Social science long identified modernization with territorial integration and functional differentiation, but within territorially-bounded states. Globalization theories at the end of the Cold War projected this to the world level, with the ‘borderless world’. This is better conceptualized as a rescaling and selective rebounding of social systems at multiple levels, above, below and across the state system. This has posed again an old question about the relationship of function, community and territory. It is an essentially contested matter and can only be appreciated if we accept that all three elements are constructed and mutually constituted. There can be no neutral and uncontested spatial fix, since the definition of territory and the drawing of boundaries has huge implications for the distribution of wealth and power. Rescaling is above all a political matter.