On the importance of the state in the era of globalization

Table of contents: The Kazakh-American Free University Academic Journal №9 - 2017

Author: Ivashchuk Olga, Doctor of Philosophy, Professor of the School of Public Policy of the Russian Presidential Academy of National Economy and Public Administration (RANEPA) , Russian

The issue of a role of the state in the formation of modern society arises due to the fact that the processes occurring in the advanced European countries encourage to see in civil society not just a sphere that protects its independence from the state, and not just a society that can fit its concept only in the form "The world civil society" ("a civil society in one country is strictly not possible" [1, p. 46]), but the society to which the state prevents the realization.

With this approach, the national state seems like a relic, like a brake for a progress and freedom. It’s apparent "confrontation with universally formulated social-ethical and personal-legal claims" [2; p. 431] makes even supporters of it’s preservation go in some way to bargain with conscience, to "renounce the principle" [3; p. 62], once "state-organized brotherhood" is able to "organize and guarantee solidarity only on its territory" [2; p. 440].

R. Darendorf, the Popperian-oriented theorist and advocate of the "open society", describes the mutual relations of the state and civil society at the present stage as the main "modern social conflict".

And even the way of life achieved today in the OECD social democratic states is not an argument in favor of the state for him, although there "the old class struggle is by no means fully play out… most differences in income and status… have become gradual” and  “the world of citizens is a perfect world” [1; p. 45-47], the proletariat has disappeared, the only line of conflict is the access to the whole scope of civil rights, which can be provided by the employment, and the unemployed people (whom are no more than 10% - p. 144) are the only “group which does not fit” [1; p. 145]. This state of affairs is in the interests of the new ruling class - "citizens”. This is “the majority class”, a class of citizens, if such a paradoxical formulation is permissible [1; p. 112].

The fact is that here is in this "the best of all possible worlds" [1; p. 42], where civil society has reached proximity to the ideal, yet a number of issues, of which the main are the following:

1) “Whereas in the OECD societies, a majority is doing relatively well and only a minority is defined out, the OECD world itself constitutes but a minority of mankind” [1; p. 186], and this generates inclusion / exclusion problems; what happens when civil society is confined to national borders - the history of refugees and immigrants shows. If they are they are admitted, no society in the world can still give them the status that full citizens have, at best they become citizens of a second class, and “that violates the very principle of civil society”. If they are not admitted, it makes impossible to grant “citizenship rights for all human beings” [1; p. 46].

2) Not least this inferior civic status leads to the fact that in the OECD countries there is a non-working minority, which stubbornly reproduces itself and does not receive, or more accurately, systematically loses access to an employment, and that means, to the fullness of rights [1; p. 149].

3) Due to a kind of "natural weakness" of civil society in which traditional ligatures are destroyed, false idols easily master the minds of people, and from this the “scourge of totalism” [1, p. 45] comes.

Dahrendorf imposes the responsibility for all these problems on the Social-Democracy, which "has come close to the end of its tether" [1; p. 173], since "in one way or another all social-democratic roads end up with big government" [1; p. 167]. It is the Social Democracy, defending the majority class, forms “a tendency to define people out of the social universe of the majority, with persistent unemployment, inner-city blight, regional disparities and the underclass” [1; p. 176].

These problems could be solved also with the continued inequality of distribution, but with the growth of everybody’s well-being. However, "heroes of the social-democratic world tend to be super-bureaucrats rather than leaders with innovative sense of direction" [1, p. 167]. Therefore, it turns out that the state not only produces totalitarian mentality, but the strengthening of statism leads to the total stagnation, because the initiative that can only be aroused by the market (laissez-faire) is dying out.

Indeed, if any intervention in the autonomous functioning of the market only harms the market, and if there is not a lack of rights, but their supplying, then it is necessary to stop the bureaucratic intervention and fight for a single universal "world state" in order to provide laissez-faire for the sake of the general benefits.

It seems, however, that the matter is not so simple. This is doubtful due to at least the recent experience of Russia, which in the 90-ies followed this particular recipe - and ran into a severe crisis process, which has not yet been reversed.

The analysis of the intermediary links between the market and the life chances of people may call into question the connections and the reasons for the problems that have arisen, which at first glance seem obvious.

Firstly, in explaining the impossibility of eliminating the "non-working minority", it should be noted that it is not just residual, but is being reproduced, and in this reproduction, it is precisely the prematurity of the statement that a classless society has come. Because the subject, interested in the reproduction of socially deprived groups, is not the "majority class", but the top of the social hierarchy as a very real class, and not a "class on paper" [4, p. 725], whose reality is revealed precisely in maintaining this social distance. The cultural isolation of these groups, pushing them to a semi-underground existence, brings, as M. Foucault showed, a huge profit to the opposite pole of the social field, which, thanks to this deprivation of lower minorities, is able to control and reproduce, for example, through delinquency [5, p. 281-290], their illegal practices (such as drug dealing). And it is not the Social Democracy, who makes these practices profitable (Social Democracy at the state level, by all means available to it, is counter-acting), but an uncontrolled market. This is just an example of what monstrous forces can unleash the removal of the social-democratic state, which gives the only space, where socially deprived groups can fight for their rights and thus have a chance to defend themselves.

As for the distance between developed and backward countries, it can be shown that it is also reproduced, and it is also not in the interest of the majority that does not exist as a "class", but in the interests of the strong players of the world market, which are determined by the gain.

But, as in the first case, this process is not simple, but multiply mediated. And in order to develop it and at the same time see that the foundations of totalitarian temptations are in fact different from the insolvency of Social-Democracy, it is necessary to turn to the genesis of the world market.

Reconstructing this genesis, K. Polanyi established: "There was nothing natural about laissez-faire; free markets could never have come into being merely by allowing things to take their course… laissez-faire itself was enforced by the state" [6, p. 145]. Here are the arguments.

1) The self-regulating market has become a reality in the 30s of the XIX century, because the industry needed a constant inflow of raw materials and labor, and only the market could send this flow to it. However, governments had to pave the way forcibly by overcoming the resistance of the classes associated with the land [6, p. 90]. Thus, "the emergence of national markets was in no way the result of the gradual and spontaneous emancipation of the economic sphere from governmental control. On the contrary, the market has been the outcome of a conscious and often violent intervention on the part of government which imposed the market organization on society for non-economic ends" [6, p. 258].

2) Such a market cannot operate only within one territory, it requires three conditions at once: "international free trade, competitive labor market, and gold standard; they belonged together"[6, p. 155]. But the adoption of the gold standard, and protectionism in case of a threat to the national economy require the state policy.

3) The organization of production activities of this kind could not be a "natural" mechanism, since if it had occurred at the dawn of human history, all producers would have perished. Its essence is a specific motivation for work, the so-called "economic motivation", in which people are forced to engage in production by "hunger, or the fear of it, which those who sell the use of their labour power, and gain with those who… make profits" [7, p. 98]. Defenders of the market as a natural automatism believe that these motives are effective at all times, but in fact all the known historical systems of economics, except capitalism, "are usually not based on them”, for individual of such an economy “his share in the сommon food resources is secured to him independently of his part of the productive efforts of the community" [7, p. 97-99]. Referring to the results of ethnological research, K. Polanyi draws attention to the fact that "there is no starvation in societies living on the subsistence margin... the individual in primitive society is not threatened by starvation, unless the community as a whole is in a like predicament ... The same is true of the stimulus of the individual gain... A characteristic feature of primitive economies is the absence of any desire to make a profit from production or exchange ... Not hunger, nor gain, but pride and prestige, rank and status, public praise and privat reputation provided the incentives for individual participation in production" [7, p. 99-100].

Until the middle of the XIX century "In effect, all societies known to anthropologists and historians restricted markets to commodities in the proper sense of the term" [8, p. 111]. And only in the 1830s. "fictitious commodities" came into the sphere of alienation (as Polanyi calls money, labor and land). And if at the same time in society there are no cultural barriers that prevent the literalism of their modern existence, then, "human beings would perish from the effects of social exposure; they would die as the victims of acute social dislocation through vice, perversion, crime, and starvation" [6; p. 76], the land - the natural environment – would be polluted, uncontrolled financial flows would the enterprises to stop. Thus, cultural barriers form the necessary prerequisites for the functioning of the market itself, and the main one, capable of coordinating all three directions, is the state.

That is why the establishment of a universal market and a national state in Europe took place simultaneously. As a reaction to the reification of labor, land and money, the classes associated with them were mobilized, fighting for their own interests: classes associated with land opposed the market, preventing the separation of land from the community, including the landed aristocracy – by social-oriented laws (Speenhamland is a paradigmatic example), workers - organizing themselves in trade unions and fighting for working legislation, the bourgeoisie defended its enterprises by regulating finance (with the help of state central banks and other instruments).

If the developed market, whose necessary trend is expansion, invades from outside (as required by the construction of a world civil society – “we have to embark on it if we do not to see the achievements of citizenship jeopardized” [1; p. 46]) in a culturally and politically unprotected zone, all the vitally important institutions of society are destroyed in it. Social anthropology abundantly documents processes of this kind. A. Radcliffe-Brown was naively surprised that “the very material on which the ethnologist and the social anthropologist rely for their studies is disappearing before our eyes" [9, p. 146], but already the descriptions of M. Mead allow to clearly trace the lines of dependence: cultural contact with Europeans launches the process, "by which a group of savages ... merely robbed of all incentive to effort and left to die painlessly beside streams still filled with fish" [6, p. 166]. K. Polanyi clarifies: "Not economic exploitation, as often assumed, but the disintegration of the cultural environment of the victim is then the cause of the degradation… The result is loss of self-respect and standards" of cultural behavior [6, p. 164].

The decisive factor in such destruction is the pace that does not allow the culture, which is not ready for the market, to develop protective institutions. Already A.de Tocqueville saw that these rates are becoming deadly, he was amazed with them in the USA already in the 1830s. and described the main ways in which the "disappearance of the native tribes" occurs under the onslaught of market production [10, p. 199 et seq.]. With such an onslaught, "the Indians had only the two alternatives of war or civilization; in other words, they must either have destroyed the Europeans or become their equals" [10, p. 203].

But the Indian cannot compete with the Whites in the war, civilization takes time, so that the corresponding habitus that asks for it could be produced: “Living in the freedom of the woods, the North American Indian was destitute, but he had no feeling of inferiority towards anyone; as soon, however, as he desires to penetrate into the social scale of the whites, he takes the lowest rank in society, for he enters, ignorant and poor, within the pale of science and wealth. After having led a life of agitation, beset with evils and dangers, but at the same time filled with proud emotions, he is obliged to submit to a wearisome, obscure, and degraded state; and to gain the bread which nourishes him by hard and ignoble labor; such are in his eyes the only results of which civilization can boast: and even this much he is not sure to obtain” [10, p. 206].

The Europeans themselves once passed through the same thorns, but A.de Tocqueville records the difference that exists in the development of the pioneer peoples and the retarded peoples: the situation of the retarded ones is specific because they are compelled to compete with the pioneers on their, market, rules without appropriate protections, and there is a result – “it is the misfortune of Indians to be brought into contact with a civilized people, which is also… the most avaricious nation on the globe, whilst they are still  semi-barbarian: to find despots in their instructors, and to receive knowledge from the hand of oppression" [10, p. 206].

All these problems cannot remain in the past, while, in spite of crises, there a world market «laissez-faire» exists. At the end of the twentieth century, it directly expanded to the area of the former socialistic camp. An analysis of these events on the Russian model of the 1990s, carried out by M. Buravoy, allows us to see that the diagnosis posed by Karl Polanyi to liberal-market utopianism has a "completely modern sound" [11; p. 2].

If the country-pioneer, having survived Speenhamland, came to the development of production based on the market, then in our case, contrary to the promises of market utopians, there was what Buravoy calls "economic involution, a situation in which exchange strangulates production, an economy that gobbles up its own foundations" [11, p. 7].

In Russia, opened for the market, started the shock therapy aimed at destroying the administrative economy, and for 3 years since January 1992 all "fictitious commodities" were commodified, as Russian reformers “programmed an obsessive destruction of everything associated with communism, claiming this to be a necessary precondition for the market to autonomously work its magic. They did not attend to the institutional conditions for nurturing capitalist production, that markets cannot operate in an institutional vacuum” [11, p. 7]. Without protection of money enterprises stop, without labor protection degrades labor, without protecting the land, nature becomes polluted.

Indeed, after received a market trauma, the society reacted so that production has curtailed. Enterprises withdrew from the financial sphere, preferring barter to closure, workers did not leave jobs at the same time, but the latter were transformed into places of exchange and consumption, "where labor market information circulates, where work on the side is distributed, where desired products can be obtained in exchange for unpaid wages, where facilities (machinery etc.) can be used for their own independent production, where meals are taken, or where things are simply stolen (materials, etc.)" [11, p. 8].

Production, which still remained, receded and concentrated around single households, the home economy [11, p. 9]. As for the land, Duma “has managed to rebuff market initiatives of the executive and the urgings of the World Bank”, but this action has not saved production. The collective farms “have collapsed as productive centers”, the result was a significant drop in the amount of production of grain products and “organizing subsistence production of basic food products”, “intensification of the domestic economy… petty commodity production (Kitching)” [11, p. 9].

The question that arises here is the following. Why from so similar starting conditions - Speenhamland in England and the command economy in Russia - so different results were obtained: in England - production growth, in Russia - involution, in England a working class has emerged; in Russia it is being destroyed? Because only the catch-up situation created by the market, the situation of rupture and backwardness, could create a paradoxical new class-owners of means of production that are not interested in the development of production.

M. Buravoy describes it as “a new class in Russia”, which “is not a bourgeoisie lodged in self- expanding production but a parasitical class ensconced in networks of exchange. The New Russians range from the mafia that regulate economic transactions to the bankers and financiers who speculate in government credit and bonds, to the merchants who regulate imports and exports, to the oligarchs who control the appropriation and distribution of raw materials, to the moguls who own and monitor mass media. The New Russians do not generate new resources, they do not add value, they live off the rapidly diminishing and impoverished productive classes” [1; p.14]. Since this class is far from production, it does not care about the productive capabilities of the working people, and this is favorably to its partners in the world market, whose interests are to maintain a distance from countries whose market should be unprotected and open for imported commodities as much as possible.

Hence the differences: in England, where the interests of the social top coincided with the interests of production development in the country, state policy, opening the way to a free market, simultaneously protected the society from the market, responding to its functions in the market system: "Factory legislation and social laws were designed to protect labor power, land laws and agrarian tariffs were enacted to protect natural resources and the environment, and central banking and the regulation of the monetary system were required to shelter businesses from the caprice of money markets” [11; p. 15-16]. But in Russia, paralyzed by a market blow, production cannot yet form classes capable to represent its interests at the state level. The state became one-sided "instrument of market fundamentalism, of a narrow class of oligarchs who own and control the most profitable industries (gas and oil) who also control the major banks and media channels” [11; p. 16-17], and therefore not only did not protect society from the market, but provides for the lack of control of its agents against the interests of producers. Therefore, in all directions, "we have the picture of involution, of society withdrawing into itself and away from the state" [11; p. 18] which normally should have saved it.

The dysfunctionality of the state leads to the fact that "Russia is stretched between two receding galaxies –societal involution and international glitter” [11; p. 18] of the oligarchic elite, which is trying to keep up with the Western standard of living, but exploiting national resources and destroying national production, which is rapidly recedes to the periphery of the world economy. And this situation creates not only internal problems.

Normally, when the state is consistent with its notion, like the pioneer leaders of the market system, it is the outpost of protecting the society from the market, and its strengthening does not cause threats of parting with democracy (the state is growing as a welfare state in times of global market crisis), and it used to be in England, the USA. But the same crisis at the opposite pole, where inaction of the state and the ousting of workers from political participation caused industrial and institutional paralysis, led to a completely different situation: "The more backward European countries, most notably Germany, Austria and Italy, succumbed to fascist solutions" [11, p. 20], it was the extreme reaction to the market, the result of market liberal utopianism as a policy. This is the situation described by A. de Tocqueville: if the civilizing process poses a threat to death, then, in order not to disappear, the culture collapses at the societal level, shrinks into totalitarianism and decides to attempt a war, involving everyone, including the most universal - outstanding representatives, such as M. Heidegger [12].

Thus, the temptations of totalitarianism arise not because of intervention in the market, but quite the contrary, because of the destructive principle that is contained in the uncontrollably operating machine of the laissez-faire market. The soil for a conservative revolution, of which no one is insured, is preserved to the same extent that alienated market communication creates threats to human existence without creating a simultaneous opportunity to respond to this threat by the development of production.

Thus, it is a democratic state, i.e. such, in which political participation is ensured for all productive classes of society, is a prerequisite for the work of market production and the prevention of fascist development options. And that's why it should be national. To understand why this is so, let us turn to the criticism of the paradoxes of liberalism that K. Schmitt developed and whose provisions "carry an important warning for those who believe that the process of globalization is laying the basis for worldwide democratization and the establishment of a cosmopolitan citizenship" [13; p. 42].

Democracy assumes the substantial homogeneity of the "demos" [14, p. 9]. K. Mannheim calls this "basic, formative principle" of democracy [15]. At the same time, a common substation of such equality cannot be a certain "human nature", and Schmitt rightly rejected this liberal premise [14; p. 13]. Such declarations would only mean that the norms and rules of the game will be set by the leading nation in its own interests. In practice, this substance has a specific historical and cultural definiteness of the mode of man's production in the Marxian sense[1], its local-cultural specification, which for this very reason cannot be accepted, as liberalism does, for the natural characteristic of an abstract individual in general. In this cultural specification one cannot invade without damaging the foundations of being a man in a given culture, this way of producing surplus labor.

Democracy takes into account the reality of these differences of cultural faces, thereby the right to self-determi-nation is taken into account. In this sense, the Schmitt distinction "we/ they" is meaningful, and Schmitt does not assert anywhere that this distinction should be based on race. Quite the opposite, by virtue of the very logic of the functioning of democracy, it is the subject-matter of a struggle to establish legitimate demos boundaries, i.e. for the establishment of the order of his life, the subject-matter of domestic policy in the proper sense. Therefore, it is by no means an accident that, as Schmitt notes, historically "since the nineteenth century it has existed above all in membership in a particular nation, in national" [14, p. 9], as not an accident the fact recognized by the liberals that "The only law we know is national" [1; p. 195].

The homogeneity of the demos is the index of readiness for the market, since from the inside, the side of production, the world market becomes demanded by the culture when the unified internal market is created, which requires the unity of the territory, the concentration of all types of capital and other monopoly conditions, including monopoly to symbolic violence, which only the state can provide [17; p. 4]. From this side, the state is a monopolist.

Nevertheless, from the other side, the modern state, in which power over the metacapital legitimizes the education system, i.e. the state of not dynastic, but bureaucratic type, in a double sense is a pluriversum.

Firstly, in the sense that only in this way there can exist autonomous and formally equal actors - players of the world market. Although K. Schmitt wrote about the medieval organization of the spatial order of Respublica Christiana as a pluriverse of autarkic communities, about the procedure for recognizing the right of an equal Other to resistance, in which the state did not play a significant role until the 16th century [18; p. 57-62], this order could retain the autonomy of its units without the state, only because this order did not yet knew the lassez-faire market. Without a state, it is impossible to provide multiplicity of market subjects in market conditions, and no "parties, trade-unions, associations of many kinds" [1; p. 110] can create and keep it.

Secondly, contrary to K. Schmitt's conviction, “the political form” can be implemented only within frames of the democratically organized state space. Political form, i.e, management, in which there is not only a bureaucratic technique and a "norm", but also the sovereignty of a "decision" making [19; p. 65-66]. This sovereignty takes place because the border between "them and us" (the rules of legitimate inclusion / exclusion) is not reified, but remains an object of struggle, in field of which all productive classes must be represented. The reification of the boundary is avoided because the sovereign who takes decisions, who accepts the authorship concerning the aims of his culture, cannot be a monarch or head of the family, but only a plural subject in the Bakhtin sense of "alien living and full" subjects - pluralia tantum [20; p. 331], which remains plural in any variants of representative forms.

Another question is that in itself this democratic form provides only chances, it is only a space of politics, i.e. the struggle for social justice in decisions regarding a common cause - res publica. The actual measure of the rope achieved in this tug-of-war should remain unresolved.

But in any case, "state-organized brotherhood" does not create grounds for moral torment or ethical relativism in the spirit of O. Depenheuer: to act morally doesn’t mean to provide the right of universal entry, destroying all local borders, but to prevent the market from spontaneously producing poverty when this market destructs those cultural bonds that endow the individuals of each culture of the dignity and systemic quality of "being a man". Moral prohibition should be on the border of invasion of foreign market-protection institutions, allowing different cultures to transform at their own pace and along their trajectories, relying on their own state sovereignty. The ABC of dialectics is that the universal, if it is not empty abstraction, including the universality of the "world civil society", can exist only in a peculiar and plural form, in this case - the form of the national state.


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[1] «It is always the direct relationship of the owners of the conditions of production to the direct producers - a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity - which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state” [16]

Table of contents: The Kazakh-American Free University Academic Journal №9 - 2017

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