The main proponents of market fundamentalism did not confine themselves to abstaining from any intervention in market mechanisms. They also initiated active deregulation, thus abdicating their responsibility to regulate the market and civil society. The consequence was the triumph of the economic and social potentates, the spread of organized crime, violence and international terrorism. Financial oligarchies can in effect pass judgement on national governments through the rating agencies. These have the power to “vote” against governments via capital transfers abroad or speculative attacks on interest rates. Citizens may vote and choose their government, but those elected too often obey the dictates of private interest groups not accountable to the people. The new ruling class – consisting of 1% of the population, as “Occupy Wall Street” repeats tirelessly, has deprived the people of the power to decide its own destiny. The powerlessness of democratic institutions is rooted in the weakness of national governments and parliaments with regard to the global decision-making power of financial oligarchies. Faced with this dilemma, it is no exaggeration to say that the survival of democracy is at risk.

The victory of global capitalism has been so overwhelming that social democratic parties have now abandoned their aspiration to tame and transform capitalism. They have absorbed their adversaries’ vision of the world and ended up by inserting themselves actively into the prevailing trend, as shown by the Blair's and Brown's British Labour Party. The culture of the primacy of economics over politics is now so pervasive that it has contaminated even the civil society movements. These – like multinational corporations and banks – now belong to the category of non-state actors and, at least in part, share the same culture. They even interpret the progressive erosion of state sovereignty brought about by globalization as being “a withering of the state”, reviving a phrase associated with the old dream of replacing state power with local communitarian bonds. But this cultural concept, though perhaps superficially attractive, does not provide any answer to the need for a new world political order. In today’s society, our relationship with the world is, both theoretically and practically, governed by the economy. Our mainstream behaviour models are shaped by the markets. The big firms see us as consumers and use seductive advertising as a means of getting hold of our money. Information is hostage to powerful mass media which disseminate biased interpretations of social reality. Our time is confiscated by information and communication technologies which pull the wires of our lives.

Only one science thrives: economics, rightly called the sad science because its basic postulate is egoism – in other words, the pursuit of private interest. Politics, law and philosophy seem unable to offer any useful criteria to understand and control the world around us. We hold law to be the framework within which the relationships between human beings can be regulated, politics to be the activity which enables humankind to make the choices which determine our destiny, and philosophy to offer us an insight into the meaning of life, nature and history; yet, despite all this. the power to govern human communities has now shifted from politics to economics, and from the national to the international level. The old maps provided by traditional political thinking – liberalism, democracy, socialism, etc. – are now obsolete. They have become useless while the new ones are, at the moment, still far from being able to devise a coherent design.

If it is true that sovereign states are no longer the exclusive actors in international relations, it is also the case that they represent a milestone in the development of civilization. Only political institutions can assert the supremacy of the common good over private interests. The way out of the crisis of the nation-state therefore lies in the reorganization of the state through the establishment, at the same time, of supranational and local levels of government according to the federal institutional formula, which would enable us to rethink and question the traditional model of the unitary state. The current financial and economic crisis has unquestionably revealed the flaws in the present system: the lack of coercive rules to combat the abuses committed by the speculators and the inability of governments to take effective action. Yet, economic order implies both rules and a government to enforce them, i.e. a political order. It is worth recollecting that more than two centuries ago Adam Smith, in his Wealth of Nations, emphasized that the orderly working of market mechanisms is not simply the result of the spontaneous weave of social relations, but that it requires public goods provided by the state, such as national defence, law and order, money and public works. In the contemporary world, this list has been extended with the inclusion of, for example, income redistribution and antitrust policies.

Economic forces alone cannot generate the social cohesion necessary to make the market work. Only politics can shape a market order that ensures obedience to the law within the framework of the political community. The European Communities not only established a free trade area, but also an imposing institutional edifice specifically designed to regulate and lead economic integration. Today the only effective response to the need of a new world order can only come from politics and, more precisely, from the return of the primacy of politics over markets. The first step in this direction must be a European Constitution written by the European Parliament, not by national governments.