Neoliberalism and Conflict In Asia After 9/11

Garry Rodan, Kevin Hewison

• Publisher: Taylor & Francis
• Year: 2013
• Print ISBN: 9780415373210
• eBook ISBN: 9781317998242
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Political History & Theory
• Index: Politics & International Relations

Key events in Asia's recent history have included the end of the Cold War, the Asian Economic Crisis and the 'war on terror'. This is a critical assessment of these events, and of the interplay of security and economics in shaping political regimes and modifying market systems.

Based on the notion that market systems are inherently political and conflict-ridden, this collection clarifies and explains the conflicts shaping the path of neoliberal globalization. Collectively it represents a disciplined and systematic address of four overarching questions:

* What are the significant conflicts emanating from neoliberal globalization, and what are their implications?
* What are the implications of new security concerns for these conflicts, and what are their impacts?
* How are conflicts associated with globalization and security affecting social and economic policy directions?
* Can these directions be reconciled with the reproduction of existing political regimes, or do they threaten their basis?

In addressing these questions, the essays depict neoliberal globalization – in the new security context – as being able to accommodate a range of political regimes. This fascinating collection is a must-read for those with a professional interest in the region post-9/11.

This book was previously published as a special issue of the Journal Critical Asian Studies.

Introduction

Globalization, Conflict, and Political Regimes in East and Southeast Asia

Garry Rodan and Kevin Hewison

NEOLIBERAL GLOBALIZATION is often seen as a period of enhanced economic interconnectedness that began from the late 1980s. In fact, this globalization is a relatively recent set of processes marking the further expansion of capitalist economic relations. Earlier processes—such as mercantilism, colonialism, and imperialism—may also be identified as significant stages or epochs in global capitalist development. Whatever the periodization or terminology chosen, it remains a fact that conflicts are inherent elements of each period of capitalist expansion. These conflicts are local and global, and social, economic, and political in nature.

Contemporary manifestations of these conflicts are the subject of this book. The focus is on the changing nature and significance of conflicts over neoliberal globalization in East and Southeast Asia since the advent of the economic crisis of 1997–98 and in the more recent geopolitical context since September 11.

At the beginning of the twenty-first century it seems unnecessary to point out that the Asian region has been an important site of capitalist development. After all, apart from the period of the crisis, the region has witnessed remarkable (if uneven) economic growth since World War II. This growth has been accompanied by extensive economic and social transformations that have seen capitalist relations of production become solidly embedded. Capitalist development everywhere has been attended by conflict and contestation; the Asian region has been no exception to this. However, the nature and impact of these conflicts have not been constant. Rather, we must identify the dynamics that shape conflicts. In this introduction, we intend to identify a set of watersheds—or critical junctures in the terminology of Collier and Collier¹—that have been associated with the continual restructuring and reorganization of capitalist production and the changing geopolitical context within which capitalism has developed in the region. We suggest that these political and economic dynamics have fundamentally influenced the sorts of political regimes that have accompanied the region’s incorporation into the global political economy throughout this period. The dynamics of this process have involved a range of critical political and economic junctures. In this introductory chapter, we examine the developing internationalization of manufacturing production and, increasingly, other labor-cost-reducing processes; the increased significance of financial capital; and the important geopolitical reconfigurations associated with the cold war and the more recent “war on terrorism” (hereafter without quotation marks).

The importance of examining these critical junctures cannot be underestimated. After all, the compatibility or otherwise of the region’s prevailing regimes with global capital accumulation strategies has changed dramatically over the period discussed here.² Whether or not this involves the rules and regulations shaping the distribution of economic or political resources, power relations and alliances of interest are always at stake. The advent of the Asian crisis, for example, brought with it unprecedented pressures on crisis economies to allow greater access for international capital and the adoption of governance regimes that challenged the positions of many of the region’s economic and political elites.³ These pressures were associated with a view that the crisis provided ample evidence for the failure of “Asian Capitalism.” Moreover, the recent U.S.-led war on terrorism, associated with an increasingly unilateralist foreign policy,⁴ can be expected to play a significant role—as was the case during the cold war—in mediating the outcomes of economic and political contestation in the region. U.S. geopolitical concerns are now tempering both the neoliberal emphasis on free trade mediated by multilateral economic institutions and the championing of democracy that had enjoyed increased diplomatic support during the 1990s.⁵

Indeed, for some writers, recent developments are symptomatic of a “new imperialism” that reflects a growing dependence of U.S. capital on military and political power for its global ascendancy,⁶ a scenario with increasingly destabilizing consequences for East and Southeast Asia.⁷ To be sure, this “new imperialism” is not something that has suddenly appeared but, as Wood observes: “As the gap between the economic reach of capital and the extra-economic reach of territorial states grows wider, imperial powers, and the United States in particular, have experimented with new forms of extra-economic force to deal with contradictions.”⁸ Importantly, in contrast with much of the post-World War II period, heightened tension between the interests of U.S. capital and other capitals now appears to be a feature of those contradictions. Yet, there is also a strong resonance with the earlier anticommunist phase of globalization, a possible “closing of the circle” that sees authoritarian regimes increasingly tolerated or even supported by the United States in its war on terror, as in the cold war period.⁹

Examining the changing nature and significance of conflicts associated with neoliberal globalization in the period since the Asian crisis is no simple challenge in theoretical and methodological terms. The prevailing political economy literature attempting to explain the interaction between domestic political and economic regimes and global political structures generally falls into one of two categories of approach: the “outside-in” or the “inside-out.” The former has been stronger in explaining the external structural pressures on the region,¹⁰ while the latter’s main contribution has been to explain how domestic states and social and political forces have mediated the impact of these pressures.¹¹

One of the problems with these views is that neither camp has been sufficiently engaged with issues concerning relations between states. Over the last few decades, much of this ground has been surrendered to mainstream international relations theorists. In the current phase of neoliberal globalization whereby conflict within and between states is assuming fundamental importance, this ground needs to be reclaimed by political economists. Collectively, the essays in this book are meant to stimulate a research agenda that debates the nature, determinants, and consequences of conflict associated with attempts to embed neoliberal globalization within East and Southeast Asia in a context that is now being shaped by the enhanced political emphasis on security.

The discussion to follow, which explains in more detail how the essays go about this task, is preceded by an attempt to place this exercise in a historical context. This involves a brief and selective analysis of some of the critical junctures involving the organization of capitalist production and geopolitical developments affecting the region’s incorporation into the global political economy since World War II.

Globalization, Cold War, and Political Regimes

The initial decades of globalization after World War II were characterized by a conjuncture between production systems and security concerns that is reflected in three discernible and interrelated patterns: the harmonization of multiple national development strategies with the internationalization of capital; the tolerance and even promotion by Western governments of authoritarian political regimes to protect and advance capitalism; and an unambiguous leadership role by the United States in the establishment and promotion of multilateral institutions conducive to the general spread of market systems and international trade. In effect, economic and political regime diversity—so long as it was not hostile to capitalism—was consistent both with the global spread of capital and U.S. economic and political dominance.

Initially after the war, the further consolidation of capitalism in the West occurred predominantly via protectionist economic policies and the refinement of Fordism. The latter was as much a political and ideological strategy as a production strategy, linking large-scale mechanized production (and associated deskilling and intensification of work) with mass consumption. In part, Fordism relied on rising living standards in the national economies of the West in order to foster expanded consumption and continued growth. But this rested on a form of social contract that helped to limit industrial conflict and foster an embrace of consumerism ahead of political demands.¹² Thus, in the West, liberal democratic institutions and social democratic movements, including trade unions, accompanied Fordist production systems and were integral to the struggles over the precise content of social contracts. Here political regimes were avenues through which conflict was both expressed and contained.

It was in this context that pent-up demand for consumer and capital goods following the war led to investment in industry (and the Marshall Plan assisted this in Western Europe). These developments resulted in a “Golden Age” for Western capitalism in the 1950s and 1960s, where low unemployment and rising incomes created increased demand that fueled production.

However, when capitalism expanded to developing economies, the political context differed. This in part reflected the fact that often investment was still driven by a search for the raw materials that fueled industrial development in the West. In other instances, however, attempts to foster industrialization through import-substituting production based on protectionist policies occurred without the related and costly welfare policies of the social compromises that had been negotiated in the West. Consequently, wages and living standards remained relatively low. A significant part of the explanation for this contrast had to do with the priority accorded security during the cold war, which did little to encourage democratic forces akin to those that extracted new social contracts in the advanced capitalist countries.

In Asia, the West’s fear of communism helped facilitate a range of political regimes, with few in the liberal democratic mould of the West. In fact, authoritarian regimes, some of them quite brutal—as in Indonesia under Soeharto and South Korea under Park Chung Hee—were encouraged, so long as they promoted political stability, were anticommunist, and protected the development of economic systems that were broadly capitalist. Contrary to the prevailing Western modernization rhetoric, it was the threat to capitalism—not democracy—that was the principal driver of foreign policy. Samuel Huntington’s political order theory was, in time, to provide a neat theoretical justification for such a direction, arguing that the building of institutions capable of establishing social and political order and control was paramount in the early stages of development.¹³

Indeed, so important was the security consideration in the process of safeguarding capitalism that some exceptional economic models emerged in Japan, South Korea, Taiwan, and Singapore with significant U.S. facilitation. In these cases, as Cumings shows,¹⁴ massive injections of aid and foreign investment helped to establish export-oriented industrialization (EOI) models, well before these became more generalized as a capitalist investment strategy in response to cost pressures in the developed West and the emergence of new technologies. In each case, the state took a critical economic role and, except in Singapore, this also involved the strengthening of domestic capitalist classes.

These EOI models gathered considerable momentum in the 1970s and 1980s and were, to differing extents, emulated within and beyond the region. Accumulation became truly global as the competitive need of manufacturing capital to limit the costs of production combined with the technical opportunity to exploit low-skilled labor in developing countries.¹⁵ The enhanced global spread of international finance capital soon added another dimension to the new forms of economic integration between national economies that were emerging before the end of the cold war, including through the rapid infusion of new investment funds.¹⁶

Initially, it was East and Southeast Asia that gained the greatest economic benefit from this restructuring. In fact, with sluggish growth in the West, especially in the United States, an Asian Capitalism model—characterized most notably by a so-called developmental state shaping the costs of different factors of production in an attempt to create comparative trade advantage—was recognized as a viable alternative economic model.¹⁷ Alongside such states, which were most evident in Northeast Asia, there was also a range of other departures from the liberal economic model in the region in which market intervention was less guided by national strategic considerations and within which political cronyism and corruption were commonplace, including in Malaysia and Indonesia.¹⁸ Yet, as investment poured into these economies, even these regimes appeared viable.

Such critical junctures in the global development of capitalism increasingly placed pressures on social contracts in established democracies in the West and on some economic regimes in East and Southeast Asia, but it was only after the cold war’s end that these were given full expression. For the time being, even if some stresses were appearing, a plurality of regimes did not generate fundamental friction; security concerns permitted a distinction between politics and economics.

Importantly, U.S. leadership after World War II extended beyond the political and military domains to an elevated international role in the building of multilateral economic institutions. The United States had been important before this, but in the context of a war-damaged and politically divided Europe and the destruction of an industrializing Japan, U.S. capitalism was now in an unambiguously dominant economic position. Significantly, this enhanced economic status and influence provided substantial benefits for national capitalisms across the Western world. These included not just injections of capital investment and aid that supported national economies—not least in postwar Europe and Japan—but the fostering of multilateral institutions conducive to the general spread of market systems and international trade, particularly through the Bretton Woods institutions. These institutions underwrote stable and prosperous capitalist economies and were important to the viability of the various social contracts negotiated throughout the established liberal democracies, a point Ruggie emphasized in his concept of “embedded liberalism.”¹⁹

Cold War’s End and Neoliberalism’s Advance

With the end of the cold war and the United States being the only remaining superpower, much of the foreign policy security preoccupation gave way to a more aggressive and focused expansion of international capitalism that was far less tolerant of any obstacle to capital mobility. U.S. dominance within multilateral organizations such as the International Monetary Fund (IMF) and World Bank, as well as through the World Trade Organization (WTO) and other institutions, was now increasingly used to exert pressure on the domestic economic policy of in...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• Acknowledgments
• 1. Introduction—Globalization, Conflict, and Political Regimes in East and Southeast Asia
• Part 1—Markets, Security, and Political Regimes in Asia
• Part 2—Governance and Conflict in Asia
• Contributors
• Index