Economic integration, democracy and the welfare state

The present difficulties of democratic welfare states in Europe are often ascribed to economic "globalization", that is to the world-wide integration of markets for capital, goods and services which has eliminated national control over boundary-crossing economic transactions, and which therefore exposes national producers to world-wide competition. In fact, however, globalization in the strict sense of the word is, at the most, realized only for speculative capital transactions. It is true that in all other areas of economic activity the intensity of international competition has increased as well. Nevertheless, even under the liberal regimes of GATT and WTO, governments have not abdicated their capacity for boundary control, and the freedom of world trade is still constrained by a wide variety of tariffs, quotas, "voluntary" restrictions and non-tariff barriers.