Globalization and Antiglobalization

Dynamics of Change in the New World Order

Henry Veltmeyer

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781351933162
• Edition: 1
• Topic: Política y relaciones internacionales
• Subtopic: Relaciones internacionales

Globalization has changed the context for, and the organizational forms of, politics, unleashing forces in support of, and in opposition to, the globalization dynamic. Investigating the dynamics of change and development in two regions of the world economy, Latin America and Asia, this book evaluates these forces, their political dynamics, and the responses of governments and citizens.

Part I
The Theory and Practice of Globalization

Chapter One
World Development: Globalization or Imperialism?

James Petras and Henry Veltmeyer

Many writers have argued that we have entered a new era characterized by globalization, the driving force of epoch-defining changes in the nature of societies and economies across the world, resulting in the creation of an interdependent system. This notion of globalization has become a part of the everyday discourse in academia and among policymakers. It serves as a point of reference and a framework of ideas for the analysis of macro and micro socioeconomic developments and of the process that gave rise to them. The notion of 'globalization' spans the ideological spectrum and crosses academic disciplines. Even trenchant critics of the dominant discourse have been constrained to adopt the term and, in the process, tacitly accept its presuppositions.

The very pervasiveness of the notion of globalization points towards a problem. Not only does it reflect the presence of a fundamental paradigm, a worldview that structures the thinking and practice of most scholars in the field, it also suggests the working of an ideology that obfuscates reality. Although globalization is presented as an economic process, a paradigm for describing and explaining worldwide trends, it is better viewed as a political project, a desired outcome that reflects the interplay of specific socio-economic interests. We argue that 'globalization' provides an inadequate description and understanding of worldwide trends and developments. More useful in this regard are the concept of imperialism, a notion that is currently a minority view, but one that is beginning to gain attention from scholars, including some former supporters of the Vietnam War (Chalmers, 2000).

In the process of critically analysing the notion of globalization, and supporting the greater intellectual relevance of the concept of imperialism, we proceed first by critically discussing the presuppositions and claims of globalization theorists. Then we will proceed towards a systematic critique of globalization theory. This is followed by an argument in support of an alternative way of understanding worldwide trends and developments based on the concept of 'imperialism.'

The Origin and Rise of Globalization Theory

What is globalization? The term has been used in a multiplicity of senses. For some writers it refers to an increasing number of events and developments taking place simultaneously in more than one country—in an increasing number and range of countries worldwide (Stalker, 2000). For others globalization implies something beyond similarity. They argue that these trends and developments are connected and that there is a steady multiplication and intensification of links and flows among discrete national entities—a higher level of organization and integration into one system. For a few writers, the term tends to be used loosely to refer to a broad range and great variety of processes and trends, some of which, such as privatization and liberalization, are increasingly escaping control by the nation-state, reflecting a new level of capitalist development in a new set of supranational institutions which have replaced the nation-state (Griffin and Rahman Khan, 1992; Burbach and Robinson, 1999).

The notion of globalization contains a description and explanation of processes and trends that hitherto unfolded at the national level but that over the past few decades have spilled beyond the boundaries of the nation-state. In its most general sense 'globalization' refers to the upsurge in direct investment and the liberalization and deregulation in cross-border flows of capital, technology and services, as well as the creation of a global production system—a new global economy. It is in this sense that the term was apparently coined in 1986, in the context of the eighth Round of GATT negotiations (Ostry, 1990). For the theorists of this process and its many advocates these flows, both in scope and depth, together with the resulting economic integration and social transformation, have created a new world order with its own institutions and configurations of power that have replaced the previous structures associated with the nation-state, and that have created new conditions of people's lives all over the world, including a greater interconnectedness (Giddens, 1990; Holm and Sørensen, 1995; Rosenau, 1990; Therborn, 2000).

Globalization as a New Phenomenon?

There are several points of dispute about this process, particularly as to whether it represents something 'new,' a qualitatively different phase in the evolution and development of capitalism, a new epoch, or simply the latest and not necessarily most significant phase in a long historical process.

This issue has both a conceptual and empirical dimension. On the one side it is argued that the trends and developments associated with globalization cannot be equated with the evidence of the internationalization of economic intercourse and the flow of goods, capital and labour during the late 19^th century. Several studies have documented that the flows capital, goods and labour were higher in the period leading up to the First World War than during the last half of the 20^th century (Dicken, 1992). However, advocates of globalization argue that the earlier forms of this internationalization were not accompanied by anywhere near the same degree of economic integration and that it did not result in the creation of an integrated global production system.

As for the new global economy formed over recent decades the driving forces were different. The entire process of change, globalization theorists argue, has been underpinned by accelerated technological progress, mediated by the growing role of transnational corporations and facilitated by the deregulation and liberalization of markets all over the world (Griffin and Rahman Khan, 1992: 59-66). The difference between the past and the present, these theorists assert, is in the technological conditions of this globalization (a revolution in communications technology); its relevant institutional and policy framework (free market reforms, structural adjustment measures); and the degree of systemic integration. The neoliberal programme of structural adjustments and policy reforms of the post world war period were designed, and have served, to liberalize the international flow of capital, goods and services, technology and information. In addition, they have worked to deregulate the associated economic environments and markets.

The Myth of the Third Technological-Industrial Revolution

If indeed we were living in a new global economy based on the new information technologies, we would expect the introduction of those technologies to have a significant impact on productivity growth. In the past, during the first and second industrial revolutions, when steam power, electricity, and the internal combustion engine were introduced, productivity showed a marked increase. To speak of the information revolution means that the innovations have had a profound effect in stimulating new productive investments, more productive utilization of capital and new ways of stimulating output per capital investment. A comparison of productivity growth in the United States over the past half-century fails to support the argument of the proponents of a Third Scientific Industrial Revolution (TSIR). Between 1953 and 1973 productivity grew on an average of 2.6 percent; between 1972-1995 productivity grew a mere 1.1 percent (Wolfe, 1999: 10).

The 'information revolution' clearly did not revolutionize production. In fact, it failed to even sustain the previous levels of productivity and was not able to counteract the tendencies to capitalist stagnation that have been operative since the 1970s. Some advocates of the TSIR argue that the real 'take off,' of the information revolution should be dated from the mid-1990s, citing the productivity growth of 2.2 percent between the last quarter of 1995 and the first quarter of 1999. While this figure is substantially greater than the rate of productivity between 1992 and 1995 it is still below the growth data for the 1953-1973 period. Moreover, it is very questionable whether the increase in productivity can be attributed to the technological revolution. A recent article by Robert Gordon, which analyses an increase in productivity between 1995 and 1999, raises serious doubts about the TSIR claims (Gordon, 1999). He argues that almost 70 percent of the improvement in productivity can be accounted for by improved measurements of inflation (lower estimates of inflation necessarily mean higher growth of real output, thus productivity) and the response of productivity to the exceptionally rapid output growth over the three-year period. Thus, only one third of the 1 percent gain in productivity made during the 1995-99 period can be attributed to computerization or the so-called 'information revolution'—hardly a revolution (Gordon, 1999).

Even more devastating for the advocates of the TSIR, Gordon provides a convincing argument that most of the increase in productivity attributed to computerization is in the manufacturing of computers! The dramatic improvements in productivity claimed by the TSIR apologists are largely in the production of computers, with little effect on the rest of the economy. According to Gordon's study, productivity growth in the production of computers has increased from 18 percent a year between 1972 and 1995 to 42 percent a year as of 1995. As Gordon sees it, this accounts for all the improvements in productivity growth in durable goods. In other words, the computer has brought about a 'revolution' in the production of computers, having an insignificant effect on the rest of the economy. The basic reason is that computers have simply substituted for other forms of capital. According to a recent study, growth in computer inputs exceeded those in other inputs by a factor of 10 in the 1990-96 period (Jorgenson and Stiroh, 1999). The substitution of one form of capital for another need not raise productivity in the economy as a whole. The basic measure of a technological revolution is what the authors call 'multi-factor productivity,' the increase in output per unit of all outputs.

The basic question posed by TSIR theorists is not over whether computers have revolutionized the production of computers but how the so-called 'information revolution' has affected the other 99 percent of the economy. According to Gordon's longitudinal study of technical progress covering the period between 1887 and 1996, the period of maximum technical progress as manifested in annual multi-factor productivity growth was in the period from 1950 to 1964, when it reached approximately 1.8 percent. The period of lowest multifactor productivity growth in this century was from 1988 to 1996—approximately 0.5 percent growth! (Gordon, 1999).

Clearly the innovations in the early and middle 20^th century were far more significant sources of economy-wide productivity improvement than the electronic, computerized information systems of late.

Computer manufacturers account for 1.2 percent of the US economy and only 2.0 percent of capital stock (Wolfe, 1999: 10). While corporations spend substantial amounts on computers it is largely to replace old ones. There is no evidence to back up the claims of the advocates of TSIR. There has been no such thing as the Third Scientific Industrial Revolution—at least by any empirical measure of increased productivity in the US economy. Despite the vast increase in the use of computers, the productivity performance of the US economy remains far below the levels achieved in the pre-computer age of 1950 to 1972. In fact, annual multifactor productivity growth (AMPG) between 1988 and 1996 is the lowest of the last 50 years (Gordon, 1999). Even more significantly, according to Gordon, the rate of growth between 1950 and 1996 has been steadily declining: from 1950 to 1964 AMPG grew approximately 1.8 percent; from 1964 to 1972 it grew 1.4 percent; from 1972 to 1979 it grew 1.1 percent; from 1979 to 1988 it grew 0.7 percent and from 1988 to 1996, 0.6 percent.

The claim of the NSIRs related to a new capitalist era has no basis in any purported third scientific information revolution. On the contrary, one could argue that the new information systems might have a negative effect on productivity insofar as they draw a disproportionate amount of capital away from more productive activities and feed into and reinforce 'service' activities, such as financial speculative investments, that hinder productivity growth. At a minimum one could argue that the new information systems are not likely to counteract the long-term systemic propensity towards crisis. We can also argue that rather than being the wellspring of productivity, or the determinant of capitalist growth, the new information systems are subordinate elements of a larger configuration of capitalist institutions—particularly financial—that influence their use and application.

The myth of the new Revolutionary Information Age of capitalism, however, has served several political uses. First, it is an attempt to put an intellectual 'technological' gloss on the imperial expansion of Euro-American capitalism. The driving force of what is dubbed 'globalization' is imputed to the 'revolutionary' consequences of electronic information systems that operate across national boundaries. The information systems approach renders the old Marxist categories of capitalist expansion-imperialism obsolete. The dominance of the new international information systems, according to TSIR, creates a 'global economy'—a new global phase of capitalist development. Since we have argued that no such 'technological revolution' has in fact taken place, at least as it affects the growth of the productive forces, what can we make of the arguments for a 'global economy' and 'global corporations'—ambiguous terms that mask the relations of power in the world economy.

At issue in the overseas expansion of Euro-American capital was the need to counteract, and undo, institutional arrangements that were formed in the post-war context of an east-west cold war; movements of national liberation and the desalinization of a large part of the so-called 'Third World;' and a labour and capital accord (social contract), supported by the institutions and policies of a Keynesian state in the North and a developmentalist state in the South (Arrighi, 1994: Marglin and Schor, 1990). Under conditions of an economic and fiscal crisis that beset the system as a whole in the late 1960s and early 1970s, the sweeping reforms of the New Economic Model (Bulmer-Thomas, 1996) brought about a counter-revolution in theory and practice, and with it the subversion of the post war world order—and the new Euro-American empire dubbed by then President Bush the New World Order (NWO).

The Inevitability of Globalization?

Globalization, according to its advocates, has ushered in a new era of late or postcapitalist development, the economic and political dynamics of which have become focal points of a broad range of studies from diverse perspectives (Kenen, 1994). So entrenched has this notion of globalization become that even its many critics have succumbed to the suggestion, or claim, that the process is inevitable and thus inescapable in its effects. Accepting this claim some critics argue that the best and only 'realistic option'—as Casteñeda (1993) has put it—is to enter into the globalization process under the most favourable conditions available and to adjust to its requirements as needed or possible. This position is most clearly articulated in the World Bank's 1995 World Development Report. Among others Keith Griffin, by no means an uncritical globalist, allows for no possible alternative to an adjustment to what cannot be avoided or changed (Bienefeld, 1995; Griffin, 1995). Against clear evidence to the contrary presented by the United Nations Development Programme (UNDP) with which he is himself associated, Griffin sees a trend towards convergence, which is creating opportunities for some developing countries to participate in the fruits of development engendered by globalization. In this connection, Griffin adopts a view held not only by the economists at the World Bank but by most sceptics and critics of globalization.¹

Globalization and the Nation-State

The claim of globalization theory about the growing irrelevance of nation-state has also been widely accepted, even by critics. They see globalization as tending to displace the role of the state as the institution creating the conditions of capital accumulation as well as the regulation of capital. Scholars as diverse as Stalker (2000), who provides an ILO perspective on globalization, and Drucker, articulate the widely held mainstream view that globalization has ushered in a new postcapitalist form of development. They argue that the nation-state has retreated from the development process and been replaced by what Robinson conceptualizes as the 'internationalized state' (Robinson, 1996: 363-80). Some scholars in this connection more plausibly argue for a new system of global governance, a set of institutions that can secure the regulatory conditions of political stability for a global capital accumulation process.²

However, not everyone has accepted this notion of a powerless state, unable to resist the erosion of its economic role. Some 'realist' analysts of the political dimension of the 'globalization' process continue to see the nation-state as a major actor in international ...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Tables
• List of Abbreviations and Acronyms
• List of Contributors
• Acknowledgements
• Introduction
• PART I: THE THEORY AND PRACTICE OF GLOBALIZATION
• PART II: THE MACRODYNAMICS OF GLOBALIZATION
• PART III: THE DYNAMICS OF ANTIGLOBALIZATION
• Conclusion
• Bibliography
• Index