Capturing Globalization

James H Mittelman, Norani Othman

• Publisher: Routledge
• Year: 2003
• ISBN:
  9781134517473
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

What are the moral codes and normative principles inscribed in globalization? How do diverse communities optimize their positions, and try to capture these processes? What are the foremost cultural and political attempts to govern the market? What are the social and ethical limits to a framework based on deregulation, privitization and liberalization? These related themes reveal how issues such as religion, private capital flows, poverty, the state and democracy, transnational class structures, disruptions in culture and new patterns in the use of language are part of the globalization process.
Empirically, the research derives from data from fieldwork within and outside Southeast Asia, with a common reference point based on research in Malaysia. Following the trauma of the late 1990s - with environmental abuses in Southeast Asia, transnational turmoil in currency trading and the meltdown of stock markets - this book seeks to understand how, and to what extent, communities can reclaim political and social control over the dynamics of globalization. This highly original contribution to the globalization debate will be invaluable to researchers in a number of disciplines including political science, anthropology, history, economics, Asian Studies and sociology.

1 Globalization

Captors and captives

James H. Mittelman

The act of capturing establishes a hierarchy between the captor and the captive. A hierarchy entails an ordering and a division of labour and power. The captors are of course on top, and the captured are atthe bottom of the heap. Both within and between countries, there are many different shadings of this relationship. Thus, such structures must be contextualized and, today, are integral to an epochal transformation known as globalization.

More than a metaphor, the theme of capturing opens questions about large-scale historical change, and turns attention to some of the most vexing aspects of globalization: control, autonomy and agency. To what extent, and how, is the set of processes known as globalization being governed? If it is being governed, or if elements of it are subject to governance, then one would like to know whether there is effective management, what strategies are employed, and with what results. The tasks of control are both manifold and challenging in different arenas, i.e. at the global, regional, national and local levels. Moreover, there are the matters of defining the criteria of control, identifying who is doing the defining, and determining which interests are at stake.

In this introductory chapter, then, the objective is to formulate the core questions for analysis in the subsequent chapters. At bottom, they probe the interactions between globalization and the multiple actors, or combinations of them, who strive to dominate both its objective structures and the intersubjective processes that give it meaning. The challenge issued here is to consider these questions in light of Western scholarship and, going further, to decentre enquiry by drawing on varied non-Western discourses on religion, language and other spheres of social activity.

The problem in historical context

Whereas globalization has a long lineage, the last three decades of the twentieth century were a period of rapid structural change. In the 1970s, the international economy consisted of a handful of industrial countries that exported manufactured goods to a multitude of developing countries, which in turn sent abroad their primary products, mainly agricultural commodities and natural resources. Following the collapse of the Bretton Woods system of fixed exchange rates in 1971, a deep recession began in the United States in 1973, the year of the first oil shock, and ramified widely, initially in the West and then in the socialist and developing countries. After the Vietnam War, there was oversupply in primary commodity markets, and by the late 1970s, the hopes of a new international economic order, a package of proposals for international reform put forward by leaders from developing countries, were dashed. Marked by the simultaneous fall of commodity prices and the rise of real interest rates, the debt crisis of the early 1980s emerged. Although the United States was no longer the world’s major creditor, but now its chief debtor, it maintained a position altogether different from that of developing countries whose balance of payments reflected deep structural problems. Against this backdrop, the pileup of large external debts allowed international creditors and donors to shape macroeconomic policy in many countries. Since the early 1980s, structural adjustment programmes mandated by international financial institutions further opened national economies and oriented, or reoriented, development strategies.

Meanwhile, deeply concerned about declining rates of productivity, the emphasis in the US economy changed from the old Fordist system of mass production, mass consumption towards post-Fordism, which allows for a higher degree of specialization, greater flexibility and faster turnover time.With the spread of the post-Fordist system, facilitated by new technologies, especially in transportation and communications, the 1980s witnessed a spatial reorganization of production. While the West and Japan largely moved from capital-intensive towards technologically intensive industries, some developing countries upgraded their manufacturing industries, initially through labour intensity, and climbed to a higher position in the global division of labour. This coincided with a changeover from import substitution policies to export promotion. Centring on greater integrationin the global economy, the Reaganite–Thatcherite idea of neoliberalism extended from Anglo-America to other parts of the world, eroding barriers, relaxing restrictive frameworks for cross-border transactions, and allowing information, goods, and labour to flow more easily across national boundaries. Born in Anglo-America, neoliberalism is a culturally specific formula, one that has been extraordinarily mobile and propagated as a purportedly universal and moral proposition. But it has encountered other visions of the right and the good, such as a universal code of human rights and the notion of ‘Asian values’.

After the Cold War, nonetheless, ‘free markets’, an idea and set of policies propounded and monitored by some states, public intellectuals, and international agencies, especially the International Monetary Fund (IMF), have became an icon as well as a matter of faith throughout much of the world. Foreign assistance, loans, credit ratings and foreign investment are conditioned on implementing neoliberal policies, namely deregulation, liberalization and privatization.

By the mid-1990s, there were signs of danger in emerging markets.In 1997–1998, financial turmoil, the meltdown of stock markets and in some cases (most notably, Indonesia) political turbulence struck parts of Asia. The contagion of economic decline threatened other locales: among them, and in different measure, South Africa, Brazil and Russia. At the turn of the millennium, what had been called ‘the Asian crisis’ escalated into a possible generator of global instability.Even if this crisis was a zigzag, not a complete breakdown, and notwithstanding substantial recovery in Asia, it is possible that periodic financial crises will be a regular feature of neoliberal globalization.

In the meantime, the power component in the new global configuration has triggered backlashes. At first, the impetus for resistance seemed to emanate from civil society, which began to scale up and thrust across borders. The ascendance of capital fragmented the identity of labour, and movements oriented to gender, the environment, religion, race and ethnicity asserted themselves singly or in combination.But backlashes against globalization appeared in other guises, including the groundswell of right-wing support for populist politicians, such as Pat Buchanan in the United States, Jean-Marie Le Pen in France, and Pauline Hanson of Australia. Conservatives in the US Congress and renowned neoliberal economists, such as Nobel laureate Milton Friedman and Jeffrey Sachs, expressed dismay over the workings of the market and the role of international financial institutions. While not opposing the market per se, some states, including France, resisted the Anglo-American version of neoliberal globalization, instead maintaining a large public sector and generous welfare provisions while only selectively deregulating and privatizing.In another permutation, Malaysia, after widely opening its economy to foreign investors during its economic growth spurt, adopted selective and, as it turned out, temporary capital controls in 1998, restricting outflows of funds.

At issue in the uncertain period after the turn of the millennium are the struggles of a multiplicity of agents to subordinate the processes of globalization to their own desires and needs. In this contestation, markets are not only arenas of buyers and sellers, but also powerful forces increasingly detached from a bounded territory and with the capacity to discipline the state, evident in structural adjustment programmes, the ratings given by credit agencies such as Moody’s and Standard and Poor’s (which can make or break a developing economy), and attacks by currency speculators. Increasingly, markets are becoming dislodged from social and political control. Globally, there is no central source of order. No sovereign power can claim legitimate authority over the world market. Although national economies continue to serve as important arenas for markets, an upsurge of transnational flows challenges extant authority in this realm. What warrants investigation is not merely what states do to each other, the focus of realism, the dominant tradition in international relations. (Neorealists formulate the problematic of globalization by delimiting it as a matter of how the state adjusts its policies, without giving credence to the deep structural transformations under way in the global political economy. In this connection, see Waltz 1999: 693–700.) In fact, diverse contenders – both state and non-state actors – seek to capture political and economic power or aspects of it.

Capturing globalization is only partially a matter of state power.Not only may power be defined in terms of its overt and covert dimensions, but there is a structural sense of power at multiple levels, which involves both coercion and consent. It was Antonio Gramsci’sinsight that the mix of the two defines hegemony. From a Gramscian perspective, if consent is predominant over coercion, then a hegemonic constellation prevails. This is of course more cost effective than is the use of brute force, but the question, one that concerned classical writers such as Ibn Khaldun in the fourteenth century and Niccolo Machiavelli two centuries later, is how to use different capacities to ensure compliance and capture intersubjective understandings. It will be recalled that in Machiavelli’s view of the world as a thoroughly treacherous place, the qualities most useful to a prince, or that a prince should appear to have, are likened to those of a centaur: half-man, half-beast. Both require a capacity to know how to employ them:

Thus, you must know that there are two kinds of combat: one with laws, the other with force. The first is proper to man, the second to beasts; but because the first is often not enough, one must have recourse to the second.

(Machiavelli 1985: 69)

This is very much a matter of determining what are the positions of authority and which prince – collective agency writ large – will hold them.

In a globalizing world, the lines of legitimate authority are blurred. This tendency is especially apparent with regard to licit and illicit activities. As in Russia, states are sometimes in league with organized crime, and criminal activities, such as drug trafficking, are becoming globalized. In this and other ‘spheres of authority’ (a concept borrowed from Rosenau 1997: 39–41), there is no dichotomy between the captor and the captive. Novel, complex hierarchical relationships have formed, are fluid, and may overlap. Moreover, global hierarchies are manifest within regions, but refract differently from one region to another, and crucial intraregional differences are apparent.

Objectives

To examine these hierarchies, a preliminary task is to identify the globalizers, to determine who are the sponsors and torchbearers of globalizing processes. Conversely, one must know who is harmed by – who bears the pain of – this parametric transformation. The contributing authors will probe the interactions among the actors. In addition, lurking behind the identities of these agents lies the issue of their interests in the overall configuration of power relations. This points to the question of control: who or what are the arbiters of order? While indicating the array of actors engaged in globalization processes, consideration is, above all, given to the ways that they are attempting to capture, i.e. direct or redirect, changing global structures, and whether they are doing so in a democratic or undemocratic manner. Posing these questions underlines the importance and urgency of thinking concretely about agency without being unduly voluntarist about large-scale structural change.

Working amid the salutary and sordid effects of market-based integration, the contributors have gained perspective on the tradeoffs – the opportunities and constraints – in the globalization matrix.
The trauma associated with environmental abuses that deeply affect daily life in many countries, large fluctuations in the value of national currencies, and the loss of confidence in some economies have animated searching enquiry into underlying causes, both regionally and at a global level.

Thus, the main objective in this book is to explain how different communities try to capture social and political control of the dynamics of globalization, specifically as they interpenetrate conditions in Southeast Asia and also on an interregional basis. Whereas many researchers in this field have rightly focused on big, abstract structures, it is also important to provide detailed description of globalization as a contested process. The outcome of this contestation is in no way predetermined but open ended. Furthermore, the playing field is not level; it is tilted in various directions, and firm rules are lacking. If so, one must shift attention to the ways that agents seek to maintain or undermine global structures. In the globalization literature, theories and concepts have largely travelled from the West to other parts of the world. Indeed, globalization studies are not really global but primarily emanate from Western intellectual traditions and practice. While considering the extant literature, the authors contributing to this volume will also draw on non-Western discourses. Whereas this analysis does not purport to offer a fully fledged alternative framework for studying globalization, it does bring to bear the experience of diverse scholars who have carried out extensive research on non-Western encounters with globalization, and points to new directions deemed worthy of pursuing.

This undertaking is necessarily interdisciplinary. One of the most promising features of globalization research is that it helps to overcomethe compartmentalization of knowledge and calls for a holistic approach. Time has been the province of historians; space, the métier of geographers. Now, the disciplines of history and geography are central to understanding world order, and political economy also requires the expertise of sociology and anthropology. To be sure, the cultural aspects of globalization involve practices and representations,matters long treated in the humanistic sciences. Globalization studies thus bridge diverse fields of investigation.

The contributors to this volume are drawn from the disciplines of anthropology, economics, history, political science, and sociology.While they adopt different perspectives, let me offer a point of departure, a frame of reference that others can use as a target in their own chapters. There is a line of thinking that regards globalization as a compression of time and space (Giddens 1990; Harvey 1990; Robertson 1992). That is, with new technologies that speed transactionsand shrink distances, both time barriers and spatial constraints are lessened. Anthony Giddens sees this process as part of the inherent unfolding of modernity and as a spur toward interconnectedness. Elaborating on the concept of time–space compression, David Harvey shows the radically different ways that thinking about, and the representations of, the ordering of time and space have changed.Both Harvey and Roland Robertson regard time–space compression as a cultural force, and for Robertson, it is driven by global consciousness. Importantly, one must look at the links between this compression and social relations, for globalizing processes are not socially or politically neutral. Rather, they are both constitutive of and constitute social relations. Of course, the argument mounted by these theorists becomes entangled with the debates over modernity and the postmodern critique. In my view, it is useful to separate analysis of globalization from any notion that it is necessarily an outcome of a process such as modernity, as if it had its own laws. To think otherwise runs the risk of positing an end-point, a teleology (Albrow 1996: 99). Rather, if globalization is a contested and political phenomenon, then it cannot have a predetermined outcome. A political agenda of inevitability overlooks the fact that globalization was made by humans, and, if so, can be unmade or remade by humankind.

Also, if globalization theories offer the advantage of seeing the parts from the view of the whole, and if the whole global political economy has its own dynamics, then the parts are subject to systemic effects. However, what bears emphasis is that the system affects the components in very different ways. Globalization is a partial, not a totalizing, phenomenon. Countries and regions are tethered to some aspects of globalization, but sizeable pockets remain removed from it. Globalization contains a dialectic of inclusion and exclusion.

It is worth emphasizing that globalization is not a single, unified process but a set of interactions that may be best approached from different observation points. First, it may be seen as a complex of historical processes. The trajectories differ in various regions of the world, though all are directly or indirectly tied to the central institutions and growth mechanisms of the world economy. Second, globalization may be understood as material processes closely related to the accumulation of capital. It is caught up with the innovations in capitalism, especially the inner workings of competition, pressures that may be called hypercompetition. Third, globalization may be regarded as an ideology – the neoliberal belief in free markets and faith in the beneficial role of competition (Mittelman 1996a). Hence, globalization is an extensive set of interactions, dialectically integrating and disintegrating economies, polities, and societies around the world. Capital is in ascendance, while labour and nationality – the two major identities of the twentieth century – are fragmented into multiple identifiers, including gender, religion, race, and ethnicity.Furthermore, the globalization trend offers gains in productivity, technological advances, higher living standards, more jobs, broader access to consumer products at lower cost, widespread dissemination of information and knowledge, reductions in poverty in some parts of the world, and a release from traditional social hierarchies in many countries. Yet there is a dark side to globalization: the integration of markets threatens tightly knit communities and sources of solidarity, dilutes local cultures, and portends a loss of control, particularly in very poor countries. This massive socio-historical transformation warrants empirical and theoretical exploration of its underlying dynamics.

Research questions

The editors of this book have posed four research questions, though others could be added. The following questions provide a framework of considerations for critical scrutiny by the contributors, each of whom has been asked to respond to some or all of these issues.

1 Globalization is rapidly reorganizing people’s livelihood and modes of social existence, but without systematic reflection on the values that undergird this set of processes. What are these moral codes? Whose ethics are dominant? What are the results of attempts to balance divergent norms such as the commitment to sustained economic growth and equity?

The first question, or bundle of questions, suggests that globalization is not merely an economic process, or, to put it differently, that markets are social institutions encoded with normative claims. In fact, the ethics of globalization are understudied and have been poorly grasped in the social sciences. Clearly, there are values associated with neoliberal globalization – efficiency, competitiveness, profitability, and individualism – that form a normative paradigm based on instrumental rationality, and may be seen as part of a larger attempt to assert universal truths.

The key to the argument about universals is that through ideas, humans have access to truths, a universe that transcends time and space. In this universe, knowledge is supposed to be generated without recourse to observation. The logi...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Tables
• Contributors
• Preface
• Abbreviations
• Acknowledgements
• 1 Globalization
• 2 Globalization
• 3 Globalization and private capital movements
• 4 Globalization and economic disparities in East and Southeast Asia
• 5 Globalization and democratization
• 6 Globalization and transnational class relations
• 7 Reconsidering cultural globalization
• 8 Capturing globalization
• Bibliography