Globalization, Neither Ideology Nor Utopia

Professor Lord Desai

June 2001

Introduction

The debate on globalisation has been raging now for some ten years. Starting from a celebratory account of a borderless world [Ohmae (1990)], scepticism about the extent and the novelty of globalisation [Hirst and Thompson (1995; 1999)], fear and loathing about its destructive consequences [Sassen (1998), Burbach (1997)] the debate has continued. This is a debate which excites sharp differences in books written by developed country authors [see for a contrast Friedman (1999), Grieder (1997), Barnes (1999) all writing from a US perspective] as much as writings by developing country authors [Amin (1997)]. The State has been pronounced as powerless in the face of globalisation [Ohmae (1990)] and in turn the powerless State has been denounced as a myth [Weiss (1998)]. Many fear that globalisation has brought about the rule by global corporations who are bound by no law except that of money making [Korten (1995)], that the new order is creating a 'global apartheid' [Alexander (1996)].

The position taken in this paper avoids any of the extremes of hope or fear. Globalisation is a phase of capitalism, but not so much a new phenomenon as a revival or resumption of a similar phase in the late 19th Century. As such, it is in its early stages of development. Capitalism in its global phase is taken to be a disequilibrium dynamic system which reproduces itself through cycles and crises. This is what I have elsewhere labelled a classical or a nineteenth century Marxist view [Desai, (forthcoming), (2000)]. Thus it is neither a utopia [Friedman (199) or Ohmae (1990)] nor a dystopia [Burbach (1997), Barnes (1999)]. In order to understand globalisation as a phase of Capitalism, it is necessary to revive certain ideas from classical political economy. The main idea is that of the economy is an organism which is the result of human action but not of human design. Adam Smith and Karl Marx share such a view which was doggedly held and propounded during the twentieth century by Hayek [For a comparison of Marx and Hayek, see Desai (1997) and Sciabarra (1995)].

The organicist view is contrasted with a mechanistic view which I argue prevailed through much of the twentieth century thinking. This view considers the economy (or society) as a result of a deliberate if faulty design and holds certain agents - capitalists/corporations, government/politicians, bankers/jews - as responsible for the design and operation of the machine that is the economy. Thus in this view, globalisation could be a creation of Western powers or global/transnational/multinational corporations. Their ideology would be the hegemonic ideology. It would then be programmatic to regulate/overcome/abolish such malevolent agents and establish a world government or New New Deal etc.

The view taken here is that globalisation is neither a utopia nor is it merely or creation of ideology. Ideas, especially the revival of the nineteenth century organicist ideas play a crucial role in our understanding of globalisation. But even then organicism has to be distinguished from neo-liberal or conservative ideology which is often as mechanistic as its socialist twin.

In order to lay down some markers, I list the characteristics of globalisation and its consequences in Box 1. This is done for reasons of brevity but the lists are as ecumenical as is possible in such a subject. After that, the history of capitalism over the years 1870-1970 is succinctly described. [A more detailed version is available in a book length manuscript which will see publication in the near future Desai (forthcoming).] This history is central to the question as to whether globalisation is a mere ideological epi-phenomenon or something more substantial. The history then leads to an articulation of the period 1970-1990 which is crucial to the break-up of the phase of 'capitalism in one country' that ruled in the short twentieth century 1914-1989. It also allows us to contrast the two philosophical views - organiscist and mechanist - in a simple form in Table 1.

Following this somewhat lengthy introduction, there follows an analysis of the contemporary phase of globalisation. Three questions are posed and answered - why has globalisation happened and happened now, whether it is a benevolent or a malevolent process and if there are any predictable limits to the process that globalisation represents. A historically specific but analytically coherent account is presented in the brad tradition of Classical (as against Leninist) Marxian political economy. The essay concludes by bringing together the main elements of the essay.

Characteristics of Globalisation

1. deregulated capital markets with the possibility of speedy transfer of capital;
   
   
2. communications and information technology which makes possible ìaction at a distance in real timeî which can be very short
   
   
3. active forex markets with supporting financial markets with new products [e.g. derivatives, options] which allows speculators to take positions in any currency around the world where there are potential profit opportunities;
   
   
4. greater geographical spread and increased mobility of fixed, i.e. direct, investment;
   
   
5. rapid and linked reactions as between different financial markets which work round the world round the clock, as well as between financial markets and forex markets;
   
   
6. the emergence of a global media network linked with a global communications network;
   
   
7. the fashioning a of a global consumer culture and a global music/film/TV culture benefiting from all the above, especially [b] and [f];
   
   
8. increased but as yet imperfect and legally impeded mobility of labour;
   
   
9. greater awareness, though, as yet, not very effective redress of human rights violations, ecological disasters, famines and refugee problems, benefiting from [b] and [f];
   
   
10. speeding up of technological change leading to increased concentration of capital via mergers and takeovers but at the same time increased competition between the surviving large companies.

Consequences of Globalisation

1. reduced control of the nation state over its macro economic affairs especially in the matter of budgetary policy and monetary policy;
   
   
2. increased volatility of forex and financial markets;
   
   
3. displacement of manufacturing industry from its old locations in the North to selected locations - Asia, Latin America - in the South;
   
   
4. a dematerialisation of the industrial products [the weightless economy];
   
   
5. a feeling of increased job insecurity in the North as well as the South;
   
   
6. increasing feminisation of the labour force;
   
   
7. rapid spread of new technology embodied in new investment in the favoured locations of foreign direct investment;
   
   
8. rapid industrialisation, despite some recent setbacks, of Asian economies;
   
   
9. increased marginalisation of economies previously reliant on intergovernmental aid who are unable to attract capital, especially in Sub Saharan Africa.

A Crisis of Capitalism 1914 - 1945

It is now agreed that there was a phase of globalisation in the ‘long’ nineteenth Century stretching from roughly 1870-1914 [Hirst and Thompson (1995, 1999). (The starting date could be pushed back to anywhere up to 1840 but the terminal date is fixed by ‘the guns of August’). The more recent phase of globalisation can be similarly dated as having commenced in the early 1970’s [Desai (1997a), 2000)]. Here again the starting date could be pushed back if so desired though there is a logic in locating the beginning to coincide with the collapse of the fixed exchange rate systems, exposure of Western economies to an external adverse shock (oil price rise) and the response in terms of dismantling of capital controls. The full arrival of globalisation could however be postponed until the destruction of the Berlin Wall in 1989.

The crucial period for understanding the nature of globalisation is however the period in between 1914-1971 (or 1914-1989). This is the period in which, in the first phase 1914-1945, capitalism deglobalised at first and went through a crisis phase with the Great depression, the challenge of Bolshevism and the rise of Fascism. In economic terms, the pre-War global system broke up into individual, somewhat insulated capitalisms in the few industrialised countries [‘Capitalism in one country’ as I have previously labelled it, Desai (1998)] protected from free trade, controlling their own money supply (after the abandonment of the Gold Standard) and with disrupted capital movements.

The period also saw two further developments, one well noted and the other not at all. The first World War led to the rise of ‘the territorial social State’ in the words of Nigel Harris. [Harris (1995)]. This was the State which would actively promote the welfare of its citizens (though not of the foreigners, immigrants or refugees within its borders). It had fixed borders and created barriers to entry (passports/visas). It was also the State which believed it had the capacity via fiscal and monetary instruments to do so. The first World War had been an experiment of State control over the economy (War Socialism as it was called in Germany and State Capitalism as Lenin labelled it [Stolper (1967), Lenin in Desai (1989)]. This departure from the nineteenth century liberal order was to continue and be strengthened in the 1930’s with FDR’s New Deal, Hitler’s economic planning and the Soviet Five Year Plan.

Two Views of Society - a slight detour

The more important and unheralded change was in the growth of the social sciences and the conceptualisation of the economy and indeed society as structures or machines built to a design (though faultily) in contrast to the previous idea stretching from Adam Smith to Karl Marx and even Lenin before 1914 that society (including the economy) is an organic process. The organicist view spanned the Left and the Right in the years up to 1914 just as the mechanistic vision (if I may so label it) was also adopted across the political spectrum [Desai (forthcoming)].

In the organicist view, society is a self organising process which no single agency -individual or collective -designs or controls. There are a myriad individual and group actions directed by some praxeological force but there are also unintended consequences which are unpredictable but, in practice, inevitable. Within the broad organicist tradition, Adam Smith laid down the basic proportion that the ultimate social outcome of the myriad individual actions is benevolent; there is a harmony between the individual and the aggregate established by the ‘Invisible Hand’ which is another name for deep structures of interconnectedness beneath the seemingly chaotic and uncoordinated individual actions [Hont and Ignatieff (1983)].

Hegel took a more cautious view in this respect and thought that the civil society (the market economy as we would say today) was not self-regulating in this benevolent way and needed an occasional corrective hand of the State. His State was a combination of the Estates represented in the legislature, a neutral supra class, civil service and a hereditary monarchy. Marx in subverting Hegel took the view that the self organised process was conflictual and prone to cycles and crises. But he did not look at the State for a corrective. He envisaged a more self conscious self organised process where society would jointly decide on its course. This was possible only after a self conscious self liberating proletariat had abolished/overcome private property and the Bourgeois mode of production [Taylor (1975) Part IV; see also Dickey (1987) and O’Malley (1970). The basic reference is of course Hegel (1821/1942)].

The economic theoretic analogue of the self organising process is market competition. This is not competition in the Neo Classical, Marshallian, static sense of many small firms producing an identical product etc but a process in which there is free entry and dynamic uncertainty caused by the incessant search for profits. There was also the view that while Capitalism had imperfections, its global spread was a sign of progress. Smith argued that while Capitalism (the System of Natural Liberty) increased inequality, the increase in wealth due to competition was such that even the poorest person would be better off over time [Hont and Ignatieff (1983)]. Marx welcomed the destruction of old modes of production in the wake of the spread of the Bourgeois mode and had no sympathy for the disappearing past [Marx and Engels (1848)].

Within the organicist tradition, Adam Smith’s ideas lead to a ‘conservative’ stream via Burke, Menger and Hayek. On the other side via Marx there is a left radical tradition. Hegel stands at the middle of the fork. He is suspicious of the autonomy of the self organising process and would like the State to correct the occasional dysfunction of the market. Marx is non interventionist and anti Statist but he does believe that the system could destroy itself through its own contradictions.

The decisive change that the Twentieth century caused to this view is difficult to exaggerate. While there are antecedents in the 19th Century for the mechanistic idea [Hayek singles out Saint-Simon in this respect, though he labels the view as Constructivist not mechanistic, Hayek (1953)], the practical experience of the War economy was central in the shift of thinking. Technology in general but military technology in particular was crucial to the war effort and engineers and technicians rose to prominence. Armies are planned economies built to a design and cannot rely on an individualistic, almost anarchistic, process that market competition represents. Armies also have a hierarchical structure and the blame for defeat rests at the top. Unintended consequences are not admitted in military or engineering thinking [see Table 1 for a summary statement].

A good example is the way the notion of the market changes as between the classical and the neoclassical political economy. While for the former it is a dynamic process of discovery and innovation, for the latter it is a static process of resource allocation. Within this static view, the Marshall Pigou tradition introduced the notion of market failure in microeconomic activities, which Keynes extended to the macroeconomics of full employment. Conservative neoclassicals challenged the scheme of market failure in both micro and macro economics in the 1970’s but they stuck to the static view. Thus the onslaught of monetarism and ‘new classical’ economics of Friedman and Lucas on Keynesian economics, the Coase theorem which cast doubt on the principle of externalities and the abandonment of fixed exchange rates in place of flexible rates brought up the neo liberal orthodoxy. Yet there is a distance between this view and the organicist view which needs to be kept in mind.

The ravages of the War and the economic problems that followed in the inter War period - hyper inflation, mass unemployment, tariff wars, currency devaluations - encouraged the idea that the economy should be planned or controlled much like a military campaign. While the idea that an economy could be collectivistically planned had been debated by liberal economists [Pareto, Barone, Mises, Hayek, see Hayek (1935)], they by and large rejected its feasibility as well as its desirability. But the inter war economy could not revert to its pre-War liberal order. It was only when Keynes provided the intellectual wherewithal that the possibility of regulating an individual capitalist economy was established. Keynes provided the tools that the territorial social State needed to deliver on its promise [Keynes (1936)].

The defeat of Fascism by the joint efforts of Capitalism (reformed from its liberal days by the New Deal) and Leninist Socialism enhanced the prestige of planning, be it in a mixed economy or in a fully Socialist economy. The idea of economy as a model that could be manipulated took firm root in academic economics. Growth theory used the metaphors of take-offs and turnpikes and trajectories [Rostow (1960) for 'take-off', Dufman, Samuelson and Solow (1958) for turnpike]. The State, a benevolent, neutral, supra class agency staffed with experts was in the driver's seat in the process. While Conservatives disagreed about the extent of State intervention, they too agreed (in the USA especially) on a State-Corporations-Trade Unions partnership inaugurated in the New Deal and preserved through the 1950's and 1960's [Macmillan (1938)].

The triumph of the Soviet Union had popularised a version of Marxism (Marxism-Leninism) that was a stranger to its 19th Century roots. The spread of Capitalism was not, in this version, a positive but a negative development. During the 1950's, Marxists such as Paul Baran, Andre Gunder Frank and Paul Sweezy characterised the contemporary mode as monopoly Capitalism - predatory and parasitical on the colonies and ex colonies of the European empires. Capitalism was wasteful, sclerotic, oppressive [Baran (1960), Frank (1964), Baran and Sweezy (1968) For an early critique see Warren (1980). See also Desai (1998) (2000) (forthcoming)].

The Third International had declared soon after its inauguration that Capitalism was in a terminal crisis, its breakdown being imminent. The inter-war years seemed to vindicate this view. But even after 1945, an optimism persisted that planning and Socialism would out-compete and reach beyond monopoly Capitalism. 'We will bury you' Khruschev predicted in 1960 and he meant bury the USA under an avalanche of commodities.

The Golden Age of Capitalism 1945-1971

Despite such dire predictions, in advanced capitalist countries, the twenty five years after 1945 saw full employment, steady income growth and the surge of mass consumerism. Keynes had unlocked the secret of controlling the economic machine. He had also provided an international framework of control over capital movements and exchange rate fluctuations which made 'Capitalism in one country' safe. For the first time in its 200 year history, Capitalism seemed to be tamed, almost benevolent. Welfare Capitalism, the Keynes-Beveridge New Deal seemed to be permanent. If there were problems, there were policy tools available to solve them. There was a worry about the growth gap as compared with the Soviet union, but the differences in income levels and especially in the availability of consumer goods was expected to persist for a long time.

This post 1945 Capitalism was not one that the 19th Century liberal order would have recognised. There was a cosy symbiosis between the State and the large corporations. The latter were oligopolistic and thought to be powerful enough to shape and control the economy. John Kenneth Galbraith was the celebrated chronicler of this New Industrial State (1967). It was not shareholder ownership but managerial control which drove the corporate economic activity. Trade Unions were permitted in the larger corporations as junior partners rather than antagonistic enemies. There was surplus to go around for everyone.

A radical critique of this order focussed on the concentration of power in the corporate structure and its parasitic control of the State's fiscal transfer mechanisms. The tax and subsidy structure was designed to favour the large corporation. The US corporation also began to export goods and capital and transformed itself into a multinational corporation. In its international reach, it seemed to reproduce the older patterns of surplus transfer of nineteenth and early twentieth century European Imperialism. Both at home and abroad, the Neo Marxist critique asserted, American capital reproduced racism and inequality [Baran and Sweezy (1968)].

The course of the Cold War had divided the world into the West and the East - ideological rather than geographical expressions with Japan and the Antipodes as part of the West and Cuba as part of the East. It had also given use to the expression the Third World. To this was added the other geographical/ideological divide North and South. International political economy saw the North as the core/the metropolis and the South as the periphery/hinterland. The relationship between the two was portrayed as asymmetric. The North exploited the South, underdeveloped it and perpetuated the asymmetry. The radical solution was a drive for self sufficiency (independence of imports of goods and capital from the West) in the South. A decisive break form Capitalism, or at least Western style monopoly capital was necessary if the South was to develop. Better still it could embrace Leninist Socialism as China, Cuba, North Vietnam and North Korea had done [Baran (1960)].

The breakdown of the Keynesian model was drastic and unexpected. Profitability was eroded due to the continuous full employment and growing trade union strength. (The corporatist model did not deliver a solution of the malaise of stagflation for which Keynesians had no answer. The oil price rise deepened and globalised (across North and South) the Keynesian failure [for reference and a longer argument see Desai (2000)]. This is where the Conservative alternative began to command public support in Western democracies. Monetarism with its emphasis on money supply control (central bank) and deficit reduction (central government) was consistent with a Statist/mechanistic view except that it was a Right rather than a Left one. But in its wake a more radical libertarian approach began to command attention. If monetarism was represented by Milton Friedman, libertarianism had Frederich Hayek as its symbol. It was Hayek who radicalised the Eastern European dissidents. The libertarian view is organiscist; the neo liberal view is Statist. While both speak of the market, the neo liberal is caught in the static resource allocation logic of neoclassical economics; the Libertarian view is classical in its theory of the market, emphasising the dynamic discovery process beset with uncertainty and unintended consequences [Hayek (1960), (1982)].

Capitalism in the advanced countries recovered from the crisis of 1970's by renegotiating the Social Contract, abandoning full employment as the prime objective, putting the reduction of inflation in its place, denationalising the public enterprises and privatising, undermining the strength of trade unions. profitability was restored by the mid 1980's in the major developed countries [Desai (1997a)]. In the meantime, the Soviet system did not recover from its crisis of low growth, rising inefficiency and foreign debts. By the end of the 1980's, it collapsed - an outcome unpredicted even by its worst enemies. In the Third World, some countries in East Asia emerged as tigers with double digit growth rates, rapid industrialisation with an open export oriented economy. They demonstrated that developing countries could grow through Capitalism, disproving the Baran-Gunder Frank thesis. But other countries were caught in the debt trap and had to suffer structural adjustment by the IMF. Commodity prices collapsed after their quick upsurge in the early 1970's. State and parastatal organisation had to be dismantled. Planning in a mixed economy with autarkic self sufficiency had to be abandoned. Even China deviated from the Bolshevik State Capitalist paradigm.

To recap, the short twentieth Century 1914-1989 could be split into three phases:

1. 1914-1945 deglobalisation, hyperinflation/depression, shrinkage of trade/capital flows; retreat of the liberal order, rise of Fascism/Bolshevism; growth of the territorial social State, an inter-State system replacing a global order
   
   
2. 1945- 1971 Golden Age of Keynesianism, Stalinism and of Decolonisation; Full employment, steady growth (in East and West), growth of mass consumerism, trade unionisation, corporate power; governments as important, essential institutions; Cold War; nationalism as a positive force in the South, rising inflationary pressures (North)
   
   
3. 1971 - 1989 Crisis of Keynesianism - stagflation, workers militancy, growth of government budgets and of a fiscal burden; crisis of Stalinism - low growth, repressed inflation, citizen unrest (Poland, Hungary, Czechoslovakia), deregulation of capital movements, de-industrialisation in the North and new industrialisation in the South, steady liberalisation of trade; Cold War; crisis of the Third World due to indebtedness and structural adjustment.

Table 1

Two Contrasting Systems
Characterisation of Major Processes

Globalisation; The Latest Phase of Capitalism

The above recapitulation of the history of ideas and events is a necessary background to understanding the issues posed at the beginning of this article - the why, the whether and the if of globalisation. This is because I shall argue that globalisation is a decisive break from the way capitalism was in the 1914-1989 period, even more so from the Cold War stasis of East/West, State (aided) Capitalism/State Socialism. It is Capitalism of course, but in a phase which is more in tune with 19th Century than the 20th. The collapse of the Twentieth Century Statist Capitalism/Socialism during 1971-89 was the result of a Marx Hayek cycle triggered by the decline in profitability in the early 1970's and prolonged by the futile attempt to reflate using Keyneisan devices [Desai (1996)]. The painful restructuring that took place to restore profitability laid the foundations of the transformation of Capitalism that is globalisation. The change in conceptions about the role of markets was as crucial as the changes in fiscal and monetary policy.

There was an independent parallel process of innovations going on at the same time. In the transport field, in information technology, in communications there was a wave of innovations. This was a Schumpetarian process. While many of the new inventions came from established large corporations, it was the small venturesome Capitalist who subverted the old Capitalism. While economists such as Galbraith and Kalecki had traced profits of the corporations to monopoly/oligopoly power and control over markets and thus warned of a tendency to secular stagnation in advanced Capitalism, the new dispensation falsified these predictions. The Silicon Valley entrepreneurs such as Bill Gates rose from minnows to whales in record time. The dynamic process of Schumpetarian competition threw up new giants as it displaced old ones.

Why?

Thus Globalisation is a combination of material developments in technology, of conceptual paradigm shifts in our view of the nature of markets and the changes in economic policy - balanced budgets, inflation control, privatisation and deregulation of capital movements. It has happened in the wake of a crisis of profitability in the Keynesian system in the 1970's. The compulsion to restore profitability led at first to policy shifts (monetarism, deregulation) which were supported by paradigm shifts. The ideological shift was definitely there but it did not exist in a vacuum. I have distinguished between Neo classical conservatives like Friedman and neo Austrian libertarians like Hayek because there is a distinct shift away form the State in the latter. The parallel collapse of the Soviet System (except in China) strengthened the conservative/libertarian message. Eastern Europe chose to go from Stalinism not to market Socialism as many had hoped but to market Capitalism. State Capitalism was on the retreat everywhere.

In the mechanistic paradigm, globalisation is seen as a neo-liberal ideology - a facade - to rationalise economic inequalities. The point, however, is that the asymmetries of wealth and income inequalities were there before globalisation. There was a hope in the advanced capitalist countries that the State may reduce inequalities at least within the rich countries while paying rhetorical obeisance to reducing North South inequality. Now the State is unable to pursue that programme since it does not ëcontrol' the economy. In the organicist way of looking at it, no one - no individual or group - has brought about globalisation. It is the result of a wave of innovations and a compulsion to restore profitability on the part of many many capitalists.

There persists a suspicion of a hegemonic ideology. This is, however, due to the fact that institutions of global economic governance - IMF, World Bank - reflect the inequalities of political power in the inter-State system. The clash between the juridicial equality of sovereign nation States and the de facto inequality of economic and political power is real. The Washington Consensus reflects this reality and is therefore resented. After all, what the consensus preaches to the Third World countries is what the First world has already practised in its own monetary, fiscal and exchange rate policies. Of course, in an organicist paradigm, such institutions are redundant if not positively harmful. The Left and Right critiques of the Washington consensus may yet combine to rid the global system of these institutions.

Whether

The issue is whether globalisation is benevolent or malevolent. Or perhaps is it benevolent to the powerful North and malevolent to the poor South. Is it just a continuation of the imperialist system of the nineteenth and early twentieth century under a new glossy faÁade of liberal democracy and free markets? The answer to this crucial question has to be multi-layered. We need to distinguish as between North and South and according to the historical phases outlined above. It will also be different according to whether we take a mechanistic or an organicist view. Let us begin with the dominant paradigm in the social sciences which is mechanistic. In this view, if we begin with the North then capitalism was benevolent in its Keynesian phase while full employment prevailed. Contrasted with those golden years, globalisation has brought job insecurity, financial volatility, weak state and an erosion (threatened rather than actual) of welfare benefits. Flexible labour markets (in Anglo Saxon economies at least) have weakened trade unions and through them social democratic parties. Income inequality has increased markedly rewarding highly educated people who are in demand in the new technological enterprises relative to blue collar workers large sums as compensation. Big corporations merging and retrenching are seen as villains of the piece. They are relocating abroad, outsourcing, downsizing, flattening the hierarchy, imposing insecure and demanding job contracts etc. There was, for a while, in the mid 1990's real concern that work will shrink or disappear though the rising employment record in the Anglo Saxon economies, at least, has disproved that prediction [Geider (1997), Korten (1995), Burbach (1997), Barnes (1999)].

The critique of large global or transnational corporations also extends to the ecological damage done by the growth of production. The migration of capital to the South is criticised for employing cheap labour which lacks the healthy working conditions of labour in the North. International trade which has steadily liberalised and took a big upward jump, with the negotiation of the treaty establishing the WTO, is then characterised as a transmission belt of all the evils of globalisation. Radical groups in the South echo this critique. They see the flow of global capital as a reestablishment of hegemony, with the end of self sufficiency as an ideal for the autonomous development of the South. They join their Northern counterparts in pointing out the ecological damage. Since the self sufficiency ideal was built on a denial of free trade as a beneficial arrangement, they too see the WTO as the problem.

But while the North critique contrasts the present with a golden age of 1945-1971, the South critique cannot make that contrast. While that period saw decolonization and the beginnings of economic development, the contemporary radical critique during that period bemoaned the slow speed of growth, the lack of capital - either private or public - from the North and the barriers to trade. Capitalism in either of its forms - pre 1970's or post 1989 - is thought undesirable in the radical critique from the South. Thus there is no way to discriminate between globalisation and its precedents for the radical critics of Capitalism from the South [Gunder Frank (1968), Baran (1960), Amin (1997)].

There is a pragmatic attitude of some governments and capitalists of the South which contradicts the radical critique. It realises that the South or at least some countries within it have a lot to gain from greater access to the markets of the North. This was the motivation behind the Uruguay Round of GATT negotiations which culminated in the WTO. The Newly Industrialising Economies of East Asia and Latin America took a lead in this process. They seek larger FDI flows from the North. They resist the imposition of the Social or the Green Clause in the WTO process. In this group are some highly populous countries - China, India (though only very recently convinced about the benefits of Globalisation) , South Korea, Malaysia, Mexico, Brazil, Argentina and Chile. Most of the Asian governments have moved in line with this view. They continue to emphasis the unequal nature of the international economic arrangements- debt burden, the intellectual property rights regime, the high handedness of the IFIs etc. Thus, the governments of the Third World were angry at Seattle that no further negotiations took place on the Treaty, that they were excluded by the OECD countries, that the smaller states had not enough means to negotiate properly. What they did not say was that they wanted to abolish the WTO. This is why China is trying to join the WTO. Governments of these countries have abandoned the NeoMarxist idea that the best escape from poverty lies in the rejection of capitalism. They seem to want more of it.

The governments of the North began by being positive about globalisation, though they too are aware of the reduced autonomy for the state in fiscal matters. They have begun to adapt to globalisation (USA, UK) or are still hoping to preserve the Keynesian Welfare Capitalism (France, Germany). With the passage of time the political opposition to globalisation is mounting as the job losses increase, and there has to be continuous adaptation to new technologies, mergers and migration of capital abroad. The search for a ìThird Way' is part of this process. But on the whole the North governments remain happy with the WTO even as they quarrel across the Atlantic about bananas and hormone fed beef [Desai (1999)].

Within the mechanistic paradigm with its emphasis on the State as a pivotal institution, the above views can be classified along the radical versus pragmatic/conservative grid.. They involve giving a yes/no answer to the benevolent/malevolent question. The organicist view (especially of Marx) starts with the idea that as a dynamic self organising process, globalisation is neither one nor the other but it is both in a dialectical manner. Thus capitalism is characterised by cycles and ìgales of creative destruction', panics and crises but these are the ways capitalism reproduces itself. Its wealth generating capacity is at one with its wealth destroying capacity. The closure of old outdated industries and their replacement by new profitable ones is part of the process by which capitalism thrives. The fact that the closure may be in the North and the replacement located in the South is no argument against capitalism in this view. Trade freer and freer, as it removes all tariff and non tariff barriers, is of universal benefit including those who stand temporarily to lose their industries. The migration of many industries from the North to the South in search of ìcheap labour' is precisely how the industrialisation of the South can take place. Attempts to slow this process down by way of a Social clause seemingly in the interests of the poor workers of the South is merely a protectionist device deployed by the Rich and not for the first time either [on Marx's defence of free trade, see Lenin (1894)].

Thus the search for a purely or even largely benevolent globalisation with all its bad features removed either by a proto- global State would be seen by the organicist as a chimera. Schemes of improved global governance - a better IMF with more resources to be a lender of the last resort, schemes to rescue banks from bad debts or failure, to stabilise the prices of primary commodities - would all be castigated as Statist attempts to block the free flow of capital. In as much as this view would support State action it would be in dismantling itself at the national and the international levels. In practical terms its critique of IMF has been that it over reaches itself and by its rescue attempts condones moral hazard, thus inducing excessively risky portfolio movements.

If

The organicist view would see the entire short Twentieth century as a deviation from the true nature of capitalism. Thus it would see the new phase of globalisation as not 'the end of history' but a resumption of the Nineteenth century global capitalism. Of course, over the century there has been a massive spread of democratic politics and the organicist view predates democracy in the sense of universal adult franchise with multiple political parties competing for power and having to respond to voters demands, many of which require interference with the self organising order. Thus the organicist view often seems to be uncomfortable with parliamentary democracy. This tension was ever present in the work of Hayek the most formidable exponent of the organicist view in the Twentieth century[Hayek (1960)]. No organicist exponent of the Marxist view has been active during the Twentieth century as Leninism displaced the classical Marxist view [Desai (1999)]. Since its ideal is essentially a Stateless civil society or at best one with a minimal state, organicism has not articulated a vision of the international society except that universal free trade should prevail [Sally (1998)]. But the inequities of imperialism are ignored in the Hayekian version of the organicist view and the characterisation of imperialism in the Marxist tradition has based itself on Lenin's Imperialism rather than the much more organicist work of Rosa Luxemburg. [Luxemburg (1913/1951)] For Luxemburg Imperialism was an economic process of absorption and reproduction of surplus value designed to sustain capitalism as a global system. But as it reproduced itself by penetrating the periphery, it sowed the seeds of its own destruction because dialectically it strengthened the periphery, as a result of displaced accumulation. Imperialism in Luxemburg's theory is not the political domination of the periphery by the core but its economic interpenetration. This process is self destructive.

In Lenin's theory, the growth of the proletariat in the periphery may bring new partners for the proletariat of the metropolitan countries. In Neo Marxist visions of Mao and Lin Piao, it became a war of the East against the West. To say the least, this version of Neo Marxism has proved a bit over sanguine about the prospects of a revolution. Much of contemporary international political economy derives from the Leninist position about imperialism as an antagonistic political relation across states in which the governments of the metropolitan states in cahoots with ìtheirî capitalists exploit the workers and even the capitalists of the peripheral countries. The development of the periphery requires the exclusion of metropolitan capitalists at least and of periphery capitalists at best. Here globalisation is part and parcel of the same old process of imperialism that Lenin wrote about. The problem with this view is that capitalists of the Metropolitan countries are often taking actions which hurt ìtheir home economiesî while they search for profits abroad. While during the Keynesian phase, States seemed to be in control over capitalists as well as workers within their territories, now capital is footloose and liable to go where it pleases. Governments, even of the core countries, have to entice capital to stay at home or attract it from abroad in form of FDI. In this sense, they are much more like the periphery than they were during the golden age of Keynesianism. In the Neo Marxist perspective it would require joint action by the South countries to counter the North countries to win concessions for the South. The alternative ideal, that the proletariats of the North and the South would combine in a joint action against capital, seems to have been removed from the agenda of radical movements. That way of ending capitalism has closed itself. [See however Singer (1999) who has hopes that it is the proletariat of the metropolitan, especially continental European, countries which may yet bring about a revolution]

By contrast, the Luxemburgist view would see the Twentieth century globalisation as part of the process of reproduction of capitalism on a global scale with industrialisation in the South as the North tried to restore profitability of capital. Along the way, there would be destruction and creation of wealth but capital will behave as it always does - without loyalty to country or caste, seeking profits incessantly. In this way, it would aggrandise neither the North nor the South but only itself. It would eventually, though with no fixed time table, destroy itself. Of course there is no guarantee that the self destruction will eventually occur or that there are viable channels through which it will if and when the time comes. Luxemburg's hopes were that such a self destruction could have taken place at the end of the last globalisation but that did not happen as the world sank into barbarism rather than rose to Socialism.

There are other visions of the end of globalisation as it reaches an ecological limit or as society revolts against the utopian experiment of free markets [Gray (1998)]. But they are not germane to our discussion which has focussed on two world views and even if they were it would require another long article to deal with them.

Conclusion

Globalisation today is a renewal of the nineteenth century phase of capitalism. It is not ideology alone but it is ideology plus technology plus deregulated capital movements which are connected to a new policy paradigm which is related to ideology. Lenin called Socialism Soviets plus electrification. Globalisation by analogy is computers plus deregulated capital. In contrasting two world views, we have shown that it is possible from one world view to regard globalisation as malfunctioning, ideological, hegemonic and unequalising. But that would be to stick to a paradigm whose world has passed . Indeed it has passed largely as a result of the resurgence of capitalism in its global phase. The organicist view sees globalisation as a self organising process not designed by any one or even many corporations or governments but as an incessant seeking for profits in a gale of creative destruction. It is refashioning what was an Inter-state [International] Order into a Global Process whose end is not predictable. Yet if the organicist view blames no single agency for the functioning of capitalism, it neither offers hope of a better world in the near future. In Marx's vision, there is incessant class struggle as capitalism reproduces itself. There is a distant end to capitalism and a self conscious, self organising society emerges at the end. But here again there is no promises, at least in Marx's own writings, of any immediate redress.

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