After the Peace of Westphalia in 1648, the international order was reformed by a historic shift of power. While the suspected ambition of the Habsburgs for a “universal monarchy” was collapsing the routes of what we now call “state” were growing. This evolutionary process of state formation could not be completed without the development of diplomacy and international law, as means of defending the interests of the state. As history went by, it became clear that the maximization of power and the integrity of the state were the main goals set. Until 1945, the history of humanity was mainly a mosaic of wars and fragile peace treaties. Almost eighty years later, the element of war is still present, however, its appearance is less frequent in the most developed countries, which progressively become highly interconnected. This interconnectivity makes the states interdependent, thus the cost of war becomes bigger than its gains. Simultaneously, two major factors, namely AI and multinational enterprises, are becoming dominant in policy-making procedures. Does this mean that states lose power, or the traditional definition of the word “power” must be altered?

Coming to a conclusion presupposes the examination of these factors individually. As far as interconnectivity is concerned, the focus must be placed on international organizations. If someone takes a dive into recent history, they will realize that the reasons for a state to be part of an international organization have changed due to the appearance of supernational threats which demand combined forces in order to be tackled. For instance, the migration crisis, the covid-19 crisis, the environmental crisis or the terrorist attacks overpass the strict limits of the state’s borders, making international cooperation nothing less than essential, otherwise, the lack of coordination among states may lead to an extravagant waste of resources, if not total chaos. Within the context of the UN and the EU, this need for coordination in such issues merely explains the reasons why they often take precedence over other topics on the agenda during the last few years. Despite this multi-level crisis, interdependence is also apparent in domains such as energy and trade. Especially, as long as capitalism continues to be the dominant economic structure of today’s world, the maximization of profit will always be a key to accessing “power”. But, in order to maximize your profit, you need partners and buyers, and, at the international level, states play both roles. These economic ties create a “path dependency”, which means that the longer a state is engaged in economic activities with other states, the harder it is to withdraw from each agreement because the cost may overweight the profit. With that being the case, international organizations provide the forum needed for the arrangements to be made. At first sight, this might seem harmless, but in order for a state to be part of an international organization that coordinates its behavior to such an extent, it must cede a significant part of its sovereignty to another authority. Examining the process of the World Trade Organization, the World Bank, the International Monetary Fund, the European Monetary Union, and so on, states are willingly taking this step toward economic interconnectivity in a multi-polar world, even if that means that they have to sacrifice a part of their sovereignty in order to achieve prosperity.

Furthermore, nobody can question the dominance of technology in the 21st century. History might not repeat itself per se, but surely there are similarities between the past and future events in world history. Starting from this thesis, the changes brought by the Industrial Revolution of the 17th and 18th centuries might be similar to the changes that will be brought about by the progressive dominance of AI. And like Industrial Revolution, AI Revolution will change some fundamental elements of national power. Of course, according to the Center for Security and Emerging Technology, “these foundational shifts can render some of the current processes and resources of a state obsolete, but they can also make what states are already doing, or already possess, more valuable”. The major innovations cannot be independent of existing trends in population, resources, institutions, character, and policies of the states. This means that each state will adapt differently to the circumstances, and the level of success that each state will hold during this procedure will also define its relative power in the international system. The states that were focusing on the development of AI within their borders up until now (such as the USA, China, India, etc.), may appear to be multiple steps forward in comparison to other states that have not yet invested in those technological means. This affects the way of approaching the element of “power”. The most common definitions of power include three dimensions; control over resources, control over others, and control over outcomes. Nevertheless, even if AI cannot simply be characterized as a “resource”, in the light of an AI Revolution, the states that hold the expertise in this domain will certainly have control over other states and outcomes. In a way, AI is connected to every dimension of power which is exactly the characteristic that makes it revolutionary.

Another factor that affects the power of states is the constantly increasing role of multinational corporations (MNCs) in the international system. MNCs are simply understood as business enterprises that have expanded across the world through foreign direct investment (FDI) in services, manufacturing, or commodities to achieve partial or full control over the market and production of other economies and own and control income-generating assets in more than one country. In the context of the liberalization of the economy, the cross-border expansion of those enterprises comes down to the emergence of MNCs as dominant actors of globalization. The current dynamics seem to lead to a power shift from the states to the MNCs, especially in the European countries which are focusing more on socio-economic security. The dependency of those countries on military power is significantly decreased in comparison to their reliance on MNCs‘ products.  The impact of the MNCs is also noticeable within the social structures. As the wealth of these enterprises increases so does their influence on political and economic elites. Consequently, the engagement of MNCs in lobbying, leverage politics, or even direct dictation of state policies and conducts is frequent, especially in weak economies and fragmented societies. Simply, the expansion of MNCs threatens the power of the state because the pressure created by the economic and political elites affects the decision-making processes of the state. However, the states still hold the right to deny permission for investment or restrict access.

Acknowledging all the above-mentioned factors, the power of the state progressively receives another form. Military power continues to be an important factor for a state to be dominant, however, economic liberalization, the so-called “megatrends” (such as AI, energy/migration/environmental crisis), and the element of “interconnectivity” reduce the possibility of war among states. It would be naïve to allege that the state does not reign at the top of the power hierarchy in global politics, as large parts of state power and role, which is providing security (monopoly on violence) and welfare are not yet replaced. Nonetheless, it is difficult to ignore the appearance of multiple other important players in the international system, such as international organizations and MNCs. The claim that “states lose power” is too simply put, especially if we consider that the world will likely experience a fundamental reformation in the prospect of an AI Revolution. This revolution may alter the way of approaching power, due to the increased complexity of the term per se. Maybe the real test of power in the future will not be the capacity to make war but the capacity to prevent it. Who will be capable of doing so?

Author: Eirini Korda

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