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Benoist.fmkEveryone is talking about globalization — a phenomenon all the more significant because it is generally considered inevitable and beyondanyone’s control. What does it mean? Although there are many works onthis subject,2 the concept remains unclear. For some, globalization is adevelopment beyond the nation-state. For others, it defines a new type ofopposition between capital and labor brought about by the rise of financecapital, or a new separation between skilled and unskilled labor. Some seeit as the expansion of world-trade with the inclusion of new players fromthe South (accompanied by the globalization strategy of multinationalcorporations), while others emphasize the broadening of exchange causedby the information revolution. What is it really? First of all, cultural globalization must be distinguished from eco- nomic globalization. These two phenomena overlap, but are not the same.
One of the most obvious features of economic globalization is the explo-sion of financial exchange. Today, international business is growing morerapidly than the various GNPs. In 1990 international exchange was “Face a la Mondialisation,” translated by John Lambeth and Deborah Shair See Robert Reich, L’Économie Mondalisée (Paris: Dunod, 1993); Francois Chesnais, La Mondialisation du Capital (Paris: Syros, 1994); Jacques Adda, La Mondali-sation de l’Économie, 2 Vol. (Paris: Decouverte, 1996); Samir Amin, Les Défis de la Mon-dialisation (Paris: L’Harmattan, 1996); Anton Brender, L’Impératif de Solidarité. LaFrance Face à la Mondialisation (Paris: Decouverte, 1996); Jean-Yves Carfantan,L’Épreuve de la Mondialisation. Pour une Ambition Européene (Paris: Seuil, 1996;François Chesnais, ed., La Mondialisation Financière. Genèse, Coût et Enjeux (Paris:Syros, 1996); Elie Cohen, La Tentation Hexagonale. La Souverainaité à l’Épreuve de laMondalisation (Paris: Fayard, 1996); Philippe Engelhard, L’Homme Mondial. LesSociétés Humaines Peuvent-elles Survivre? (Paris: Arlea, 1996).
already 15% of world business. In only five years, from 1985 to 1990,exports increased by 13.9%. Between 1960 and 1989, the exchange ofmanufactured products doubled while the flow of capital increased four-fold. During that time the nature of financial flow changed: the continu-ous development of direct foreign investment was accompanied by theready availability of short term capital. These direct investments are alsoincreasing more rapidly than world wealth. The annual rate of growth hasgone from 15% between 1970 and 1985 to 28% from 1985 to 1990, dur-ing which time direct investments quadrupled in volume, going from $43billion in 1985 to $167 billion in 1990. A global economy has emergedwith an increasing share of GNP directly dependent on foreign exchangeand international capital flow.
The other important factor is obviously the growing role of computers and electronics. By reducing the costs of long distance transactions andpermitting communication in “real time” anywhere in the world, thus pro-viding instantaneously information crucial to price structuring — infor-mation that used to take weeks to reach a few financial centers — the newcommunication technologies have made possible an unprecedented finan-cial flow. The sun no longer sets on interconnected stock markets. Cur-rency moves from one end of the globe to the other, searching for the bestreturns at the speed of light. This globalization, however, is exclusivelyfinancial: the currency market is the only one where instantaneous arbi-trage makes sense.
Thanks to this increased mobility, made possible by computers, trans- actions on currency markets have experienced a fantastic growth. Theynow exceed a trillion dollars per day. These funds come from commercialbank holdings, multinational corporations, floating currency reserves heldby central banks especially created for this type of transaction. The foun-dation of the system is the exchange of currency which, from day to day,or even hour to hour, may result in considerable gains, far higher thanthose derived from traditional industrial or commercial activity. In antici-pation of moving exchange rates, computerization allows for the immedi-ate virtual displacement of enormous amounts of currency, almostcompletely independent of the central banks. This is why this new phe-nomenon is called the “casino-economy.” Some commentators locate the origins of globalization in the early 1970s, at the time of the double shock of skyrocketing petroleum pricesand the crisis of the international monetary system. At that time, the slow-ing of productivity and growth-rate, the progressive saturation of demand for durable consumer goods, the increasing burden of foreign financialconstraints, along with the abandonment of fixed exchange rates and theexplosion of the American trade deficit, led to a rise in purely speculativefinancial products. This process continued into the 1980s, with the grow-ing public debt favoring the development of a vast currency market —especially with the wave of deregulation that, beginning with the ReaganAdministration, rapidly spread to all developed nations. At that time,states began to retreat in the face of financial integration by adopting the“three Ds” — decompartmentalization, dumping the middleman, andderegulation. By liberalizing the capital market, this strategy allowedarbitrage at a global level and opened consumer markets and large corpo-rations to foreign dealers. Then, at the beginning of the 1990s, the suddencollapse of the Soviet Union and the brutal switch in the former commu-nist countries to unbridled capitalism translated into the entry of 2.5 bil-lion additional people in the world market, while at the same timespreading the illusion of a unified planet within a single bloc.
The Monopolization of Capital
This series of events must be placed within a broader chronology. Far from being an aberration or a radical innovation, or even the result of someplot, globalization is simply part of a long term dynamic of capitalism. AsKarl Marx already observed during the last century, “the tendency to createa world market is part of the very concept of capital,”3 For Philippe Engle-hard, “globalization is undoubtedly only the grand finale of the explosionof Western modernity.”4 It justifies a whole series of metamorphosesthroughout the long history of the mercantile economy — an economybased from the very beginning on open exchange within a climate of indi-vidualism and universalism, predicated on a metaphysics of subjectivityand material success. It began with the development of long term businessat the time of the Italian city states in the 14th century, continued with the“great discoveries” and the industrial revolution, then with colonialism.
Between 1860 and 1873, England had already succeeded in creating thebeginning of a global commercial system. In July 1885, Jules Ferrydeclared to the Chamber of Deputies that “founding a colony means creat-ing a market.” By contributing to the disintegration of traditional culturesand societies in Africa and Asia, colonialism allowed the penetration of Philippe P. Engelhard, Principes d’une Critique de l’Économie Politique (Paris: Western products and opened new trade centers, a practice that would notbe abandoned until it had lost its profitability, i.e., when the colonies beganto cost more than they were bringing in.5 The market as an institution is itself inextricably bound with the inter- nationalization of exchange. In classic 18th century economic theory, thefree circulation of goods and services is already supposed to lead to theequalization of systems of production and living standards. As such, capi-talism appears as a nomad from the very beginning. Thus, as Adda notes,globalization “merely brings capitalism back to its original vocation, moretransnational than international, which is to play with borders as withstates, with traditions as with nations, in order to better subsume all thingsunder the single law of value.”6 Yet globalization also exhibits a number ofnew features. In addition to the fact that, in international exchange, it isnow manufactured products that take precedence over raw materials, thefinancial sphere has acquired an extraordinary degree of autonomy in rela-tion to real economic production. The great market deregulation of the1980s effectively heralded the arrival of a capitalism no longer primarilyindustrial but speculative. The monetary mass circulating in the worldtoday is estimated to be more than 15 times the value of production. Thisfinancial “bubble” aggregates funds from the private as well as the publicsectors, be it the management of public debt by individual nations or retire-ment pension funds. It naturally encourages speculative and illegal logics:drugs and corruption become integral parts of the new economic order.
Another novelty is the universalization of the market. Transactions now involve previously independent sectors. Culture, services, naturalresources, intellectual property are now part of the free trade mechanism.
All things are now being transformed into currency. What enters the sys-tem as a living thing comes out as a commodity, a dead product. Further-more, the players are no longer the same. Yesterday, these players wereprimarily nations. Today, they are multinational corporations that domi-nate investment and trade, while financial markets dictate the rules andthe banks control a financial sector increasingly disconnected from thereal economy. A world organized around nation-states is giving way to a“world-economy” structured by global players. This is a fundamental “The rest of the events,” said Marcel Mauss in 1920, “goes in the sense of a growing multiplication of loans, exchanges, identifications all the way to the detail ofmoral and material life.” See his “La Nation,” in Oeuvres, Vol. 3: “Cohésion Social etDivisions de la Sociologie,” (Paris: Minuit, 1969), p. 625.
Adda, op. cit., Vol. 1.
transformation. Some decades ago, nation-states were still the naturalpolitical and social frameworks for managing the national systems of pro-duction. Capitalist competition played itself out basically among nations.
The dominant trait of the capitalist system was thus territorialization, i.e.,its attachment to a particular industrialized nation. Although expanding,the market was primarily national. Even for companies with foreign sub-sidiaries, it was crucial to have a mother-company located in a powerfulnation. Economics and politics basically coincided, making national eco-nomic policy decisions all the more important. Finally, the Third Worldhad not yet become part of the industrial system and there was a starkcontrast between industrial centers and peripheries.
Today, the global integration of capital has broken down national pro- duction systems and has restructured them as so many segments of a globalproduction system. The various components of production are now scat-tered far from the corporation’s geographic location and sometimes evenindependent of its financial control. Products incorporate technologicalcomponents of such varied origins that one can recognize neither the spe-cific contribution of each nation nor the nationality of the labor force pro-ducing the merchandise. Robert Reich notes that when an American buys acar from General Motors for $20,000, less than $800 returns to Americanproducers. Globalization is creating a reorganization characterized prima-rily by a generalized deterritorialization of capital. “Space of places” isbeing displaced by a “space of flux.” In other words, territory is beingreplaced by network,7 which no longer corresponds to a particular territorybut is inscribed within the world market, independent of any national polit-ical constraints. For the first time in history, economic and political spaceare no longer bound together. This is the deeper meaning of globalization.
The appearance of industrial firms able to plot their development on a global scale and to implement integrated world strategies is one of the mostcharacteristic traits of globalization. Multinational companies are those thatdo more than half of their business abroad. In 1970, there were 7,000 of them.
Today there are 40,000 and they control 206,000 subsidiaries while employ-ing only 3% of the world’s population (about 73 million people). The budgetof these corporations in 1991 was greater than all of the world’s exports ofgoods and services ($4.8 trillion); they control either directly or indirectly agood third of the world’s revenue and the top 200 of these companies monop-olize a quarter of the world’s economic activity. Nearly 33% of world tradenow takes place among the subsidiaries of the same corporations, not between Bertrand Badie, La Fin des Territories (Paris: Fayard, 1996).
different corporations. These network corporations have immense resourcesat their disposal. The budget of General Motors ($132 billion) is greater thanthe GNP of Indonesia; Ford’s ($100.3 billion), greater than the GNP of Tur-key; Toyota’s greater than the GNP of Portugal; Unilever’s greater than theGNP of Pakistan; Nestlé’s greater than the GNP of Egypt, etc.
These corporations, whose national origin is now merely a formal ref- erence, have long since learned to replace minimal profitability objectiveswith objectives that maximize financial gain, whatever the social conse-quences. Less preoccupied with production than with market and patentcontrol, they are above all financial groups that place most of their profitsin currency or in by-products, instead of distributing the profits amongshareholders or investing them in productive activities. Moreover, sincethey are wealthier than many nations, it is not difficult for them to purchasepoliticians and to corrupt government officials. To become more competi-tive, multinational corporations have also developed a new strategy. Toavoid massive and brutal devaluations, as in the 1930s, they have beenforced to seek other outlets for the surplus of floating capital, since produc-tion profits from classical investments are no longer sufficiently high. Thestruggle for market share has led them to include ill-qualified and poorlypaid workers in the world labor force in order to better maximize profits.8 Where earlier Western nations were content to exploit the internal markets of Southern countries, multinational companies are now busyreexporting to Western markets products assembled or produced at lowcost in the South. Globalization is taking place through the repatriation ofa portion of the economic activity in Southern countries, through a globalreorganization of the production cycle and the transformation of a locallabor force into salaried workers. This phenomenon, called dislocation,has become generalized since the 1980s and is merely the extension-reor-ganization on a global scale of labor relations, another step toward thecreation of a global labor market. It goes without saying that, from thisviewpoint, the free movement of currency is essential in order to siphonoff profits to decision-making centers — a process that has the doubleeffect of reducing local accumulation and restricting purchasing power.9 Charles-Albert Michalet, Le Capitalisme Mondial (Paris: PUF, 1985).
“The liberalization of international transfers of capital,” writes Samir Amin, “the adoption of floating exchanges, the high rate of interest, the deficit in the Americanbalance of payment, the Third World’s external debt, and privitization, constitute a per-fectly rational policy that offers floating capital the outlet for speculation, thereby down-playing even the major danger of a massive devaluation of surplus capital.” See “LesVrais Enjeux de la Mondialisation,” in Politis-La Revue (October-December 1996), p. 70.
Simultaneously, from Asia and, to a lesser extent, from Latin America and the former Soviet empire, new players are beginning to emerge in glo-bal trade. In the past, gaps between wages in the North and the Southreflected similar gaps in productivity and quality. The emergence of newindustrialized nations and the sudden appearance of multinationals in someof the Southern nations have radically altered this situation. In 1995, theper capita income in Singapore had already surpassed that of France. Thistrend obviously will only continue to grow. The success of these newlyindustrialized nations in no way supports liberalism’s claims. The “Asianmiracle” is primarily a result of specific cultural characteristics, be it inJapan, China, Korea or Singapore.10 It may also be explained in terms ofthe ingenuity of the industrial policies of these countries. Far from uncriti-cally accepting the theory of the comparative advantages of specializing inlow cost production forced on them, without worrying about actualdemand, they have focused on the production of goods for which there ishigh world-wide demand. Of course, globalization changes competitionamong nations. As soon as businesses and funds can move freely in theworld, the competitiveness of national businesses is no longer automati-cally linked to that of nations. The transnational space in which these largecorporations operate no longer coincides with the optimal organization ofnational space. The position of a country in the world is only defined by thelevel of competitiveness its products have in the global market place — itsbusinessmen being obliged to position themselves in this market accordingto the best benefit/risk or advantage/cost ratio. One might even say thatnations are nothing more than points in the production space of large cor-porations. The very notion of comparative advantage is becoming obsolete.
Nations no longer have any choice but to fall back on policies of pure competition, to the detriment of social cohesion. That is precisely what hap-pened in Europe beginning in the 1980s, first under the influence of RonaldReagan’s and Margaret Thatcher’s liberal theories, then as a result of theMaastricht Treaty. This acceptance of globalization’s demands has trans-lated into generalized deregulation and liberalization, with priority given toforeign over domestic markets, the privatization of publicly- owned corpo-rations, the opening to international investments, the fixing of wages andprices by the world market, the progressive elimination of aid and subsidies, As Engelhard notes, “those peoples’ cultural systems were the least brutalized by western modernity or, at least, they opened themselves up to it and did so with care, and withan eye on the best economic performances. Such is the case with Japan, but also with certainpeoples of South-East Asia and China.” See Principes d’une Critique, op . cit., p. 23.
and, lastly, the reduction of expenditures designed to slow competition —such as education, social welfare and the protection of the environment.
One after another, European nations have adopted strictly monetarist poli-cies (called competitive deflation) that amount to fighting inflation throughhigh interest rates, the clearest result of which has been slow growth andincreased unemployment. Taxed at a lower rate than wages, finance capital,meanwhile, contributes less and less to the general welfare.
At the same time, the debt crisis has forced Third World countries to make similar adjustments: the structural realignments the IMF and theWorld Bank have demanded have led most of these countries to use thesame recipes as the industrialized nations — with even more catastrophicresults. International organizations themselves have become instrumentsof globalization. The role of the IMF and the World Bank is to imposederegulation, to manage the fluctuation of money and to force Third Worldeconomies to submit to the absolute imperative of servicing the debt. TheG7 is trying to coordinate the crisis management policies of large industri-alized nations, without attacking the root problems. But a very particularrole is reserved for the organizations overseeing world trade.
In the past, trade negotiations among nations dealt with a small num- ber of national practices, such as import quotas, custom tariffs, controlover the transfer of funds, etc. Today, the stakes of trade diplomacy go farbeyond questions of borders. Negotiations now include institutions withincountries: the structure of their banking system, the terms of their right toprivate property, their social legislation, their regulations concerningcompetition, concentration or industrial property. The underlying princi-ple of these negotiations is that international trade will bind togethernations with more or less the same institutions. In the attempt to reduceuncertainty and risk of direct foreign investment it encourages further uni-form systems of property and regulations often consistent with Americanlegislation. The negotiating power of multinational corporations is thusreinforced by a new lobbying power that allows them to demand specialarrangements in matters of regulation, wages or taxes in order to increaseprofitability and competitiveness. In the final analysis, “through a grow-ing number of local and international negotiations, societies are con-fronted with the demand to transform their domestic rules and institutionsin order to conform to an externally-imposed model.”11 The clauses of the GATT or of the WTO go far beyond the traditional Suzanne Berte, “Le Rôle des Etats dans la Globalisation,” in Sciences Humaines objectives of fair-trade agreements. Their primary objective is to promotecapital mobility. The agreements they reach are actually not so much fair-trade agreements as agreements for the free circulation of funds, with theintention to establish new international property rights for foreign invest-ments and to create new limits to national and government regulations. AsIan Robinson has written, “the agreements on the free circulation of fundsmay be understood as instruments that, in the name of the reduction ofobstacles to trade, alter or allow the renegotiation of laws, policies andpractices that block the path toward a global market economy.”12 Finally there is another novelty which facilitates understanding of the nature of cultural globalization: capitalism no longer sells just commodi-ties and goods. It also sells signs, sounds, images, software, connectionsand links. It does not just fill up houses: it colonizes the imagination anddominates communication. In the 1960s, consumer society thrived onidentifiable material goods, cars, household appliances, etc. The systemthat Benjamin R. Barber calls “McWorld” — like in Macintosh orMcDonald — is a virtual world resulting from the intensification of allsorts of transnational transactions that converge to homogenize life-styles.
“The props of the McWorld system,” says Barber, “are no longer cars, butthe Eurodisney amusement park, MTV, Hollywood films, software pack-ages. In short, concepts and images as much as objects.”13 This generalized commodification makes the consumption of advertis- ing-spectacle the sole form of social integration, while at the same timeintensifying feelings of exclusion and aggressive tendencies in those leftout. Through a flood of universal images and sounds, it contributes to thestandardization of lifestyles, to the reduction of differences and particulari-ties, the conformity of attitudes and behaviors, the eradication of collectiveidentities and traditional cultures. But more than this, it goes so far as tomodify our perception of space and time. Under the network of stationarysatellites, under the influence of economic empires that multiply alliancesand mergers, under the effect of information highways that carry the sameglobal sub-culture to the farthest reaches of the earth, the planet is shrink-ing. Dominated by fewer and fewer monopolies, which are more and morepowerful, the space in which commodities, investments and currency cir-culate is being increasingly unified. Furthermore, while up until now all “Mondalisation et Démocratie: un Point de Vue Nord-Américain,” in M “Internet et Tchador, Même Combat,” in La Vie (November 14, 1996), p. 58.
See also Benjamin R. Barber, Jihad versus McWorld (Paris: Desclée de Brouwer, 1996).
societies have lived time both as a succession of moments and subjectiveduration, this distinction is being erased. The technological revolution of“real time” accelerates the circulation of material and immaterial flux, withno possibility of a reference point or contextualization. This compressionof time makes immediacy the only remaining horizon of meaning. As RenéChar put it, “Abolishing distance kills.” The closeness that new communi-cation technologies create ends up crushing things and confusing forms.
We are in fact witnessing a redefinition of reality. The Internet is a good example. While classic media are limited to showing what happenselsewhere, the Internet allows its users to virtually transport themselves tothis elsewhere. The occupant of the McWorld system thus sees botheverywhere and nowhere. The Internet inaugurates a new lifestyle thatone could call electronic nomadism, but which is also an electronic colo-nialism. As Nelson Thall, Marshall McLuhan’s successor at the Univer-sity of Toronto, points out, “in the end, the power of the Internet is . . . thatit allows the entire world to think and to write like North Americans.” Thus globalization should not be confused with simple international- ization, which was the system created and organized by nations to defineinternational relations.14 It is better defined as the shift from an interna-tional economy conceived as an aggregate of national and local economiesthat differ in the ways they function and are regulated, to a true planetarymarket economy governed by a system of uniform rules, in Karl Polanyi’ssense.15 It describes “the growing interdependence uniting all the compo-nents of space in order to lead them to an increasingly restrictive unifor-mity and integration.”16 Those at the controls are new extra-state andextra-national players, whose only ambition is to maximize their profits byplanning the planetary organization of their activities, and eliminating allthat can be an obstacle to their freedom of action. These new playersstrengthen their autonomy each day, and are therefore increasingly inter-dependent, to the point of constituting a single immense market organism.
Immiseration of the Masses
Once the exact nature of globalization is understood, it is easy to Marcel Mauss already noted, ‘the internationalism worthy of this name is the opposite of cosmopolitism. It does not deny the nation. It situates it. Inter-nation, this isthe opposite of a-nation.” See ‘La Nation et l’Iinternationalism’ (1920), in Oeuvres, Vol.
3, op. cit., p. 630.
The Great Transformation (New York: Octagon Books, 1975 ).
Bertrand Badie, “Mondialisation et Société Overte,” in Après-demain (April- understand the consequences. The first is a tragic increase of economicdisparity. Hegel already said that rich societies are not rich enough toreduce the excessive misery they generate. Today, poverty no longerresults from scarcity but from the poor distribution of wealth and from apsychological and cultural mind-set which cannot conceive of wealthother than in terms of work and production.
Between 1975 and 1985, the gross world product rose 40%; since 1950, world trade has increased eleven-fold; economic growth, five-fold.
However, during the same period, there has been an unprecedentedincrease in poverty, unemployment, social disintegration and environmen-tal destruction. The real GNP per person in the Southern hemisphere todayis only 17% of that in its Northern counterpart. The industrial world,which represents only a quarter of humanity, possesses 85% of the world’swealth. The G7 nations constitute 11% of the world population but twothirds of the planet’s GNP. New York City alone uses more electricity thanall of sub-Saharan Africa. Between 1975 and 1995, American wealthincreased by 60%, but this increase was monopolized by 1% of the popu-lation. One last revealing figure: the holdings of the 358 billionaires on theplanet today is more than the cumulative annual revenue of the 2.3 billionpoorest individuals, or the equivalent of nearly half of humanity. Thismeans one thing: the more wealth, the more poverty — which refutes theliberal theory whereby the whole of society should end up benefiting fromthe profits of the wealthiest. In reality, because it gives a quasi-monopolyback to market forces, globalization contributes to the development ofinequities and of social exclusion, thereby threatening social cohesion.
Similarly, colonialism continues by other means. Aid to the Third World perfected the technique of usury as a means of control. The WTO isnow requiring Southern countries to treat foreign investors as if they werelocal by eliminating any legislative obstacles to work, the environment orhealth. Wherever liberal structural adjustments have been made, the resultshave been a worsening of the masses’ living conditions and an increase insocial instability. A logical consequence of all this is the flight of capital,which allows the measurement of the fundamentally parasitic character ofglobalization. As for countries that refuse to satisfy these demands, theyare simply marginalized, ignored and finally expelled from internationalcircuits. Obviously these consequences are not felt only in Southern coun-tries. In the North, globalization translates into exacerbated transnationalcompetition that, by means of exports and direct investments, is causing aleveling of wages and employment. All goods or services produced locally that could be produced elsewhere are vulnerable to the pressures exertedby capital to lower wages and benefits. On the other side of the ledger, diminishing human capital and the progressive aging of the labor force have increased cost, thereby encour-aging entrepreneurs to relocate their operations in countries whose laborforce is the least expensive and the most flexible. Because the competitiveproduction of developing countries is found especially in areas thatrequire considerable unskilled labor, this labor force is encouraged andexploited in the South, and increasingly excluded from work in the North,contributing to the rise in structural unemployment. In the absence of anincreasing number of commercial outlets, companies can only achieve thecritical size they need to survive in global markets by taking market sharefrom their competitors and by constantly improving their level of compe-tition, which translates into a continuous movement of industrial restruc-turing and downsizing with devastating social consequences.
These dislocations are just beginning. In 1990, manufactured prod- ucts exported by the newly industrialized countries of Southeast Asia tothe developed countries still represented only 1.61% of the latter’s GNP.
In France, commercial exchanges with newly industrialized countriesaccount for about 1% of the current unemployment rate. But this tendencyis likely to grow. Between 1970 and 1990, the share emerging countrieshad in the stock exchanges of advanced countries went from .7% to6.44%. At this rate, it could reach 55% in twenty years.
Whereas the industrial revolution allowed the integration of unskilled labor, globalization tends to systematically exclude those who do nothave the right kind of know-how. From the viewpoint of the previous ten-dencies of capitalism, this represents a fundamental break that calls intoquestion all social compromises adopted by the Keynesian welfare state.
Globalization of wages and financial globalization combine to reverse thecourse of economic and social policies prevalent during the decades ofpost-war growth. During the thirty years following WWII, which corre-spond to the apogee of the Fordist system, capitalism had to come toterms with social demands formulated in industrial societies, as well asthe determination of nations to create the foundations of an internationaleconomic order. The welfare state was the result of this historical com-promise between capital and labor. It was a strategic adjustment of capitalto meet a number of social demands. Globalization broke this social con-tract. Beginning in the 1970s, the economic logic of capitalism began todisconnect itself from social preoccupations, which led to the questioning of the hierarchy of wages and of mechanisms of social cohesion.
This disconnection of the economic and the social goes hand in hand with the loosening of the connection between the welfare state and themiddle class around which the growth of preceding decades was built.
Globalization is leading to the rise of an hourglass model of society inwhich the large majority of the occupants tend to fall towards the bottom,succumbing to a precarious existence, while money is polarized in thehigher spheres, signaling the destructuration of the middle classes, i.e., ofthose classes “that capitalisms of the early 20th century not only gener-ated but on which founded their growth.”17 During the thirty years fol-lowing WWII, these middle classes became consolidated, leading to theintegration of increasingly large portions of the population and thus to therelative reduction of inequities. Today, this model of an irreversably expanding middle class is obso- lete. The result is a profound transformation of class relations and interestswithin capitalist countries. In fact, the destructuration of the middle classescorresponds to a destructuration of the lower classes, which are seeingtheir traditional defense mechanisms obliterated. Unions are obviouslyunable to pressure multinational firms, used to playing on wage differenceson the world market, as they did their traditional negotiating adversaries.
This change signals an astonishing regression — a return to situations of over-exploitation comparable to those the workers’ movement faced atthe dawn of industrial capitalism. Despite his faulty philosophy of history,Marx at least saw that the logic of the monopolization of capital leads tothe reification of human relations. One can appreciate the irony of history.
Precisely when the communist system collapses, Marx’s theses are partlyconfirmed not only in the ruthless logic of profit but in the fact that unem-ployment and poverty are once again, as in the 19th century, becomingstructural features of society, that social uncertainty and exclusion aregrowing each day, that the revenues of capital are increasing as the reve-nues for labor are decreasing, and that the guarantees won by the workersafter decades of struggle are now all being questioned.
The Decline of the State
The last consequence of globalization is the nation-states’ growing loss of power. In view of the increasing mobility of international capital,the globalization of markets, and the integration of economies, state Pierre-Noel Giraud, L’Inégalité du Monde. Économie du Monde Contemporain governments are seeing their possibilities of macro-economic actiondiminish in the blink of an eye. In currency matters, their impact is alreadyalmost nil because the interest and exchange rates are now controlled byindependent central banks that make their decisions according to markets.
A country deciding on a unilateral decrease in its interest rates wouldimmediately witness a flight of currency to countries offering the possibil-ity of higher gains. At the same time, the range of monetary mobilizationof the central banks has become less than the volume of transactions: inJuly 1993, in a single day of speculative attacks against the franc, the Bankof France lost all of its exchange reserves. In budgetary matters, states seetheir margin of freedom similarly reduced, owing to increased public debtthat prevents any non-legislated stimulation. Finally, regarding industrialpolicy, governments have no solution to resist competition other than toattempt to attract foreign business through subsidies and special fiscalprivileges, which leaves them at the mercy of the multinationals.
However, these firms are not satisfied merely to break through barri- ers: they also bend the legislative framework meant to regulate their oper-ations. High wages and taxes or costly labor conditions make them leave.
The result is that “any form of regulation may be a victim of the market’sdownward pressures simply because transnational companies see acost.”18 The fiscal power of the states is then no longer sovereign but con-tractual, because it must be negotiated with an increasingly erratic capitalin an ever better position to dictate its conditions. “No government, evenin the North,” explains Edward Goldsmith, “has control over multinationalcorporations any more. If a law disturbs their expansion, they threaten toleave and they can do so immediately. They are free to run all over theplanet to choose the cheapest labor, the environment least protected by thelaw, the lowest taxes, and the most generous subsidies. There is no longerany need to identify themselves with a nation or to allow a sentimentalattachment to hinder their projects. They are totally out of control.”19 Inthe end, concludes Adda, “financial globalization may be analyzed as aprocess of getting around the rules instituted by the most developed statesthrough a multilateral system of world economic regulation.”20 The globalized economy thus weighs so heavily on nation-states that they see their traditional means of action gradually relegated to modalities Robinson, op. cit., p. 19.
“Seconde Jeunesse pour les Comptoirs Coloniaux,” in Le Monde Diplomatique of adherence. Confronted by a growing difficulty to control the rich, theyfind themselves deprived of an essential political lever: the coherent devel-opment of their territory. Since all budgetary efforts in the social realmmeans less ability to compete economically, they can no longer fulfill theirhistorical role of managing social compromises. Politicians thus becomepowerless and the state changes its role. From a social mediator, it nowmerely manages territorial affairs beyond its control. Reduced to the role ofspectator, it is like “a court clerk who notes decisions made elsewhere.”21 Such a change is revolutionary in that it undermines one of the founda- tions of modern politics: national sovereignty. According to Badie: “global-ization destroys sovereignties, cuts through territories, abuses establishedcommunities, challenges social contracts and renders obsolete earlier con-cepts of international security. . . . Thus sovereignty is no longer the undis-puted fundamental value it was, while the idea of outside interference slowlybut surely changes connotation.”22 As soon as the concept of sovereignty ischallenged, however, the question of identity comes to the fore with all thesocial anonymity it brings along. Democratic principles are also threatened.
There is a direct link between the loss of national sovereignty and the weak-ening of democracy. On the one hand globalization tends to generalize multi-ple loyalties to the detriment of civic allegiance. On the other, the rulingclass’ democratic legitimacy is called into question as soon as it no longer hasthe means to intervene between the demands of capital and social needs.
Finally, the free circulation of currency also limits democratic control overeconomic and social policy because such policy is subject to external pres-sures the government can no longer ignore and because there is a transfer ofdecision-making power to worldwide unaccountable economic players. Citi-zenship thus becomes meaningless to the point where one wonders what“taking power” means any more.
The Dissolution of Modernism
Globalization is not what Ernst Jünger called the “universal state,”23 constituted by the progressive fusion of the “red star” and the “white star,” Ricardo Petrella, in Le Monde Diplomatique (May 1995). On the way in which globalization reduces the power of the nation-states, see also Kenishi Ohmae, The Border-less World (New York: Harper Collins, 1990); Vincent Cable, “The Diminishing Nation-State,” in Daedalus (Spring 1995); Kenishi Ohmae, ed., The Evolving Global Economy:Making Sense of the New World Order (Cambridge, MA: Harvard University Press, 1995).
“Mondialisation et Sociétée Overte,” op. cit., p. 9.
Jünger hinted that “the difference between the red and the white star is only the fluttering which accompanies the rising of a star on the horizon. Let it rise into the sky,and let unity be unveiled.” See L’Etat Universal (Paris: Gallimard, 1962), p. 35.
i.e., the East and the West. Globalization is the result of a modernizationwhich takes the form of a structural adjustment seeking to integrate eachsociety in the world market. It is a process which presents itself as aresponse to the crisis of modernity stemming from the Enlightenment.24But this response consists only in hypostatizing the market economy, inturning all capital into finance capital, and in increasing the power oftechnoscience. The general idea is that science will allow an understand-ing of everything; technical expertise, a resolution of everything; and themarket, the purchase of everything. But that is not the way it is. Polanyiforecast that the market would destroy society. The time has arrived. The“soft trade” which, according to Adam Smith, was supposed to pacifyhuman relations, transplants war to the heart of exchange. The dictator-ship of the economic, the primacy of the private sector in the conduct ofpublic affairs, leads to the dissolution of social ties. The universe of gen-eralized deregulation leads to cultures of the lowest common denomina-tor: the same consumerist model. “The eye with no prejudices,” notedJünger over thirty years ago, “is surprised by the growing vast confor-mity, which little by little extends to all countries — not only as a monop-oly by one of the competitive powers, but as a global life-style.”25 “Thecontemporary shock of globalization is the consequence of a universalistliberalism which, despite appearances, loathes differences. Its implicitprogram is the homogenization of the world through the market and, con-sequently, the eradication of both nation-states and cultures. . . . Thearrival of liberal society cannot bear cultural slag nor community mem-bership. The maximalist liberal program seeks the eradication of differ-ences, whatever their nature, because they create an obstacle to the bigmarket and social peace. In fact, it is not only cultural residue which is toomuch, but the social fact itself. . . . Basically, the logic of Western moder-nity rests on the universal a-cultural character of all markets.”26 Gustave Massiah, “Quelles Reponses a la Mondialisation?” in Après-demain Engelhard, Principes d’une Critique, op. cit., pp. 199, 250 and 256. “In the same way that differences in wealth, talent or whatever, are ineliminable, it is necessary thatindividuals become absolutely the same . . . This occasionally unbearable lack of differ-ence is latent in the neoclassic paradigm, which postulates the absolute separability ofindividual preferences. In other words, my things have to be independent and incompara-ble to those of my neighbor . . . This lack of difference, which culminates in the absoluteseparability of personal choices, is closely connected with the denial of culture. In effect,all cultural or communitarian belonging amounts to reducing personal preferences tobeing part of a group.” Ibid., pp. 251 and 256.
But globalization is not universality either. In certain respects, it is even the opposite, because the only thing that it universalizes is the mar-ket, i.e., a mode of economic exchange that corresponds to a historicalmoment of a particular culture. In this regard globalization is only theimperialism of the Western market expanding to cover the entire planet— an imperialism internalized by the very people who are its victims.
Globalization is the mass imitation of Western economic behavior. Itamounts to turning the entire planet into this market religion, whose theo-logians and high priests operate as if the only goals were profitability.27 Itis not a universalism of being but of having. It is the abstract universalismof a splintered world, where individuals are defined only by their abilityto produce and consume. Capitalism proposes to succeed where commu-nism failed: to create a planet with no borders, inhabited by a “new man.”But this new man is no longer the worker or the citizen but the “pluggedin” consumer who shares the common destiny of an undifferentiatedhumanity connected only by the Internet or the supermarket.
“The Portuguese writer Miguel Rorga,” Zaki Laïdi wrote, “once defined the universal as ‘a place without walls.’ By this, he meant that thevalues of universality could not be promoted and defended unless peoplealready felt connected in a real, solid place. Globalization, however,develops an inverse dynamic. Individuals feel uprooted by globalization.
Feeling powerless, they erect walls, even if fragile and laughable.”28 Onthe psychological level, individuals now feel dispossessed by overwhelm-ing mechanisms, an increasingly fast pace and even heavier constraints —variables so numerous that they are no longer able to grasp where theystand. That this happens at a time when individuals are lonelier than ever,abandoned to themselves, when all great world-views have caved in, onlyintensifies this feeling of a nothingness. “Globalization,” says Laïdi,“strangely reproduces the Freudian mechanism of the crowd in the grips ofinfection and panic: infection, to the extent that globalization engendersconformity and uniformity; panic because everyone feels alone, facedwith mechanisms beyond their understanding.” Accordingly, globalizationresembles a puzzle of splintered images. It provides no vision of the worldand it rules out any representation, while public powers, which declare it On this, see Philippe Lancon, “L’Économie, comme Theologie de la Contri- tion,” in Liberation (June 3, 1996), p. 5.
“Qu’est-ce que la Mondialisation?” in Liberation (July 1, 1996), p. 6. See also Zaki Laïdi, Un Monde Prive de Sens (Paris: Fayard, 1996); “Pour une Pedagogie de laMondialisation,” in Après-demain (April-May 1996).
irreversible, are unable to deploy even symbolic resistance to it. “Thedepths of the problem of globalization result from interaction between aborderless world and one with no markers. . . . It is this dialectic between aworld with no borders and a world with no markers that explains the crisisof meaning and that reinforces our perception of a disordered world.”29This is reminiscent of what Peguy wrote in 1914, just before dying:“everyone is unhappy in the modern world.” The more globalization grows, the more societies try to reconstruct their particularity. But they have great difficulties doing so. Some inventidentities from thin air. Others try to recreate an artificial internal dimen-sion in a world where everything is becoming purely external. Fed by alltypes of frustrations, many undertake marginal projects which lead irrepa-rably to irredentism and xenophobia. The result is what Benjamin R. Bar-ber has dubbed “Jihad versus McWorld.”30 On the one hand, a planet onthe road to uniformity, progressively homogenized by the market and byglobal communication; on the other, regrouped under the convenient title“Jihad,” an ensemble of identity spasms, of aggressive ethnic or religiousaffirmations, which generate civil wars and tribal conflicts all over.31Such an outburst of convulsive identitarianism is understandable, becauseit is only the logical consequence of the transformation of the entire planetinto an “open society”: too much openness inevitably leads to too muchclosure. The reinvention of tribalism, clanism or ethnocentrism can thusbe interpreted as a desperate reaction against a threat of dispossession.
Since through their excuses both reactions discredit each other, they cannot be sustained. It would be fairer to consider them, with Barber, asepiphenomena of globalization which mutually reinforce and justify eachother. In so doing they turn their excesses outward and redirect them — inthe same way that increasing inequality resulting from the constraints of ageneralized economy pushes the poorest into extremism. Once the ethno-religious wars are over, however, the banner of McWorld returns evenmore forcefully. Moreover, in many respects, these two antagonistic forces “Pour une Pedagogie de la Mondialisation,” op. cit. p. 4.
Jihad versus McWorld , op. cit.
These are the convulsive reactions which led to Samuel Huntington’s thesis, according to which the world is heading toward a cultural or civilizational war. See “TheClash of Civilizations?” in Foreign Affairs (Summer 1993); and The Clash of Civilizationsand the Remaking of World Order (New York: Simon & Schuster, 1996). This thesis mustbe taken with a grain of salt, since culture determines the specificity of conflicts less than“the specificity of conflicts conditions the role of culture and the perception the actorshave of it.” See Panajotis Kondylis, in Frankfurter Allgemeine Zeitung, cited in CourrierInternational (October 10, 1996), p. 42.
are two different forms — the soft and the hard — of one and the sametotalitarian tendency. They both conspire to extinguish all forms of democ-racy and any active participation in public life. Finally, one can only bestruck by the manner in which certain fundamentalist movements, be theythe Talibans of Afghanistan or those involved in African ethnic conflicts,reject modern Western ideas in the name of their traditional values and atthe same time open themselves to all sorts of Western technological andcultural products: listening to CNN, wearing jeans, drinking Coca-Cola. Thus the extremes meet. As early as 1920, the Russian linguist Nicolas S. Trubetzkoi pointed out the paradoxical relation between cosmopolitan-ism and chauvinism. “One has only to consider chauvinism and cosmopol-itanism,” he wrote, “in order to realize that there is no radical differencebetween the two, that they are only two aspects of one and the same phe-nomenon.”32 Cosmopolitanism, he added, only denies national differencesbased on an idea of humanity derived from a specific model. It only invitescivilized humanity to form a single entity by universalizing the model of aparticular civilization, in this case Western civilization, implicitly consid-ered the most complete “stage” of civilization. “Thus there is a parallelismbetween the chauvinist and the cosmopolitan. . . . The difference is simplythat the chauvinist takes into consideration a smaller ethnic group than thecosmopolitan.”33 But both know only one thing: “What resembles us isbest and better than what is different from us.”34 A Political Response: Sovereign Europe
It is clear that the unchecked growth of financial capitalism is not the only outcome of today’s crisis and that regulations are necessary at all lev-els to meet the challenges of globalization. First of all, financial marketscan be regulated at the international level. Originally proposed by Tobin,taxing financial currency movements is already under way. A tax of .05%on world currency operations would discourage a number of short-termspeculative operations and produce $150 billion per year — double thecurrent amount of international aid. Thus, such a sum would allow the cre-ation of a fund for social protection or for environmental defense. It is alsopossible to envision international organizations that would manage theworld economy differently than existing ones, whose task would be toimpose substantial redistribution of the profits of globalization for the L’Europe et l’Humanité (Mardaga: Liege-Siprimont 1996), p. 47.
benefit of those most victimized by it. Engelhard proposes the creation ofa world currency. The establishment of a planetary floating currency, thereturn to a stable international standard of value would obviously preventspeculation primarily feeding off differences of exchange.
All the same, if “the phenomenon of globalization is seen as the revenge of the economy over the social and the political,”35 it is equallyobvious that an economic response to globalization is not enough. Thenthe question is how to fill the gap between the incredible expansion of theworld economy and the fact that there are no organizations able to dealwith this phenomenon. If politics must control and regulate economics, itfollows that a planetary economy must be confronted politically at theworld level. In other words, as soon as the economy expands world-wide,should not politics do the same? Unfortunately, a world state is a pipedream and it would create more problems than it would solve.36 Similarly, to oppose the nation-state to globalization would be a dou- ble error. First, because globalization spreads a process of homogeniza-tion to the entire planet, which in the past state bureaucracies have alreadyachieved at the national level. Second, and more important, because thenation-state today operates at a level of intervention and decision which iscompletely paralyzed by the mere fact of globalization. Subject to exter-nal constraints exceeding its capacities, the nation-state is simply nolonger able to take on global problems by itself. To believe that thenation-state can still decide about the opening or closing of its borders tofinancial fluxes, to believe that it is possible to reconstruct a cohesivesociety sheltered by walls which would isolate its inhabitants from theexternal world, is either a utopian dream or a lie.37 Political Europe and, more broadly, the regionalization of a number of large continental ensembles, could effectively confront globalization. With-out being a panacea (because there is always the risk that, through directinvestment, the countries concerned might be in competition inside their Adda, op. cit., Oeuvres, Vol. 1, p. 62.
See Danilo Zolo, Cosmopolis. La Prospettiva del Governo Mondiale (Milan: To resist globalization does not necessarily imply a reassertion of the territorial- ity typical of the nation-state. A large number of particularistic social dynamics areopposed to territoriality. One need only consider the example of Islamic fundamentalism,which challenges all grounding in particular nations. Similarly, identitarian, religious, eth-nic, linguistic or cultural solidarities are transnational. From this viewpoint, threatened atthe same time by globalization and the new forms of particularism, the nation-stateappears more or less as an obsolete identitarian horizon. See Bertrand Badie, “Entre Mon-dalisation et Particularismes,” in Sciences Humaines (May 1996), pp. 22-25.
borders with foreign multinational corporations), European integrationwould allow the response to a sufficiently broad range of market needs,while constituting a pole of sufficient size to confront world financialfluxes. The European economic space is potentially the largest world mar-ket in terms of population and global buying power. A European politicalauthority, controlling and coordinating monetary and budgetary policies,would make it easier to abandon the politics of external as opposed to inter-nal growth, without abandoning social protection. Similarly, a single cur-rency used advisedly could reduce the prerogative of the dollar andsimilarly become an element of power and of a regrounding of sovereignty.
But is it still necessary to strive for a truly sovereign Europe, where each stage of integration of national markets would be accompanied by agreater ability to make decisions and not simply constitute a market spaceof free exchange? Today this is hardly the case. European institutions canjust as easily resist globalization as further it. For the moment, the acts ofthe European Community, which the member states impose upon them-selves, are not predicated on true European sovereignty.38 Finally, dailylife remains local, which is the only place where politicians can still seethe effects of their policies. Faced with the globalization of exchange andthe universalization of signs — this tidal wave which erases all differ-ences and values — what remains is the singularity of forms: languages,cultures and other social links patiently recreated from day to day. Engel-hard writes of “the rehabilitation of politics passes, from one moment tothe next, by a reconstruction of the social and of the cultural, and viceversa. But this is possible only as long as culture is not seen as static butas a creative tension, both a carrier of meaning and a process for deepen-ing the art of living together.”39 Jean Baudrillard recently remarked that“all cultures worthy of this name lose themselves in the universal. All cul-tures which universalize themselves lose their singularity and die. It wasso for those we have destroyed by assimilating by force, but it is the samefor ours in its pretense to universality.” He added: “all that matters todaydoes so against the universal — against this abstract universality.”40 See Arlette-Doat, “Les Institutions Européennes: Pôle de Résistance ou Facteur d’Accélération?” in Après-domain (April-May, 1996), pp. 44-45.
Engelhard, Principes d’une Critique, op. cit., p. 365.
“Le Mondial et l’Universel,” in Libération (March 18, 1996), p. 7.
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