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World Affairs
Politics of Economics: A Shifting Paradigm
While an aggressive push on globalisation continues, so does rising concern about the waywardness of the globalising process. The pressure to alter the political, social and cultural frame of nations to conform to the imperatives of an armament-protected consumerist paradigm is building worldwide tension and destabilising both developed and developing countries in diverse ways. The authors trace the contours of the shifting paradigm and developing compulsions within the political-economic systems and also discuss retrieval strategies.
Democracy, Globlisation and War Prem Shankar Jha
Information: The Great Leveller Hazel Henderson
Economic Maturity Beyond Capitalism Terry Mollner
Good Governance and the Goals of Development Gilbert Etienne
The Uncertain Fate of Nations Mihaly Simai
Democracy, Globalisation and War
New Myths to Save the West From the Rest
The western dream of an end to war following the fall of the Soviet Union, as well as the prescription of western style democracy for its fulfilment are both untenable. In reality the basic premise of unfettered competition contains within it the seeds of great conflict.
Prem Shankar Jha
Since the end of the Cold War the people of the industrialised world have lived between a hope and a fear, both almost too big to be put in words. The hope is that humanity has at last entered an age without war. The fear is that the Cold War and, for that matter, the two World Wars that preceded it, may only have been chapters of a book, and that although they cannot yet discern the script, another chapter may remain to be written. By almost any yardstick, the twentieth century has been the most violent the human race has ever known. Not only did the two World Wars claim 50 million lives, but despite the constraints imposed by the Cold War, 138 more wars were fought in the 44 years that followed. These claimed another 23 million lives. Few are therefore willing to express the hope outright. Instead, most writers hedge it with caution. "The doomsday clock", wrote Richard Caplan and John Feffer, "which once ticked but three minutes from nuclear midnight ... has been turned back to 11:43 pm" Or "War will not disappear, but the security threat to states from other states is on a downward course".
Not surprisingly, most scholars writing on international relations have been preoccupied with assessing the possibility of war, estimating whether it is waxing or waning, and identifying its possible sources. In the immediate aftermath of the Cold War optimism bordering on euphoria prevailed. A spate of writing in the late eighties and early nineties confidently predicted that after the defeat of communism, war as the twentieth century had known it had passed and only aftershocks have remained. Then as ethnic and border wars multiplied, and as the breakdown of the communist system did not bring peace and prosperity but the exact opposite to the states of the former Soviet Union, optimism began to be tempered with realism and then with anxiety. Was the sudden eruption of localised wars a backlash to the constraints imposed by the Cold War? Was the rise in frequency and intensity of conflict temporary or did it presage a new dark period for mankind?
Most of this debate and the policy formulation that has accompanied it, has taken place in the US. This is not surprising, for somewhere between the World Wars, the US supplanted Britain as the global hegemonic power. Hegemony imposes its own burden of responsibility, especially in an increasingly intermeshed world. But America’s belief in its own exceptional nature and unique sense of mission ensured that, unlike Great Britain, it embraced its hegemonic role and did not wait to have hegemony thrust upon it.
The thesis that the age of war is behind us has been derived from two powerfully influential works at the end of the ’eighties. These are Francis Fukuyama’s The End of History and Samuel Huntington’s The Third Wave. But the roots of both beliefs go much deeper. Fukuyama uses the term ‘history’ not as it is used in common parlance but in Hegel’s sense of mankind’s ideological evolution. The endpoint of this evolution is the "universalisation of Western liberal democracy as the final form of human government". According to him, in the last two centuries international conflict has been driven by and large by ideology. The end of the eighteenth and the first fifteen years of the nineteenth centuries saw a struggle between liberal democracy and authoritarianism. "The twentieth century saw the developed world (again) descend into a paroxysm of ideological violence as liberalism contended first with the remnants of absolutism, then bolshevism and fascism, and finally an updated Marxism that threatened to lead to the ultimate apocalypse of nuclear war." But the century closed with ‘an unabashed victory of economic and political liberalism’. The underlying message is obvious: if, for two centuries, war was fuelled largely by ideological conflict, the end of history meant the end of war. Fukuyama ends by speculating that if war were ever to resurface, it would probably be because mankind will get bored with peace: "The end of history is a very sad time. The struggle for recognition, the willingness to risk one’s life for a purely abstract goal, the worldwide ideological struggle that called forth daring, courage, imagination and idealism will be replaced by economic calculations, the endless solving of technical problems, environmental concerns and the satisfaction of sophisticated consumer demands. In the post-historical period there will be neither art nor philosophy, just the perpetual caretaking of the museum of human history. Such nostalgia will continue to fuel conflict even in the post-historical world for some time to come ... perhaps this very prospect of centuries of boredom at the end of history will serve to get history started again."
Huntington’s book The Third Wave is much less well known, partly because it was overtaken by his celebrated essay on ‘The Clash of Civilisations’ only two years after it was published. But its main thesis was no less influential for policy makers in the early nineties because it linked democracy, economic development and the end of war in a single, coherent causal relationship. Put in a nutshell, his thesis was that the period 1974 to 1990 had seen the third wave of democratisation. No fewer than 34 countries had switched to democracy or reverted from being authoritarian to democratic, and that was before the bastions of communism came crumbling down. This wave had been preceded by two other waves: the first between 1828 and 1926, and the second shorter wave from 1943 to 1962. Huntington was concerned mainly with explaining why democratisation had occurred in waves, but as a byproduct of his analysis, he pointed out that not only did democracies not wage war against each other (for the obvious reason that they were usually on the same side of the ideological fence) but that most high-income countries were democracies. Huntington used World Bank 1989 per capita GDP tables to show that out of 24 high-income countries (excluding Switzerland) only three – the UAE, Saudi Arabia, and Kuwait – were non-democratic, and out of 53 middle income countries, 23 were democratic, 25 non-democratic and five in transition and lastly that out of 42 low-income countries only two were democracies. The moral was obvious.
Huntington’s implied thesis has come under damaging attack. In an article in Foreign Affairs, Edward Mansfield and Jack Snyder pointed out, on the basis of a 170-year statistical analysis of wars from 1811 to 1980, that the thesis that democracies did not go to war against each other needed to be heavily qualified. While stable democracies did indeed abstain from war against each other, so too, as a rule, did stable authoritarian regimes. On the other hand, democratising countries were more likely to go to war within a decade of their transition than those that had not undergone a change. Mansfield and Snyder were able to go one layer deeper and relate the type of democratic change with the chances of war. Thus, freeing the choice of Chief Executive doubled the chance of war. Increasing the competitiveness of politics increased it by 90 per cent; weakening the Chief Executive increased it by 35 per cent. The longer the leap from autocracy to democracy, the greater the chance of war; likewise with increased mass participation. The reason, they surmised, was that democratisation tended to release powerful forces of nationalism and these increased the chances of conflict. The Napoleonic wars, the Franco-German war, and the First World War itself, could be traced to the rise of nationalist sentiment following democratisation in France and Germany. The same, or at least similar forces could be released by democratisation today.
Despite these and other inconsistencies, over the decade after their publication, Fukuyama’s and Huntington’s 1989 theses have become part of the bedrock of thinking about the post-Cold War world. Its primary and most basic assumption is that democracies will never wage war on one another. The second is that as more and more countries become democratic, the areas of the world prone to conflict will diminish. Thus the forces that cause war are ebbing and need only to be controlled. Its third premise is that economic development automatically leads countries towards democracy. Its last premise is that open market, i.e. capitalist, economies are the only ones likely to progressively raise standards of living. Thus, open market capitalist economic policies promote growth, which promotes democracy, which in turn promotes peace. Thomas Friedman made the connection in a blinding flash of intuition and presented it in his book The Lexus and the Olive Tree as his ‘Golden Arches’ theory of conflict prevention. "No two countries", he wrote some time in 1998, "that both had McDonald’s had fought a war against each other since each got its McDonalds."
The logic underlying the ‘Golden Arches’ theory is part of the western psyche. As far back as the eighteenth century, the French philosopher Montesquieu wrote in a book entitled The Spirit of Laws, "Two nations who traffic with each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling; and thus their union is founded on their mutual necessities". Montesquieu observed that international trade had created an international ‘Grand Republic’ which was uniting merchants and trading nations across boundaries, and would surely ‘lock in a more peaceful world’. A century later, when the industrial revolution was sweeping across Europe, not only had trade links deepened immeasurably, but they had been supplemented by cross-border investment. The savings of tens of thousands of people in one country were locked into fixed investments in another. War would therefore hurt both. In addition an entirely new player had entered the scene as a powerful force for peace. This was the shadowy network of international bankers whom Karl Polanyi called Haute finance.
By the end of the first decade of the twentieth century, international trade had grown to the point where nations were selling abroad almost one-tenth of all the merchandise they produced abroad. Their foreign direct investment added up to almost the same in percentage. The world, by which one means mostly the industrialised world, was clearly so deeply intermeshed that war would create as many losers in the victorious countries as it would winners, and that was even before one counted the cost in lives and wanton destruction. Not surprisingly, these facts led Norman Angell to write a book, The Great Illusion, in the early years of the century, which declared that war itself had become obsolete. The book was published in 1910, four years before the Great War.
Despite the obvious incongruity, the basic theses propounded by him have not lost their vigour or validity. Ninety years later, Friedman makes the same point. "Today’s version of globalisation – with its intensifying economic integration, digital integration, its ever-widening connectivity of individuals and nations, its spreading of capitalist values and networks to the remotest corners of the world ... makes for a much stronger web of constraints on the foreign policy behaviour of the nations which are plugged into the system. It both increases the incentives for not making war, and it increases the costs of going to war in more ways than in any previous era in modern history".
For about three years after the fall of the Berlin wall, euphoria prevailed. The Cold War was over. The Gulf War had only demonstrated the invincibility of the modern military technology possessed by the US. Power was securely in the hands of the major industrial democracies, and democracies did not go to war. The implosion of the Soviet Union and the helter skelter rush of the entire bloc of formerly socialist countries towards market capitalism ensured that one day these countries would also join the community of peaceful nations. Where then was the need for the colossal stockpiles of weapons built up during the Cold War? The popular mood fully reflected this sentiment. Opinion polls between 1992 and 1995, showed a two to one majority in favour of cutting the budget deficit by reducing defence spending. In his promises, President Clinton included a reduction in the size of American nuclear stockpiles and conventional forces and a $20 billion programme to convert defence industries to civilian production – to turn swords into ploughshares.
It was not long, however, before developments in the real world began to challenge some of the optimistic assumptions of the first post-Cold War years. To begin with, the end of the Cold War and the triumph of capitalism over communism led, not to a reduction of wars and conflict in the world, but seemingly to its opposite. Early in 1993, The New York Times published a list of countries in the throes of violent conflict. They numbered 48, and that was just a partial count! Three years later, by another count, the number had risen to more than a hundred. The dream of a new age for mankind began to go sour in other ways as well. Instead of making a smooth transition from socialist to market economies, the East European countries all collapsed into varying degrees of chaos. Their standards of living fell precipitously, income differentials widened dramatically, unemployment and crime grew by leaps and bounds and far from welcoming their new-found democratic freedoms, their older people in particular began to hanker for the ‘good old days’ of communism. By 1995, eight out of nine formerly socialist countries had voted the Communists back into power.
Wars broke out all over the globe. One index of their rising frequency was the number of peacekeeping missions that the UN was asked to undertake. Between 1990 and 1992, it undertook 14 missions. This was the same number as had been undertaken in the previous 43 years. This eruption of violence provoked Lawrence Eagleburger, then Deputy Secretary of State in the Bush Senior administration, to observe, "For all its risks and uncertainties the Cold War was characterised by a remarkably stable and predictable set of relationships among the Great Powers". As people began looking for explanations, Fukuyama’s thesis came in handy once more. This was the notion of lagged ideological evolution. For Hegel, history had ended in 1806 for the vanguard of humanity. For Kojeve, the two World Wars, attendant upheavals and, one must presume by extension, colonial conquests were merely a messy but unavoidable extension of the "basic principles of the liberal state ... spatially, such that the various provinces of the human civilisation were brought up to the level of its most advanced outposts." Fukuyama therefore predicted that wars would continue as some parts of the world continued to remain trapped ‘in History’, but die out as the rearguard of humanity caught up with the vanguard.
This type of reasoning, which was echoed by many writers, is vastly reassuring, for it panders to peoples’ need to believe that despite the evidence to the contrary, war, as the twentieth century had known it, is truly a thing of the past: only, the arrival of the future had been unexpectedly delayed. Out of this view, and its corollary, that the industrialised West represents the vanguard of humanity, has been born the belief that the resurgence of ethnicity and the wars being fought on that account in the former Soviet Union, the ethnic conflict in Turkey and the Middle East, in Afghanistan and South Asia, and above all in Africa, are primitive and atavistic. The ideologies and beliefs that feed these conflicts, such as fundamentalism and nationalism, are irrational and doomed to extinction. The ‘vanguard’ societies have to bear with them, but if these conflicts threaten them, or threaten the consolidation of the liberal democratic system, they have a duty to intervene and prevent or control them. All such interventions are morally justified because no matter what pain they may inflict in the short run, and no matter how uncertain or unexpected their immediate outcome, they ultimately force the ‘provinces’ to catch up with the ‘vanguard of humanity’. In short, they force them to be free. In its hour of triumph, therefore, liberal democracy is beginning more and more to resemble the totalitarian creeds that it vanquished.
It did not take long for these views to get reflected in policy – especially US policy. In a lecture at Harvard in October 1993, Anthony Lake, then the National Security Adviser to President Clinton, warned his audience against half-baked pacifism and calls for political disengagement and disarmament. He listed no fewer than nine circumstances in which the United States would be prepared to go to war. These included everything from the defence of the homeland to acting unilaterally to protect America’s vital interests (such as in oil), to taking part in peacekeeping operations in concert with allies or under the mandate of the United Nations, to honouring commitments to allies threatened with attack and to simply maintaining the credibility of American assurances abroad. The list was so comprehensive that by the end of the speech the audience was convinced that despite the end of the Cold War, President Clinton had no intention of tinkering more than marginally with the defence budget. That had indeed been Lake’s purpose. All it had done was to manufacture a new set of reasons for continuing to do what the military asked.
As the decade progressed and conflict did not diminish, new explanations began to be sought for its stubborn persistence. Out of these came two concepts that began to play a larger and larger role in determining international policy. These were the concepts of ‘outlaw’ or ‘rogue’ states, and ‘backlash’ states. Backlash states were not simply states caught in the grip of conflicts inherited from the past, but states that consciously resisted the spread of democratic and capitalist values in the name of alternative ideologies — leftover communism, nationalism and religion. "For now", wrote Lake, who may even have coined the term, "they lack the resources of a superpower, which would enable them to seriously threaten the democratic order being created around them. Nevertheless their behaviour is often aggressive and defiant". "The backlash states", he continued, "have some common characteristics. Ruled by cliques that control power through coercion, they suppress basic human rights and promote radical ideologies ... Finally, they share a siege mentality. Accordingly they are embarked on costly military programmes, especially in weapons of mass destruction and missile delivery systems, in a misguided quest for a great equaliser to protect their regimes or advance their purposes abroad. As the sole superpower, the United States has a special responsibility for developing a strategy to neutralise, contain and, through selective pressure, perhaps eventually transform these backlash states into constructive members of the international community". In 1994, Lake named Cuba, North Korea, Iran, Iraq and Libya as backlash states. But since then, their number too has grown. For to these must be added Sudan, Afghanistan, Myanmar (Burma) and above all, Serbia. Pakistan too seems on the way to being dubbed as backlash if not yet a rogue state.
Policy has evolved in step with these shifts. In the decade following the eighties, it has coalesced gradually around four postulates. These are, first, that the end of the Cold War has eliminated the potential for major global conflicts of the kind that led to the first and second World Wars and the Cold War itself. Second, that the main sources of tension in future years will be sectarian and ethnic violence born out of a worldwide resurgence of such sentiments and challenges to the emerging international system from backlash and rogue states. Third, that so long as these conflicts remain localised, their resolution should remain a local matter, to be pursued bilaterally or at the regional level. The international community should step in only where it is characterised by such behaviour as ethnic cleansing, genocide and the wholesale violation of other human rights that the international community deems a threat to its collective security. Since the older industrialised countries of the West are not embroiled in these conflicts, they are qualified to act as referees and take the lead in suggesting, or when necessary imposing, solutions. And fourth, when these conflicts have the potential to become generalised, the international community has the duty to step in and help contain them, if not nip them in the bud.
In 1998, US Secretary of State Madeleine Albright summed up US foreign policy challenges as follows:
If our dynamic world were to stop for a snapshot today, it would be possible, very generally and imperfectly, to discern four basic categories of countries: full members of the international system; those in transition, seeking to participate more fully; those too weak, poor or mired in conflict to participate in a meaningful way, and those that reject the very rules and precepts upon which the system is based ... First and foremost, we must strengthen the bonds between, and prevent ruptures among the leading nations ... Second, we must fortify the international system by helping transitional or otherwise troubled states to become full participants ... Third, we must give a boost to weaker states that are most willing to help themselves ... Finally we must repel threats to the system of laws and relationships that affect the security of all nations.
These policies, which have been dubbed ‘The New Interventionism’, have not met with any conspicuous success in reducing the frequency and intensity of conflict around the globe or spreading democracy and promoting prosperity. The number of UN peace missions has continued to grow. The number of armed interventions by the major powers or surrogates like NATO and Australia, with or without the blessings of the UN, has increased. Intervention has not made these conflicts easier to resolve and efforts to dislodge dictators held responsible for the revanchist policies pursued by backlash states have met with a conspicuous lack of success. Where these have met with success, as in the case of Indonesia’s Suharto and Haiti’s ‘Baby Doc’ Duvalier, the resulting weakening of the State has spawned a litter of new threats, not least to human rights, that has forced the burden of further intervention upon the ‘leading nations’. Indeed, in every respect the ‘new interventionism’ has uncannily fulfilled the prediction made eight years ago by John Stedman: "Followed unthinkingly, the New Interventionism could become increasingly expansive till the US and the United Nations ultimately take on tasks for which they are ill-prepared, leaving themselves embroiled in numerous internal conflicts without the will or resources to bring peace to any."
Despite the battering that the ‘end of history’ thesis has received at the hands of the real world, it remains the dominant framework for understanding the world that has emerged from the end of the Cold War. The only powerful challenge to it has come from Samuel Huntington’s The Clash of Civilisations. Written first as an article in 1993 and expanded three years later into a book, Huntington’s starting point, one suspects, was his discomfort with the messianic overtones in Fukuyama’s End of History, and in particular its claim to universalism with its implicit belief that in the end the world would become a single homogeneous entity. Cultural peculiarities, no less than political ones, would eventually blend into a single featureless paste while the global economy turned into a single completely intermeshed market. Huntington believes this will never happen and that it will be these very attempts to force such homogenisation and the resistance they provoke that will throw up the fault lines of future global conflict. He draws a distinction between modernisation, westernisation and universalisation. Societies are becoming modernised in the sense that they increasingly use much the same technologies as the western countries and are developing political and economic institutions appropriate to the functioning of a modern state. But modernisation is not co-terminous with westernisation and the process is most certainly not producing ‘a universal civilisation in any meaningful sense of the term.’ What actually happens is that culture, i.e. what Huntington refers to more broadly as civilisation, remains outside the modernisation process in each country or group of countries, and provides the frame that gives a distinct shape to it. Except in the most superficial sense, therefore, modernisation does not lead to the westernisation of non-western societies. The world that is emerging will therefore be a multi-civilisational one. At the same time, since economic power is shifting from the old industrial centres to a variety of new ones and is therefore much more evenly dispersed, it will also be a multipolar one. The core of his thesis therefore is that "The West’s universalist pretensions [will] increasingly bring it into conflict with other civilisations, most seriously with Islam and China ... At the local level, ‘fault line wars’ largely between Muslims and non-Muslims [will] generate ‘kin-country tallying’ and [bring with it] the threat of broader escalation". Huntington concludes that the survival of the West depends on "Americans reaffirming their Western identity on the one hand and the West accepting that their civilisation is unique but not universal ... Avoidance of a global war of civilisations", he concludes, "depends on world leaders accepting and co-operating to maintain the multi-civilisational character of global politics".
To sum up therefore, war as the twentieth century knew it may not after all become obsolete. To minimise the chance of its recurrence, the west needs to shed its messianic attitude and allow local conflicts, as Luttwak puts it, to burn themselves out. It needs to shed the notion that all conflicts anywhere are threats to it because they threaten its ‘values’. In terms of international relations theory, Huntington makes a powerful case for realism. It is hardly surprising that scholars of every other school, be they liberal, neo-liberal or social constructivists, have found it necessary to attack his theories.
In 1993, Huntington’s realist insights must have seemed far-fetched indeed. Operation Desert Storm was only two years behind the US. This had seen an unprecedented coalition of Christian countries rise to the defence of a small, highly conservative Islamic country and forge a coalition with other conservative Muslim countries against one that, for all of its other faults, was the most secular, technologically advanced and, in a word, ‘Western’ of them all. Saudi Arabia, the most rigidly fundamentalist and messianic Islamic country of all, had become a firm ally of the US, so much so that a country which till barely three decades earlier would put infidels to death summarily if it discovered them on its soil, had agreed to the permanent positioning of US troops on its territory. At the other side of the Asian landmass, China had opened its doors to foreign capital and was ‘McDonaldising’ itself with a fervour that few would have even dreamed of a few years earlier.
But developments in the second half of the nineties have amply vindicated at least the first part of Huntington’s predictions. The Islamic backlash has continued to grow. It has subverted two states – Afghanistan and Sudan, and may be on the verge of subverting Pakistan in South Asia, and Tajikistan in Central Asia. Were these states to go fundamentalist, Wahaby Islamic fundamentalism will embrace a vast chunk of contiguous territory across more than a thousand miles, stretching from the Indian border well into Central Asia. This will turn the religious establishment in Saudi Arabia, which is both the ideological and financial nerve centre of Wahaby Islam, into a global power centre and make it almost impossible for the Saudi government to maintain its close links with the US .
The ambitions of the fundamentalists do not stop there. They are active in Turkmenistan, Uzbekistan, Chechnya, Egypt, Algeria, the Philippines and Kashmir. China too has taken a direction that no one could have predicted as recently as June 1998, when President Clinton visited Beijing. At precisely the moment when it is straining every nerve to get into the World Trade Organisation, the Jiang Zemin government has consciously embarked on a policy of internal repression, external bellicosity (towards Taiwan) and skillfully orchestrated anti-Americanism.
The most telling proof of Huntington’s hypothesis comes, however, from Indonesia. In that country, an over-enthusiastic attempt by the West to hasten the pace of universalisation led to the ousting of Suharto in May 1998, and greatly weakened the Indonesian state. The ensuing competition for power in the elections that were to follow resulted in the surreptitious emergence, albeit on a small scale, of a brand of Islamic extremism that had been unknown in the country till then. Since the elections, this new brand of Islam has allied itself increasingly with nationalism and has won growing support within the army. As a result, clashes between Muslims and Christians are erupting with increasing frequency across the country. The fillip to this development came from another misguided effort to extend Western democratic and civilisational (in this case Christian) values, this time to East Timor, which had been annexed by Indonesia in 1962. Today this emerging ethnic divide is reinforcing existing ones based on tribal and economic lines and is endangering the unity of Indonesia further. The response will undoubtedly be a further consolidation of the bonds between Islam and nationalism.
Despite its explanatory power, Huntington’s thesis remains unsatisfactory. Huntington himself does not seem entirely at ease with the full implications of his thesis. In particular he is unwilling to cross swords with American hegemonism. This is reflected by a contradiction of which he himself seems unaware. On one hand, he argues that global conflict, if it occurs, will be triggered by a civilisational offensive from the West. But on the other hand he argues that it is western civilisation that is under threat and needs to be defended – by America reaffirming its western identity. The offensive therefore comes from the non-western civilisations. This defensive posture has made it relatively easy for the new interventionists (to use Stedman’s term) to co-opt his ideas into their End of History project. What he is advocating is no different from what Madeleine Albright believed to be the prime goal of American foreign policy. In the end all Huntington has done is provide one more argument for the West, and for America in particular, to maintain a strong defence posture and keep increasing its defence spending in real terms, while insisting that nations outside the perimeter of western civilisation reduce theirs.
Cataclysmic Globalisation
This paper shares Huntington’s belief that history has indeed not ended,
and is not likely to end, either on its own or through human intervention, at any time in the foreseeable future. But it does not share some of his underlying optimism. If we follow Huntington’s logic, all that is necessary to avoid a future global clash of civilisations is for the leaders of the world and its opinion makers to genuinely accept its multicivilisational character. Western leaders and media in particular need to refrain from actions that threaten this natural diversity. This will pave the way for the emergence of a hierarchy of civilisations. As human interaction within and between these civilisations increases, cultural fault lines will soften and a civilisational continuum will develop that will not threaten the cultural diversity of the human race and therefore the identity of its people.
The hypothesis presented below is that the forces that might trigger large-scale conflict once more are not cultural but economic. These economic forces are of almost unimaginable strength, and all of them are being released by the single most profound, indeed cataclysmic change that is occurring in our time. That is the onset of globalisation. Cultural and civilisational affinities may well become the rallying points around which coalitions are built. But ultimately it will be society’s success or failure in coping with the economic, social and political strains generated by globalisation that will determine whether mankind completes the voyage to one world safely or, not to put it too delicately, blows itself up along the way.
The proposition that globalisation carries within it the potential for destroying or at least crippling the further development of the human race will provoke as much disbelief, as Huntington’s essay did. For globalisation is precisely what is propelling the unification and homogenisation of the world today. Thus, according to its neo-liberal proponents even if intra-state and inter-state local conflicts have not diminished, and even if one accepts realistic prescriptions to let small wars die out on their own, this enormously powerful economic force will complete the task of ridding the world of war on its own. One has, after all, only to draw a line from Montesquieu to Angell, to Thomas Friedman, and extrapolate it another fifty years to see that by the middle of the twenty-first century, no matter how grave the provocation, no one will want to go to war to obtain redress. Indeed the End of History project has already spawned its own optimistic literature on globalisation. Globalisation, they say, is leading to huge and ever-expanding flows of capital from the industrialised nations to the developing ones and accelerating their growth till they catch up with the former . Then they too begin to export capital to other capital-poor and labour-rich countries, accelerating their growth in turn. This by no means incorrect assessment of the impact of globalisation, has been captured in the celebrated paradigm of The Flying Geese, developed by T Ozawa. Neo-liberal writers have pointed out that it is already abolishing economic frontiers. In so doing it is steadily reducing the areas of autonomy of the sovereign state, and presaging the end of the nation state. To quote Kenichi Ohmae, "the glue holding traditional nation states together, at least in economic terms, has begun to dissolve." Instead, globalisation is linking not nations but cities and industrial zones in different countries together in tight networks of rising prosperity and shared interest that cut across national boundaries to create region states. Globalisation is also undermining the nation state through its impact on politics. Satellite television and the Internet revolution are linking people in different countries directly, without the intermediary of the state. The Internet has broken the state’s monopoly on information and the power this enables it to exercise over individuals. This is particularly true with respect to human rights. Today the concept of human security is slowly superseding that of national security.
By far the most important and comforting belief is that globalisation is not a new phenomenon. As Paul Krugman has pointed out, most economists date its onset to the 1840s, when railroads and steamships made the large-scale shipment of bulk goods possible. The Internet bears the same relationship to the telephone as does the telephone to the telegraph. Accordingly, if globalisation is the child of technological evolution, then it has been going on for almost two hundred years. The integration of the global economy, measured by the ratio of trade and foreign investment to GDP, has also been rising continuously since the early 1800s. In fact by these and several other yardsticks the world was more integrated in 1913 than it was in 1973, and not much less so than it is today. Globalisation is therefore a ‘going back to the future’. It is the resumption of trends in the world economy that had existed for most of the nineteenth century but had been rudely disrupted by the hammer blows of the First World War, the Depression of the thirties and the Second World War. There is also an awesome body of supporting literature, mostly economic, to show that the move towards free trade and market integration that we have witnessed in the past five decades is also very largely a return to the state of affairs that had existed in the nineteenth century. To sum up the argument, far from being a new phenomenon, globalisation is almost as old as the industrial capitalism. Since the development of capitalism is inextricably linked with the rise and eventual triumph of liberal democracy, globalisation is an integral part of the End of History. How then can it be the beginning of a new chapter?
My contention is that globalisation is most emphatically not a return to the future. This belief rests entirely upon the continuity of evolution of technology in transport and telecommunication and that while the evolution of science and technology is continuous, social change is discontinuous. "Every few hundred years in Western history", writes Peter Drucker, "there occurs a sharp transformation. We cross what in an earlier book I had called a ‘divide’. Within a few short decades society rearranges itself – its world view; its basic values; its social and political structures; its arts; its key institutions ... We are living through just such a transformation."
To bring about such a transformation, technological change has to take place in several areas at once and attain a critical mass before it can change the way people live, work and relate to each other. When that critical mass is attained the change happens very quickly – far more quickly than the human mind and human institutions can adjust to. The potential for conflict resides in this asymmetry.
The technological changes that were needed to trigger off what we call globalisation attained their critical mass in the sixties and seventies. Most of the changes took place in the realm of information technology. What they ushered in was not just a new phase, but a higher order of capitalism. This was global, as distinct from national capitalism. From its early beginnings in the fourteenth century, capitalism had been restricted in its scope by the emerging modern state. Indeed capitalism developed in step with the modern European state. From then on through the industrial revolution and more or less till the end of what some writers have called the ‘golden age of capitalism’ (which stretched from the beginning of the fifties to the early seventies), it remained essentially national in character. Even the expansion of international trade and the massive amounts of foreign investment, that liberal economists refer to when they speak of going back to the future, were intended to continue the expansion of productive capacity and find markets for the products of industry located within the home country. International trade and investment were therefore bearers of the national flag from the outset. Globalisation, by contrast, is capitalism, that is international from birth. Indeed the word is a misnomer, for it implies an ongoing process of continuous incremental change, when what has happened is a sudden, discrete and irreversible change in the organisation of production made possible by advances in technology. A more appropriate term for ‘globalisation’ would therefore be the Rise of Global (as distinct from national) Capitalism.
Global capitalism was born when technological change made it possible for the entire world to become a single market. The assertion that the world has become a single market is now a tired cliché and, like most cliches, has lost much of its meaning. But to a producer, whether of goods or services, the term market has a very precise meaning. It is the area within which no producer finds himself or herself at a competitive disadvantage in relation to his peers. Competitive disadvantages arise from the existence of barriers of various kinds that favour some and discriminate against others. Such barriers can either be natural, such as transport bottlenecks that raise production costs and cause delays, and difficulties in communication that complicate the task of management and control. Or they can be man-made, such as customs duties, import bans and other restrictions on international trade and investment. Technology has almost eliminated the natural barriers that divide markets. It has thus created the potential for turning the world into a single economic unit. But the removal of man-made barriers requires political action. It can happen spontaneously, as when a country’s government decides that their existence impedes its economic growth. Or it can be made to happen through coercion, when nations that are in the best position to take advantage of the opportunities created by technology, force others into lowering or removing barriers. Every coercive expansion of the global market therefore contains within it the seeds of conflict.
Conflict can arise from the very nature of capitalism, for competition is its life-blood and competition creates both winners and losers. This is even truer of global than it was of national capitalism. Not only is technological change, and therefore technological obsolescence, more rapid, but the very removal of natural barriers (and the concerted effort in GATT and the WTO to remove man-made ones) has intensified competition to a level that was inconceivable only three decades ago. Competition raises efficiency and therefore the total output, but creates profound conflicts of interest between the winners and the losers. It is only natural for the losers to resist the changes that are in misery. Unless this problem is addressed collectively, the very least that the clash of interests will do is to increase the reliance on repression to maintain peace. But that kind of peace is a time bomb waiting for the right kind of primer to detonate.
Globalisation is creating two types of losers. Large parts of the world, which contain dozens of countries, are being left out of the international economic system that global capitalism is building. They are being marginalised and increasingly forgotten. Can anyone be sure that these nations will accept their fate passively?
Globalisation is creating new classes of losers within the winning nations too. During the growth of national capitalism the attempts by the losers to protect themselves gave birth to a host of movements, from the knee-jerk reaction of the Luddites who broke the new knitting frames that were displacing them in 1812, to the Chartists who tried to control the ravages of capitalism by advocating universal suffrage and secret ballots to capture political power, and were hanged for their pains, to Owenites and other forms of guild socialism in the mid-and late nineteenth century. But it also gave birth to communism and, last of all, to fascism. These were not simply battles fought in the realm of ideas. The ideologies themselves reflected society’s attempts to contain profound clashes of interest that were tearing it apart and addressed the problems either by superseding capitalism with a ‘classless society’, or by ‘corporativising’ it. The conflicts the world witnessed in the twentieth century, especially the Second World War and the Cold War, were a product of the resulting confrontation. Of all these the only successful effort to reconcile the interests of the winners and losers was ‘social democracy’. This came into being more than a century after the rise of industrial capitalism, and became its crowning achievement during its ‘golden age’ after the Second World War. But that golden age did not last for even a third of a century before these very institutions came under attack. Today the industrialised world is trying to pull down the prime institutions of social democracy – collective bargaining and the welfare system – with a savage glee and a sublime disregard for longer-term consequences that have few parallels in history. The attack does not reflect a resurgence of class conflict within national capitalism, as did the violent struggle between factory owners and trade unions in the US in the twenties, but a profound and growing contradiction between national and global capitalism. The German philosopher Ulrich Beck calls it the second age of modernity. "We live in a multidimensional, polycentric, contingent, political world society in which transnational and national actors play a cat-and-mouse game with each other."
The fact that institutions which were the crowning achievements of the first three quarters of the twentieth century have become the dinosaurs of its last quarter is the clinching proof, if such proof were needed, that globalisation is not a return to the future, but a wholly new epoch in the history of capitalism. For the attack on social democracy is not an aberration. It is a part of the effort of global capitalism to complete the formation of a single world Market Economy. Collective bargaining and social welfare are man-made obstacles to the creation of a global factor market, just as tariffs and import restrictions were man-made obstacles to the creation of a unified product market. The potential for conflict arises out of this development in two ways. First, the losers in the ‘winning’ countries may globalise themselves too and form alliances with the loser nations or sections within them. No one can predict how or when this will happen and, if it does, what shape the resulting international class conflict will take. The second is that in order to contain the growing conflict within the winning nations, their governments may launch a successful attempt to project the blame for their plight on ‘outsiders’ — be they ‘rogue’ nations or rogue individuals from ‘alien’ cultures. This will increase the temptation to contain domestic class conflict through external aggression.
I explore the nature of globalisation, and the kind of conflict it can give rise to, in greater detail elsewhere. But before closing this essay, I feel it is necessary to point out that in the final analysis, Huntington is an optimist. He believes that global conflict can be prevented if the West only learns to respect the cultural uniqueness of other civilisations. Much as I would like to, I cannot share his optimism. Huntington’s prognosis gives to the leaders of the West an autonomy – a freedom of choice and action – that they do not actually possess. Western interventionism, whether in the economic, political or cultural field, is itself being driven by the rise of global capitalism. As the rise of national capitalism has demonstrated, this is an autonomous process, largely outside human control. From the thirteenth century on, when man developed the compass, technology has opened up new possibilities and human beings have exploited them. By making competition the organising principle of economic life, capitalism has ensured that human beings exploit technology as fully and rapidly as possible, without a thought for its social consequences. Society is then left to adjust to the change as best it can. For two centuries, since the industrial revolution turned the Market Society into the Market Economy, the recurring refrain in capitalism’s song has been: "If I don’t do this, someone else will". It is hardly surprising therefore that all attempts by the losers to mitigate the adverse impact of capitalism upon their lives have taken the form of efforts to limit competition. Today, when the world is in the earliest phase of global capitalism, for neo-liberals as much as for the dominant nation of the day, the United States, this is anathema. The globalising world of today has no helmsman. And its leaders, who fancy that they are in control of things, are emperors without clothes. W H Auden wrote in the thirties: "We are lived by powers we pretend to understand". This sums up the plight of humanity today.