Similar arguments have been applied to the welfare regime: that national
competitiveness within Europe is incompatible with generous social provisions
financed at least in part by taxation on companies: firms will prefer to locate
where they can escape with lower, if any, contributions. Moreover, even within
Europe the collectively imposed restraints embodied in the Maastricht ‘con-
vergence criteria’ for participation in the single currency have required curbs
on public debts and government deficits, widely resulting in pressures to cut
back the welfare state. Some have seen this as a decisive challenge to the
European social model (Hemerijk and Schludi, 2001); or at least as requiring its
radical reconstruction (European Commission, 2002). This example indicates
that the belief in the potency of global competitive forces may itself acquire a
coercive social force: ‘whether the globalization thesis is “true” or not may
matter less than whether it is deemedto be true (or, quite possibly, just useful)
by those employing it’ (Hay and Rosamond, 2002: 148).
Path-dependence: the case for continuing diversityThere is a counter-argument which challenges the ‘globalisation’ thesis. The clear-
est example is that of Hirst and Thompson (1996): they deny that the economic
system is significantly more internationalised today than a century ago, and insist
that globalisation is not so much fact as ideology. For many employers and gov-
ernments in recent years, the idea of globalisation has provided a useful excuse: it
implies that the fate of national economies is not susceptible to influence by
domestic policies, or at best that governments can do no more than impose the
most effective forms of adaptation to external forces. Yet in reality, globalisation
‘both is authored by states and is primarily about reorganising, rather than bypass-
ing, states’ (Panitch, 1994: 63). As Boyer (1996) puts it, the twentieth century is
‘still the century of nations’. However, from this perspective the myth of national
impotence has provided a powerful rationale for advocates of deregulation –
though this is itself a misleading concept since, as Standing (1997) has insisted,
the social relations embodied in market forces impose their own disciplines and
punishments and thus market liberalism is itself a mode of regulation.
The task must be to disentangle reality and myth. Part of the problem is that
the ‘G-word’ (Ruigkrok and van Tulder, 1995) has many meanings and can serve
both as analytical instrument and as rhetorical device (Scott, 1997). All striking
(and influential) interpretative arguments tend to involve oversimplification and
incautious extrapolation of complex, confused and contradictory trends and
relations. What are the industrial relations implications of the cross-national
restructuring of production and the shift to a regime of ‘flexible accumulation’
(Harvey, 1989)? How far do MNCs possess and exploit a capacity to undermine
national regulatory systems? Has the regulatory capacity of the nation-state been
destroyed by the dynamics of international finance? And if – as numerous writers
insist, and as Ohmae (1985) himself has indicated – internationalisation has to
National industrial relations and transnational challenges 425