Globalization/Anti-Globalization David Held and Anthony McGrew polityoon © Di Held nd Anthony Mew 2002 The gh of Dav Hel and Any Gn ob eid us of hi week Is been seed moran withthe Cort, Desens a hat 198 in abla in 2002 yy Poin scion with kw abit td 1 Bbw Ping Copy ae fie Shae Set amb C82 108 Mitkas 108 Con Rom Ord ORT OX Pabied i te USA by aon O48, USA A igs tern But eh toto fhe psp fr he pps of ‘Since dei of of ths aeston maybe pede ra ‘Rta stn, tana non fom oy any ea econ hci Phowscepig earings wit te pt pei te es Eas nh Utd Ste of Ameri hbk sl bit othe sndon hat shan by way err ln sal ied ete tere ‘cle shah palit ime an fin of bg ont ee thon hat nies aed and waa» sn emo cig ‘odin bg impor on he en pac, BEN 0.7456 2000 phy cal nd ooo coal om the Bh ey ad a ‘ppl rm te Liar of Cons Uy raph Links HongKong od Gretta Terai, ow, Come This beak 4 printed on ao apes. Contents List of Figures and Tables Acknowledgements Introduction Making Sense of Globalization “The Reconfiguration of Political Power? ‘The Fate of National Culture A Global Economy? (Mis)Managing the World? Divided World, Divided Nations ‘World Orders, Ethical Foundations The New Politics of Globalization: Mapping Keals and Theories 9 Reconstructing World Order: Towards Cosmopolitan Social Democracy References Index 98 us 137 1324a Sa 52 6a 62 63 a 34 32. Figures and Tables Figures Who is on top: countries and companies ranked according to value added or GDP The organizational infrastructure of global ‘governance: a UN-centrc view Levels of action in the architecture of global governance iow the structure of human development in the world has shifted ‘The ‘champagne glass’ pattern of inequality between the world’s rich and poor ‘Comparing incomes between the developing regions and high-income OECD, 1960-1998 Variants in the polities of globalization ‘Tables Key indicators for the world telecommunication service seevor, 1990-2002 Top fifteen countries in internet use at yearend 1999) “4 0 66 80 2 86 32 3 33 34 4a List of Figures and Tables ‘Top fifteen countries in internet penetration rate at year-end 1999 International trade in cultural goods by category, all countries availabe, 1980 and 1998 Locations of the world's 500 largest multinational enterprises Daily foreign exchange turnover, 1989-2001 Merchandise exports as percentage of GDP in 1990 prices, world and major regions, 1870-1998, Contrasting interpretations of global governance ‘Models of global polities: a summary and comparison ‘Towards cosmopolitan social democracy 4 3s 4a ” 8 16 1Introduction inequality, andthe ethical foundations of politcal community and lobal oder. Chapter 8 set out the range of politcal responses to flobaliation and explains what is at stake, and why it mates ‘The final chapter, chapter 9, offers tentative assessment ofall these isues, revaluates the debate between lobaliers and scepeicy, land the questions raised by the politics of plobalzation, We sketch 2 way forward in both theoretal and poltieal terms. OF couse, ics too much co hope that ll partis fo these hugely importa discusions will agree with us, But atthe very lest, we Hope fo ‘show that cere sa compelling way of gong beyond the question, tobalization or antglbalization? “This book draws on over ten yeas of thinking and writing ahout globalization but a novel eerie for us an atempe te ‘eat billy and suciney what the Key questions ae inthis ld and how they might be adessed, (Out previous attempts run 0 ‘many hundred of pages see Global Transformations, The Global ‘Trasformations Reader and Governing Globalization) The book began asa essay, “The great globalization debate published in the Global Transformations Reader. It ha been update extended snd akly deep fr he bw of tis ame. We ‘woul like thank John Thompson for encouraging us to devel this texty Sue Pope and Avil Symonds for mack assistance preparing it for pubicaton; Gill Motley, Sandra Byate Ann Bone, ALL Wye and Jenny Liddiad for extraordinarily professional help at all stages of prodetion and marketing 1 Making Sense of Globalization Globalization, simply put, denotes the expanding scale, growing magnitude, speeding up and deepening impact of transcontinental flows and patterns of social interaction. It refers to a shift oF transformation inthe scale of human organization that links distant ‘communities and expands the reach of power relations across the world’s regions and continents. But it should not be read a8 prefiguring the emergence of 2 harmonious world society ot 5 a universal process of global integration in which there is a rowing convergence of cultures and civilizations. For not only does the awareness of growing interconnectedness create new ‘animosities and conics, i can fuel reactionary polities and deep Seated xenophobia. Since a substantial proportion of the world’s population is largely excluded from the benefits of globalization, itis a deeply divisive and, consequenty, vigorously contested pro- cess. The unevenness of globalization ensures itis far from a universal process experienced uniformly across the entire planet. ‘Although the term globalization has acquired the status of a poplar cliché, the concept itself is not new. Its origins lie in the work of many nineecenth- and early twentith-century intellectuals, from Karl Marx and sociologists such as Saine Simon to students ‘of geopolitics such as MacKinder, who recognized how modernity was integrating the world. Bur it was not until the 1960s and 1Making Sense of Globalization early 1970s that the term ‘globalization’ acquited academic and wider currency. This ‘golden age’ of rapidly expanding political and economic interdependence between Western states demon: strated the inadequacies of orthodox thinking about politics, «economics and culeure which presumed a strict separation between internal and external affairs, the domestic and international arenas, and che local and the global. In a more interdependent world, events abroad readily acquired impacts at home, while develop” ments ar home had consequences abroad. Following the collapse of state socialism and the consolidation of capitalism worldwide, public awareness of globalization intensified dramatically in the 1990s. Coinciding with the information revolution, these develop- ments appeared co confirm the belief that the world was fast becoming a shared social andl economic space — at east for is most affluent inhabitants, However, the idea of globalization isa source of great controversy: not just on the strets but in che academy too. In short, the great globalization debate has been joined: Within the academy, no singular account of globalization has acquired the status of orthodoxy. On the contrary, competing theories vie for dominance. Nor do the existing political traditions ‘of conservatism, liberalism and socialism offer coherent readings ‘of, or responses to, globalizing era Although some conservatives and socialists find common ground in dismissing the significance ‘of globalization, many of thee colleagues consider ita major threat to cherished values and traditions. Indeed, the very ida of global iuation appears to disrupe established paradigms and political orthodoxies, creating new political alignments Cutting through this complexity, itis, nevertheless, feasible to identity a clustering of arguments around an emerging fissure between those who consider that contemporary globalization is & zeal and profoundly transformative process ~ the globalists ~ and those who consider that this diagnosis is highly exaggerated and distracts us from confronting the real forces shaping. societies and political choices today ~ che sceptics, OF course, this dualism 2 Making Sense of Globalization is eather crade since it elevates two conflicting interpretations from among diverse arguments and opinions. But, as used here, the labels ~globalsts and sceptics ~ refer co ideal-ype constructions. Ideal types are heuristic devices which order a field of inquiry and identify the primary areas of consensus as well as conteation ‘They assist in clarifying the primary lies of argument and, thus, in establishing the fundamental points of disagreement. deal types provide an accessible way into the mélée of voices ~ rooted in the slobalization literature but by definition corresponding to no single work, author oF ideological postion. In essence, they are starting points, rather than end points, for making sense of the ‘reat globalization debate The myth of globalization For the sceptics the very concept of globalization is rather unsatis- factory. What, they ask, is “global” about globalization (Hirst 1997)? Ifthe global cannot be interpreted lierally, as a universal phenomenon, then the concept of globalization seems to be litle note chan a synonym for Westerization or Americanization, In interrogating che concept of globalization, sceptics generally seek to establish a conclusive empirical test of the globalization thesis, This involves assessing how far contemporary trends ‘compase with what several economic historians have argued was the belle Epoque of international interdependence, namely the period from 1890 to 1914 (Gordon 1988; Jones 1995; Hirst 1997) Such analyses disclose that, rather than globalization, cueent trends reflect a process of “interationalizaion’ ~ cha i growing links between essentially discrete national economies or societies ~ and ‘regionalization’ or ‘tiadivation’, the geographical clustering of cross-horder economic and social exchanges (Ruigrok and Tulder 1995; G. Thompson 19983; Weiss 1998; Hirst and Thompson 1999; Rugman 2001). Some studies go further to argue that, by 3Making Sense of Globalization ‘comparison with the belle époque, the world has “imploded? eco- nomically, politically and culturally as global empites have given ‘way to nation-states, while the majority ofthe world's population is excluded from the benefits of economic development (Hoogyelt 2001). This is an argument forthe continued primacy of territory, borders, place and national governments to the distribution and location of power, production and wealth in the contemporary world order, There isa clear disjancture between the widespread discourse of globalization and a world in which, for the most par the routines of everyday ives are dominated by national and Instead of providing an insight into the forces shaping the contemporary world order, the idea of globalization, argue many sceptics, performs a rather different function, In essence, the dis course of globalization helps justify and legitimize the neoliberal slobal project, thats, che creation of a global fee market and the consolidation of Anglo-American capitalise, within the world’s ‘major economic regions (Callinicos etal. 1994; Gordon 1988; Hirst 1997; Hoogvele 1997). In this respect, the ideology of slobalization operates asa ‘necessary myth’ through which polit cians and governments discipline their citizens to meet the require ‘ments of the global marketplace. It is, thus, unsurprising that the globalization debate has become so widespread just as the ncoliberal project ~ the Washington consensus of deregulation, privatization, structural adjustmene progeammes (SAPs) and limited ‘Bovernment has consolidated its hold within key Western capitals and global institutions such as he International Monetary Fund aM, Embellshing this sceptical argument, orthodox Marxist analysis asserts that capitalism, as social ordet, has pathological expansionist logic, since to. maintain profits capital constantly has to exploit new markets. To survive, national capitalism must continuously expand the geographical reach of capitalist social relations. The history of the modern world order is the history of 4 Making Sense of Globalization Western capitalist powers dividing up and redividing the world into exclusive economic 2ones. Today, itis argued, imperialism hhas acquired a new form as formal empires have been replaced bby new mechanisms of multilateral control and surveillance, such a8 the G7 group of leading industrial powers (Canada, France, ‘Germany, Italy, Japan, UK, USA) and the World Bank. As such, the present epoch is described by many Marxists notin the language ‘of globalization, br instead asa new mode of Western imperialism ‘dominated by the needs and requirements of finance capital within the world's major capitalist states (Petras and Veltmeyer 2001), For many of a sceptical persuasion, geopolitics too is important. For the existing international order is constituted primarily by and through che actions of the major economic and militarily powerful states and cheir agents). Accordingly, the international ization of economic or political relations is argued to be contingent ‘on the policies and preferences of the great powers of the day, since only they have sufficient military and economic muscle £0 ‘create and maintain the conditions necessary for an open (liberal) international order (Waltz 1979). Without the exercise of American hegemony, so the argument suggests, the existing liberal world corder, which underpins the recent intensification of international intordependence, cannot be sustained (Gilpin 1987). In this respect, tlobalizaion is understood as litle more than Americanization, The globalist’s response Globalists reject the assertion that globalization isa synonym for Americanization ot for Western imperialism. While they do not deny that the discourse of globalization may well serve the interests, ‘of powerful economic and social forces in the West, che globalist ‘account emphasizes that globalization is an expression of deeper sevctual changes in the scale of modern social organization. Such changes are evident in, among other developments, the growth of 5Making Sense of Globalization ‘multinational corporations (MNCs), woe financial markets, the diffusion of popular culture and the salience of global environ- ‘mental degradation Central co this globalise conception is an emphasis on the spatial attributes of globalization. In seoking to differentiate global networks and systems from those operating at other spatial scales, such as the local or the national, the globalst analysis identifies tlobalization primarily with activities and relations which crystal- lize onan interregional or intercontinental scale (Geyer and Bright 1995; Castells 1996; Dicken 1998). This leads to more precise lytical distinctions between processes of globalization and processes of regionalization and localization, that i, the nexus of relations between geographically contiguous states, and the clus- tering of social elacons within sates, respectively (Dicken 1998). In this account, the relationship berween globalization and these other scales of social organization is not typically conceived in Inierarchical, or mutually exclusive, terms, On the contrary, the interrelations between these different scales are considered to be both fluid and dynamic. ‘The attempt to establish a more systematic spocfiation of the concept of globalization is further complemented by the signific- ance attached to history. This involves locating contemporary slobalization within what the Freach historian Braudel refers t0 4s the perspective ofthe ‘Tongue durée’ ~ that is, very long-term patterns of secular historical change (Helleiner 1997). As the existence of premodem world religions confirms, globalization is not only a phenomenon of the modem age. Making sense of ‘contemporary globalization requires placing it in the context of secular trends of world historical development (Modelski 1972; Hodgson 1993; Mazlish and Buulrjens 1993; Bentley 1996; Frank and Gills 1996; R.P. Clark 1997; Frank 1998). That development, as the plobalist account also recognizes, is punctuated by distinct: ive phases ~ from the epoch of world discovery tothe belle poque or the interwar period ~ when the pace of globalization appears to 6 ‘Making Sense of Globalization intensify of alernatively, sometimes slacken or reverse (Feeninder- Armesto 1995; Geyer and Bright 1995) To understand conten porary globalization involves drawing on a knowledge of what Uiteretiates these discrete phases, including how such systems land patterns of global inerconnectedness ae organized amd re product thee different geographies, and the changing configure {ion of power reacons. cording, the lobait acount stetches the concept of slobaliaton t embrace the idea ofits distinctive historical forms. This requires an examination of how pattens of sobalization have varied overtime and this of what is distinctive bout the curcent phase ‘Central to this plobalist interpretation isa conception of global change involving a sigifiant tamsformation of the organizing Principles of social lie and world order. Three aspects of this tend to be identified in the globalist iterate: namely, the ransforma: tion of teaditional pattems of socio-sconomicorganication, of the teeritoral principle, and of power. By eroding the constraints of space and time on patterns of social interaction, globalization Tents the poet of new modes of ranmatona cial organ ination, for instance global production network, etait networks, and regulatory regimes. Simultancously, it makes commonities in particular locales vulnerable to global conditions or devlon- iments, a5 the events of 11 September 2001 and is aftermath demonstrate Tn transforming both the context of, and the conditions for, social interaction and organization, globalization also involves 4 reordering of the relationship between territory and socio- economic and political space. Put simply, as economic, socal and political activites increasingly transend region and national on- tiers a direc challenge s mounted othe teitoral principle which underpins the modem state. That principle presumes a direct correspondence between society, economy and polity within an exclsive and bounded national teiory. Ba globalization disrapts this correspondence in s0 far as socal, economic and political 7‘Making Sense of Globalization activity can no longer be understood as coterminous with national territorial boundaries. This does not mean thae territory and place ave becoming irrelevant, but rather that, under eonditions of con temporary globalization, chey are reinvented and reconfigured, as new global regions and global cities emerge (Castells 1996; Dicken 1998), [At the core ofthe globalist account lies a concern with power: its instrumentalities, configuration, distribution, and impacts, Globalization is taken to express the expanding scale on which ower is organized and exercised. In this respect, it involves the reordering of power relations between and across the world’s regions such that key sites of power and those who are subject to them are often oceans apart. To paraphrase Jameson, under con: ditions of contemporary globalization the truth of power no longer resides in the locales in which it is immediately experienced (Jameson 1991). Power relations are deeply inscribed in the dynamics of globalization, as the discussion ofits implications for Politics and the nation-staze confirms. 2 The Reconfiguration of Political Power? Contemporary social life is associated withthe modeen state, which specifies the proper form of nearly all rypes of human activity, The state appears to be omnipresent, regulating the conditions of life from beth registration to death certification. From the policing of everyday activities to the provision of education and the pro ‘motion of health cate, the steady expansion of state power appears heyond question. Quancitatvely, che growth of the state, from the size of its budget to the scope of it jurisdiction i one ofthe few really uncontested facts ofthe lat century. On many fundamental measures of political power (for example, the capacity to raise taxes and revenues, the ability to produce weapons of mass destruction) states are, at least throughout most of the OECD world (the states belonging to the Organization for Economic Cooperation and Development), as powerful as if nor more powerful chan their predecessors (Mann 1997). The sceptics make a great deal ofthis, asthey do ofthe rise and dominance ofthe modem state in general Iris useful to rehearse this position, especially is many implications for che form and organization of political power, before examining the alternative globalist account,The Reconfiguration of Political Power? The formation and rule of the modern state ‘The claim: ofthe modern state to an overarching role i relatively novel one in human history, even in the place hat gave birth to it = Western Furope. A thousand years ago, for example, inhabit- ants of an English village knew litle of life beyond i, the village was the beginning and practically the end oftheie world. Villagers might have visited the nearest marker town but would scarcely have ventured further. They would probably have recognized the name of the king, although they would rarely, if ever, have seen him and they might well have had more contact with representa tives of the church than with any ‘political’ or military leaders (Lacey and Danziger 1999). And while S00 years later two forms ‘of political regime ~ absolute and constitutional monarchies — were beginning to crystallize across the European continent, Europe resembled more a mosaic of powers, with overlapping political claims and jurisdictions (Tilly 1975; Poggi 1978). No ruler or state was yet sovereign inthe sense of being able to claim supremacy ‘over a bounded territory and population. Modern states emerged in Western Europe and its colonial territories in the eighteenth and nineteenth centuries, although their origins dare back to the late sixtenth century (Skinner 1978: Hild 1995: chs 2-3). They distinguished themselves initially from eacliet forms of political rule by claiming a distinctive symmetry and correspondence between sovereignty, territory and legitimacy ‘The disillason of the concept of sovercignty was pivotal to this development, for it lodged a special claim to the rightful exercise of political power over a circumscribed realm ~ an entitlement to exclusive rule over a bounded territory (see Skinner 1978}. Moder states developed as nation-states ~ political odie, separ- ate from both ruler and ruled, with supreme jurisdiction over a demarcated territorial area, backed by a claim to a monopoly of coercive power, and enjoying legitimacy as a result ofthe loyalty 10 ‘The Reconfiguration of Political Power? or consent of thee citizens. The major innovations ofthe modesn nation-state ~ teritoilty that fixes exact borders, monopolistic control of violence, an impersonal structure of politcal power fad a distinctive claim to legitimacy based on representation = marked outs defining (and sometimes fragile) fates. The regi latory power of such states expanded throughout the modera perio, creating albei with significant national ferences) systems ‘of nifed rule cross demarcated terstries, centralized admins tion, concentrated mechanisms offical management and resource lstibution, new types of lawmnaking and law enforcement, pro- Fesioal sanding armies, a concentrated waemaking capacity and, concomitany, elaborate formal relations among states through the development of diplomacy and diplomatic institutions (. ‘Anderson 1974; Giddens 1985). “The consolidation of the power of leading European nation seats was part of a proces in which an international society of sats was create, fst in Europe itself, and then, a8 Europe expanded across the globe in diverse regions as Europe's demands famits colonies were pressed and resisted (Ferro 1997). This society of states laid down the formal rules which all sovereign and futonomous states would i principle, have wo adope if they were &o become fall and equal members ofthe international order of sates. The origins ofthis order are often traced to the Peace of Westphalia of 1648, the teats which concluded the Thicty Yeas" War sce Falk 1963; Krasner 1995; Keohane 1995). But the cule system codified at Westphalia best understood as having created 2 normative sajectory in international ls, which didnot receive its lest articulation uni the late eighteenth and erly inetenth century. Ie was daring this time that territorial soverignty, the formal equality of states, non-intervenion in the internal affairs of other recognized states, and state consent as the foundation Stone of international legal ageeemene became the core principles ‘ofthe modern international order (see Crawford and Marks 1998). OF course, the consolidation of this order across the world, uThe Reconfiguration of Political Power? paradoxically, would have to wait until the decline ofits earliost protagonists ~ the European poswers ~ and the formal process of decolonization after the Second World War. But it is perhaps fair to say that it was not until the late twentieth ceneury that the modem international order of states became truly global; for it ‘was only with the end of all the great empires ~ European, Amer- ican and finally Soviet ~ that many peoples could finally join the society of sates a independent political communities, The number of internationally recognized states more than doubled between 1945 and the ate 1990s co over 190 today (wwwstate.gov, accessed May 2002). The high point of the modern nation-state system was reached atthe end of the twentieth century, and it was but ‘essed and supported by the spread of new multilateral forms fof international coordination and cooperation, in international ‘organizations like the UN, and new international regulatory mech: anisms, such asthe universal human rights regime, Not only has the modern nation-state become the principal type of politcal rule across the globe, but it has also increasingly assumed, since decolonization and the collapse ofthe Soviet empire, particular political form; thai, ithas crystallized as representa ive or liberal democracy (Potter et al. 1997), Several distinctive waves of democratization have brought particular countries in Europe, such as Portugal and Spain, into the democratic fold, and brought numerous others closer to democracy in Latin America, Asia, Africa and Fastern Europe. OF course, there is no necessary ‘evolutionary path to consolidated liberal democracy; the path is fragile and littered with obstacles ~the hold of liberal democracy ‘on diverse political communities is sil tentative and open to setious challenge. Surveying the political scene at the start of the twenty-first century there are good reasons, argue the sceptics, for thinking of this period as the age of the modem state. For states in many places have increasingly claimed a monopoly of the legitimate use of force and judicial regulation, established permanent military 2 ‘The Reconfiguration of Political Power? forces a8 a symbol of statehood as well as a means of ensuring national security, consolidated tax-raising and redistributive mech- nisms, established nationviide communication infrastructures, Sought to systematize a national or oficial language, raise literacy levels and ereated a national schooling system, promolgated a national identity, and built up a diverse areay of national political, economic and cultural instititions, In addition, many states, west and east, have sought ro create elaborate welfare instivations, partly fs means to promote and reinforce national solidarity, involving, public health provision and social security (Ashford 1986). Mote fver, OECD states have pursued macroeconomic management strategies, sifting from Keynesian demand management in the 1950s to 1970s to extensive supply-side measures from the ealy 1980s, in order co help sustain economic growth and widespread employment. Success in these domains has often remained elusive, but the economic strategies and policies of Western nation-states have been emulated in many regions of the word It certainly can be argued that much of this ‘emulation’ has heen more the result of necessity than of choice. Decolonization clearly did not create a world of equally free states. The influence ‘of Western commerce, trade and political organization outlived direct rule, Powerful national economic interests have often been able to sustain hegemonic positions over former colonial rerttores through the replacement of ‘a visible presence of rule’ with the ‘invisible government” of corporations, banks and international ‘organizations (the IMF and the World Bank, for example) (Ferro 1997: 349-50). Furthermore, interlaced with this has been the sedimented interests and machinations of the major powers, jostling with each other for advantage, if not hegersonie status {Bull 1977; Buzan, Litle and Jones 1993). The geopolitical roles of individual stares may have changed (for example, he shifts in the relative position of the UK and France during the twentieth ‘century from global empires to middle-anking powers), but these changes have been accommodated within the prevailing structures 2BThe Reconfiguration of Political Power? of world order ~ the modern state system and capitalist economic relations ~ which have governed the strategic choices open ‘politcal communities. The restricted nature of these choices has become clearer with the collapse of Soviet communism and the bipolar division of the world established during the Cold Wae, Accordingly, the development programmes of states in sub Saharan fica, Asia and Latin America have tended to acquire a uniform shape ~ market liberalization, welfare cutbacks, minimal regulation of private capital flows, deregulation of labour markets ~ and to be governed by political and economic necessity rather than by publi desig. ‘Yer, however limited the actual control most states posses over their ferttores, they generally fercely protect their sovereignty — their entitlement to role ~ and their autonomy ~ cher capacity to choose appropriate forms of political, economic and social develop ment. The distinctive ‘bargains’ governments ereate with thee citizens remain fundamental to theie legitimacy. The effective choices of states vary dramatically according to their location in the hierarchy of states, but, in the age of nation-states, the inde- pendence bestowed by sovereignty, principle, sill matters greatly toall states. Modern states are politcal communities which create the conditions for establishing national communities of fate; and fev if any, are willing to give this up. Although national political choices are constrained, they still count and remain the focus of intense public deliberation and debate. According to the sceptics, national political traditions are stil vibrant, distinctive political bargains ean stil be struck between governments and electorates, and states continue, given the political will, ro rule. The business ‘of national politics is as important as, f not more important than it was during the period in which modern states were fist formed, The competence with which tis busines is performed is of great significance to all who live in a bounded community. Building strong state capacities in developed countries, and nurturing these capacities where they are fragile or non-existent in many develop 4 ‘The Reconfiguration of Political Power? ing countries, is the primary domestic challenge in contemporary politics if competence ~ in economic, social and welfare policies “is to be attained, and national objectives mer (see chapter 8, pp. 110-12), The implications for international affairs of thinking about the state asthe primary element of politics have been explored most systematically by ‘realism’ within international relations theory (see Morgenthau 1948; Wight 1986; S. Smith 1987), In the context cof a global states system, realism conceives ofthe state asa unified ‘entity whose primary purpose isto promote and defend is national interest. At its simplest the realist positon views the state as a ‘chicle for securing national and international order through the ‘exercise of national power. In order to survive and develop, states, must pursue their aims ina highly uncertain and competitive polit: ical environment. Accordingly, realism posits that the system of sovereign states i inescapably anarchic in character; and that this ‘anarchy forces all tates, in the inevitable absence of any supreme arbiter to enforce moral behaviour and agreed international codes, to pursue power polities in order to attain their vital interests, This realpolitik view of tates has had a significant influence on both the analysis and practice of international relations in recent times; for it offers a clear prima facie explanation of the chaos and disorder of interstate affairs, particulaely in the ewentiech ‘century. On this account, the modern system of sates sa “imiting factor’ which will always thwart any attempt to conduct interna tional relations in a manner which transcends the politics of the sovereign state. In this regard, the reassertion of the might of Amezican military power after the attacks of 1 September isthe inevitable result of both the provocation consticuted by the attack fon the US and the power logic of international affairs, which fequites that such an assaule be met with clear and, if possible, Uecisve retaliation. A powerfl state, in this ease a hegemonic ower, must act tO sustain its position and defend its national 15‘The Reconfiguration of Political Power? Realism questions the idea that che construction oF maintenance of international order can transcend the logic of power polis International order is the order produced by the most powerful states. This understanding reinforces a sceptical attitude towards the claim chat genuine global cooperation and cobust international agreements could ever exist in a system of sovereign states. This scepticism is supported by the state centric conception of order as interstate oder: states are the primary actors in world affairs, To the extent that other actors have an impact on global politcal and economic conditions, cis occurs within a framework constituted and dominated by states (Wale: 1979: 94; Gilpin 1981: 18). In addition, imernational institutions are interpreted cither as inef- fectual or a largely epiphenomensl, that is, devoid of autonomous causal power (Strange 1983s Meatshoimer 1994). States matter, above all other political entities, and world order is decisively shaped by the most powerful states. To date, the continuity in these structures is much more significant than any contemporary political developments Towards a global politics Globalists would generally contest many aspects of the above account. Thei argument runs as follows. The traditional concep tion of the state, in which itis posited as the fundamental unit of world order, presupposes its relative homogeneity, tha is, that it Js a unitary phenomenon with a set of singular purposes (Young, 1972: 36). But the growth of international and transnational organizations and colletivites, from the United Nations ancl its specialized agencies to international pressure groups and social movements, has altered the form and dynamics of both state and civil society. The state has become a fragmented policy-making arena, permeated by transnational networks (governmental and 16 ‘The Reconfiguration of Political Power? non-governmental) as well as by domestic agencies and forces Likewise, the extensive penetration of civil society by transnational forces has altered its form and dynamics, ‘There has been a shift in the narure and form of political lie ‘The distinctive form this has taken in the contempocary period is the emergence of ‘global poitcs'~ the increasingly extensive form ‘of political networks, interaction and rule-making activity. Polit- ical decisions and actions in one part of the world can rapidly acquire worldwide ramifications. Sites of political action and/or decision-making can become linked through rapid communications into complex networks of political interaction. Associated with this ‘stretching’ of polities is an intensification or deepening of slobal processes such that ‘action at a distance’ permeates the social conditions and cognitive worlds of specific places or come munities (Giddens 1990: ch. 2). As a consequence, developments atthe global level ~ whether economic, social or environmental ~ can acquire almost instantaneous local consequences, and vice The idea of global politics challenges che traditional distinctions beeen the ~domesticintemnationaly_terrtorialinon-trrtorial, insidefoutsde, as embedded in conventional conceptions of inter state politics and ‘the politcal” (see Held et al, 1999: chs 1, 2 an 9), Iealso highlights the richness and complexity of the intercon- nections which transcend states and societies in the global order. ‘Moreover, global politics today, the globaliste argue, is anchored ‘ot justin traditional geopolitical concerns but also in a large diversity of economic, social and ecological questions. Pollution, drugs, human rights and terrorism are among an increasing number ‘of transnational policy issues which cut across territorial jurisdic: tions and existing political alignments, and which require interna tional cooperation for thee efecive resolution. Nations, peoples and organizations are linked, in addition, by ‘many new forms of communication which range across borders, "7The Reconfiguration of Political Power? ‘The digital revolution in microelectronics, in information techno logy and in computers has established virtually instantancous ‘worldwide links which, when combined with the technologies of the telephone, television, cable, satellite and jet transportation, hhave dramatically altered the nature of politcal communication. ‘The intimate connection between ‘physical setting socal situation’ and polities which distinguished most politcal associations from premodern to modern times has been ruptured. The speed with Which the events of 11 September 2001 ramified across the world and made mass terrorism a global issue is one poignant example The development of new communication systems generates a world in which the particularities of place and individvality are constantly represented and reinterpreted through regional and ‘lobal communication neeworks. But the relevance of these systems ‘goes far beyond this, for they are fundamental to the possibilty of ‘organizing political action and exercising political power across vase distances (sce Deibert 1997). For example, the expansion of international and transnational organizations, the extension of international rules and legal mechanisms ~ their construction and ‘monitoring ~ have all received an impetus from these new com- ‘munication systems and all depend on them as a means to further their aims. The present era of global politics marks a shift rowards a system of multilayered regional and global governance (see chapter 5}. This can be illustrated by a number of developments, including, most obviously, the rapid emergence of multilateral agencies and ‘organizations. New forms of multilateral and global politics have been established involving governments, itergovernmental organ- izations (IGOs) and a wide variety of transnational pressure groups and international non-government organizations (INGOs). At the beginning of the twentieth century there were just 37 IGOs and 176 INGOs, while in 2000 there were 6,743 GOs and 47,098 18 The Reconfiguration of Political Power? INGOs (Union of International Associations 2001).* In addition, there bas been a very substantial development in the number of intenational treaties in force, as wel as in the number of interna tional regimes, altering the situational context of states (Feld et 1 1999: chs 1-2), According to Ku (2001; 23), in the period 1648 to 1750 there were 86 multilateral treaties, whereas in the years 1976 to 1995 there were over 1,600 treaties, of which 100 ‘reated international organizations. To this pattern of extensive political interconnectedness can be added the dense web of activity of che key international polcy- making forums, including the summits ofthe UN, G7, IMF, World ‘Trade Organization (WTO), European Union (EU), Asia-Pacific Economic Cooperation (APEC) and MERCOSUR (the Southern (Cone Common Market—in Latin America) and many other offical and unofficial meeting. In the middle of che nineteenth century there were two or three interstate conferences ot congresses per annum; today the number corals over 4,000 annually. National _government is increasingly locked into an array of global, regional and multilayered systems of governance ~ and can barely monitor ital letalone stay in command. Foreign policy and domesti policy have become chronically intermeshed, making the national coord- ination and control of government policy inereasingly problematic, Ar the regional level the EU has, in remarkably hte time taken trope from the disaray of the Second World War to a world in which sovereignty is pooled across a growing number of areas of common concer. Judged in the context of state history, iis, for all its flaws, a remarkable political formation. In addition, there an onpnization is ieergoveramentl fit rested by the signature of an apsementheween [ate he) govemmentsengndcing oations among ‘hem. The 2000 figure fr IGOs and INGOs has to etree with sone caution hecnue i inde iacove or dead organizations. See Union of Isnt ‘Aociion 200; append 3 19‘The Reconfiguration of Political Power? ‘The Reconfiguration of Political Power? has been a significant acceleration in regional relations beyond regulation of multinational corporations, and through business Europe: in the Americas, Asia-Pacific and, to a lesser degree, in contracting, arbitation and other elements of lex mercatoria (the Africa. While the form taken by this type of regionalism is very global framework of commercial law) (see Teubner 1997). Global dlifferent from the model ofthe EU, it has nonetheless had signe. public policy networks involving public and private actors are ant consequences for political power, particularly in the Asia- reshaping the basis on which national and international rules are Pacific which has seen the formation of the Association of South made and regulatory systems operate; and the results cannot ast Asian Nations (ASEAN), APEC, the ASEAN Regional Forum easily be fitted into the traditional distinetion between national (ARF), the Pacific Basin Beonomic Council (PBEC), and many and international law (Jayasuriya 1999; Reinicke 1999; Slaughter ‘other groupings. Furthermore, as regionalism has deepened, so 2000), There is no longer a strict separation between public and interregional diplomacy has intensifed as old and new regional private, domestic and international legal procedures and mecha ‘groups seek to consolidate their relations with each other. In this sms; models of lawimaking and enforcement no longer simply fit fespec, regionalism has not been a barrier to political globalization the logic of the states system, but, on che contrary, has been a building block for it (see Hetene Interlaced with these political and legal transformations are 1998} changes in the world military order. Few states, except pethaps ‘There has, moreover, been an important change in the scope forthe US and China, can now solely contemplate unilateralism and content of international law. Twentieth-century forms of or neutrality as a credible defence stategy. Global and regional international law ~ from the law governing war, to that concern- security institutions have become more salient as acollectivization ing crimes against humanity, environmental issues and human of national security has evolved (Clark 2001). Buti isnot just the rights - have created components of what can be thought of asa insittions of defence which have become multinational The way emerging framework of ‘cosmopolitan law’, law which circum: military haedwate is manufactured has also changed, The age of scribes and delimits the political power of individual states (Held “national champions’ has been superseded by a sharp increase 2002}. In principle, states are no longer able to trea their citizen in licensing, co-production agreements, joint ventures, corporate as they think ft. Although, in practice, many states will violate alliances and subcontracting (Held tal. 1999: ch. 2). "This means these standards, nearly all now accept general duties of protection that few countries ~ not even the United States ~ can claim, in the and provision in their own practices and procedures (Beetham globalist view, to have a wholly autonomous military production 1998), ‘capacity. Such a point can be highlighted in connection with key Another notable trend is the growing enmeshment of public civil technologies, such as electronics, which are vital to advanced and private agencies in the making of rules, che secting of codes weapons systems, and which are themselves the products of and the establishment of standards. Many new sites of rule: highly globalized industries, ‘making and lawmaking have emerged, creating a multitude of The paradox and novelty of the globalization of organized “decentred law-making processes’ in vatious sectors of the global violence is that national security today is becoming a collective or ‘order (Teubner 1997: xii), Many of these have come into exise- multilateral affair. Moreover, states no longer have a monopoly ence through processes of se-validation in relation to technical of fore, asthe growth of transnational terorism and the events standardization, professional role production and transnational of 11 September demonstrate. Private armies and the private 20 aThe Reconfiguration of Political Power? ‘The Reconfiguration of Political Power? provision of security playa significant role in many regions ofthe gn sats to develop marke rendly polices, including restricted Hobe. For the fist ime in history, the one thing that did most to pub det and curbs on expenditure, especially on social goods five modern nation-states a focus anda purpose, chat is national ower levels of direct eaxation that are internationally compete security, and chat has been at the very art of modern statehood ie; privatization and labour market deregulation. The decisions of as understood from Hobbes onwards, can now be realized effet pyar investors to move private capital across borders can threaten ively onl if nation-states come together and pool resouee, tech: welfare hades, taxation levels and other government polices nology, inelgence, power and authority. Tele the autonomy of states is compromised as gover ments Even in the sphere of defence and arms production and manu- find. it increasingly difficult to pursue their domestic agend: facture, the notion ofa singular, discrete and delimited politcal wiyhout cooperating with other agencies, politcal and economic community appears problematic. Thi poses many fundamental Yhove and beyond the state ‘westions about how to think about political community and * in hin cones, many ofthe tational domains of tate activity governance in our increasingly global age. For instance, in the and responsibility (defence, economic management, health and Context ofthe proliferation of weapons of mass destruction, che jw and order) can no longer be served without institutonaizing demarcation between allies’ and ‘enemies’ becomes blazed. This moliateral fotos of collaboration. As demands on the state have distinction made perfect sense in the period of massed battle, ‘when barlegrounds themselves were elativey contained. But under conditions of modern technological warfare, the impact of a war tan be as devastating fora friend” asic can be for an ‘enemy’. With the increase in global interconnectedness, the scope of strategic policy choices available to individual governments and the effectiveness of many traditional policy instruments tend to decline (see Keohane and Nye 1972: 392-5; Cooper 1986: 1-22) “This tendency occurs in the frst instance, hecause of the growing ineelovance of many border controls ~ whether formal or informal = which traditionally served to restrict transactions in goods and services, production factors and technology, ideas and culearal inerchange (see Morse 1976: chs 2-3). The resule isa shift in che relative costs and benefits of pursuing different policy options States suffer a further diminution in power because the expansion of transnational forces reduces the control individual governments can exercise over the activities oftheir citizens and other peoples. For example, the increased mobility of capital, induced by. the development of global financial markets, shifts the balance of power between markets and states and generates powerful pressure 22 increased in the postwar years, the state has been faced with a ‘whole series of policy problems that cannot be adequately resolved Yrithout cooperating. with other states and non-state actors {Keohane 1984; McGrew 1992). Accordingly, individual states on their own can no longer be conceived of as che appropriate polit teal units for cither resolving key policy problems oF managing effectively a broad range of public functions. These arguments suggest that the modern state is increasingly cembedded in webs of regional and global interconnectedness per reated by supranational, integovernmental and transnational ores, and unable to determine is own fate. Such developments, itis also contended, challenge both the sovereignty and legitimacy ‘of staes, Sovereignty is challenged because the political authority fof states is displaced and compromised by regional and global power systems, politcal, economic and cultural State legitimacy Isat issue because, with greater regional and global interdepend ‘ence, states cannot deliver fundamental goods and services to their ‘tins without international cooperation, and even the later ean he awit inadequate in the face of global problems ~ from global warming to the volatile movements of the financial markets ~ 2B‘The Reconfiguration of Political Power? which ean escape political regulation, To the extent that political legitimacy depends on comperence and the ability to ‘deliver the ‘goods’ to citizens, it is under increasing strain. Globalization, conclude the globaliss, is eroding the capacity of nation-sates to act independently in the articulation and pursuit of domestic and international policy objectives: the power and roe of the territorial nation-state is being transformed. Despite what the sceptis claim, political power is being reconfigured, 24 3 The Fate of National Culture For long periods of human history most people have lived out thelr lives in a web of local cultures. While che formation and expansion ofthe gréat world religions and premodern empires carried ideas land beliefs across frontiers with decisive social impacts, the most important vehicle for this, inthe absence of dect military and political intervention, was the development of networks of ruling ‘lass culture (Mann 1986). At points these bit deeply into the fragmented mosaic of local cultures, but for most people, most of the time, cheir daily lives and routines persisted largely unchanged. Prior tothe emergence of nations and nation-states, most cultural communication and interaction occurred either between elites or at very local and restricted levels. Little interaction took place bberween the court and the village It was not until the eighteenth century that a new form of cultural identity coalesced between these two extremes. The story of national culture: the Sceptic’s resource “The rise of the modern nation-state and nationalist movements alteced the landscape of political identity. The conditions involved 25.‘The Fate of National Culture inthe eration ofthe moder sate wer often alo the conditions in at snes of mano As ate makers ough 0 wi ere oli power i ceumserbd trite ene denen power asthe cae to pen and a of sl ean with ir sbi ose ogg). Te conalzaon of power spawned the 1385 Mann rs on the ruled for resources, humana eee er repo was ceed teen overnots and aoc Gia he temo Of thi exchange” bee conte over dear and admins regurenent fe Ieee ce! soci elation a day ody aie dr a ol became sare the membership shared cada remy, wih common fe, Although the nate Fo or atny ws nly Ofeh aE BO HOHE So ove time Theor 1977, Tame 1986; Mann 997 7 consist ofthe teas and naraies ofthe non anal hse ike oman Tso lag the and natin Naren andpovenent treat a new ey re ene the evanceent of state power and the eae al pbey really 1992; the creation, 82 coe eptem, of common amcor of undersoding a a paces wo ean the proses of He cae nation (Galle 19K; te emerence of oe coor anaes parla tew mea (ch ar ee independent publsers and fee make fr i re acd nel comminkaton and Fo ergata Nistor yt ad italy tH 4 aa ied oman hy Anderson 1983); an big o8 aaa cof homeland and derpy rooted memeriey the 2 aun fc comnins wa a onmon pac cue spel a gi and de and an economy eeatng sil star uintnembers wih bounded texery (Sth 1986, 195) 26 The Fate of National Culture Even where the establishment of « national identity was an explicit political projece pursued by elites, it was rarely their com- plete invention, That elites actively sought ro generate a sense of ‘nationality and a commitment tothe nation ~ a ‘national commun ity of fate’ — is well documented. But ‘it does not follow’, as one ‘observer aptly noted, that such elites invented nations where none existed’ (Smith 1990: 180-1). The ‘nation-to-be” was not just any large social or cultural entity; rather, it was a ‘community of history and culture’, occupying 4 particular territory, and often laying claim toa distintive tradition of common rights and duties for its members. Accordingly, many nations were “built up on the basis of premodern “ethnic cores” swhose myths and memories, values and symbols shaped the culture and boundaries of the hation that modern elites managed to forge” (Smith 1990: 180s and see Smith 1986). The identity that nationalists strove to uphold ‘depended, in significane part, on uncovering and exploiting a com: rmunity’s‘ethno-history” and on highlighting its distinctiveness in the world of eompting political and cultural values (ef. Hall 1992) ‘OF cours, the construction of nations, national identities and nation-states has always been harshly contested and the conditions for the successful development ofeach never fully overlapped with those of the others (see Held etal. 1999: 48-9, 336-40), Sates are, a8 noted previously, complex webs of institutions, laws and practices, the spatial reach of which has been difficult ro secure and stabilize over fixed territories, Nations are cros-lass collect ites which share a sense of identity and collective political fate “Theie bassin real and imagined cultural, linguistic and historical commonaltis is highly malleable and fluid, often giving rise t0 tliverse expressions and ambiguous relationships to states, National ism is the force which links states o nations it describes both the complex cultural and psychological allegiance of individuals to particular national identities and communities, and the project of tstablishing a state in which a given nation is dominant, The fixed borders of the modern state have generally embraced a diversity 27‘The Pate of National Culture of ethnic, cultural and linguistic groups with mixed leanings and Sllegiances. The relationships between these groups, and between. Such groups and states, have been chequered and often a source Of bitter conflict. Inthe late nineteenth and twentieth centuries, rationalism became a force which supported and buteressed state formation in certain places (or example, in France) and challenged (or refashioned it elsewhere (for instance, in multiethnic states such ‘as Spain or the United Kingdom) (see Held etal. 1999: 337-8 Appadiurai 1990). However, despite the diversity of nationalisms and their poli ical aims, and the fact that most national cultures are less than 200 years old, these new political forces created fundamentally ‘novel terms of political reference in the modern world ~ terms of reference which appear so well rooted today that many, if not the ‘overwhelming majority of, peoples take them as given and practic ally natural (f. Barry 1998). While earlier epochs witnessed cul ‘ural institutions that ether stretched across many societies (world religions) or were highly localized in cei form, the rise of nations, nationalism and nation-states led to the organization of cultural Tite along national and territorial lines, In Burope this assisted the ‘consolidation of some older states, the creation of a plethora of few nation-states and, eventually, the fragmentation of mulina- tional empires (such as the Austro-Hungarian Empire). he potency. ofthe idea ofthe nation’ was not lost on the rest of the world and rotions of national culture and nationalism spread ~ partly as a result of the expansion of European empires themselves ~ to the “Americas, Asia, Africa and the Middle East. Ths helped fuel inde pendence’ movements, cementing once again a particular link between culture, geography and political freedom. “The struggle for national identity and nationhood has been so extensive that the sceptics doubt the later can be eroded by transnational forces and, in particular, by the development of a fo-alled global mass culture. In fact, advocates of the primacy fof national identity emphasize its enduring qualities and the deep 28 ‘The Fate of National Culture appeal of national cultures compared to the ephemeral and esata duals ofthe products ofthe transnational media corporations hamburgers, coke and pop idls (sce Smith 1990, and Brown 1995}. Since national cultures have been eentraly concerned with éonsolidating the relationships herween politcal identity, sel derermination and the powers of the state, they are 20d wil remain, the sceptics suggest formidaly important sources of tihcal and political motivation (see chapter 6). Morcover, the new electronic networks of communication aod information technology which now straddle the world help intensify and re. Kul adinal forms and sour of natal He, restora thee influence and impact. These networks ithas been aply noted, ‘make posible a denser, more intense interaction between mem: bers of communities who share common cultural characteristics, notably languages and this provides a renewed impetus to the reemergece of enc communities and ther nationalisms (Sith 1980-175), Furthermore, the sceptics argue, while new communication systems can create access to distant others, they also generate an warenest of difference; thai, ofthe incredible diversity i fe Sryles and value orientations (ee Gilroy 1987, Robins 1991; Massey and Jess 1995) Although thie awareness may enhance caltural understanding, i often leads to an accentuaion of what is distinctive and idiosyncratic further fragmenting eultral if. Awareness ofthe other by no means guarantees intersubjective agreement, a the Salman Rushdie affair only too clearly showed {see Parekh 1989), Moreover, although the new communication industries may generate a language oftheir own, a particular st of values and consumption parterns, they confront & multiplicity of languages and discourses through which people make sense of thee lives and cultures (J.B. Thompson 1990: 3130) The rast rajorty ofthe products of the mass-market cultural eorporations which flood across borders originate within the US and Western Societies But the avalable evidence, according to the sceptics 29‘The Fate of National Culture suggests that national (and local) cultures remain robust; national institutions continue in many states co have a central impact on public ife; national elevision and radio broadcasting continues to enjoy substantial audiences; the organization of the press and news coverage retains strong national roots; and foreign cultural pro ducts are constantly read and reinterpreted in novel ways by national audiences (Appadurai 1990; Miler 1992; Liebes and Kacz 1993; J.B. Thompson 1995). Finally, defenders of national culture point out that there is no ‘common global pool of memories; no common global way of thinking; and no “universal history” in and though which people ‘can unite. Thece is only a manifold ser of political meanings and ‘ystems through which any new global awareness must struggle for survival (see Bozeman 1984). Given the deep roots of ethno- histories, and the many ways they are often refashioned, this can hardly bea surprise. Despite the vast flows of information, imagery and people around the world, there are few signs of 2 universal or ‘global culture in the making, and few signs of a decline in the Political salience of nationalism, Cultural globalization Globaliss take issue with most of the above, although they by no means dismiss the significance of ‘the national question’. Among, the points they often stess isthe constructed nature of national culture: if these cultures were created more recently than many fare willing t0 recognize, and elaborated for a world in which nation-states were being forged, then they are nether immutable for inevitable in a global age. Nationalism may have been func tional, perhaps even essential, for the consolidation and develop iment ofthe modern state, but it s today at odds with a woeld in Which economic, social and many political Fores escape the juris diction of the nation-state. 30 The Fate of National Culture Given how slow many popl' dete ofen are to change, and the song deste many people feel to (taser contol ore the forces which shape theives, the complexities of national dentty politics ae loblins concede likly persis. bat such pli Wil not deliver pliteal control and accountability over eegional {nd global phenomena unlew a diction made beween clara tavionaism ~ the conceptual, dicrive and symbole resoares tha are fundamental to people’ lives ~ and poltical nationalism, ‘he aserion ofthe exclusive poll poy of atonal identity ‘nd naional ners. Theatr cans deliver many sought ater publi goods and values without ronal nd lobal collaboration. Only global poll oulok can utimately accommodate alo the politcal chalege of more ll era, marked by overlap communities of fate and mallayered (oe, national, regional an hal) ols. there any reason obese ha such an outlook might emerge? Not only ate thete many sources for such an ut Took inthe present period bu, lobalists would srg, there ae ecedents 0 be found inthe istry of che modes ste tel ‘hile the vse of nationstates and nationalist projects iten- sed cultural formation and interaction within circumscribed Boers, the expansion of Earopean powers overseas helped en trech new for of cultsral glabalation with imovatons in transport and commenicatons, notably reglasized mechanical transport and the tegraph. These tecnologia advances helped the West expand and enabled the secular philosophies which merged inthe lat cightcenth aad ninetonth centuries ~ expe ily scene, iberali and socials eo diffuse and wanton ‘he cultural context ofslmost every society on the plane, Contemporary poplar culture may not yet have had 2 social impt to match this bi global argu, she sheer sae inten iy sped and volume of global cultural communion today dre unsurpassed, Fr instance, the value of cultwal exports and imports has increased many #mes over the lst few decades there has Been huge expansion inthe trade of tension him and 3‘The Fate of National Culture g 288 {ole 32. Ton fifteen cova in ntait to atyoar-ae 1999 aoe ae couey es ions 3 Slade } 1 Usa, 1108 g § 833 2 Japan 182 He /8 § 868 a ai UK 140 g 2 g2¢ z 4 Canada 133 B)Elg 2 sae) oF : Germany 23 sls i é inate ee g{2|® & #88] 32 > Brat és : 3 Gina 83 £)8\e 2 egal as 5 France 7 glf)& 2 588) ° South Korea 53 Blels = aga| $f " Taiwan 48 g|8)8 = S85) fe R tealy 47 3 gee B ‘Sweden 40 e(8)g 8 age) ety 4 Netherlands 23 : =| ee 8 Spain ase i 8/e = ee*lie Source: Comper ndutyAtmanac wonn.ca.com laced Ge. 200 lg ag? lt s|alg = e3°/3 Tas piccicie ears eogdeiacia Gs es 3|- sli tensiying international competion and decinng audience shares 2/8) ¥ Rat) 3 and the figures for connections and users of the internet are 2 eli ‘growing exponentially as communication patterns increasingly 5/82 = agt|! {tanscend national borders (UNESCO 1950, 1986, 1989; OED ei |% e\é 1997), Tables 3.1 0 34 illastrate the spread of communication a infastroceres, this wage andthe trad lvls in major cate 3| ly 338 peoduets.” The accelerating although uneven, dffosion of radio, é S522) 8 television, the internet, satellite and digital technologies has made gz £ Bed instant communication possible across large parts of the world, . bila ‘As result many national controls over information have become : BEI 5 lcs nite eres gees gee eee ee 3 Hilt Shown nie ad 3.3 33The Fate of National Culture ‘Table 23. Top fifteen counts in internet penetration rate at yearend 1999) sersi,00 population rank Country 1 (canada 42820 2 Sweden 4145 3 Finland 408.08 4 us 406.48 5 feeland 403.85 é Denmark 39597 > Norway 37959 8 Ausivalia 30327 5 Singapore n077 0 New Zealand 264.90 n Netherlands 2ss55 2 Switzerland 245.81 3 United Kingdom 236.41 “ Taiwan disa 6 Hong Kong 21281 Average of top 15 countries 32816 Worldwide average 45.75, Source: Computer Industry Amana, www.ca.com (aceted Ot. 2000, ineffective. People everywhere are exposed to the values of other cultures as never before (Silverstone 2001: 15-17). An example of this is the number of people who view Baywatch: over 2 billion people are estimated to have watched each episode, testifying to a rowing interest in water sports and Silicone Valley lifestyles! While Kinguistic differences continue to be a barter to the spread of TV. programmes and other cultural products, che global dominance of English provides a linguistic infrastructure especially in business, polities, administration, seience, academia and computing) ss pow tefl as any technological system fo taming ideas and cultures. 4 eae: ex lg gig} aie : 2 es g 5/8 ele é Table 3.4 inteinetional trade in cultural goods by category, 1900 and 1998 2 z E i i 2 23 Sogo 238 ae vas92 25339 37 ‘985 mass 3a740 28,588 70 7 193 2a 78 218 Da i i 160 ; 3 z : i z 199 16a vr4ar2 100 1098 2 3 35 z é ime inthe visual a i ingles than # percent of trade n developing cours dominate the morte te quarter oF the proporuon of sporting Sood a | ows of selected cultura goods 1500-58, Eaceotve te for Sati ‘Summary. see wor saeco cgienvpubbo Mtn inbooke ether printed ma there has bean a major sractural change nthe of ctrl rage Whe mate goods continue ‘mpors and export), ther hasbeen tse ; ‘ : 5 i 3 é . i i i tegen e z £“The Fate of National Culture Beyond its scale, what is striking about today’s cultural slobalization is that itis driven by companies, not countries. Corporations, argue the globalists, have replaced states and theo Gracies a8 the central producers and distributors of cultural glob~ lization, Private international institutions are not new, but their inass impact is, News agencies and publishing houses in previous ‘ras had'a much more limited impact on local and nasional cultures fhan the consumer goods and cultural products of today's global corporations. For the plobalists the existence of new global communication ystems is transforming relations between physical locales and. Social eizcumstances, and altering the ‘situational geography’ of political and social life (Meyrowitz 1985). In these circumstances, {he traditional link between physical setting” and social situation’ is broken. Geographical boundaries are overcome as individuals tnd collectivities experience events and developments far afield. Morcover, new understandings, commonalities and frames of ncaning are elaborated without direct contact between people. As Such, they ean serve to detach, or disembed, identities from par ticular times, places and traditions, and can have 2 ‘plucalizing impact’ on identity formation, producing a variety of hyphenated Idenates which are ‘less fixed or unified’ (Hall 1992: 303, 309). ‘While everyone has a loca life, the ways people make sense ofthe world are now increasingly interpenetrated by ideas and values from many diverse settings. Hybrid cultures and transnational tnedia corporations have made significant inroads into national {Cultures and national identities, The cultural postion of the modern State is transformed as a cesul (ef. McLuhan 1964; Rheingold 1995), "Those seates which seek to pursue rigid closed-door policies on information and culture are certainly under threat from these new ‘Communication processes and technologies, and itis likely that the conduct of socio-economic life everywhere will be transformed, by them as well, Cultural flows ae transforming the polities of 36 The Fate of National Culture Raler1998 andsechaper ste AK PS 74 A Global Economy? Although the debate about economic globalization has produced ‘voluminous literature, the points of contention cluster around four fundamental questions. Pu simply, these are: «wheter ing bal economy inthe making 2 REE ELEC Tacoma apa, cen by te ‘hed eel’ aing ol aco the be ae ome lain reise to roe and ne cater a tennant «RS gekeTSApnicon pelted of nona econo poly aad the well ate “These four questions preoccupy both globalsts and sceptics. The persistence of national economies “The sceptical position ceflets a cautious interpretation of contem- orty alba economic trends, Rher than developing into aly Slobal economy, the present world economy, the steptis angus, Judged in historical terms, remains only loosely integrate. By con parison withthe belle paque of 1890-1914, both the magnitude 38 A Global Economy? and geographical scale of lows of trade, capital and migrants are ‘curently of a much lower order (Gordon 1988; Weiss 1998; rst and Thompson 1999}, Although gross flows of capital between the world’s major economies are largely unprecedented today, the actual net flows between them are considerably less than at the start ofthe twentieth century (Zevin 1982; Watson 2001), Many of these economies are les open to trade than in the pastas ate many. developing couneres, making them les dependent on foreign capt (Hoogvelt 2001; First and Thompson 1999}. In addition, the scale ‘of nineteenth-century migration across the globe dwarfs that of the present eta by a significant magnitude (Hirst and Thompson 1999). In all these respects, the contemporary world economy is significantly less open and globalized than its nineteenth-century counterpart ris als, argue the sceptics, sigificanty less integrated If economic globalization is associated with the deepening integration of separate national economies, such tht the functional ‘organization of economic activity transcends national frontiers, then a global economy could be said to be emerging, Ina globalized economy, world marker forces would be expected (theoretically) to take precedence over national economie conditions asthe real value of key economic variables (production, prices, wages and interest rates) responds to global competition, Just as local econo ies are submerged within national markets, 0, suggest the strong, sceptical positon, the real est of economic globalization is whether ‘world tends confirm a pattern of global economic integration, thats, the existence ofa single global market (Hirst and Thompson 1999) In this respect, itis argued, the evidence falls far short of ‘the exaggerated claims of many globalists. Even among the OECD states, undoubtedly the most interconnected of any st of economt ies, the contemporary trends suggest only a limited degree of ‘economic and financial integration (Feldstein and Horioka 1980; [Neal 1985; Zevin 1992; Jones 1995; Garrett 1998). Whether in respect of finance, echnoiogy, labour or production, the evidence fails to confirm either the existence or the emergence of a single 39 |A Global Economy? slobal economy (Hirst and Thompson 1999). Even multinational Corporations, its concluded, remain predominantly the captives fof national or regional markets, contrary to their popular portrayal fs “footloose capital” (Tyson 1991; Ruigrok and Tulder 1995; Rogman 2001), ‘Rather than a global economy, the sceptics interpret current trends a8 evidence of a significant, but not historically unpre cedented, internationalization of economic activity, that is, an intensification of linkages between discrete national economies. Internationalzation complements rather than displaces the pre~ dominantly national organization and regulation of contemporary economic and financial activiy, conducted by national or local public and private entities. To the sceptics all economics is prin Eipally national or local. But even the wend towards iternation- Slization repays careful seruiny, for it betrays @ concentration of trade, capital and technological flows between the major OECD states to the exclusion of much of the rest of the world. The ‘Sructure of world economic activity is dominated (and increasingly 0) by the OECD economies and the growing links between them [Jones 1995). By far the largest proportion of humanity remains ‘excluded from the so-alle global market; there isa growing gap between North and South, Drawingon a range of etisical evidence, Hloogvelt and others argue that by historical standards, the world economy is imploding rather than expanding its reach, Measured in terms of trade, investment, and migratory flows, the core ofthe ‘world economy is now less integrated with the periphery than before the industrial revolution (see, for example, Hoogvelt 2001 Far from seeing an integeated global economy, the sceptical analysis highlight the increasing organization of wold economic ‘ctivity within three core blocs, each with its own centre and periphery; namely, Europe, Asia-Pacific and the Americas. This triadization of the world economy is associated with a growing tendency towards economic and financial interdependence within ‘each of these thece zones at the expense of integration between 40 A Global Economy? them (Lloyd 1992; Hirst and Thompson 1999; Rugman 2001). ‘This process is further reinforced by growing regionalization, from the formal structures of the North American Free Trade Agrec- ment (NAFTA), APEC, MERCOSUR, ASEAN and the EU to the regional production and marketing strategies of multinational corporations and national firms (G. Thompson 1998) Far from the present being an era of economic globalization, ii, especially by comparison with the belle poque, one defined hy the growing, fragmentation of the world economy into a mukiplicty of regional economic zones dominated by powerful mercantilist forces of ‘ational economic competition and economic rivalry (Hare 1992; Sandholt etal. 1992; Rugman 2001), Ifthe sceptical argument is dismissive of the notion ofa global economy, i is equally critical of the idea of a nascent global capitalism. While not denying that capitalism, following the col lapse of state socialism, is the ‘only economic game in town’, or that capital itself has become significantly more internationally mobile, such developments, itis argued, should not be read as evidence of a new ‘turbo capitalism, teanscending and subsuming national capitalisms (Callinicos et al. 1994; Ruigrok and Tulder 1995; Boyer and Drache 1996; Hirst and ‘Thompson 1999). On the contrary, distinct capitalist socal formations continue to flourish ‘on the models ofthe European social democratic mixed economy, the American neoliberal project and the developmental states of East Asia (Wade 1990). Despite the aspirations of its most power- ful protagonists, the neoliberal ride of the 1990s has not forced a _enuine or substancive convergence between these; nor ean it elim 8 serious victory over its competitors (Seharpé 1991; Hart 1992), The ‘end of history’, in this respec, has turned out to be short lived. The idea of global capitalism, personified by the business empires of figures such as George Soros and Bill Gates, may have reat popular appeal but iis, ultimately, misleading since it ignores the diversity of existing capitalist forms and the rootedness ofall capital in discrete national formations 4A Global Economy? ‘Although the television images of dealing rooms in New York ‘of Landon reinforce the idea that capital i essentially “ootloose’, the eealit is that al economic and financial activity, from prod tion, research and development to trading and consumption, ‘ecurs in geographical not virtual space. To talk of the ‘end of geography” is a gross exaggeration when place and space remain Such tal determinants of the global distribution of wealth and ‘ceonomic power, Granted that, in a work of almost reaFsime com ‘munication, corporate capital and even small businesses may have the option of greater mobility, the fate of firms, lage or small, js sill primary determined by local and national competitive ‘advantages and economic conditions (Porter 1990; Ruigeok a ‘Talder 1995; G, Thompson 1998b). Even among the largest multi- nationals, competitive advantages are principally a producto their respective national systems of innovation, while production and Sales tend to be strongly regionally concentrated (Ruigrok and ‘Tulder 1995; G. Thompson and Allen 1997; Rugman 2001). In effect, multinationals are litle more than ‘national corporations ‘with international operations’, since their home base is such a Veal foundation for their continued success and identity (Fu 1992), wry point British Airways learat to its cost when its frequent flyers {predominantly of noa-British origin) obliged the airline to recon ‘Hc its policy of replacing the Union Jack with global images on its aircraft talplanes, Furthermore, a brief glance at the Fortune 500 list of the world’s largest companies confirms this, since few fare headguartered outside the US, UK, Germany or Japan (see table 4.1) Indecd, closer inspection of table 4.1 reveals the ‘myth’ ‘Of global capitalism as a convenient cover forthe internationaliea~ tion of American business above all else (Callinicos etal. 1994; Burbach, Nunez and Kagarlisky 1997). Governments, or at least the most powerful government, thus retain considerable bargain- ing power with MNCs because the latter require access to vital national economic resources and markets, Corporations do not rule che workd, Simple economic comparisons of MNCs and states a A Global Economy? Table 4.1 Locations of the work's 500 largest multinational enterprises Countryibioc No.of MINES in 1999 United states 179 European Union 3 Japan 107 Canada 2 South Korea 2 Switzerland un Chine 10 Australia 7 Braz 3 Other " ‘otal 500 Soure: Rugman 2001 8, adapted from The Fortine ‘ior S00 rote, 2 Aug. 1398 {measured by the sizeof sales and gross domestic product (Gl riper) ate hetefore meng. Tae means of thee omic power of MNCs (by value added compared with GDP) show char none gee ino the list of the top forty largest economies in the world (se gute 4.1 overleaf), Stats, fr the mos pat, remain the dominant economic players in the world economy. In dismissing the idea of fotoose capital the sexpical analysis undermines the proposition that a new pattern of interdependence Js emerging between North and South. There is a popular belie that the deindustralization of OECD economies Is primarily a consequence of the export of manufacturing business and jobs to enerang and es developed eenomies, whee wage rte ae lower and regulatory requirements much les stingent This inter: dependence between North and South i taken by some to define anew international division of labour in which developing conor: ies are moving away from primary produits to manalaturing, aA Global Economy? pes rath fo ceomanes\ Beare 33 | =scer\ fee ne while the OECD economies ate shifting from manufacturing t0 ferviees. But the actual evidence, che sceptics suggest, does not bear out such a dramatic shife, and the argument overgeneralizes from the East Asian experience (Callinicos et al 1994; Hirst and “4 A Global Economy? ‘Thompson 1999}. The bulk of the world's poorest economies remain reliant onthe export of primary products, while the OECD economies continue to dominate trade in manufactured goods (Hirst and Thompson 1999). Deindusrialization cannot be traced to the effects of foreign trade, especially cheap exports from the developing world, but rather is a consequence of technological ‘change and changes in labour market conditions throughout the ‘OECD economies (Rowthors and Wells 1987; Krugman 1994, 1995). By exaggerating the changes inthe ineernational division ‘of labour, we run a serious risk of overlooking the deeper com: tinuites in the world economy. Despite internationalization and regionalization, the role and postion of most developing countries in the world economy have changed remarkably litle over the entire course ofthe last century (Gordon 1988). The present inter- rational division of labour is one Mare would instantly recognize. If the international division of labour has changed only margin- ally the same can be said forthe governance of the world economy, Although the post-1945 era witnessed significant institutional innovations in incernational economic governance, especially with the creation of a multilateral system of economic surveillance and regulation ~ the Bretton Woods regime - the actions of the US, asthe world’s laeges single economic agent, remain critical to the ‘smooth functioning of the world economy. In effect, the govern ance ofthe world economy stil remains reliant, especialy incimes ‘of exsis, om the willingness ofthe most powerful state(s) to police the system ~ as the East Asian crash of 1997-8 demonstrated s0 <éramatically. However, even in mote stable times, i isthe prefer: ences and interests of the most economically powerful sates, in practice the G7 governments, that take precedence. Economic mlilateralism has not rewritten the basic principles of interna tional economic governance, fr it remains a realm in which might ‘wumps right: one where the clash of competing national interests is resolved ultimately through the exercise of national power and bargaining between governments (Gilpin 1987; Sandholez ea 4sA Global Economy? 1992; Kaptin 1994. to thi espec, multe isons have to be conceived as isruens of tate ~ and the most powesfal ste at tat. ‘Of course eign part ofthe sepia angumen thatthe goven- ance of the world economy bas nt changed a al in response to {owing intrnasonalation and, especialy, epionalizaton iat Sd Thompson 1999, Gilpin 2001) There on the contrary, ston recognition thatthe most presing ie cononing the fuardans ofthe world economy is how co refoon and suengthen the Bron Woods system (Kapstein 1954, Hin and Thompson 1999), Furthermore, there isn acknowisgement of growing tensions Between the rulemaking avs of mulateral odie, Suchas the WTO, and regional bode sich athe EU. New sees, from the envionment to fod production, have fous thee way cto the governance agenda too. Many of hee are highly pols- Sted since they bite deep int the sovereign arson of tates ~ the very coe of modern statchood ile But aational governments the cepts bold, remain central the govemance ofthe worl economy, snc they alone have the ial pl ator eae oom ay. Ar mo {nd fence oemure natn scone pow he stand the contsints on national economic autonomy and sovereignty have become mor visible expecially in democrat states. Histor tally, however, these coosranes ate no great than in previous ports, when, ss not prevouly, ternational interdependence was mich more intetw. Paradoncly, che belle Gpoque was pe Cily the ea during which natonstaes and atonal economies ere beng forged (Gilpin 1981, Krasner 1993). Thus cere sno ‘eas ro suppose that contemporary conditions pose real eat tnt ret stony. a fom nos dependence necessary eroding national economie autonomy or sovereignty, ir ean be argued tat fe has enhanced the aon Capa of many states, Openness to global market, many 46 A Global Economy? economists argue, provides greater opportunites for sustained national economic growth. As the experience of the East Asian ‘rgers’ highlights, global markers are entirely compatible with serong states (Weiss 1998}, Bur even in those contexts where sate sovereignty appears to be significantly compromised by interna sionalization, as in the case ofthe European Union, national pov exnments, according tothe scepicalintetpretation, effectively pool sovereignty in order to enhance, through collective action, thelr control over external forces. Rather than conceiving, national governments as simply responding to external economic forces, the sceptical postion acknowledges ther strategic role (especialy tha of the most powerful) in creating the necessary national and international conditions for global markets to loucishin the fest. place. In this respect, states are both the architects and the subjects of the world economy. As subjects, however, states do not respond in identical ways to the dynamics of world’ markets or to external economic shocks, While international financial markets and international competi, tion may well impose similar kinds of economic disciplines on al governments, this does not necessarily prefigure a convergence in ‘ational economic strategies or policies, Such pressures are medi, ated by domestic structures and institutional arrangements sthich Produce enormous variations in the capacity of national nove iments to respond (Garrett and Lange 1996; Weiss 1998; Swank 2002). States can and do make a difference, as the continuing diversity of capitalist forms indicates. This i especially the case tt ‘elation to macroeconomic and industrial policy, where sigaifcant ‘ational differences continue to exist even within the same regions ofthe world (Dore 1995; Boyer and Drache 1996; Garrett 1998), NNor is there much convincing evidence to suggest that interna sional financial disciplines by themselves either preclude govern ‘ments from pursuing progressive redistributive ical strategies ot, alteratively, prefigure the demise of the welfare state or robust Policies of social protection (Garrett 1996, 1998; Rieger and aA Global Economy? A Global Economy? Liebfried 1998; Hirst and Thompson 19995 Swank 2002). Th faet chat levels of national welfare spending and social protection Table 42. Daily foreign exchange turnover, 1989-2001 Jae er aes il he BU, sugges cat aaa Ear souaT democracy is no threatened by globalization. In che jude Susie ot ofthe scepdcs, national governments cemain for the most =o part the sole sources of effective and legitimate authority in the 1989, 590, Patt nce ofthe world economy, wile also being the peineipal on 820 ovat of international economic coordination and repsaton. is 2e0t The new global economy * Decline due in age prt o introduction ofthe euro See eae erie og For the globalists this conclusion is hard to credit, for it completely Source: Bank for international Settlements 2001, Ci eines le 42d es oso a etal unprecedented scale and magoitide of omer- ‘a7 19131950 Rehr tate el Gamage as ee Fr et Cee 1997; Rook 1997, ieken 1998)-Daly| Wenemeftnocs 59 ay Sg 8S aarvver on the world’s Foreign exchange markets (currently $1.2 astern Europe and areas reste 37) tarmover on oc io nuene, cxeeds by sone sy tomer USAR 16s tlims dnseube (ayer cceikinam ty ome ge Ss a che ete pce ale 43), 84 eee oer ae aby muliaonal corportions i considerably, Aa ee seeker tan the level of world exports, and encompasses al the Wore % 743 SS ts we Se ee eral aceaes on ‘smaller in magnitude than in the nineteenth century, has neverthe- vr ee ee cortical Sf of production and exchange than in previous historical ¢0nomie fates ar intimatay commend, eons uch Oat thee see Tew stats, folowing the collapse of sae socialism, Although che global economy may noe mnt ali eb ce elt clio i 48 9A Global Economy? st fan within and aris eins The operation of lo writin a Stal be produced coergeee niet aa a conion whic atonal change ae ees aan se the poole of toting exchange ete By rman enn 0 te ny feminine a eee onal econome management (Flao 1995: impo e195) nal meron ao Rags wh eee of 1997-8 demonstrated, rapidly acquires lobal a a Godamen 199), Ange fan mgaton Fee Oe lanl corporations negate aoa ote Pee onanism ibs an eon production networks eit 990 Cot snd Korte 14, De 199. ca: ions ational ons 20 Toner fnction ve en of wea etn sce al Dre 2s autonomy elratt the cont and ognzaton of SuSE ihe hres oom she me aa the dncncton between domestic economic aoa ai Conant sun he geo produ n se ee acne oso incense ac stain (bac 190) tes Fn ea omemporary pat of scone bliation Yan esau rom pst pss by he aa fe leony ancening and ineeag ere ate name rgue (yer and Bae 193 sooo ge 1997 Dike 199% Frank 1998) By come a ey ic hls poaue ane singed y relsvely Ra fc poecurnm an perl economic 20% a trys much moe open nds operation a Pe coum een se nina) ara te ae North Koren iNcrop 1934), Nor hase gow ae Srna probed # arp dvs of the word oe sb oc for he eon of ono actet) 50 A Global Economy? tas not been tthe expense of economic globalization (Lloyd 1992s Anderson and Blackhurst 1993; Anderson and Norhcim 1993). On the contrary, regionalism has largely faciitated and encouraged economic globalization since it principally takes the form of open repionalsm in which the iberaliaton of ational economies (oe inseance, the Single European Marker) takes precedence over pro. tected markes (Gamble and Payne 1991; Hanson 1998), Further- more thee is litle evidence ro suggest hata proces of tiadizaion Js occurring in so far as economic interdependence between the thvee major centres of the global economy ~ the US, Japan and urope ~ appears itself zo be imtensifying (Ohmae 1980; Dunning 1993; Greider 1997; Perraton etal. 1997; Dicken 1998; Haass and Liton 1998), Although the contemporary global economy i Structured around three major centres of economic power ~ unlike the belle Epoque or the early postwar decades of US dominance ~ it s best described asa posthegemonic order insofar as no single cenit not even the US, ean diate the rules of global tade and commerce (Gill 19925 Geyer and Bright 1995; Amin 1996). OF course it emains a highly stratified order in thar by far the langest share of global economic flows ~ such as trade and finance ~ is oncentated among the major OECD economies, But the domin ance of OECD economies is beng clued as economic globalization Significantly alters the geography of world economic activity and power. Over the last few decades developing economics’ shares of world exponts and foreign invesumene flows inwards and outvards) have increased considerably (Castell 1996; Dicken 1998, UNCTAD 1988a,1998e). The newly industializing economies (NIE) of East Asin and Latin America have become an inccesingy important destination for OECD investment and an increasingly sighifant source of OECD imports ~Sio Paul, it is sometimes quipped, i Germany’s largest industrial city (Dicken 1998). By the late 1950s almost 50 per cee of tral world manufacturing jobs were located 'n developing economies, while over 60 per cent of developing stA Global Economy? county exports tothe industrialized world were manufactured Sean Relefld erase in less than four decades (UNDP ty Gntany tote septs intrpettion, contemporary co oo Sem sn nate soley sor ven ema an OPCD aoa avan buy rather, enacts all consents and repons {uRcrAD opm) ne IN deition, the global economy is capitals in tha ti ona om the Base of marke pipes and production for rein corcly, apart from the divson of the word into rela and sae Sots amps Ging the Cold War era many ei ge this ha been he case since ealy modern ies Tor nee mach befor that (Wallenstein 1974; Braudel 1984; Feria anmesto 1995 Goyer and Bg 1995; Fank and Gil {Soe Hank 1398) However, what distinguishes he present global centre ceonomy fom that of pir epochs, argue the global ee frclar hora foun. Ove sen decades the core econ SIREN hg sytem have undergone «profound econoc arcatng Inthe prose ey ave been teansforted eealy tad topostindusial economies (Pore and Stel Bane Catan 1996), Jota the ewer cenary wise the fot inf asl capa theca sen po et calcapalm staking place. This noe o argue as some do, that this new ‘global economy has transcended the ‘boom and ati of eapasm or entered the ea ofthe weihtesseo- Pen which formation bas replaced manufactured goods. On teary the dminane of fiance tends 0 maketh ste oe pec wo css adap wits athe tur ofthe went Ber Rio, co globally synchronize economic downturns. Newt Taisuke caratm has expend a sient esting ‘vitsknrorctring ha come dramatic ateaton inthe four a ongsation of lobl capitalism. nvaiousl refeting ‘er yBbal infomation] capitalism’, "manic capitalism’ "urbo eee or spenteriona api, comocntators sek caeeatsth qualtanive hfe ccuing inthe spatial organization 52 A Global Economye and dynamics of this new global capitalist formation (Castes 1996; Greider 1997; Scholte 1997; Lacowak 1999), Inthe age of the interne, to simplify the argument, capital ~ both productive and financial ~ has been liberated from national and territorial constraints, while markets have become globalized to the extent thatthe domestic economy constantly has to adapt to global com- petitive conditions. In a wiced world, software engineers in Hyderabad can do the jobs of sofeware engineers in London for a fraction ofthe cost. Inseribed in the dynamics of this new global ‘capitalism isa powerful imperative cowards the denationalization of strategic economic activites, Central to the organization of this new global capitalist order is ‘the multinational corporation. In 2000 there were 60,000 MNCs ‘worldwide with 820,000 foreign subsidiaries selling $15.6 rillion ‘of goods and services across the globe, and employing twice as ‘many people asin 1990 (UNCTAD 2001, 1998). Today transna- tional production considerably exceeds the level of global exports and has become the primary means for selling goods and services abroad. Multinational corporations now account, according to some estimates, for at least 25 per cent of world production and 70 percent of world trade, while thie sles are equivalent to almost 50 per cent of world GDP (Perraton et al. 19975 UNCTAD 2001) “They span every sector ofthe global economy ~ from raw materials, to nance, to manufacturing ~ integrating and reordering economic activity within and across the world’s major economic regions {Gill 1995; Castells 1996; Amin 1997), During the 1990s the hoor in foreign takcovers and mergers tightened the grip of the world’s major MNCS in strategic areas of indostral, financial and telecon» ‘munications activity across the globe (UNCTAD 2001), In the financial sector multinational banks are by far the major actors in, slobal financial markets, playing aertical roe in the management and organization of money and credit in the global economy (Walters 1993; Germain 1997). Iris global corporate capital rather than states, contend the globaists, cha exercises decisive influence $3A Global Economy? ‘over the organization, location and distribution of economic power land resources in the contemporary global economy (Klein 2000}. ‘This produces significant inequalities since inward flows of foreign direct investment (FDI) ate highly concentrated: chiry countries how account for 95 per cent (the triad of Europe-US-Asia 59 per cent) of all FDI, alehough overall more countries than ever before are recipients (UNCTAD 2001), ‘Contemporary pattems of economic globalization, the globaises also argue, have been accompanied by a new global division of labour brought about, in part, by the activities of multinationals, themselves Johnston, Taylor and Watts 1995; Hoogvelt 1997). ‘The restructuring (deindustrialization) of OECD economies can be ditecdy related to the outsourcing of manufacturing production by multinationals to the newly industriaizing and eransiion econ- ‘mies of Asia, Latin America and Eastern Europe (Reich 1991; ‘Wood 1994; Rodeik 1997). NIEs now account for a significant ‘proportion of global exports and, through integration into transna- tional production networks, have become extensions of, 28 wel as, competitors of businesses in, metropolitan economies. In this respect, globalization is reordering developing countries into clear ‘winners and losers. Such restructuring is, moreover, replicated ‘within councries, both North and South, as communities and par- ticular locals closely integrated into global production networks reap significant rewards while the rest survive on the margins. ‘Thus contemporary economic globalization brings with it an increasingly unified world for elites, national, regional and global, bur increasing division within nations as the global workforce is segmented, in rch and poor countries alike, into winners and losers ‘The old North-South international division of labour is giving way, suggest the globalists, roa new global division of labout which, involves a reordering of interregional economic relations and a new pattern of wealth and inequality, transcending both post ‘industrial and industriaizing economies (Reich 1991; Amin 1997 Hoogvele 2001; Rodrik 1997; Castells 1998; Dicken 1998). This s4 A Global Economy? ions for national economic strategies and 55A Global Economy? economic globalization spells the end of the welfare state and Social democracy, while others point toa less dramatic convergence across the globe towards more limited welfare state regimes (Goureviteh 1986; Rodrik 1997; Gray 1998; Pieper and Taylor 1998), Economic globalization increasingly escapes the regulatory each of national governments while at the same time, existing, multi- lateral institutions of global economic governance have limited authority because states, jealously guarding their national sover cignty, refuse ro cede them substantial power (Zim 1995). Under these conditions, assert some of the mote radical globalsts, global markets are effectively beyond political regulation, and economic slobalization isin danger of creating a ‘runaway world’ (Giddens 1999). Governments, therefore, have no real option other that to accommodate to the forces of economic globalization (Amin 1996; Cox 1997), Furthermore, the existing multilateral institutions of tlobal economic governance, especially the IMF, World Bank and WTO, in so far as they advocate and pursue programmes which simply extend and deepen the hold of global market forces on rational economic life, are the principal agents of global capital and the G7 states (Gill 1995; Korten 1995; Cox 1996). For the most par, the governance structures of the global economy operate to nurture and reproduce the forces of economic globalization, while also acting to discipline this nascent ‘global market civiliza- tion’ (Gill 1995; Korten 1995; Burbach, Nunez and Kagarltsky 1997; Hoogvelt 1997; Scholte 1997). ‘While accepting many of the precepts of this radical globalist position, others (also globalists in one form or another) conceive the governance structures ofthe global economy as having consid erable autonomy from the dictates of global capital and/or the G7 stares (Rosenau 1990; Shaw 1994; Shell 1995; Cortell and Davies 1996; Castells 1997; Hasenclever, Mayer and Rittberger 1997; Milner 1997; Herod, Tuathail and Roberts 1998). According to these authors, multilateral institutions have become ineceasingly 56 A Global Economy? important sts through which economic globalization i contested, by weaker states and by the agencies of transnational iil society, while the G7 states and global capital fnd themselves on many tecasons ar odds with thei decisions of rules. Moreover, the politcal dynamics of mulateral institutions tend to mediate great power contro, for instance through consensual modes of deison tnaking, sich that they are never merely tools of dominant states tnd social forces (Keohane 1984, 1998; Rage 19932; Hasen- ‘eve, Mayer and Rtterger 1997; Roberts 1998). Alongside these tla instttions there i also a paallelset of regional bodies, from MERCOSUR tothe EU, which constitute another dimension to wha isan emerging system of malelayered slob governance {Roseraw 1990, 1997; Ruggie 1993). Within the interstices of this system operate the socal forces of an emerging transnational ‘onde, fom the International Chamber of Commerce to the Jubilee 2000 campaign, seeking vo promote, contest or bring to account the fores of economic globalization (Falk 1987; Eins 1992; Sehote 1993; Busbach, Nunes and Kagaritsky 1997; Castell 1997; Rosenau 1997) inthis respect, the polities of global eco ‘omic governance is much more pluralistic than the seeptcs admit insofar as global and regional institutions exercise considerable independent authority. Eeonomic globalization in this view, hat been accompanied bya significant interationalization of political authority associated with an emerging sstem of global goveznance. 7