Paper: GS – III, Subject: Science & Technology, Topic: Fourth Industrial Revolution Technologies, Issue: AI’s Impact on State–Capital Relations.
Context:
Artificial intelligence (AI) is not just a technological advancement. It is a catalyst for enduring transformations in the relations between states and capital.
- The backlash against globalization can be understood through two primary theories: one focusing on distributional conflicts and the other on structural changes in capitalism itself.
Key Takeaways:
Theories of Backlash Against Globalization: Two primary theories:
Distributional Conflict Theory:
- Economic disparities, such as job losses in manufacturing, rising inequality, and wage stagnation.
- It emphasizes the redistribution to rebuild welfare states and restore legitimacy.
- No structural shift in state – capital ties.
- Politics failed to socially embed markets.
Structural Transformation Theory:
- It suggests that the backlash is a reflection of a deeper structural transformation within capitalism, driven by technological changes, particularly AI.
- The old globalization model is becoming less attractive as AI alters the interests of capital.
- The open liberal order is being reshaped by a new state – capital alignment driven by technological change, rather than collapsing due to inequality or cultural resentment.
Implications for Global Competition:
Fusion of State and Capital:
- Strategic alignment around infrastructure, data, energy, and defence.
- Defines emerging techno-nationalist competition.
- India & Europe must scale state capacity and domestic capital.
Legitimacy Crisis:
- Techno-nationalism may deepen power inequalities.
- Rising capital concentration risks instability.
- Potential for stronger societal backlash despite nationalist framing.
The transformation in state-capital relations driven by AI is profound and multifaceted. It signals a shift from traditional market dynamics to a new order characterized by territorial nationalism, the erosion of public-private distinctions, and the convergence of civilian and military technologies.
Source: (The Indian Express)
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