The concept of the nation state assumed its classical and current form after the Peace of Westphalia (actually a series of treaties) ended the destructive Thirty Years War in 1648. Since then it has generated other concepts such as the “balance of power” and “sanctity of borders”, which have become part of the interior furniture of geopolitics and diplomacy.
And yet, in a post-colonial, potentially multi-hegemonic world, it is becoming increasingly obvious that the idea of what is a nation state, which probably reached its apogee at the turn of the 21st Century, and of who has the power to define one are beginning to change, with potentially serious consequences for stability and the many freedoms that most in the so-called West at least take largely for granted.
One only had to observe the extraordinary spectacle of the Scottish Referendum in mid-September when one of the most successful political and economic unions in world history came within 400,000 democratic votes of fracture (including those of 16- and 17-year olds), to know the world has changed and that the tension between maintaining existing borders and the perceived right of self-determination is one that is very unlikely to lessen and almost impossible to suppress absent a self-destructive ruthlessness of the sort currently exhibited in Syria and to a lesser extent China.
As a result, the art of assessing political risks in the medium to long term is becoming even more complex than it already is, because one now has to factor in an additional level of uncertainty in terms of determining whether the entity whose ability, willingness and capacity to pay are fundamental stands a reasonable chance of actually surviving in a form that will provide a successor state that represents an acceptable risk. The United Kingdom without Scotland, or China without Xinjiang (to use a low-probability example) is one thing; but Spain without Catalonia, or Italy without “Padania” is very much another.
The problem is that these are perceived as “tail risks”; and so are rarely reflected in a rational calculation of risk versus reward, because analysts find it difficult to accept that such events, while rare, will actually happen- until they do! And, of course, political elites generally have an interest in maintaining the status quo because of the power and privileges they arrogate to themselves and a fear that these, and their “standing” in the world, will be diminished if they allow a segment of the deemed “national population” the right to decide upon whether or not it wishes to remain part of the same polity.
At Awbury, we recognize that, depending upon the nature of the risk we are being asked to underwrite, asking all the relevant questions may well include asking not only the Westphalian, but also the West Lothian Questions! Concepts and identities matter, even if they are often hard to factor into a risk assessment.
-The Awbury Team