Beyond the nation state

Ironically, developed societies at century's end must confront the return of a problem that they seemed, under the pressure of system rivalry, to have just solved. It is a problem as old as capitalism itself: how to exploit the allocative functions of self‐regulating markets effectively without incurring unequal distribution and social costs that undermine the integration of liberal societies. In the West's mixed economies, the state—with much of the national product at its disposal—had gained a certain latitude for making transfer and subsidy payments and, on the whole, for establishing efficient policies for employment, infrastructure and social security. The state could influence the overall conditions of production and distribution, with the aim of achieving growth, price stability and full employment. In other words, the regulatory state could, through growth inducements on the one hand and social policy on the other hand, simultaneously stimulate the economy and guarantee social integration. To guar...