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Arctic Yearbook 2013
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certain constraints, in particular financial and legitimacy constraints. My approach is thus inspired by
institutional economics, rather than by political science, international relations or political economy.
The Four Eras of the Modern Nation-State
From an institutional economics point of view, the nation-state is before all an organization capable
of setting and enforcing its own rules (e.g., monopoly over legitimate power) on its territory (e.g.,
national sovereignty) and sometimes beyond. This is before all a military matter, the army being the
―enforcer‖ of the rules vis-à-vis the outside, while the police enforces the rules vis-à-vis the inside
(but the army is always there as an ―enforcer of last resort‖). This military nature is, so-to-say, the
nation-state‘s core characteristics (or ―core business‖ in managerial terms). The origin of this core
characteristic goes back to medieval times (i.e., feudal lords controlling their territories and
populations which inhabit them), but has been carried over to the ―modern nation-state‖ (Tilly,
1975). This ―modern nation-state‖, born with the French Revolution, constitutes a change only
insofar as its military nature is now being (democratically) legitimized, the soldier now also being a
citizen and thus acting in the general (national) interest, as opposed to the interest of the feudal lord.
Until the Industrial Revolution, the core features of the modern nation-state were therefore its army,
its police and its judicial system. Basically, the nation-state extracts resources (money), generally
from its citizens, so as to finance the army, the police and the judicial system, all of whom are said to
act in the general or national interest. Besides financial resources, the nation-state also needs
legitimacy as a resource: if it is not (somewhat) legitimate in the eyes of its citizens, then also
financial resources are compromised.
This changed with the
Industrial Revolution,
or rather with the consequences of the Industrial
Revolution. More precisely, the Industrial Revolution gave rise to so-called ―industrial
development‖ with ―economic growth‖ at its core. Over time, the nation-state realized that
industrial development in general and economic growth in particular could serve its interests, namely
in the form of growing financial resources for its own ―development‖, which in turn leads it to
become an ever more enthusiastic promoter of industrial development and growth. This to the point
that, since the Second World War, the nation-state has become more or less identical to an
―industrial development agency‖ or ―economic growth machine‖, without however abandoning its
original, military nature. In other words, the pursuit of industrial development and economic growth
by the nation-state cannot be separated, from an epistemological point of view, from its military
nature. The state ―conquers‖ its own national territory by way of infrastructure development (e.g.,
roads, rail, electricity grids) so as to make (further) development possible. While the pursuit of
industrial development and economic growth answers to the state‘s financial resources needs, its
welfare dimension answers to its legitimacy needs. In other words, the nation-state can re-distribute
some of the proceeds of industrial development and, by doing so, create more legitimacy for itself.
This self-reinforcing virtuous circle went on unstopped until the end of the Cold War and intensified
globalization, thanks, in particular, to accessible and therefore cheap fossil fuel resources. The period
of the Cold War (1950s to 1980s), i.e., the period between the end of the Second World War and the
beginning of globalization, deserves a particular mention here: it constitutes, so-to-speak, the heyday
of (military-style) industrial development (both in the West and the East), as, during this period, the