Third WorldQuarterly, Vol21, No 6, pp 103 5 – 1057, 2000 Thestate o fthe‘ state’in globalization:social order and economicrestructuring in Malaysia CHRISTINEB NCHIN ABSTRACT This article asserts that,instead of anticipatingor searchingfor indications of the ‘endof the state’in anera of neoliberal globalization,it is morefruitful to examinethe relationship betweenthe state andsocial order, becauseof the potential to discern the conditionsand consequences in which occurthe ruling elite’s andsocial forces’resistance to and/or alliance with, transnationalcapital. A case study of Malaysiais presented to demonstratethe complexand even contradictory ways in whichsocial order is regulatedthat allows the state to managedemands emanating within andbeyond the country. Specically, the analysis focuses onthe different historical junctures in which changingbases of state power,paths of development,and of cial manipulation of social identities convergein the regulationof social order that facilitates capital accumulationwhile maintainingstate legitimacy in amulti-ethnic con- text. Thepromotion of economic deregulation, privatization andliberalization policies throughoutdi fferent regionsof the worldin the last twodecades of the twentieth centurysignalled neoliberalism’s ascendancein shapingthe latest phaseof globalization,or the realization ofthe world-as-a-whole.Driven by neoliberal mantras suchas efciency, productivity and transparency, mutually constitutive changesin the productionprocess andinnovations in newcommunication technologiesappeared radically to underminestate controlof the movementof capital andpeople across national borders.Consequently, some observerscame to anticipate the ‘globalvillage’ or the ‘endof the state’as asignicant outcome ofthe emergingglobal capitalist order. 1 At the beginningof the twenty-rst century,however, what is clear is that anticipation ofthe state’s demise is premature.Intellectual inquiry,instead, has examinedwhy and how the state is beingtransformed rather thanrendered obsolete bythe processes ofeconomic restructuring. Some posit the emerging formof the ‘competition’or ‘ courtesan’state as awilling participant, orin the case ofthe ‘efcient capitalist’state, as the authorof neoliberal globalization. Fromthis perspective,state economicpower can be strengthenedin partnership with,or in the service of,transnational capital. 2 Others contendthat state economicpower is weakenedby the transfer of ChristineB NChinis attheSchool of International Service AmericanUniversity, 4400Massachusetts Aveune, NW,Washington,DC 20016,USA. E-mail: [email protected]. ISSN0143-6597 print; 1360-2241 online/ 00/061035-23 Ó 2000 ThirdWorld Quarterly DOI: 10.1080/01436590020012016 1035 CHRISTINE BNCHIN sovereigntyover key economic issues to international (egWorld Bank, IMF), regional(eg EU, ASEAN)and/ortransnational organizations(eg WTO). One outcomeis the ‘defective’state that has beenhollowed out, leaving only the appearanceof an outer form. 3 Nevertheless, there are those whoinsist that this kindof deterritorialization ofsovereignty masks the fact that the state remains aconstitutive memberof such international, regionaland transnational organiza- tions. Itis arguedthat the transfer ofsovereignty beyond the state shouldbe read asaprocess ofincorporating national states into a‘transnational state’structure. 4 As the actor and/orthe acted-upon,the state remains crucial to neoliberal globalizingstructures andprocesses. Yet,while wemayknow more speci cally ofthe complexities in changingstate economicpower, we still knowless ofthe waysin whichchanging state –society relations are affected by,and affect, the conditionsfor transnationalized capital accumulationin this present era.Despite differences in the perspectives aboveon state transformation,together they elicit animportant questionof how social orderis maintained in the midst of globalization,and with whatconsequences to the state andsociety. Eventhe WorldBank and the IMF—arguablythe international promotersand guardians of neoliberalism—af rm transnational capital’s dependenceon the state to perform regulatoryfunctions in the economyand society, seen particularly in the aftermath ofthe Mexican,Asian, Latin Americanand Russian nancial crises of the late twentieth century.As the WorldBank admitted in 1997,‘ the state’s uniquestrengths are its powersto tax,to prohibit,to punish,and to require participation’. 5 This article asserts that akeystep in furtheringintellectual knowledgeof state transformation is to problematize the state’s relation to social order,ie the mannerin whichsocial orderis dened, constructed and regulated today that affects state legitimacy, the pathof development, and social relations and identities. Giventhe contexts ofnational, regional, and global economic restruc- turingprocesses, the state’s relation to social orderis shapedby the needto educatethe citizenry onthe real andperceived advantages of open markets and free trade,but in waysthat donot erode transnational capital’s dependenceon the state asthe highest-level authorityto protect its interests within geopolitically delineated borders. Particularly in multi-ethnic-religious societies, the questions ofstate legiti- macyand bases ofstate powerarise as economicrestructuring benets some and marginalizes others,while the openingof the economicand immigration gates respectively to transnational capital andmigrant labourcan generate debates overnational sovereigntyand identity. Inwhat ways, then, can and do those who dominatethe state apparatusattempt to manipulate identities in the construction andregulation of social orderthat is able to take advantageof opportunities for wealth creation offeredby achangingglobal political economy,while maintain- ing(or not) the legitimacy with whichto govern?How do efforts at overtand/ or covertsocial engineeringin acontextof economic deregulation, liberalization andprivatization transform the bases ofstate power,and with whatconse- quencesin societies markedby histories ofcontestation overaccess to,and controlof, material andsymbolic resources? Thesequestions andtheir answers shouldhelp us offermore nuanced conceptualization and contextualization of 1036 SOCIAL ORDER AND ECONOMIC RECONSTRUCTION INMALAYSIA state transformation in responseto the restructuring andharmonization of the national with the regionaland global economies. The rst section ofthis article presents aconceptualframework for examining the relationship betweenthe state andsocial order.Following this is acase study ofMalaysia, amulti-ethnic Southeast Asian countrythat has beneted from,and also has beenadversely aff ected byneoliberal globalization.The article con- cludes with asummaryof the historical phases characterizing the mutually dependentprocesses ofstate transformation andregulation of social order. Coercionand consent: state regulationof social order Forover several hundredyears the resilience ofthe modernstate in its various forms has beenpremised onthe regulationof social ordercommensurate with negotiations betweenthe demandsof forces within andbeyond geopolitical boundaries.Di fferent historical models of(re)arranging the economyand social relations andidentities, justify andare justied by distinct structures and processes ofgovernance. From the liberal welfare,the fascist, andthe commu- nist states, to the changingstate today,the different forms takenare revealingof variousideologies andvisions involvedin regulatingsocial orderamidst chang- ingmodes of capital accumulationand new social forces. Thereare twomajor perspectives onthe state’s relation to social order.While theorists workingwithin the liberal pluralist andthe moreorthodox Marxist perspectives wouldagree that the state’s role is to regulate social order,they differ onhow this is to beachieved. The state, froma liberal pluralist perspective,is conceivedas autonomousof any speci c interest groupin society, andfunctions exclusively to providepublic goods, eg security. 6 This form of state appearsto bepromoted by US foreign policy support for democracy movementsemerging from civil societies throughoutthe world. 7 Within the Marxist perspectives, the state is conceptualizedeither as tool ofthe bourgeois class to serve their interests, oras aprotectorof the capitalist system evenat the expenseof alienating the bourgeoisie. 8 Noneof the perspectives aboveis able to capturethe complexities ofhistorical andcontemporary state power.To assume that state poweris neutral,or exclusively class-based, oreven unconditionally oriented towards maintaining the capitalist system, respectively is to renderthe elite whocontrol the state apparatusas disembeddedfrom their communities’interests, orexclusively stratied along the class dimensionof social life, orto assume that the history ofrelations betweendifferent groupscan be subordinated readily andwillingly to economics per se.As AntonioGramsci asserted, the state is formedby a variety ofsocial forces that cometogether in an‘ historical bloc’led bya dominantgroup with agoverningideology. Building on this framework,Robert Coxwrote in the 1980sthat the constitution ofthe state andgoverning ideology canbe more or less commensuratewith the dominantinternational political economicideology of the time. 9 Dependingon the contextthen, state powerthat is crucial to the construction andregulation of social orderis basedon intersections ofkey identity dimen- 1037 CHRISTINE BNCHIN sions suchas class, gender,race – ethnicity andreligion. Analyses ofdifferent moments in history (egthe differences betweenearly