From Socialist Voice, April 2006

The globalisation decade

Leo Panitch and Colin Leys (editors), The Globalization Decade: A Critical Reader (London: Merlin Press, 2004; ISBN 0-850-36516-3; £16.95).

This is a series of essays on the subject of globalisation as it developed in the decade from 1994. The contributions are by Leo Panitch, Colin Leys, Alan Zuege, and Martijn Konings (all connected to Canadian academia), and all appeared in the Socialist Register during the decade. The essays cover a wide variety of aspects of this complex issue, particularly its economic and political dimensions.
    As explained in the introduction, this book sets out to achieve three things: (1) to provide a critique of the dominant intellectual and political fashions in the globalisation debate, challenging both orthodox and left viewpoints, (2) to analyse the processes driving market liberalisation as well as its human and environmental costs, and (3) to point creatively towards democratic and egalitarian alternatives. This review attempts to illustrate the salient points covered in many of the essays.
    The foundation of globalisation was laid with the development of the neoliberal project in the 1980s, arising from the perceived structural problems of capitalism in the previous decade. Neoliberalism is significantly coterminous with the coming to power of Reagan and Thatcher in 1979 and was seen as a response to the inefficiencies attributed by mainstream economists to the unchecked growth of trade union power, the interventionist state, and national protectionism. It signified an end to the golden era of post-war Keynesian capitalism, characterised by state regulation and intervention to ensure market stability and provide adequate welfare services for the needy. New capitalism, with its emphasis on the competitive market, wanted to throw off the shackles hindering the accumulation of capital and to reassert the rights of its owners to maximise profits. Trade liberalisation, deregulation and the privatisation of public enterprises became the trade marks of this new regime.
    The 1990s saw the international constitutionalisation of neoliberalism at the economic, political and financial levels. This was achieved primarily through the political negotiations of the core states—the United States, Germany, France, and Britain. The role of the nation-states in this process was primarily one of ensuring the ideological and institutional conditions for legitimising and implementing neoliberalism, by their participation in the web of international agreements of supranational agencies—IMF, World Bank, WTO, Group of Seven, etc. Third World countries suffered particularly, as they were seen to be more vulnerable and pliable to the coercive impact of the free-market regime. Managing social cohesion became a priority of the national bureaucrats in the context of a democratic deficit between their political aims and the realpolitik of a growing imbalance in world trade.
    The rapid spread of globalisation in the 1990s was seen by many as inevitable and irreversible. This development was driven particularly by a new era of financial and shareholder capitalism. “Enhancing shareholder value” became the new buzzword among an unholy corporate alliance of fund managers, chief executives, and other senior corporate management. Between 1971 and 1991 the income of the five hundred largest transnational companies increased sevenfold, while employment remained stable. The essay on “The contradictions of shareholder capitalism” in this book illustrates the absolute priority given to shareholder value, often disconnected from the underlying economic conditions. With the deregulation of exchange rates, financial markets grew rapidly. In the absence of a strong regulatory framework limiting the movement of capital, the amounts seeking profitable investment expanded exponentially. There was strong resistance on the part of global capital to any efforts of international governance to monitor this situation and maintain financial stability.
    The essay on “The nature and contradictions of neoliberalism” points out that neoliberalism has not solved the economic problem, and has considerably worsened our environmental situation. The obsession with economic growth and the need for a more competitive economy and greater productivity on the part of the work force leads inevitably to increased unemployment. The call for flexible labour markets causes job insecurity, promotes abstract individualism, and undermines family life. Many of the essays maintain that unregulated markets are unstable and economically inefficient, diverting scarce resources into unproductive investment areas. They also threaten social cohesion, political stability, and social welfare. The obsession with economic growth has not led to the elimination of poverty, and the global gap between rich and poor continues to widen, giving rise to distributional tensions and social conflicts. A rethink on the conventional growth paradigm is urgently needed to include other indicators of human welfare besides economic growth.
    The Globalization Decade is strong on analysis but it is not without some hope for alleviating the uncertain future facing the world and particularly the working class. Social-democratic and corporatist institutions advocating a “third way” are mostly seen as having failed, legitimising the neoliberal system rather than promoting a radical restructuring. The experience of east Asia proves that some national policies are viable, such as inward-oriented economic strategies, local initiatives, and the nurturing of infant industries.
    The anti-globalisation, anti-imperialist and anti-war struggles give some cause for hope of a massive redistribution of wealth and power. There is a need to enhance the capacity of such groups to question the social, property and power relations of globalised capitalism. The role of the middle classes in the survival of neoliberalism is recognised.
    All the essays stress the importance of controlling capital movements, including goods, jobs, and money. The stranglehold that the financial markets have on economies must be controlled, and there are no technical reasons for failing to achieve this. The withdrawal from the capital pool of labour’s capital and investing it in more environmentally sustainable production is recommended, as well as the promotion of more sustainable consumption patterns.
    The concluding essay deals with the geopolitical dimensions of globalisation. In his essay on “The American campaign for global sovereignty” Peter Gowan explains that the main feature of world politics since the collapse of the Soviet bloc has been the American state’s campaign to rebuild and expand the protectorate systems that formed the basis of American global political and business dominance during the Cold War. America has clearly established a dominant position in industrial, military and technological matters. In the name of creating a new world order it has embarked on a more aggressive and dangerous project to manage the world capitalist system and protect what it considers to be its vital interests in the Middle East and central Asia. There is no acceptable autonomous and general set of rules for maintaining international stability: this is determined by a complex set of power relations. The position of the United States remains problematic—despite the fact that its accumulation of capital is not strong, the stock market bubble persists, household credits are increasing, and its huge external deficits are growing, all leading to an unstable and therefore dangerous future.
    The authors of The Globalization Decade deserve commendation for giving us an enormous amount of useful information. Despite the use of academic jargon, the study of this book is well worth the effort.


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