New Perspectives on Globalization and Antiglobalization

Prospects for a New World Order?

Henry Veltmeyer

• Publisher: Routledge
• Year: 2016
• Topic: Politics & International Relations
• eBook ISBN:
  9781351914802
• Subtopic: Politics
• Index: Politics & International Relations

This completely revised and updated sequel to Globalization and Antiglobalization advances our understanding of the dynamics of neoliberal globalization and draws our attention towards efforts to construct 'another world' beyond neoliberalism. To advance our understanding of these forces and associated processes, the collection brings together eleven specialists in the political economy of international relations and globalization to reflect on and analyze the diverse dimensions of the globalization process. Taking into account significant developments in the dynamics of globalization and antiglobalization over the past years, it includes a new introduction and a new conclusion as well as eight entirely new chapters contributed by authors as diverse and different in their perspectives as James Petras, Walden Bello, Norman Girvan, Paul Bowles, Terry Gibbs, Lisa Thompson and Teivo Teivainen. These dynamics are contextualized with essays on the Caribbean, Latin America, East Asia and Southern Africa. This is an invaluable volume for students, academics and activists concerned with creating a truly new world order.

PART 1
The Theory and Practice of Globalization

Chapter 1
Globalization: A Taxonomy of Theoretical Approaches

Paul Bowles

The term “neoliberal globalization” has become a common one in both academic discourse and in the nongovernmental organizations (NGOs) and social movements which are lumped together as the “antiglobalization” movement. Despite the popularity and frequent use of the term, however, the concept of “neoliberal globalization”—and the relationship between neoliberalism and globalization—is not as straightforward to understand as this frequent use would imply. The reason for this is that the term “globalization” has been interpreted in a variety of ways each of which has its own implications for the relationship to neoliberalism. The purpose of this essay is to provide a taxonomy of approaches to globalization and to draw out what each of these approaches implies about the relationship with neoliberalism. I conclude with a sketch of what this implies for our understanding of the “anti-globalization” movement.

To begin, let us start with a definition of “neoliberalism.” This shares with classical liberalism the belief in the efficacy of market mechanisms for the allocation of resources and the reward of factors of production. It is based on the belief that markets are competitive, or can be made competitive by deregulation, and that competitive markets, based on private ownership, produce the most efficient economies and highest levels of welfare. Thus, a menu of neoliberal policies can be readily identified. A strong preference for privatization and deregulation underpins this menu and is applicable to the vast majority of areas of production including the markets for labor, capital, land, and natural resources.

There are, however, some areas of ambiguity. Two of the most important examples of these are the topics of money and regionalism. There is no neoliberal position on money with some writers (such as Hayek) advocating private money issuing banks, others (such as Friedman) preferring national monies but with flexible exchange rates, while others still (such as Mundell) prefer a world currency. Similarly, some neoliberals see regional trading areas as stepping stones to global free trade; others (such as Bhagwati) see them as undesirable distractions from the multilateral cause. There are also disagreements about the sequencing of market liberalization; with respect to capital account liberalization, for example. Thus, neoliberalism should not be seen as a monolithic body of thought and there areas of considerable dispute between its followers. Nevertheless, there is still an identifiable core set of policies, based on privatization and deregulation, which gives this school of thought its coherence.

As noted, neoliberalism shares this coherence with classical liberalism. The prefix “neo” often serves little purpose other than denote the new time period, since about 1980, that liberal ideas have returned to the ascendancy. “Neo” therefore indicates that we are talking about the late twentieth and early twenty-first centuries rather than the mid-nineteenth century. There is one other reason for using “neo” which I think is worth discussing. This relates to governance. Put simply, classical liberal thought is typically associated with democracy as a system of governance. This, despite the fact that there was very little democracy about in the mid-nineteenth century and this was the era of antidemocratic colonialism. Neoliberalism, in contrast, has no such necessary association with liberal democracy. Neoliberalism is primarily an economic concept dedicated to “free markets” but this can be, and has been, implemented in a variety of polities, from representative democracy to authoritarian. The governance structures of neoliberalism are, therefore, “underdetermined.”¹

While there are some complications, therefore, the core body of neoliberalism can be readily identified. The task of understanding globalization is not so easy. Globalization, according to Tony McGrew, “is in many respects an idea in search of a theory.” He continues that “despite the fact that, in a little over a decade, it has colonised the intellectual imagination of the social sciences, it remains for the most part largely under- (if not un-)theorised” (2001: 293).

McGrew has a point: there is no agreed theory of globalization. My purpose here is not to provide one. Rather it is provide a taxonomy of the various approaches that have been taken to analyzing what globalization might be. There are already a number of taxonomies—ways of classifying and summarizing a vast literature—available. Held et al. (1999: 10), for example, distinguish between hyperglobalists, skeptics, and transformationalists as a device for distinguishing between theories analyzing the politics, economics, and culture of globalization. Hobson and Ramesh (2002: 5) write that “much, although certainly not all, of the literature on globalization is cast in terms of two main propositions: either a strong globalization/decline of the state or weak globalization/strong state thesis.”

In this chaper, I propose a four-fold taxonomy extending the propositions relating to state and market suggested by Hobson and Ramesh.² The four main interpretations of globalization identified here are:

1. Globalization as a primarily technologically driven process which strengthens markets and market actors while weakening and requiring adaptation by nation-states.
2. Globalization as a “myth” that has not significantly weakened the national basis of economic activity and the dominance of nation states. The popularity of “globalization” has more to do with its neoliberal ideological agenda than as an objective description of contemporary capitalism.
3. Globalization as imperialism. Some states are weakened by globalization while other states and their market actors (corporations) are strengthened. The process of globalization is a strategy designed to enhance to interests of imperial powers by opening up the markets of weaker countries.
4. Globalization is inadequate as a descriptor of the processes under way in which contemporary period and is better described as regionalization and/or regionalism. Nation-states may be weakened but emerging production and governance structures are regional in nature (at both the macro and micro-regional levels) rather than global.

In the sections which follow, I will outline each of these interpretations of globalization and explore what they imply about the relationship between globalization and neoliberalism.

The “Globalization Weakens the Nation-State” View

This is probably the most well known of the four views and finds support across the political spectrum. According to this view, the beginning of the twenty-first century is marked by an inexorable and inevitable process of globalization driven by technological change. The basis of this is the information, computing and telecommunications (ICT) revolution which allows the possession, processing, and transmission of huge quantities of information at very low cost and at very high speed. In general, this view therefore sees globalization as a technologically driven process where the current period is characterized by the scope and intensity of technological change, a factor which differentiates the contemporary era both from the period immediately prior to it and from other episodes of “globalization” that have occurred in the past.

Technology is identified as a critical (although not necessarily the only) causal factor. For example, the World Bank (2002: 325) answers its rhetorical question “What is globalization?” as follows: “In broad terms it reflects the growing links between people, communities, and economies around the world. These links are complex—the result of lower communications and transport costs and greater flows of ideas and capital between high- and low-income countries.”

On the basis of this definition, the bank then continues by distinguishing between three waves of globalization each of which is defined in technological terms.

The first wave of global integration, between 1870 and 1914, was led by improvements in transport technology (from sailing ships to steamships) and by lower tariff barriers. Exports nearly doubled to about 8 percent of world trade. The second wave from 1945 to 1980, was also characterized by lower trade barriers and transport costs. Sea freight charges fell by a third between 1950 and 1970. And trade regained the ground it lost during the Great Depression. Spurring the third wave of integration has been further progress in transport (containerization and airfreight) and communications technology (falling telecommunications costs associated with satellites, fiber-optic cable, cell phones, and the Internet). And along with declining tariffs on manufactured goods in high-income countries, many developing countries lowered barriers to foreign investment and improved their investment climates (World Bank 2004b: 326).

Globalization in this, and other periods, is therefore seen as being driven by scientific advance coupled with policy responses which lower barriers to economic flows. As just one example of the lower of costs as a result of the ICT revolution, the UNDP (1999: 28) provides the following example: in 1960, the average cost of processing information was US $75 per million operations; in 1990 it was less than one hundredth of a cent.

The Global Policy Forum (GFP), an NGO with consultative status at the UN, also appeals to the technological basis of globalization:

Human societies across the globe have established progressively closer contacts over many centuries, but recently the pace has dramatically increased. Jet airplanes, cheap telephone service, email, computers, huge oceangoing vessels, instant capital flows, all these have made the world more interdependent than ever. Multinational corporations manufacture products in many countries and sell to consumers around the world. Money, technology and raw materials move ever more swiftly across national borders (www.globalpolicy.org, accessed 2 November, 2004).

The GFP collates various measures of this global “connectivity” arising from technological and other trends. For example, the percentage of the world's population that is internet users has risen from 0.73 percent in 1996 to 9.57 percent in 2002. The radio took 38 years from invention to gain 50 million users, the worldwide web took only four years.³

Other analyses posit a key role to technology although also rely on other inter-related and codependent causal factors to explain the onset of globalization. Scholte (2000: 99), for example, argues that “globalization patently could not have occurred in the absence of extensive innovations in respect of transport, communications and data processing” although he adds rationalism, capitalism, and political regulation as other causes.⁴

The argument is that these technological changes are leading to (or have led to) a global economy as evidenced by the trends in production, trade and finance. With respect to production, it is argued that there has been a dramatic change in the way in which businesses operate and that they have “gone global.” The period prior to 1980 looked more like the linking of national economies whereas now we see genuine global production and markets.

Scholte (2000) uses the term “supraterritorial” to describe the way in which firms have had their relationship with territorial space changed by globalization. He argues (2000: 125) that, “thousands of firms have in the context of globalization given their organization a substantial supraterritorial dimension, either by establishing affiliates in two or more countries or by forging strategic alliances with enterprises based in other countries.” Some of these global company networks are huge. For example, as of the mid-1990s the Unilever corporation encompassed more than 500 subsidiaries in over 90 countries. Global companies have acquired a very prominent place in contemporary capitalism. For example, “the collective annual sales of the 50 largest unitary global enterprises rose from $540 billion in 1975 to $2,100 billion in 1990, equivalent to around 10 percent of recorded world product.” For this reason Scholte prefers the term “transborder companies” to multinational corporation (MNC). The annual sales of some of these companies surpass the gross national products of even medium-sized national economies.⁵

An integrating world economy can be seen from the data that between 1990 and 2002, the percentage of trade in goods to world GDP increased from 32.5 percent to 40.3 percent, gross private capital flows increased from 10.1 percent of world GDP to 20.8 percent, and gross direct foreign investment from 2.7 percent to 6.0 percent of world GDP (see World Bank, 2004b: 308). The turnover in foreign exchange markets is now well in excess of US $1 trillion a day, over 40 times the daily volume of world trade.

All of this has led to what Kenichi Ohmae (1990) calls in a provocative but brilliantly encapsulating phrase “the borderless world.” It should be noted, however, that while this view of the world can readily be found in business-oriented publications, in the documents of the Bretton Woods institutions as well as in the NGO movement, it can also be found in the work of those who adopt a Marxist approach. For example, Teeple (2000) argues that the 1970s witnessed the start of a “revolution in the means of production” with this revolution being “grounded in the development of computers” (2000: 13). Furthermore, “these changes were revolutionary because of the qualitative turn they brought to the pursuit of knowledge, the objectification of science, the transmission of information and the production process” (2000: 13). The result of this revolution was that “national structures of accumulation” were no longer compatible with the new technologically driven global accumulation strategies of firms. As a result, Teeple argues that the role of nation-state has changed and been weakened. As he colorfully puts it, “if the ‘first’ bourgeois revolutions represented the political consolidation of capitalism by creating the nation state, then this ‘second’ bourgeois revolution is the globalization of national regimes of accumulation. It represents a shift from the mitigated framework for capital, the Keynesian Welfare State, liberal democracy, and so on, into a more or less unmitigated framework, supranational agencies for capital alone” (2000: 14). These supranational agencies (such as the IMF, World Bank, the World Trade Organization or WTO, and the BIS – Bank of International Settlements) oversee a corporate dominated globalization in which there is a “decline of national political powers” (2000: 17). Indeed, Teeple argues that globalization represents “the end of national history” (2000: 22).

Bryan (1995) provides a novel approach in analyzing capital's “chase across the globe” for profit. He argues (1995: 8), using a Marxist framework, that there is a “contradiction between the internationality of capital accumulation and the nationality of the state.” National categories, used in balance of payments calculations for example, are flawed accounting measures: they ascribe a nationality to international capital flows where there is none.

Bryan's (1995: 6) purpose is to “explore the historical logic of the chase [across the globe], and in particular to address the wishful view that nation states can confront the chase, and avert its damning consequences. The analysis is by no means dismissive of the role of nation states, but confronting the consequences of the chase of capital requires a broader politics than can be achieved by the re-direction of national policy.”

For Desai (2004), globalization represents “Marx's revenge.” Revenge, that is, against twentieth-century attempts to construct state socialism under his name. Desai invokes Marx's belief that capitalism would only come to an end after it had become global and had played fully its historic role of developing the productive forces. Capitalism was playing this role until it was sidetracked by the First World War. For the next seventy years, state socialist and capitalist countries, in their different ways, deglobalized the world as the state took center stage in economic management. However, it is “the underdevelopment of capitalism that allows and supports substantial market intervention. As capitalism develops, it sheds rather than strengthens such restrictions” (Desai 2004: 214).

When capitalism underwent a process of reglobalization in the 1980s, therefore, the state as economic manager was weakened. Capitalism became more like Marx's...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Table of Contents
• List of Contributors
• Acknowledgements
• List of Abbreviations and Acronyms
• Introduction
• PART 1 THE THEORY AND PRACTICE OF GLOBALIZATION
• 1 Globalization: A Taxonomy of Theoretical Approaches Paul Bowles
• 2 World Development: Globalization or Imperialism? James Petras
• 3 Civil Society and Good Governance: The Politics of Adjustment Henry Veltmeyer
• PART 2 THE REGIONAL MACRODYNAMICS OF GLOBALIZATION
• 4 Denationalizing Mexico: The World Bank in Action John Saxe-Fernández and Gian Carlo Delgado-Ramos
• 5 Crisis and the Retreat from Globalization in Asia Walden Bello
• 6 Globalization and Counter-Globalization in the Caribbean Norman Girvan
• 7 Chávez, Democracy and Globalization: Business as Unusual Terry Gibbs
• 8 Globalization and Development in Southern Africa: A Contradiction in Terms? Lisa Thompson
• PART 3 THE MACRODYNAMICS OF ANTIGLOBALIZATION
• 9 Power and Globalization in the New World Order Noam Chomsky
• 10 Expanding Boundaries of the Political: Globalization Protest Movements and the State Teivo Teivainen
• 11 From Globalization to Antiglobalization Henry Veltmeyer
• Conclusion
• Bibliography
• Index