In the second of his studies of globalisation and capitalism, Boris Kagarlitsky assesses the role of the state in the globalised world. He argues that far from being powerless and irrelevant, the state can and should play a significant role in the twenty-first century.Kagarlitsky challenges the notion that globalisation is a completely new phenomenon. However, transformation of the state in response to globalisation is according to Kagarlitsky urgently needed, and in order for the state to once again play a key role in the economy, it must change radically.Kagarlitsky examines questions of state intervention in the economy and draws on examples from Russia and the Czech Republic to show new ways in which the state sector is being recreated. He demonstrates that even without the participation of the left, a spontaneous recreation of the state sector is emerging in response to neo-liberalism. Kagarlitsky also discusses the national question and looks at cases in the former USSR, Eastern Europe, and the Balkans. He argues that failure of socialists to link the question of self-determination to other democratic rights has meant socialists have been slow to respond in the wake of the developing nationalist movements.