National sovereignty has always impacted on international trade and business. In the 20th century, sovereignty has effected commerce most significantly through the operation of sovereign risk. This article examines the development of national sovereignty, from its 16th and 17th century origins to its increasing curtailment in the latter part of the 20th century.
The rise of national sovereignty and the development of international law
The origins of national sovereignty and the major trigger for the development of international law are usually ascribed to the Peace of Westphalia. ‘The Peace of Westphalia’ refers to the series of settlements, concluded in 1648, which brought to an end the Eighty Years War, in which Spain was the notable protagonist, and the Thirty Years War, which involved mainly Holland, Germany and Sweden. The Peace was negotiated from 1644, in the Westphalian towns of Münster and Osnabrück. The Spanish-Dutch treaty was signed on 30 January 1648, and the main treaty—involving the Holy Roman Emperor Ferdinand III, the other German princes, France and Sweden—on 24 October 1648. England, Poland, Russia and Turkey, not being directly involved, were the only unrepresented European powers. In recognising the independence of Switzerland from Austria and the Netherlands from Spain, the Westphalian settlement went beyond merely securing peace amongst the warring states: it recognised that each state was protected by a principle of ‘sovereignty’.
The central proposition of Westphalian ‘sovereignty’ is the non-interference of states in each other’s internal affairs. This is generally referred to as ‘internal sovereignty’. However, sovereignty also has external aspects, such as the making of treaties or declarations of war and peace, and the use of
military force against other states. Another important principle behind sovereignty is that of equality, which holds that, while some states will necessarily be militarily more powerful that others, all are juridically equal in international law. Today, sovereignty survives in Art 2(7) of the United Nations Charter, which provides that:
Nothing contained in the present Charter shall authorize the United Nations to intervene in matters which are essentially within the domestic jurisdiction of any state or shall require the Members to submit such matters to settlement under the present Charter…
The immediate consequence of the enunciation of sovereignty in 1648 was to strip powerful international players, such as the Holy Roman Emperor, of any legal justification for intervening in the internal affairs of other states. Prior to the Westphalian settlement, the dominant political configurations in Europe were entirely inimical to sovereignty. For example, Pope Innocent X, who reigned from 1644–55, refused to recognise the independence of Portugal, then at war with Spain. Further examples are found in English legislation of the 1530s. As part of its attempts to withdraw from the common system of Papal authority, England declared itself ‘an Empire’.2 The declaration implies that, there being no clearly accepted concept of an independent sovereign state, only ‘empires’ were exempt from external authority.
Perhaps only a catastrophe as immense as the Thirty Years War could have brought about such a fundamental change in the international system. No other war prior to that time had wreaked such havoc, and only the Black Death of the 14th century had caused greater destruction of life in Europe as a whole. The Westphalian doctrine involved the recognition that, in order to avoid perpetual conflict as a result of religious differences, states must be allowed to differ on fundamental aspects of their internal organisation. In particular, it was recognised that attempts to impose Catholicism or protestantism by force could not be pursued any further. Protestantism had to be accepted as part of the political and religious landscape of Europe, at least for the foreseeable future. Only Spain, which was supported by Pope Innocent X, remained unreconciled, continuing its war with France until 1659.
The Treaty of Westphalia is also recognised as one of the first moves towards the protection of human rights in international affairs. Enslavement of enemy soldiers, originally common, had declined in Europe during the Middle Ages, although ransoming was still widely practised. The use of mercenary soldiers tended to create a slightly more tolerable climate for prisoners, as the victor in one battle knew that he might be the vanquished in the next. In the 16th and early 17th centuries, some European political and legal philosophers expressed their thoughts about the amelioration of the effects of capture upon prisoners.3 The idea was taking hold that, in war, no destruction of life or property beyond that necessary to decide the conflict was sanctionable. The Treaty of Westphalia, which released prisoners without ransom, is generally taken to mark the end of the era of widespread enslavement of prisoners of war. An echo of this was the declaration against the slave trade included in the settlement of the Congress of Vienna, at the insistence of the British statesman, Viscount Castlereagh.
The Westphalian settlement was also successful in preventing the widespread destruction of Europe through war. From 1648–1914, European wars were generally of limited scope and duration. They were fought over disputed border provinces, successions or commercial and colonial rivalries. Not until the activities of revolutionary and Napoleonic France, from 1793–1815, did states again seek to conquer or impose their religious, political or ideological views on their neighbours.
In 1793, the reign of terror and mass execution of the French aristocracy, following the French Revolution, proved too much for the reactionary European powers.4 Napoleon’s orgy of conquest over other European countries in 1805–06 led to the establishment of an ‘Empire’. However, there being room for only one empire, the Holy Roman Empire was finally abolished (one might say, put out of its misery) in 1806. At the Congress of Vienna, held from 1814–15, the European leadership found no reason to question national sovereignty when drawing up the European peace. Indeed, external sovereignty was developed further at the Congress, with important principles being laid down regarding protocol, drawing up of treaties and diplomatic representation.
Another development from the Napoleonic period was the systematic use of economic sanctions as an instrument of policy to bring a country to its knees. Napoleon’s ‘Continental System’ closed the parts of Europe over which he held sway to British goods. Britain retaliated by issuing the Orders in Council, under which continental Europe was blockaded. Assertion of the right to board and search neutral ships in pursuance of this policy eventually led to the war of 1812 between the United Kingdom and the United States.5
Apart from the tumultuous Napoleonic interlude, the quarter-millennium from 1648 to 1914 was marked by longer periods of peace than had hitherto been enjoyed since the Pax Romana. Helped by the long peace, economic prosperity spread immensely during this period. For the first time in history, famine disappeared on a permanent basis from Europe in the late 19th century.6 This was in marked contrast to the immediately preceding period, from the start of the reformation until 1648, in which conflicts often resulted in great suffering on the part of the civilian population, as well as great disturbance to civil and economic life.7
Historians generally note a fundamental transition from the Middle Ages to the modern era at around 1500. The Middle Ages and before, back to the Ancient World, is seen as an age of empires, in contrast to the domination of the modern era by the concept of nation states. Inherent in the modern formulation is the Westphalian concept of ‘national sovereignty’. Except in relation to the hereditary territories of the Hapsburg family, the 1648 Westphalian Settlement reduced the position of the Holy Roman Emperor to a largely ceremonial role,8 albeit one enjoying great prestige. The age of European, as opposed to colonial, empires was over, except for occasional resurrections when tyrants such as Napoleon, Hitler and Stalin acquired control over other countries. Where and when such empires existed, concepts of national sovereignty were temporarily blurred.
In pre-1648 Europe, with its lack of a clear definition of national sovereignty, but rather a patchwork of rambling and competing feudal empires, there was no clear distinction between internal and external affairs. The territorial boundaries of these empires ebbed and flowed with their political and military fortunes. Consequently, interference in ‘internal’ affairs of territories was easily justified on the basis of some alleged feudal right, or, after 1517, in the name of maintaining the true universal Christian religion against allegedly heretical reformers.
Prior to the Protestant Reformation, the Pope was regarded, by himself and others, as the head of a united Christendom. The Vatican was a form of medieval United Nations in the European context.9 In legal terms, the Vatican was the final court of appeal on matters of marriage and divorce, although in England it also controlled succession to property other than land. In addition, the Pope was an influential political player. An example of the Pope’s power was the imposition of the six-year interdict during the reign of King John.10
King John eventually resolved the matter by resigning his crown to the Pope and having it regranted. Once he had escaped from the influence of the Barons who had constrained him to sign Magna Carta, he appealed to the Pope, who promptly purported to release him from its terms. In 1571, Pope Gregory issued the infamous Bull, Gloria in Regnans, absolving subjects from allegiance, inter alia, to Elizabeth I as an excommunicate sovereign, and, indeed, going further in declaring it their duty to rise up and overthrow her—by violence if necessary.
In the century or more prior to 1648, a limited number of European countries succeeded in establishing the essentials of national sovereignty by breaking away from allegiance to the Pope. For example, in 1521, Sweden established Lutheranism as the state religion, on the assumption of the throne by Gustavus Vasa.11 Similarly, Denmark adopted Lutheranism in the mid-1530s, and independent-minded Swiss cities12 and Cantons went their own way. At the same time, Henry VIII terminated papal jurisdiction in England by securing the passage of the Act of Appeals and the Act of Supremacy.13
Although the major break-away from the Pope came with the Protestant Reformation in the 16th century, English kings had previously attempted to limit papal jurisdiction. In the late 13th century, Edward I had sought to curtail foreign ecclesiastical influence indirectly through the Law of Mortmain, by limiting the accumulation of ecclesiastical property upon which feudal dues would not be payable to the same extent.14 Later, the Statutes of Praemunire, dating from 1351,15 attempted to reduce the influence of the Pope in England.
However, the primary motivation for the enactment of the Statutes of Praemunire was the Hundred Years War, which began in 1337. The Pope was a key player, and the papal courts were of great importance in this prolonged struggle between the English and French monarchs. In order to ensure that the diplomatic processes would operate to French advantage, the French King, Philip the Fair, kidnapped Pope Boniface VIII, and forced him to march from town to town until he died of a heart attack. He then persuaded the cardinals to choose a French bishop as the new Pope, and relocated the papacy to Avignon.
Of course, it was one thing to attempt to break away from the universal world of Christendom, and quite another to succeed. Various dissident groups had been ruthlessly suppressed by the authorities at various times in the Middle Ages, one of the last being the Bohemians in the early 15th century. The crucial difference for the Protestant Reformation of 1517 was that it gained the backing of rulers who could resist immediate suppression. Either they were sufficiently powerful in their own rights, were allied to powerful nations—as was the case with the Germans and the Dutch—or were geographically situated so as to avoid conquest—as was the case with England, Sweden, Denmark and Switzerland.16 It is significant that Germany and the Netherlands, which did not enjoy such geographic advantages, suffered the brunt of religious warfare between 1517 and 1648. There are some parallels to this in the modern era.
It seems that the development and long enjoyment of democracy has a close link with early attainment of national sovereignty. It is a remarkable coincidence that England, Sweden and Switzerland, of the only seven countries which enjoyed continuous democracy throughout the 20th century, are the only three that existed prior to 1776, and were, with Denmark,17 the first to establish national sovereignty as nation states rather than as empires. After 1648, the concept of national sovereignty spread beyond Europe, as relations developed with countries in other continents, and as European and other countries gained independence by war, rebellion18 or peaceful legal processes.19 The independence of the United States added it to the Eurocentric world of nation states, especially once the other American states gained their independence. This process was greatly facilitated by the enunciation by President Monroe of the Monroe Doctrine, in 1823, as the fundamental principle of United States foreign policy. This stated that the United States was not a European power, and so would not take sides in European conflicts. However, it also stated that the United States would regard any further20 colonial activity in the Western hemisphere as a threat to its security. The Monroe Doctrine placed the Americas off-limits to further European colonialism, thereby guaranteeing national sovereignty to the newly independent former Spanish colonies of South and Central America.
While colonial activity may have brought about relative peace in Europe in the period after 1648, imperial ambitions were still nascent. They eventually exploded under Napoleon, Hitler and Stalin. The desire to recreate the ‘glories’ of the Roman Empire seems to be rooted deep in the continental European psyche.21 Even today, this can be seen in the creation of the European Union. By contrast, Britain has remained largely aloof from European trends,22 as have Switzerland and Scandinavia. British colonisation seems initially to have been motivated by a desire to find new trading opportunities, rather than an expansion of empire. Exploration was undertaken predominantly by commercial companies,23 or self-help initiatives of groups of individuals seeking greater religious freedom,24 although the grandeur associated with empire became more influential later.
Eventually, the principles of international law, which had governed the relations between the European states since 1648, had become so well established in state practice that they could not be ignored by the Founding Fathers in establishing the United States of America.25 Also, the principle of maintaining diplomatic relations is evidenced by the several references to ambassadors26 and treaties27 in the Constitution of the United States.