Table Of ContentTHE GLOBALIZATION
DECADE
A Critical Reader
Edited by Leo Snitch, Colin L65/s,A1a11 Zuege
and Martian Konings
The Merlin Press
Fernwood Publishing
© this co11cction,The Merlin Press, 2004
The authors assert the right to be identified as the
authors of this work
First published 2004 by The Merlin Press Ltd.
PO 30705
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LondonWC2E SQD
VN\»'\r'VV.I11C1l1iII1P['CSS. CO- uk
British Library Cataloguing in Publication Data
is available from the British Library
National Library of Canada Cataloguing in Publi cation Data
The globalization decade: a critical reader / edited by Leo Paunch [it aL]
Includes bibliographical references.
ISBN 1-55266-088-5
-
1. Globalization Political aspects. 2. Globalization. 3. Capitalism.
I. Par itch, Leo, 1945-
JZ1318.G5773 2002 327.1 C2002-903650-X
Published the UK baThe Merlin Press
ISBN: 0850365163
Published in Canada by Fernwood Publishing
ISBN: 1552660835
All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted,
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Printed in Great Britain by Antony Rowe Ltd., Chipper ham
CONTENTS
The Globalization Decade: An Introduction
Alan Zuege, Marr Kori:zgs, Colin Leys and Leo Panitclz 1
Glob;11izati.on and the State
Leo Pa rzitdz 9
Capitalism and the Nation State in the Dog Days
of the Twentieth Century'
A/Ianhed Bielefeld 44
In Defence of Capital Controls
_}arn£'5 (irony and Gerald Epstein SO
A World Market of Opportunities? Capitalist Obstacles
and Left Economic Policy
Gregory Alba 111
Taking Globalization Seriously
Hugo Radice 153
Crlobalization and 'the Executive Committee
Reflections on the Contemporary Capitalist State
Constantine Tsoukalas 176
Contradictions of Shareholder Capitalism:
Downsizing jobs, Enlisting Savings, Destabilizing Families
Wally .Seccozwbe 193
Material Wo171d:'Tl1c Myth of the 'Weightless Economy'
Ursula Hows 221
The Nature and Contradictions of Ncoliberalism
Gérard Duménil and Dominique Lévy 245
The C11'owtl1 Obsession
Elma? Altvater 275
The American Campaign For Global Sovereignty
Peter Gnu/an 295
A Guide to Additional Re;1di11gs 322
THE GLOBALIZATION DECADE:
AN INTRODUCTION
Alan Zuqge, Martyn Kouings, Colin Leys and Leo Snitch
The Globalization Decade brings together some of the most original and influential
analyses yet made of the realities of neoliberal globalization, the new internation-
al order that was consolidated during the 1990s. The foundations of globaliza-
tion's 'long decade' were, of course, laid much earlier. Capital's drive to become
truly global was re-started under American leadership at the end oflWorld War
II, and gathered economic momentum throughout the whole post-war period,
expressed most visibly in the increasing size and mobility ofrnultinationad corpo-
rations. Ncoliberalisrn itself became a full-Hedged political project in the 19805,
when Reagan and Thatcher launched their offensive to impose the discipline of
global competition on everyone, from workers and peasants to national states
and corporations north and south. But it was only in the 1990s that globalization
became a fully accomplished fact, to which the world has been adjusting or
. -
failing to adjust - in the first years of the twenty-first century. The essays here
explore both the historical roots of these processes and their broad social context.
They all view globalization in its totality: not as a mere series of 'reforms' giving
free rein to transnational companies but as a radical progaimne to reshape the
entire economic, political, legal and ideological landscape of capitalism. They
link the economics of global capitalism both to its geopolitical dimensions and to
its intimate repercussions on daily life.
Taken together, these essays accomplish three things. They provide a critique
of the dominant intellectual and political fashions in the globalization debate,
challenging both orthodox and left perspectives, they analyze the processes
driving market liberalization as well. as its human and ecological costs, and they
point creatively towards democratic and egalitarian alternatives. Cutting across
2 THE GLOBALIZATION DECADE
academic disciplines and specialized debates, they take up the following themes:
the re-emergence of a world market in capital and the possibility* of its control;
technological and organizational changes in production and the ascendancy of a
new financial order at the centre of neoliberal gl.obalization, the changing class
configurations and social relations associated with this, the inequalities and defla-
tionary pressure inherent in the n.eolibera1 economic program, the futility of so-
cial democratic models to harness the global market for progressive purposes and
economic growth, and the political transforlnations and contradictions involved
in managing the globalization process in the domestic and international spheres.
Long beibre the opening of the globalization decade, the 'organic intellectuals'
of capitalism - in banks, think-tanks, university departinents of economics, etc.
-
espoused market liberalization as the solution to the ineil'icien.cy and indisci-
pline that they claimed had set in across the industrialized wor]d.The origins of
the severe political and cconoinic crises that deepened in the early 197()s were at-
tributed to the unchecked growth of trade union power, interventionist govern-
ment and national protectionism. Across th.c advanced economies, industry and
finance abandoned a strategy of negotiation in. favour of confrontation, seeking
to reverse the postwar gains of working classes and social rnovenients through a
comprehensive prograninle of rollbacks, privatizations and liberalizations. This
new agenda, embraced by global elites, was pressed forward in the 19805 by
Wall Street bankers and Washington policy-makers in particular, demanding that
gover rents everywhere to dismantle the political and economic constraints on
capital constructed through decades of struggle and compromise.
At first, neoliberal tapped. into the sense of fear and powerlessness of those
they called on to surrender to international competition, claiming that globaliza-
tion was inevitable and irreversible. According to their new technologies and
the expanding scale and mobility of capital had unleashed economic forces that
could no longer be contained by nation states.The neoclassical models advanced
by 'Chicago School' economists purported to otter assurance that employment,
trade and currency equilibrium would be secured bi* the mechanisms of the self-
regulating market. States that exposed themselves to the rigor of international
competition would eventually come to share in the fruits of enha.nced efficiency
and higher rates of growth, whereas those which tried to impede the free flow
of capital on the basis of"unerlliglltened' notions of the general interest or, even.
worse, 'special interests', would be disciplined harshly by the market.
By the 19905, these neoliberal postulates were accepted by many others in di-
verse fields, from pop historians to postmodern geographers, who coined euphe-
mistic phrases like the 'death of distance' to depict a 'borderless' and 'weightless'
economy which could no longer be captured by established intellectual frame-
-
works a myth brilliantly demolished in the now f`arnous essay here by Ursula
Huws. But to reject such myths does not mean falling prey to the tendency,
Fashionable on the social-democratic centre-left, of supposing that globalization's
AN INTRODUCTION 3
importance has been exaggerated. Those who subscribe to this tendency have
maintained that capital remains 'embedded' in specific national social formations
and that international financial Hows are not dissimilar from what they were at the
beginning of the twentieth century. Denying that global pressures force national
institutions to converge OI1 a standard liberal economic pattern, they insist that
the role of the state has even been enhanced in some respects, as globalization
puts a premium on the capacity of states to forge 'social pacts' and 'public-private
partnerships' in competitive strategies to enhance labor productivity. On this
view, neolibcralisrn is seen mainly a wrong theory; and its influence on policy
circles as unfortunate and unnecessary However, as Gregory Albo points out in
his essay, the impact of neoliberal policies is not confined to a few countries; all
forms of national capitalism are in different ways and to different degrees being
deeply modified by it.
The papers collected here thus challenge both the neoliberal account, in which
economic globalization is portrayed as the working out of a pure logic, devoid
of social content and disconnected from political processes, and the social demo-
cratic account, which niinirnizes the significance of globalization in order to try
to show how national states can accommodate to it. An important contribution
of this volume is to transcend the false dichotomy of political authority and mar-
ket power that underlies these debates.
Taking globalization seriously' (as Hugo Radicels essay insists we must do)
requires foregrounding, its social and political as much as its economic diInen~
sons. (rérard Duniénil and Dominique Levy's essay, for example, recognizes the
significance of the increasingly integrated and liberalized international market in
capital, 8S reiiected in the vast growth in international trade and foreign direct
investment as well as short-term capital flows, the revolution, in information
technology, the 'networked' multinational corporation, and the ethos of share-
holder capitalism. But they also show that the emergence of this complex set of
strictures has by 110 means been the smooth, honiogcnizing and harmonizing
process predicted by orthodox economic models. The contradictions of neolih-
eralisni., repeatedly revealed in financial crises, trade asymmetries and seemingly
unending 'structural adjustm.ents', attended. by mass uziernpl oynicnt and sheer
coercion, have made the 'long decade' of globalization a time of iinmiseration for
much of the world's population.The marketization of society has resulted in the
creation of large private monopolies, destroyed essential labor market institu-
tions, sparked speculative capital movements resulting in stock marker instability,
and caused economic downturns by restricting denland.The lives of those most
dependent on social security have everywhere become much harder.
Conversely, the fact that even neoliberal regimes have ultimately been unable
to scale down welfare expenditures has more to do with the contradictory con-
sequences of neoliberal policies (et. a rise in unemployment) and the resistance
it generates, than with any institutioilally entrenched commitment to the welfare
4 THE GLOBALIZATION DECADE
-
state. Even the strongest corporatist 'models of capitalism' from Swedish Social
Democracy to the Rhineland Model to the 'Third Italy' - have buckled under
the pressure of international competition. Corporatist institutions have certainly
not been dismantled, but their function has been dramatically altered: now they
function almost excl sively a means of legitimation for unpopular policies,
QS
rather than as channels of even limited representation..
W`llat is especially significant about the essays collected here, however, is that
they do 110t see nation states as helpless victims of the rise of global markets. On
the contrary, they show how nation states have been active participants in shap-
ing these markets, and how in the process they have in turn been profoundly
restructured and conditioned by them.They challenge the prevailing illusion that
globalization results from disembodied technologies and impersonal market f`orc-
es, showing instead that the ways new technologies were used and new markets
were created in even the most mobile and 'i`ungible' financial assets of all, such as
'derivatives', were ultimately the product of political choice and social agency
-
in the mainstream literature trapped within a conceptual framework pitting
states versus markets -- political globalization is seldom discussed, and seems as
mysterious as its economic counterpart. Even today, the connection between
globalization and states is often discussed purely as a matter of a decline in nation-
al sovereignty. Market liberalization in fact relied heavily on national states to dis-
mantle the barriers to capital that had been built up over the postwar period, and
the resulting instability of emerging world markets, and the intern ational tension .S
and political disorder they have generated, have further increased the burden on
states, since they have to manage these contradictions.And as they have Laker up
this responsibility; the growing visibility of political regulation and the coercive-
ness of state interventions have displaced the contradictions of globalization ever
more clearly onto national and international political processes.
Of course, the 'external' constraints on domestic policy-making are real enough,
the changing role of the state i.s ind.eed generalized and enforced by the workings
of world markets. A dynamic of competitive liberalization across the advanced
economies wa.s triggered by early moves to restore an open international eco-
nomic order, including the development of the London Eurodollar market in the
1960s and the liberalization of financial services in New York beginning in the
early 1970s. As the essays here forceiially demonstrate, the resulting integration
of world markets does exert a constant disciplinary pressure on domestic policy-
making and. limits the roof. to man oeuvre of states as they compete for mobile
capital. But these external. pressures are only part of the story. The inultiibld
transformations implied by political globalization cannot be adequately measured
in degrees of state autonomy, they afect the very_fE>rrn of state autonomy New
channels of state activity have been opened up, while others have been closed
down and the terrain of political conflict has been changed.
Untangling this requires opening up the 'black box' of the nation state. The
AN INTRODUCTION 5
essays by Par itch and Tsoukalas take up this task, drawing on the work of Nicos
Poulantzas in the classic 'state theory' debates of the 19705 to track the chang-
ing 'institutional zrnateriality' of the state in the management of the globalization
process. They reveal how a dramatic internal reorganization of the state has ac-
companied and followed the globalization process.\X/hat this means is that taking
political globalization seriously involves first of all recognizing that the erosion
of autonomous domestic bases of accumulation and national bourgeoisies has
transformed the structure of political representation and social compromise. As
capital has become increasingly mobile it has gained in structural power vis-a-vis
labor, but it has also become more dependent on global sources of accumula-
tion. Correspondingly, then, nation states have increasingly abandoned their
former role of reproducing domestic social cornproinises through 'welfare state'
regulation to embrace the economic requirements that come with being part of
the new global economy, and to share with other states and international institu-
tions the political responsibilities for managing the global system.
This reorganization is what is meant by the 'internationalization of the state".
There is no 'world state' developing to oversee globalization, on the contrary, in-
ternational corporations that worked so hard to escape regulatory constraints and
welfare costs at the national level have no wish to recreate them at a higher level.
Instead, the internationalization of th.e state entails, on the one hand, a rcordeiring
of the relative status and influence of government departments in favour of those
which mediate relations with the world economy - treasuries, central banks and
trade ministries - relative to departments of eniploynlent, social services, and the
like. On the other hand, it involves a partia.l _fiugrnez-tration of the state, associated
with the rise of trans-governmental regulatory networks, as the demands of an
integrating world economy bring officials from domestic agencies into regular
contact with their regulatory counterparts ahroad.This docs not, however, nec-
essarily translate into an assertion of" greater state independence from the social
forces these agencies seek to represent within the policy process as the scandals
.-
from Berlu sconi to Blair to Bush over state-business ties testify. Nor are interna-
tionalization pressures confined to those ministries directly implicated in global
governance. All branches of the state, from education to local govern rent, now
have a part to play in reorienting their social constituencies to the demands and
discourse of international competitiveness.
An important related development is the expanding ideological role played by
government agencies. T'his signals a broader shift in the legitimation function of
the COI'1tCl:11PO1IE1]IY capitalist state, as this function. comes into sharper contradic-
tion with the state's accumulation Function in the international sphere. Under
conditions of globalization the rnairitenance of social cohesion and the mobiliza-
tion of` popular 'consent' present new challenges. Powerful domestic agencies
of the state have insulated themselves from popular pressures in order to remain
responsive to the exigencies of the world economy, placing them tiirther from
