as the development of dual-use
railway systems, steel industries, and shipbuilding industries. Additionally, the
nation-state constituted the predominant (although not the only) organizational
unit for both types of activities. The international economic instability of the
1920s and the Great Depression of the 1930s, however, represented a
fundamental loss of control by states, both authoritarian and liberal, over
international economic processes. The immediate result was, of course, the
attempt to reassert previously existing forms of control in more intensified
forms—more potent authoritarian autarchic empires and the withdrawal of even
liberal states behind trade barriers—as all major states tried to recapture
hierarchical control over their economic processes.
Thus the story of capitalism in the second industrial revolution was one of
uneven internationalization if not yet of globalization....
... [A]lthough political consciousness remained overwhelmingly national, both
security and economic structures—especially the latter—became increasingly
internationalized. The later stages of the second industrial revolution itself—the
so-called long boom—saw the beginnings of the decay of the second industrial
revolution state....
GLOBALIZATION AND THE CHANGING PUBLIC GOODS PROBLEM
The most important dimension of convergence between political and economic
structures in the second industrial revolution state was the dominance of national-
level organizational apparatuses in each sphere and the development of complex
organized interfaces cutting across and linking the two spheres.... [A] fundamental
transformation has taken place in the structure of public goods in today’s global
era, making both their pursuit and their provision through the nation-state more
problematic.
Those traditionally conceived public goods have been primarily of three kinds.
The first involves the establishment of a workable market framework for the ongoing
operation of the system as a whole—regulatory public goods. These include the
establishment and protection of private (and public) property rights, a stable currency,
the abolition of internal barriers to production and exchange, standardization of