Globalization: Critical Reflections 9781685852764

Table of contents :
Contents
The Contributors
Preface
1 The Dynamics of Globalization
2 A Perspective on Globalization
Part 1 The Thrust of Globalization: Production and the State
3 The Spatial Organization of Information Industries: Implications for the Role of the State
4 The Elusive Last Lap in the Quest for Developed-Country Status
5 Rethinking the Role of the State
Part 2 The Counterthrust to Globalization: Political and Cultural Resistance
6 Global Restructuring and Labor: The Case of the South African Trade Union Movement
7 New Social Movements: Democratic Struggles and Human Rights in Africa
8 The Reconstitution of Hegemony: The Free Trade Act and the Transformation of Rural Mexico
9 The Resurgence of Islam
Part 3 The Potential and Limits of Neoliberal Globalization
10 Globalization, Democratization, and the Politics of Indifference
11 How Does Globalization Really Work?
Bibliography
Index
About the Book

Citation preview

Globalization

International Political Economy Yearbook Volume 9 William P. Avery and David P. Rapkin, Series Editors

Board of Editors J o n a t h a n D. A r o n s o n University of Southern California Richard Ashley Arizona State University T h o m a s J. Biersteker Brown University Volker Bornschier University of '/.urich J a m e s A. Caporaso University of Washington Christopher Chase-Dunn Johns Hopkins University Peter F. Cowhey University of California, San Diego Robert W. Cox York University Ernst-Otto Czempeil University of Frankfurt Alain d e j a n v r y University of California, Berkeley Judith Goldstein Stanford University Keith Griffin University of California, Riverside W. Ladd Hollist Brigham Young University Hans-Henrik H o l m Aarhus University, Denmark Raymond F. H o p k i n s Swarthmore College Takashi I n o g u c h i University of Tokyo

Harold K . J a c o b s o n University of Michigan Robert O. K e o h a n e Harvard University S t e p h e n J. Kobrin New York University S t e p h e n D. Krasner Stanford University Robert T. Kudrle University of Minnesota Bruce E. M o o n Lehigh University H e r a l d o Murioz University of Chile Lynn K. Mytelka Carleton University E. Wayne Nafziger Kansas State University Guillermo O'Donnell University of Notre Dame Dieter Senghaas University of Bremen Susan Strange University of Warxuick William R. T h o m p s o n Indiana University F. LaMond Tullis Brigham Young University Laura D'Andrea Tyson University of California, Berkeley Raimo Väyrynen Helsinki University Mark Zacher University of British Columbia

Globalization:

Critical Reflections edited by

James H. Mittelman

L Y N N E RI E N N E R PUBLISHERS

B O U L D E R L O N D O N

Published in the United States of America in 1997 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 and in the United Kingdom by L.ynne Rienner Publishers, Inc. 3 Henrietta Street, Covent Garden, London W C 2 E 8LU © 1996 by Lynne Rienner Publishers, Inc. All rights reserved Library of Congress Cataloging-in-Publication Data Globalization : critical reflections / James H. Mittelman, editor. p. cm. — (International political economy yearbook : v. 9) Includes bibliographical references and index. ISBN 1-55587-752-4 (alk. paper) 1. International economic relations. 2. International relations I. Mittelman, James H. II. Series. HF1410.1579 vol. 9 [HF1359] 375'.05 s - d c 2 0 [337]

96-1319 C1P

British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. Printed and bound in the United States of America

©

The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1984. 5 4 3 2 1

Contents List of Contributors Preface 1 2

The Dynamics of Globalization James H. Mittelman A Perspective on Globalization Robert W. Cox

PART 1

3

4

5

7

8

1 21

THE THRUST OF GLOBALIZATION: PRODUCTION AND THE STATE

The Spatial Organization of Information Industries: Implications for the Role of the State Saskia Sas sen The Elusive Last Lap in the Quest for Developed-Country Status Gary Gerejfi Rethinking the Role of the State Leo Panitch

PART 2

6

vii xi

33

53 83

THE COUNTERTHRUST TO GLOBALIZATION: POLITICAL AND CULTURAL RESISTANCE

Global Restructuring and Labor: The Case of the South African Trade Union Movement Glenn Adler New Social Movements: Democratic Struggles and Human Rights in Africa Fantu Cheru The Reconstitution of Hegemony: T h e Free Trade Act and the Transformation of Rural Mexico June Nash and Christine Kovic V

117

145

165

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9

Contents

The Resurgence of Islam Mustapha Kamal Pasha and Ahmed I. Samatar

PART 3

10

11

187

THE POTENTIAL AND LIMITS OF NEOLIBERAL GLOBALIZATION

Globalization, Democratization, and the Politics of Indifference Stephen Gill How Does Globalization Really Work? James H. Mittelman

Bibliography Index About the Book

205 229 243 265 273

The Contributors

G L E N N ADLER is senior lecturer in sociology and a staff associate in the Sociology of Work Unit at the University of the Witwatersrand in Johannesburg. He recently completed his Columbia University Ph.D. on the rise of trade unions in the South African motor industry and is the editor, along with Doris Suarez, of Union Voices: Labor's Responses to Crisis (1993). His current research projects are on labor and the transition to democracy and the impact of international institutions on domestic policy debates. FANTU C H E R U is associate professor of African and development studies at the School of International Service, American University, Washington, D.C. He is the author of The Silent Revolution in Africa: Debt, Development and Democracy (1989) and Dependence, Underdevelopment and Unemployment in Kenya (1987); coauthor of From Debt to Development: Alternatives to the International Debt Crisis (1985); and coeditor of Ethiopia: Options for Rural Development (1990). R O B E R T W. COX is professor emeritus of political science and social and political thought at York University, Toronto. He is the author of Production, Power, and World Order: Social Forces in the Making of History (1987) and, with Harold K. Jacobson et al., of The Anatomy of Influence: Decision Making in International Organization (1972). A collection of C o x ' s essays compiled with the help of Timothy Sinclair has been published under the title Approaches to World Order (1995). GARY G E R E F F I is professor of sociology at Duke University. He is the author of The Pharmaceutical Industry and Dependency in the Third World (1983); Manufacturing Miracles: Paths of Industrialization in Latin America and East Asia (1990), coedited with Donald W y m a n ; and Commodity Chains and Global Capitalism (1994), coedited with Miguel Korzeniewicz. His current research interests deal with global commodity chains, regional divisions of labor, and the social bases of international competitiveness, with a focus on the evolution of embedded networks in the apparel, footwear, automobile, and computer industries. vii

viii

The Contributors

STEPHEN GILL is professor of political science at York University, Toronto. His publications include The Global Political Economy: Perspectives, Problems and Policies (1988), coauthored with David Law; Atlantic Relations: Beyond the Reagan Era (1989); American Hegemony and the Trilateral Commission (1990); Gramsci, Historical Materialism and International Relations (editor) (1993); and Restructuring Global Politics (1996), in Japanese. CHRISTINE KOVIC is a graduate student at the City University of New York Graduate Center. She is currently working with the Center for Human Rights "Fray Bartolome de Las Casas" in Chiapas, Mexico. She is coauthor of Con Un Pueblo Vivo, En Tierra Negada (1994) with Patricia Jovita Gomez Cruz. JAMES H. MITTELMAN is professor of international relations in the School of International Service at American University, Washington, D.C. He is the author of Ideology and Politics in Uganda: From Obote to Amin (1975); Underdevelopment and the Transition to Socialism: Mozambique and Tanzania (1981); and Out from Underdevelopment Revisited (1997), coauthored with Mustapha Kamal Pasha. JUNE NASH is distinguished professor of anthropology at the City College of the City University of New York. She is the editor of Crafts in the World Market: The Impact of Global Exchange on Middle American Artisans (1993); From Tank Town to High Tech: The Clash of Community and Industrial Cycles (1989); Women and Change in Latin America (1986), with Helen Safa; and We Eat the Mines and the Mines Eat Us: Dependency and Exploitation in Bolivian Tin Mining Industries (2d ed., 1993). LEO PANITCH is professor of political science at York University, Toronto. He is the editor of The Socialist Register (London and New York, annual) and one of the founders of the journal Studies in Political Economy. His books include Social Democracy and Industrial Militancy (1976); Working Class Politics in Crisis (1986); The Assault on Trade Union Freedoms, with Donald Swartz (2d ed., 1993); and the edited works The Canadian State: Political Economy and Political Power (1977) and A Different Kind of State: Popular Power and Democratic Administration, with Gregory Albo and David Langille (1993). MUSTAPHA KAMAL PASHA is assistant professor of comparative and regional studies in the School of International Service, American University, Washington, D.C., specializing in political economy, Islamic studies, and South Asia. He is the author of several publications, including Colonial

The Contributors Political Economy (1996) and, with James H. Mittelman, Out Underdevelopment Revisited (1997).

ix from

AHMED I. SAMATAR is professor and dean of international studies and programming at Macalester College, specializing in international political economy and cultural studies with an emphasis on African development. His recent publications include, as editor, The Somali Challenge: From Catastrophe to Renewal? (1994) and, with Terrence Lyons, Somalia: State Collapse and Multilateral Intervention (1995). SASKIA SASSEN is professor of urban planning and serves on the faculty of the School of International and Public Affairs at Columbia University. Her most recent books are Cities in a World Economy and Immigrants and Refugees: A European Dilemma? (forthcoming); she is currently writing a book about immigration policy in a world economy for The Twentieth Century Fund. She has begun a new five-year research project entitled "Governance and Accountability in a World Economy," the first phase of which are the 1995 Columbia University Schoff Memorial Lectures, to be published in 1996.

Preface

T h i s b o o k is o r g a n i z e d a r o u n d three t h e m e s : the thrust of g l o b a l i z a t i o n in the r e a l m s of p r o d u c t i o n and the state, political and cultural r e s p o n s e s to it, a n d t h e potential and limits of n e o l i b e r a l g l o b a l i z a t i o n . T h e first t w o o b j e c t s of s t u d y d e r i v e f r o m Karl P o l a n y i ' s ( 1 9 5 7 b ) i m p o r t a n t insight that a " d o u ble m o v e m e n t " — a n e x p a n s i o n of m a r k e t f o r c e s and a reaction to it in the f o r m of d e m a n d s f o r s e l f - p r o t e c t i o n against c a p i t a l ' s socially d i s r u p t i v e and p o l a r i z i n g e f f e c t s — p r o p e l s m o d e r n society. To e x t e n d P o l a n y i ' s c o n c e p t , this b o o k e x a m i n e s a third p h a s e , w h i c h i n v o l v e s the o p p o r t u n i t i e s and c o n straints p r e s e n t e d by c h a n g i n g s t r u c t u r e d h i e r a r c h i e s at the turn of the millennium. W h i l e there are several g l o b a l i z i n g t e n d e n c i e s that need to be taken into a c c o u n t , w e h a v e s o u g h t to c e n t e r attention on these key a s p e c t s of the p r o c e s s . We m a k e n o c l a i m to p r o v i d i n g a c o m p r e h e n s i v e study —an e l u s i v e goal in any e v e n t with a topic as b r o a d as g l o b a l i z a t i o n . O u r p u r p o s e is to d e e p e n u n d e r s t a n d i n g of g l o b a l i z a t i o n and to s t i m u l a t e other, m o r e d e t a i l e d , inquiries into the issues not i n v e s t i g a t e d f u l l y (or at all) here. If w e a c c o m plish that, o u r v e n t u r e will h a v e s u c c e e d e d . A debt of g r a t i t u d e is d u e to the s p o n s o r s of the w o r k s h o p that c u l m i nated in this v o l u m e : the International S t u d i e s A s s o c i a t i o n ( I S A ) , the I n t e r n a t i o n a l Political E c o n o m y Section of the I S A , and the C e n t e r f o r the S t u d y of the G l o b a l South at A m e r i c a n U n i v e r s i t y . In the S c h o o l of International S e r v i c e , A m e r i c a n U n i v e r s i t y , J o s e p h C l a p p e r and R a n a E l - K h a t i b c o n t r i b u t e d i m p o r t a n t l y to the s m o o t h r u n n i n g of the w o r k s h o p a n d p u b l i c a t i o n of this b o o k . A p p r e c i a t i o n also g o e s to the g r a d u a t e s t u d e n t s w h o p r e s e n t e d the a u t h o r s ' p a p e r s and o f f e r e d critical c o m m e n t s : L e i g h E n g e l h a r t and A b d u l Latif H a j i - S a l l e h ( D u k e U n i v e r s i t y ) , K i r a s G h a r a b a g h i and A n n G r i f f i t h s ( D a l h o u s i e U n i v e r s i t y ) , E n r i q u e P u m a r and M e l i t o n S a l a z a r ( A m e r i c a n U n i v e r s i t y ) , and M a g n u s R y n e r and T i m o t h y Sinclair (York U n i v e r s i t y , T o r o n t o ) . S c h o l a r s w h o g e n e r o u s l y c o n t r i b u t e d their ideas w e r e Philip Brenner, Samih Farsoun, Louis Goodman, Kenneth Kusterer, Clovis Maksoud, £erif Mardin, Nicholas Onuf, Timothy Shaw, Diane Singerman, Ritu V i j , and L i n d a Yarr. S p e c i a l t h a n k s are o w e d to the w o r k s h o p o r g a n i z i n g c o m m i t t e e —

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Enrique Pumar (coordinator), Meliton Salazar, and Rakhi Sehgal — w h o s e u n s t i n t i n g e f f o r t s a r e r e f l e c t e d in this p u b l i c a t i o n . M e l i t o n S a l a z a r a n d , l a t e r , Ashwini T a m b e also helped with n u m e r o u s editorial tasks. L y n n e R i e n n e r , h e r s t a f f , a n d an a n o n y m o u s r e v i e w e r k i n d l y i n s i s t e d o n h i g h s t a n d a r d s in t h e f i n a l p r e p a r a t i o n of t h e b o o k . I a m i n d e b t e d to G i a H a m i l t o n a n d S a l l y J a s k o l d f o r p o l i s h i n g t h e m a n u s c r i p t a n d m a k i n g it m o r e a c c e s s i b l e to t h e r e a d e r . -J.H.M.

James H. Mittelman

-R.

The Dynamics of Globalization

T h e d r e a m s of m o d e r n i z a t i o n are c o m i n g true in m a n y parts of the w o r l d , even in r e m o t e areas of u n d e r d e v e l o p e d c o u n t r i e s , b u t , ironically, not as social scientists had e n v i s a g e d and certainly not t h r o u g h the f o r m a l c h a n n e l s that s o m e of t h e m helped to b u i l d . In lieu of policy i n s t r u m e n t s or international a g e n c i e s , g l o b a l i z i n g s t r u c t u r e s i n t e r a c t i n g with i n d i v i d u a l s , h o u s e h o l d s , and c o m m u n i t i e s are d e l i v e r i n g m o d e r n i t y to s o m e — b u t not a l l p e o p l e s f o r m e r l y far r e m o v e d f r o m m e a n i n g f u l participation in c r o s s - b o r d e r f l o w s of c a p i t a l , k n o w l e d g e , i n f o r m a t i o n , and c o n s u m e r g o o d s . A m a s s i v e t r a n s f o r m a t i o n is being c o m p r e s s e d into a short t i m e —a f e w years rather than m a n y g e n e r a t i o n s — a n d o f t e n despite o f f i c i a l l y m a n a g e d p r o c e s s e s . T h e s p e e d and d i r e c t i o n of c h a n g e in P a k i s t a n ' s rural e c o n o m y and social r e l a t i o n s e x e m p l i f y this t r a n s f o r m a t i o n . L i k e m a n y l a b o r - e x p o r t i n g c o u n t r i e s , P a k i s t a n has in s o m e years r e c e i v e d m o r e capital in m i g r a n t s ' r e m i t t a n c e s than the state has a l l o c a t e d f o r national d e v e l o p m e n t at the f e d eral and local levels. F r o m 1971 to 1988, P a k i s t a n i w o r k e r s in the M i d d l e East g e n e r a t e d $ 2 0 billion in f o r e i g n e x c h a n g e t h r o u g h official c h a n n e l s —a sum that e x c e e d e d the c o u n t r y ' s entire g r o s s national p r o d u c t in a single year. In the peak y e a r ( 1 9 8 2 ) , o f f i c i a l r e m i t t a n c e s o u t s t r i p p e d e x p o r t earnings and r e p r e s e n t e d m o r e than half the f o r e i g n e x c h a n g e costs of i m p o r t s ( A d d l e t o n 1992: 117, 120). R e p o r t e d r e m i t t a n c e s d o not include r e m i t t a n c e s in kind ( c o m m o d i t i e s p u r c h a s e d o v e r s e a s and sold in the i n f o r m a l e c o n o m y ) or black m a r k e t r e m i t t a n c e s , a c a t e g o r y of f u n d s that m a y be r e g a r d e d as a f o r m of r e s i s t a n c e to the s t a t e ' s e f f o r t s to c a p t u r e i n c o m e f l o w i n g into rural a r e a s . U n l i k e f o r eign a i d , these f l o w s c o m e w i t h o u t strings a t t a c h e d and are not d i r e c t e d by the d o m i n a n t c l a s s e s . By s t r e n g t h e n i n g the u n d e r g r o u n d e c o n o m y , remittances m a y u n d e r m i n e a u t h o r i t a t i v e p r e f e r r e d m o d e s of d e v e l o p m e n t and c o n t r i b u t e to the s t a t e ' s loss of control within w h a t had been p o r t r a y e d as the national or d o m e s t i c unit ( A d d l e t o n 1992). I n d i v i d u a l s , h o u s e h o l d s , a n d rural c o m m u n i t i e s thereby b e c o m e directly i n v o l v e d in global p r o c e s s e s . F o r individual f a m i l i e s d r a w n into t r a n s n a tional f l o w s , there are vast c h a n g e s in c o n s u m p t i o n p a t t e r n s , e x p o s u r e to a m o r e d i v e r s i f i e d e c o n o m y w h e n sectors such as c o n s t r u c t i o n and retailing

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James H.

Mittelman

services expand, and new stresses on transformed social structures, especially marked in Pakistan by an overall decline in poverty and increased measures of inequality. This chain of far-reaching events is but one element in the whole pattern known as globalization. Globalization is crucial to understanding international political economy, for it directs attention to fundamental changes under way in the p o s t Cold War era. The manifestations of globalization (some of them evident in the Pakistan example) include the spatial reorganization of production, the interpénétration of industries across borders, the spread of financial markets, the diffusion of identical consumer goods to distant countries, massive transfers of population within the South as well as from the South and the East to the West, resultant conflicts between immigrant and established communities in formerly tight-knit neighborhoods, and an emerging worldwide preference for democracy. A rubric for varied phenomena, the concept of globalization interrelates multiple levels of analysis: economics, politics, culture, and ideology. But what explains globalization? What are its causes, mechanisms, and possibilities for transformation? Where can one focus an analysis? On the inner workings and logic of capital itself? On strategies and actors seeking to optimize their positions? On empirical indicators or trends said to constitute this process? On the complementary and contradictory interactions among localization, regionalization, and globalization? On the social and political consequences? These questions are central to the chapters that follow. The contributors to this volume —a diverse group of authors f r o m seven countries (by origin if not current citizenship) who represent various academic disciplines —will present different hypotheses and interpretations as well as evidence. I have asked each of them to use my introductory series of questions and analytical propositions as a target to attack and a springboard for their own studies. To open the conversation among the authors, I contend that world society is entering a new era in the relationship between power and the division of labor, which is globalized. What sets the context for conflict and cooperation in the post-Cold War period is an integrating yet disintegrating process known as globalization. Although any given world problem has many sources, globalization establishes novel challenges and opportunities for solutions. In developing this argument, I will first explore varied meanings of the concept of division of labor and the multilayer character of the globalization process. Then I will anchor the discussion by examining one region —East Asia —within this framework; this section is obviously not a detailed account but a synopsis of the impact of globalization on a specific regional division of labor. Finally, I will turn to the seeds of future conflict sown by globalization and will discuss the implications for adaptation to a rapidly changing and highly competitive environment.

Dynamics

of Globalization

3

THE GLOBAL DIVISION OF LABOR In The Great Transformation, Karl Polanyi analyzed the socially disruptive and polarizing tendencies in the world economy driven by what he called the self-regulating market, not a spontaneous phenomenon but the result of coercive power in the service of a Utopian idea. He traced the tendencies in the global economy that generated the conjuncture of the 1930s and produced—out of a breakdown in liberal-economic structures —the phenomena of depression, fascism, unemployment, and resurgent nationalism, collectively a negation of economic globalization, leading to World War II (Polanyi 1957b). The specific form of globalization providing the structural preconditions for world war included production focused primarily within territorially bounded spaces and linked to international finance; convergence between productive and statist forces; autarchic spheres of influence within economic blocs; and growing political rivalries. A Polanyian framework of "double movement" encapsulates unprecedented market expansion entailing massive social dislocation and a sharp political reaction in the form of society's demands on the state to counteract the deleterious effects of the market. Perhaps similar to the global economy of the 1930s, the contemporary globalization process appears to be approaching a conjuncture in which renewed liberal-economic structures will generate large-scale disruptions as well as sustained pressure for self-protection. The opportunities and challenges arising from globalization are integral parts of this contradiction. A worldwide phenomenon, globalization is a coalescence of varied transnational processes and domestic structures, allowing the economy, politics, culture, and ideology of one country to penetrate another. The chain of causality runs from the spatial reorganization of production to international trade and to the integration of financial markets (on the impetus for globalization, see Griffin and Khan 1992; Waters 1995). Driven by changing modes of competition, globalization compresses the time and space aspects of social relations. 1 In short, globalization is a market-induced, not a policyled, process. To examine this pattern, the choice of avenue of inquiry is crucial because it sets one's sights on research questions and provides a perspective on data. An appropriate starting point is the nature of the labor process and its products on a global level, for conflicts between capital and labor, and commerce and consumer tastes reflect what is produced and how it is produced. Hence, attention must focus on how whole societies and their constituent groups try to influence and adjust to changes in the organization of production. Although first studied by classical political economists and their followers, with implications for comparative advantages in trade, nowadays the global division of labor differs radically from the allocation of work and its reward in Adam Smith's time. In An Inquiry into the Nature and Causes of

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James H. Mittelman

the Wealth of Nations, Smith contrasted the isolated producer and modern industry. He posited a subrational or nonutilitarian origin for specialization (but not its intensification) in a "propensity to truck and barter" innate in humankind. A novel form of specialization, modern industry separates the production process into compartments, each performing a different task, with implications for the rates of profit. To the extent that these separated producers and buyers and sellers are identified with nations, the international division of labor refers to the specialization of a country in a particular trade or product (e.g., Portugal in wine and England in textiles) (Smith 1970; Mittelman 1994b). Hence, the international division of labor highlights a set of relationships associated with an exchange of goods produced by individual units, namely, nation-states. As the old international division of labor evolved, a small number of industrial countries provided capital goods and consumer goods to exchange for the Third World's primary products. However, a basic change in the international division of labor occurred in the 1960s: a restructuring involving the formation and expansion of a world market for both labor and industrial sites. Beginning in the 1960s, Asia's Four Dragons achieved spectacular economic growth by exporting not raw materials but manufactured goods. As an empirical study by Arrighi and Drangel shows, in the period from 1965 to 1980 the "core" deindustrialized in terms of the average percentage of the labor force employed by industry and the average portion of manufacturing in gross domestic product (GDP). By the late 1970s, the "semiperiphery" — an intermediate tier of countries —actually surpassed the core in share of G D P generated by industry (Arrighi and Drangel 1986: 5 5 - 5 6 ; Gereffi 1990a: 8 - 9 ) . Manufactures relative to export volume in East Asia j u m p e d 13.2 percent per year from 1980 to 1985, 19.3 percent in 1986, 23.8 percent in 1987, and 11.2 percent in 1988 (World Bank 1989b: 148-150). The core of course developed new technologies and began to convert to service industries, while growth in the semiperiphery occurred in the context of smaller economies. With industrial upgrading, the newly industrializing countries (NICs) sought to transform their structures of production f r o m an emphasis on labor-intensive to capital- and technology-intensive goods centering on high-value-added products. No longer was there a dichotomy between a small number of industrial countries and a Third World providing primary products. An emerging world market for labor and production entailed massive industrial relocation, the subdivision of manufacturing processes into multiple partial operations, major technological innovations, large-scale migratory flows, and the feminization of labor. From Asia's export processing zones to Mexico's maquiladora (assembly plants as subsidiaries or subcontracting firms for the manufacture of export-oriented goods) program, a barometer of the changing character of the labor force is the increasing number of women employed in manufacturing. Jobs take on characteristics iden-

Dynamics

of Globalization

5

tified with female employment: a minimum level of skills, low wages, and limited possibilities for promotion. To explain this restructuring, scholars have devised the construct of "the new international division of labor." The title of a seminal study by Frobel, Heinrichs, and Kreye, this thesis focuses on the "overriding pressure of competition" as the mainspring of a distinct set of conditions for global capital accumulation. These authors hold that observable changes in the international division of labor (the transfer of plants to the Third World, the fragmentation of production processes, etc.) are the result of "the conditions for the valorization and accumulation of capital" (Frobel, Heinrichs, and Kreye 1980: 46; see also Lipietz 1985 and Amsden 1990). This new international division of labour is an institutional innovation of capital itself, necessitated by changed conditions, and not the result of changed development strategies by individual countries or options freely decided upon by so-called multinational c o m p a n i e s . (Frobel, Heinrichs, and Kreye 1980: 46)

For these authors, national strategies and the policies of multinational corporations are consequences, not causes, of new conditions, especially the need for additional industrial sites around the world. This thesis centers on the expansion of capital and hence production as the force behind an international division of labor that is deemed new in that it restructures the classical division of labor between hewers of wood and drawers of water—Third World countries —and industrialized nations. Emphasis is placed on the spatial reorganization of production and increasing differentiation within the Third World. Clearly this mode of explanation advances understanding by providing a fruitful way to examine the relationships between developed and developing countries. However, some of the key tenets of the concept of the new international division of labor are flawed. To begin with, exactly what is new about the new international division of labor? The claim that industrialization in the Third World is new overlooks the establishment of import-substituting industries in Argentina, Brazil, and Mexico in the 1930s and 1940s. In fact, industrial growth in some parts of Latin America stems from the interwar period (Gereffi 1990a: 3). Frobelians give little attention to the role of the state during this period and underestimate the importance of international finance. Additionally, the new international division of labor has not replaced the old international division of labor. Properly understood, they coexist. In countries such as Mexico, jobs in export industries account for less than 10 percent of total employment. In many parts of the Third World, the share of primary goods in exports is more than half of all exports. The variance in job allocation among and within regions is sufficiently large to call into question the con-

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cept of the new international division of labor. W h a t is m o r e , to stress that c h e a p labor drives the m o v e m e n t of capital around the globe runs the risk of a m e c h a n i c a l and economistic explanation. It depoliticizes important aspects of production —namely, the specific f o r m s of p o w e r relations and challenges to t h e m in diverse industries and sectors. By f o c u s i n g so strongly on the logic of capital to the detriment of local social f o r c e s , the new international division of labor m o d e of inquiry is too abstract, too t o p - d o w n . It is a useful starting point for investigation but neglects a fine-grained analysis of different spatial divisions of labor within various industries and sectors. Innovation and technological d e v e l o p m e n t s take place in certain industries and sectors but also transcend national b o u n d a r i e s . Within a globalizing division of labor, technological and managerial cores f o r m specifically regional divisions and redivisions of labor and generate their own peripheries subject to both constraints and developmental opportunities (Cohen 1987; Henderson 1989: 22, 27). Distinct regional divisions of l a b o r — a p h e n o m e n o n ignored by new international division of labor theorists —provide diverse m o d e s of coordinating capital flows but are ultimately subordinate to the globalization process. M a c r o regions —the European U n i o n , the North American Free Trade A g r e e m e n t [NAFTA] area, and Asia Pacific — m a y be regarded as loose spatial units larger than the state with s o m e political and cultural bonds, h o w e v e r varied, t e n u o u s , and sometimes conflictual. As we shall see, states —and indeed the interstate system —while diminished in scope in a global division of labor, may not be treated as mere e p i p h e n o m e n a .

PRODUCTION, THE STATE, AND NEW SOCIAL MOVEMENTS T h e global division of labor may be conceived in a Braudelian m a n n e r as a system of interactions on a world scale. The French e c o n o m i c historian Fernand Braudel indicated that the world e c o n o m y is not the ontology of world society but those entities, individual and corporate, that interact with and thus create patterns that may be called global structures (Braudel 1980b: 55; Helleiner 1990: 74; C o x 1986; Mittelman 1994a). Following B r a u d e l ' s e m p h a s i s on interactions, but without invoking his whole method of different axes for analysis, one can conceptualize the implications of evolving divisions of labor as a series of relationships: e c o n o m i c globalization and the state; pressures on the state; globalization and democratization; and resistance to globalization. Economic

Globalization

and the State

In recent d e c a d e s , several states sought to protect their domestic e c o n o m y against external forces and to limit the net o u t f l o w of surplus by adopting

Dynamics

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7

acts of e c o n o m i c nationalism: the nationalization of key industries, indigenization decrees, r e q u i r e m e n t s for local incorporation of a portion of foreign capital, and so on. S o m e states (e.g., C h i n a under M a o ; B u r m a ; Tanzania) also p r o f e s s e d a more radical course of self-reliance as a m e a n s of insulation f r o m the world s y s t e m . Today, h o w e v e r , there is little to c o m m e n d strategies of e c o n o m i c nationalism or d e l i n k i n g , for transborder f l o w s (migration, c o m m u n i c a t i o n s , k n o w l e d g e , technology, etc.) have c i r c u m v e n t e d the globe and p e r m e a t e the state. T h e scope for state a u t o n o m y —a concept that d r e w considerable attention f r o m scholars in the 1970s and 1980s —is reduced in the context of econ o m i c globalization. Additionally, the drive to bring the state back to the f o r e f r o n t of social theory requires fresh analysis in light of globalization ( E v a n s et al. 1985). In a globalized division of labor, the state no longer primarily initiates action in, but rather reacts to, w o r l d w i d e e c o n o m i c forces. To realize material gain f r o m globalization, the state increasingly facilitates this p r o c e s s , acting as its agent (Cox 1987: 2 5 3 - 2 6 5 ) . S u r r o u n d e d by impersonal and unaccountable forces beyond leaders' control, their capacity to lead is diminished ( H u g h e s 1990). Faced with the p o w e r of globalized production and international f i n a n c e , including debt structures, leaders are constrained to concentrate on e n h a n c i n g national conditions for c o m p e t i n g f o r m s of capitalism. Statecraft, tested as it is by nonstate actors, is reduced in e f f i c a c y relative to transnational forces. A m o n g the public in different zones of the world e c o n o m y , the politics of disillusionment is rife. T h e state is at risk because of challenges to sovereignty in the a f t e r m a t h of the Cold War. With the disintegration of socialist r e g i m e s c a m e the eruption of subsurface tensions f o r m e r l y stifled by the state. N o w , state borders are subject to revision (Halliday 1990). East G e r m a n y has d i s a p p e a r e d , the f i f t e e n republics the f o r m e r Soviet Union c o m p r i s e d have achieved indep e n d e n c e , and Yugoslavia, now d i s m e m b e r e d , is riven with ethnic conflict. P r e d a t i n g the end of the Cold War, separatist m o v e m e n t s in Q u e b e c , Northern Ireland, B a s q u e country, and Corsica are c h a l l e n g i n g the status q u o . W h i l e North Korea could be absorbed by South Korea, Balkanization is a l w a y s a danger in A f r i c a , w h e r e colonizers arbitrarily drew borders without regard to ethnic distribution and natural frontiers such as rivers and m o u n t a i n s . Ethiopia, for e x a m p l e , is a dubious proposition as a unified country. Pressures

on the State

This e x p l o s i o n of pluralism involves a renewal of historical forces —a m a z e of religious loyalties, ethnic identities, linguistic d i f f e r e n c e s , and other f o r m s of cultural expression. A s noted, the state, especially in the f o r m e r Soviet Union and Eastern E u r o p e , had restrained these tensions. W h i l e globalization limits state p o w e r , there is a reassertion of historical f o r c e s . Just as

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globalization gives impetus to cultural homogenization (e.g., the diffusion of standard consumer goods throughout the world), so too does a global thrust undermine state power and unleash subterranean cultural pluralism. This contradictory process merges with a dialectic of subnationalism and supranationalism. Many polities are disrupted by substate actors and simultaneously seek advantage in global competition through regionalization. Despite the past failings of regional groupings, regional cooperation is widely regarded as a way to achieve mobility in the changing global division of labor. Thus, the state is being reformed from below by the tugs of subnationalism and from above by the pull of economic globalization. Globalization

and

Democratization

Pressured by nonstate actors, the state seeks to fortify itself by adopting such measures as computerized surveillance in finance and establishing transnational police forces (e.g., Europol) to regulate migration. Nonetheless, the state must accommodate the new pluralism and allow for demands for political reforms. With the revolution in Eastern Europe, the release of Nelson Mandela f r o m prison, and the assertiveness of the human rights movement, the drive toward democratization has won legitimacy. Equally important, pro-democracy forces have gained confidence. But what type of democracy is appropriate for the late twentieth century? While democracy is a universal concept, there are different versions of democratic theory. From a liberal perspective, democracy centers on the principle of accountability: in some manner the right to rule should be based on the consent of the governed. Liberal democracy calls for public influence on government through such institutions as political parties, regular elections, and an alternation in power. However, critics point out that in practice, liberal democracies exclude some groups from both meaningful participation in politics and the distribution of economic benefits. In the Third World, it is often recognized that democracy is necessary for development, if democracy is understood to imply increasing social equality —an ingredient missing from ethnocentric and Western conceptions of democratization (Moreira Alves 1988: 9 - 1 3 ) . A restricted type of democracy has emerged in Latin America, most notably in Brazil and Argentina, which have experienced authoritarian and democratic phases of development. Authoritarian democracy (other qualifying adjectives, such as limited, guided, and protected, are sometimes attached to the term democracy) is an expression of the state's efforts to expand its links to civil society. In view of a regime's lack of legitimacy and weak economic performance, proponents of authoritarian democracy advocate a more flexible system of political representation and gradual liberalization. Class alliances are broadened, and the state makes concessions to pressure groups. However, such attempts to modernize the state leave

Dynamics

of Globalization

9

unchanged the basic structures of power and domination. Programs for slow democratization typically include measures to restrain calls for social equality so that they can be accommodated by the political system. Armed with the power to enforce order, the state wields the means of coercion to safeguard the nation against "chaos." The transparency of this domination and its social ramifications engender mounting conflict: protests against abuses of human rights and demands for the pursuit of substantive justice (Mittelman 1990: 67; Moreira Alves 1988: 9 - 1 3 ) . A challenge to democracy as an ideology of domination emerges f r o m the mobilization of social movements seeking to assert popular control. The self-aggrandizing individualism characteristic of liberal and authoritarian democracy, coincident to the lack of accountability to the governed integral to economic globalization, is rejected in favor of a belief that the individual depends on society for development. The liberal-economic conceptualization of globalization allows for tolerance of social inequality, a formulation that critics regard as inconsistent with democracy understood as the provision for all people to develop their potential (Macpherson 1977; Mittelman 1990: 67). In terms of actual performance, the ultimate test of democratization is whether a party, or in some cases the military, will relinquish its preeminent role in political life, disengage from the state, and permit real dissent. The alternative preferred by some critics, popular democracy, while noble in theory, has yet to be proven viable at the national level, surely because of a combination of internal and external pressures. These pressures coagulate into one seemingly supreme challenge: how both to manage the socially disruptive costs of economic reform and to democratize. Put differently, the major problem is how to make economic revitalization compatible with democratization. At bottom, the question of democratization centers on contradictory forms of accountability. To whom are elected officials responsible? Whereas in theory democracy means accountability to the governed, in practice leaders are accountable to market forces, most notably debt structures and structural adjustment programs. Closely related, there is a marked contradiction between the emerging global preference for electoral democracy and the increasing economic polarization generated by world capitalism, which is not held accountable to elected officials. Resistance

to

Globalization

In the drive for rapid economic growth, the East Asian NICs placed severe restraints on democratic rights. These states retained authoritarian controls to try to prevent the eruption of social tensions. Little dissent was tolerated, and the strong state is touted as a prerequisite for good government and modernization. Citing the examples of Taiwan, Singapore, and South Korea, Deng

10

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H.

Mittelman

Xiaoping and his cohorts sought to justify their contention that restraining democratic rights is essential for successful economic development. In crushing the pro-democracy movement in 1989, the Dengists held that too much f r e e d o m promotes disruption and impedes economic reform. Silent on the matter of political reform, the leaders voiced concern that given the chaos and turmoil experienced by China in this century, disorder is the gravest threat to development. In the absence of effective links between the state and civil society, the regime could rely only on guns and terror. In fact, the economic reform program required more flexible political structures to deal with increasingly autonomous groups in civil society —families detached from cooperatives by decollectivization, private entrepreneurs and industrialists, international traders, and students and intellectuals attracted by novel ideas entering China's open door (MacFarquhar 1989: 8). Just as autonomous groups are emerging in Chinese society, so too are new social movements bringing pressure to bear in global civil society. The globalization of civil society involves resistance from disadvantaged strata in a changing division of labor. The losers in global restructuring seek to redefine their role in the emerging order. In the face of the declining power of organized labor and revolutionary groups, the powerless must devise alternative strategies of social struggle. They aim to augment popular participation and assert local control over the seemingly remote forces of globalization. New social movements — w o m e n ' s groups, environmentalists, human rights organizations, etc. —are themselves global phenomena, a worldwide response to the deleterious effects of economic globalization. With the globalization of social conflict, observers have been quick to celebrate the formation of autonomous movements within civil society. Relatively little attention has been given to the coalescence of these movements. Coordination is a crucial matter precisely because the proliferation of new social movements can splinter civil society, perhaps culminating in the Lebanonization of political life. The push for regional autonomy in areas such as Kurdistan has the potential to open a global Pandora's box. Another reason for caution is that new social movements can have a repressive side —e.g., the resurgence of Islamic fundamentalism in Africa and Asia and of anti-Semitism in the former Soviet Union and Eastern Europe. Before the disintegration of socialist regimes in 1989, the Soviet Union and its Eastern European allies adopted anti-Zionist and anti-Israeli policies. Although the state did not sanction popular expressions of anti-Semitism, Jews were subject to discrimination in the bureaucracy. With the demise of socialism, however, anti-Semitism is flagrantly exhibited at many levels, with little sign of restraint, the impetus coming from autonomous groups in civil society. In sum, not only production and the state but also civil society itself is being globalized.

Dynamics of Globalization

11

REGIONALISM AND GLOBALIZATION: EAST ASIA Paradoxically, regionalism both shields d o m e s t i c society f r o m and integrates it into the global division of labor, as evident in East Asia. A l t h o u g h each regional division of labor has its distinctive f e a t u r e s , all regional experiences are fluid and tethered to the global division of labor. T h e linkages differ substantially f r o m one region to another and p r o v i d e an important c o m p a r a t i v e basis for better understanding globalization. A s noted, one c o m m o n e l e m e n t a m o n g diverse regions is that the state is increasingly a m e c h a n i s m in the globalization process and thus intervenes directly in the e c o n o m y to p r o m o t e capital a c c u m u l a t i o n . O u t f l a n k e d by transnational f l o w s partly b e y o n d its control, the state adapts to a c h a n g i n g global division of labor by tightening the fit b e t w e e n the local e c o n o m y and technological innovation, research and d e v e l o p m e n t ( R & D ) , and natural resource exploitation. With a lessening of the state's ability to harness external f o r c e s , there has been a strengthening of regional g r o u p i n g s —largely a de facto process s p e a r h e a d e d by the private sector in the Pacific R i m , substantially a de jure process in E u r o p e , and a mix of the two in North A m e r i c a , M e x i c o , and the C a r i b b e a n . T h e e f f e c t s of regional cooperation as a means to enhance participation in globalization are not yet k n o w n . But it is clear that many Asian countries and f i r m s look to improve regional cooperation for access to a b u r g e o n i n g regional market and as a sound base for sharing in globalization ( O E C D 1989: 1 0 - 1 1 , 26). T h e e c o n o m i c growth generated by the Japanese-led " f l y i n g g e e s e " pattern of regional integration, involving countries at very different levels of d e v e l o p m e n t , suggests important distinctions a m o n g generations of countries to have penetrated global markets in diverse industries and sectors. In East A s i a , there is a highly stratified division of labor a m o n g J a p a n , the Four D r a g o n s , the countries constituting A S E A N (the Association of Southeast Asian Nations), southern China, and Indochina. In the J a p a n e s e m o d e l of state capitalism, the g o v e r n m e n t subsidizes favored industries and shields t h e m f r o m market f o r c e s , especially imports. The state acts more by g u i d a n c e than by edict, giving capital a m a j o r role in setting directions. As is well k n o w n , the state helps coordinate industries, the financial system, and technological innovations. R e m a r k a b l e e c o n o m i c gains by J a p a n e s e business h a v e p r o m p t e d corporations in other countries to experiment with switching f r o m a just-in-case m a n u f a c t u r i n g system to a just-in-time m e t h o d . This m e t h o d requires precise synchronization and continual supply of materials to r e d u c e storage and other o v e r h e a d costs as well as to i m p r o v e productivity. Just-in-time also implies tight discipline over l a b o r — o r else it might be just-too-late (Gill 1993c). Important in terms of the regional division of labor, the j u s t - i n - t i m e m e t h o d places a p r e m i u m on spatial proximity b e t w e e n suppliers and p r o d u c e r s . In other w o r d s , it is a

12

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system that seeks advantage through labor and spatial hierarchies. With this form of managerial and technological upgrading, Japanese industry has fanned out in East Asia in search of low-cost manual labor for such tasks as assembly operations. Having negotiated financial and technological alliances between private capital and the state, other manufacturers in the region are attempting to follow in Japan's footsteps to establish protected domestic and expanding international markets. In light of the Japanese experience, the Hong Kong government initially sought to keep labor costs low, partly by its welfare provisions in such areas as public housing and also through its policies of taxation, a form of indirect subsidies. Moreover, there was little history of militancy in Hong Kong's trade union movement. Hong Kong also had the advantage of being able to deliver highly skilled technical engineering at a cost considerably below that of the advanced countries. In terms of sourcing, there emerged a cluster of components, materials, and skilled labor in Hong Kong (Henderson 1989: 102-117). Another global city, Singapore, has similarly followed a path from lowcost, labor-intensive production to capital-intensive industries and is now attempting to convert its economy to a knowledge center. As Singapore climbed the value-added ladder, it invested increasingly large sums in R & D activities. The state, especially its Economic Development Board (EDB) arm, has created a propitious zone for direct foreign investment (DFI), a catchment for transnational corporations offering ready technologies. As one E D B official summarized Singapore's development strategy, "Inner globalization," or regionalization, "and outer globalization benefit each other. Outer globalization improves inner globalization" (Lee 1991). Too small to be anything but a regional power, Singapore lacks economies of scale to build large industrial parks and extensive facilities for a scientific culture. Unable to be on the cutting edge of R & D, Singapore emphasizes the D component, refining what others have invented. In other words, its technological capacity is borrowed, not indigenous. Singapore is a global power only to the extent that it has a DFI-driven economy. Optimizing its spatial advantages as a crossroads of major sea and air routes, Singapore has developed excellent infrastructure and state-of-the-art industrial services, making it a regional maintenance center that repairs equipment and provides aircraft services. With a large concentration of transnational corporations, numbering over three thousand in 1992, Singapore is an attractive location for banking, finance, distribution networks, and telecommunications operations. Today Singapore offers global technology and aspires to become an "information node" in the globalization process, but its own products are competitive primarily in regional markets (Economic Development Board 1992: 1; Wong 1991). To gain advantage, Singapore promotes subregional integration. Within

Dynamics of Globalization

13

A S E A N , there is a m o v e to link three n o d e s —the city-state of S i n g a p o r e , J o h o r state in peninsular M a l a y s i a , and I n d o n e s i a ' s Riau Islands —in a " G r o w t h Triangle." This strategy of subregional integration seeks to c o m bine S i n g a p o r e ' s highly skilled h u m a n capital and w e l l - d e v e l o p e d infrastructure, J o h o r ' s land and semiskilled labor, and R i a u ' s land and low-cost labor. T h e S i n g a p o r e - J o h o r - R i a u growth triangle is derived partly f r o m the e x p e r i e n c e of the t w i n n i n g of H o n g K o n g and S h e n z e n , reputedly C h i n a ' s fastest g r o w i n g city. Also to pull subregional entities into a tighter w e b are the plans f o r twinning the city-states of H o n g K o n g and S i n g a p o r e . T h u s , while Singapore u p g r a d e s its industrial and technological c a p a c i t i e s , lowv a l u e - a d d e d activities are shifted to neighboring countries, not unlike the strategy pursued by H o n g K o n g and T a i w a n . In addition to triangular ties a m o n g H o n g K o n g , T a i w a n , and C h i n a ' s p r o v i n c e s of G u a n g d o n g and F u j i a n , the Greater South C h i n a E c o n o m i c Z o n e includes the participation of the A S E A N countries, with their p o w e r ful C h i n e s e business c o m m u n i t i e s , as investors in South C h i n a . An e m e r g ing C h i n e s e transnational division of labor builds on H o n g K o n g ' s and T a i w a n ' s extensive kinship n e t w o r k s with G u a n g d o n g and F u j i a n . T h e f u s i o n of these n e t w o r k s and subregional culture f o r m s strong e c o n o m i c linkages a m o n g H o n g K o n g , T a i w a n , the A S E A N c o u n t r i e s , and South C h i n a . T h e f r e q u e n t m o v e m e n t of p o p u l a t i o n , industry, and capital across borders is establishing a "transfrontier m e t r o p o l i s . " C h i n a ' s e c o n o m i c integration with the region is f u r t h e r e d by its coast-oriented d e v e l o p m e n t strategy, m o s t notably granting special f a v o r a b l e policies to select p r o v i n c e s and designating fourteen coastal " o p e n cities" to f u r t h e r attract D F I ( X i a n m i n g citing H e r z o g 1990). In a c h a n g i n g regional division of labor, C h i n a f a c e s c o m p e t i t i o n f r o m other l o w - w a g e countries such as the Philippines and Indonesia, and s o m e of the F o u r D r a g o n s ' n e i g h b o r s , particularly M a l a y s i a and T h a i l a n d , are e x p e r i e n c i n g r e m a r k a b l e e c o n o m i c g r o w t h . W h i l e the latter countries increasingly serve as m a g n e t s for D F I , questions are nevertheless raised about the N I C s ' f u t u r e viability as industrial societies. Until recently v i e w e d as the next J a p a n , South Korea is losing c o m p e t i t i v e n e s s in s o m e key industries. Industries that f u e l e d South K o r e a ' s e c o n o m i c d y n a m i s m —such as shoes, clothing, and simple c o n s u m e r products —are now relocating in countries with lower w a g e s . T h e shift f r o m low-tech, labor-intensive industries is being hastened by d e m o c r a t i c r e f o r m s d e m a n d e d by f o r m e r l y s u p p r e s s e d workers. Strikes in the 1980s led to a tripling of w a g e s in s o m e industries, causing N i k e , R e e b o k , and other big f i r m s to seek alternative production sites. Similarly, exports of personal c o m p u t e r s f r o m South K o r e a p l u m m e t ed more than 57 percent in the first half of 1992 f r o m the c o m p a r a b l e period in 1991 ( " A f t e r Stall . . . " 1992). T h e policy d e b a t e now rife in South Korea, just as in S i n g a p o r e and other N I C s , c o n c e r n s h o w to j u m p the elu-

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James H. Mittelman

sive last hurdle in the race toward developed-nation status. The challenge is to m o v e up in the technological division of labor, which requires indigenous, not merely imported, capacity for innovation. Meanwhile, resistance to restructuring is mounting, not least in South Korea from critics who challenge government assistance to a few huge conglomerates, known as chaebol. There are complaints about state subsidies favoring the chaebol and protecting them f r o m imports, especially short of any reform of the financial system. In Hong Kong, worker mobility, most apparent among women in factories, is a sign of discontent. Notwithstanding economic growth for the country as a whole, Singapore faces disquiet among various ethnic groups and social movements. With English as the national language, and given a highly Westernized culture, many Chineseeducated members of Singapore's Chinese community feel that they have been left behind in economic development. Clearly the Singaporeans who are the chief beneficiaries of the system are English-educated Chinese. The share of wealth accruing to Singapore's Indian community, relative to that of the country's other ethnic groups, has declined in recent years. Singapore's Malays have found it hard to break into Chinese businesses, the upper echelons of the civil service, and the military. Flanked by two predominantly Islamic countries, Malaysia and Indonesia, Singapore has established barriers for its Malays who seek to join the air force. Some Singaporean Malays claim to be caught in a spiral: poverty lessens the opportunity for education, and a low level of education begets poverty. It is not surprising that Singapore's ethnic and Christian fundamentalist movements are gaining a following (Correspondents 1991). The developmental routes mapped here are unlikely to be replicated elsewhere, because global trends articulate with regional conditions in very different ways. The Four Dragons integrated into a "new international division of labor" when the world economy was robust and when the Cold War generated not only extraordinary superpower conflict but also material assistance for allies in a strategically key region. On the fringes of the Third World, meanwhile, a strategy of subsidizing nonexistent infant industries and protecting small markets within the ambit of heavy debt structures is of little use (Mittelman 1991). Although the external and domestic obstacles encountered by parvenus are now greater than in the past, the nature of the interactions between the contemporary globalization trend, which has superseded the "new international division of labor" of bygone decades, and social conflict offers important lessons for the future.

FUTURE DIRECTIONS I began this chapter by suggesting that the nation-state and social strata are embedded in a world society propelled by the unparalleled productive

Dynamics

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15

c a p a c i t i e s of e c o n o m i c g l o b a l i z a t i o n . F o r m u l a t i n g t h e p r o b l e m a t i c o f g l o b a l i z a t i o n in this w a y d i r e c t s a t t e n t i o n t o a P o l a n y i a n m e t h o d of f o c u s i n g o n an e x p a n s i o n of t h e m a r k e t a n d r e s p o n s e s f r o m r e g i o n a l a n d l o c a l e n t i t i e s t h a t d i r e c t l y e n c o u n t e r its d i s r u p t i v e a n d s o c i a l l y p o l a r i z i n g e f f e c t s . T h i s c h a p t e r h a s tried to e x t e n d P o l a n y i ' s c o n c e p t u a l i z a t i o n to a w o r l d

scale,

s h o w i n g i n t e r a c t i o n s a n d t h e i m p l i c a t i o n s of g l o b a l i z a t i o n f o r c o n f l i c t a n d cooperation. F u r t h e r , I h a v e a r g u e d that t h e e v o l u t i o n of t h e t h e o r y o f d i v i s i o n of l a b o r p r o v i d e s a k e y to c o m p r e h e n d i n g g l o b a l i z a t i o n , its o p p o r t u n i t i e s , a n d its c h a l l e n g e s . T h e d i s c u s s i o n of this t h e o r y h a s c o n c e n t r a t e d o n t w o t h e s e s , w h i l e t a k i n g t h e o p p o r t u n i t y to p r o p o s e a t h i r d a n d a l t e r n a t i v e c o n c e p t u a l ization. First, classical political e c o n o m y f o c u s e d on efficiencies s t e m m i n g f r o m s p e c i a l i z a t i o n of f u n c t i o n s , w i t h i m p l i c a t i o n s f o r d e v e l o p i n g p a r t i c u l a r products for trade and thus deriving comparative advantages on the internat i o n a l l e v e l . A l t h o u g h A d a m S m i t h a d u m b r a t e d a n o t i o n of i n t e r e s t - b a s e d p o l i t i c s c e n t e r i n g o n t h e d i v i s i o n of l a b o r , as d i d D a v i d R i c a r d o a n d K a r l M a r x , t h e c o n c e p t of d i v i s i o n of l a b o r r e m a i n e d l a r g e l y d o r m a n t

and,

notwithstanding Max W e b e r ' s and Emile D u r k h e i m ' s contributions to socio l o g i c a l t h e o r y , d i d n o t a d v a n c e s i g n i f i c a n t l y until t h e s e c o n d half of t h e twentieth century. A c o n v e r s a t i o n a b o u t " t h e w e a l t h of n a t i o n s " b e g a n a n e w in t h e 1 9 6 0 s . T h e e m e r g e n c e of t h e N I C s s p a r k e d i n t e r e s t in t h e p r o s p e c t s f o r m o b i l i t y in t h e i n t e r n a t i o n a l d i v i s i o n of l a b o r . S e t t i n g f o r t h a s t r u c t u r a l a n a l y s i s , t h e n e w i n t e r n a t i o n a l d i v i s i o n of l a b o r t h e o r i s t s s o u g h t to e x p l a i n t h e s h i f t of m a n u f a c t u r i n g f r o m a d v a n c e d c a p i t a l i s t to d e v e l o p i n g c o u n t r i e s . In t h e i r v i e w , t h e p r o c e s s is d r i v e n by d e c l i n i n g p r o f i t s in i n d u s t r i a l c e n t e r s , c a u s i n g f i r m s t o seek n e w investment opportunities w h e r e labor costs are c h e a p . manufacturing

operations are f r a g m e n t e d , with

low-skilled

Hence,

tasks

being

t r a n s f e r r e d w h i l e t h e b u l k of R & D a c t i v i t i e s is r e t a i n e d in t h e h e a r t l a n d s o f capitalism.

To

this

day,

technological

development,

especially

basic

r e s e a r c h , c o n t i n u e s to b e f a r less g l o b a l i z e d t h a n a r e m a n u f a c t u r i n g a n d s a l e s . 2 A l s o , t h e c o n t r o l c e n t e r s of i n t e r n a t i o n a l f i n a n c e a r e c o n f i n e d t o T o k y o , L o n d o n , a n d N e w Y o r k , w i t h a s e c o n d tier in F r a n k f u r t a n d P a r i s , f o l l o w e d by o f f s h o r e f a c i l i t i e s in s u c h e s c a p e h a t c h e s as t h e

Cayman

Islands. A s w e h a v e s e e n , t h e n e w i n t e r n a t i o n a l d i v i s i o n of l a b o r t h e s i s u n d e r l i n e s t h e s u p p o s e d l o g i c of c a p i t a l itself b u t d o e s n o t e x a m i n e t h e i n t e r a c t i o n s b e t w e e n g l o b a l t r e n d s a n d v a r i e d l o c a l c i r c u m s t a n c e s . In f a c t , d u r i n g t h e 1 9 8 0 s g l o b a l r e s t r u c t u r i n g e n t a i l e d a n u n p r e c e d e n t e d c o r r e l a t i o n of e c o n o m i c f o r c e s , p o l i t i c a l p o w e r , a n d s o c i a l s t r u c t u r e . A l o n g w i t h a c h a n g e in e m p h a s i s f r o m a F o r d i s t m o d e l of m a s s p r o d u c t i o n a n d m a s s c o n s u m p t i o n to a p o s t - F o r d i s t (or p e r h a p s o n e m i g h t say " T o y o t a i s t " ) s y s t e m of f l e x i b l e p r o d u c t i o n f o r n i c h e m a r k e t s c a m e i m p o r t a n t t e c h n o l o g i c a l i n n o v a t i o n s in c e r t a i n i n d u s t r i e s , e n a b l i n g N I C s to m o v e i n t o h i g h e r - v a l u e - a d d e d

and

16

James

H.

Mittelmcin

upgraded operations, deepening the production structure in select countries, partly as a result of their own initiatives, and opening the way for integrated industries. The decomposition of the production process was accompanied by technological devolution to the NICs in crucial sectors linked to transport and communications: major strides in containerized shipping making the spread of production facilities more profitable, improved engineering techniques speeding operations, and pervasive computer applications providing instantaneous data processing to augment the efficiency of global business (Hoogvelt 1987). Important in this transformation is the relatively "borderless" nature of technology and of a region, where complementary operations can easily be mounted and, if need be, transferred f r o m country to country. Beyond a " n e w " international division of labor, there have been remarkable changes in the global political economy in the past decade. In the emerging global division of labor, there are regional coordinating centers in specific industries in such hubs as Hong Kong and Singapore, with offshore assembly and natural resources situated in neighboring countries. The regional centers have upgraded and moved into even higher-value-added operations. They have sought to gain a technological edge by investing in R & D capacity. Although there is no technological quick fix for adjusting to an extremely competitive global environment, raising spending on R & D promotes access to qualified scientists and engineers with advanced training, enhanced facilities for the reproduction of this form of labor, as well as other sources of investment in local universities and research institutes (Chalmers 1991; Henderson 1989: 45). A handful of countries has used the impetus of the market and tried to cushion its full impact. Nonetheless, upward mobility in the global division of labor remains relatively limited. It still takes place at the margins of the global political economy and is only partially determined by policy initiatives. Globalization encompasses contradictory trends. On the one hand, the unaccountable forces of globalization —such as cross-border flows of undocumented workers and modern communications with instantaneous speed —are partially beyond the control of effective state regulation. To adjust, the state responds to the globalization process by more fully integrating the domestic economy into world markets. On the other hand, the state pulls in the opposite direction by using a variety of government interventions to create a competitive edge. All countries industrializing late rely on large-scale interventions —most important, direct involvement in the production process, establishment of social and economic infrastructure, generous terms of credit, and material support for shifting from imitative to indigenous technological capacity. The options are clearly restricted, and the question is not whether the state should intervene in the economy but what type of state and what interventions are most appropriate in a specific context? And policy initiatives in whose interest? Will state intervention be sub-

Dynamics

of Globalization

17

j e c t to p o p u l a r c o n t r o l ? G i v e n t h e l i m i t s o n s t a t e p o l i c i e s a n d t h e p r o m i s e o f u n p r e c e d e n t e d p r o d u c t i v e c a p a c i t y , n e w s m a l l s t a t e s s u c h as G e o r g i a , t h e Baltic countries, Slovenia, or Croatia can do no better than negotiate the c h a n n e l s of g l o b a l i z a t i o n , r e c o g n i z i n g that f r e e r m a r k e t s e n t a i l

greater

s o c i a l c o s t s a n d h e n c e m u s t b e p o p u l a r l y c o n t r o l l e d . F o r t h e s e n e w s t a t e s , as f o r all o t h e r s , g l o b a l i z a t i o n l i m i t s t h e r a n g e of c h o i c e . O n l y w i t h i n its a m b i t may actual possibilities and specific limitations be g a u g e d . A s c o u n t r i e s m a n e u v e r f o r p o s i t i o n w i t h i n t h e g l o b a l d i v i s i o n of l a b o r , c o n f l i c t s e r u p t a n e w b e c a u s e t h e o p p o r t u n i t y f o r a s c e n t is q u i t e c o n s t r a i n e d . It is c o n s t r a i n e d p r e c i s e l y b e c a u s e in a p o s t - C o l d W a r w o r l d t h e r e is o n e , and only one, metastructure —capitalism —establishing the rules for mobility, w h e t h e r u p w a r d o r d o w n w a r d . I n t r a r e g i o n a l i n e q u a l i t y is s p e a r h e a d e d b y i n c r e a s e d l e v e l s of i n t e r a c t i o n w i t h t h e g l o b a l e c o n o m y . H e n c e , c o n t r a d i c tions and conflicts have emerged a m o n g the Asia Pacific countries, with h e i g h t e n e d r e g i o n a l d i s p a r i t i e s , n e w c o m p e t i t o r s , a n d c h a n g i n g s p a t i a l orie n t a t i o n s . W i t h i n C h i n a i t s e l f , t h e u n e v e n d i s t r i b u t i o n of D F I , i n t e r a c t i n g w i t h state p o l i c i e s of e n c o u r a g i n g s o m e a r e a s a n d l o c a l i t i e s to b e m o r e integ r a t e d in t h e g l o b a l d i v i s i o n of l a b o r , h a v e e i t h e r e x a c e r b a t e d e c o n o m i c d i f f e r e n c e s or r e c o n f i g u r e d t h e m . E m p i r i c a l r e s e a r c h s h o w s that t h e o v e r w h e l m i n g p r o p o r t i o n of D F I in C h i n a is d i r e c t e d to c o a s t a l p r o v i n c e s a n d m u n i c i p a l i t i e s , w i t h t h e v a s t i n t e r i o r b e s e t by u n d e r d e v e l o p m e n t ( X i a n m i n g 1993). T h e g l o b a l d i v i s i o n of l a b o r is a l s o m a r k e d by i n t e r r e g i o n a l d i f f e r e n c e s centered on three axes: Asia P a c i f i c , E u r o p e with the i m p e n d i n g participat i o n of e r s t w h i l e s o c i a l i s t c o u n t r i e s , a n d N o r t h A m e r i c a j o i n e d b y M e x i c o a n d the C a r i b b e a n . T h e e m e r g e n c e of c o m p e t i n g r e g i o n a l b l o c s c o u l d lead to i n c r e a s e d g l o b a l c o n f l i c t , p r o b a b l y o r i g i n a t i n g w i t h i n s t a b i l i t y in t h e T h i r d W o r l d . P o v e r t y a n d n o n d e m o c r a t i c r u l e a r e t h e m a i n s o u r c e s of this i n s t a b i l i t y . A h o s t of p r o x i m a t e i s s u e s c o u l d i g n i t e r e g i o n a l a n d g l o b a l c o n f l i c t — a m o n g o t h e r s , a r e s u r g e n c e of e t h n i c o r r e l i g i o u s r i v a l r i e s , a c r i s i s of l e g i t i m a c y , a n d t h e p r o l i f e r a t i o n of a d v a n c e d w e a p o n r y . In t h e a b s e n c e of s u p e r p o w e r r e s t r a i n t s that w e r e m e a n t to h e a d o f f a c o n f r o n t a t i o n b e t w e e n the United States and the Soviet Union, regional powers now have greater l e e w a y to p u r s u e t h e i r o w n a g e n d a s . ( H e n c e , I r a q m a r c h e d into K u w a i t p a r t ly b e c a u s e S a d d a m H u s s e i n s o u g h t t o fill w h a t h e r e g a r d e d as a p o w e r v a c u u m . ) P a r a d o x i c a l l y , g l o b a l i z a t i o n e n g e n d e r s t h e r e g i o n a l i z a t i o n of c o n f l i c t . W i t h g l o b a l i z a t i o n , p o w e r is d i s p e r s e d a m o n g m o r e a c t o r s a n d i n t e r r e g i o n a l c o m p e t i t i o n is h e i g h t e n e d . G i v e n t h e i n s t a b i l i t y c h a r a c t e r i s t i c of tria d s , an a l l i a n c e b e t w e e n t w o of t h e t h r e e m a c r o r e g i o n s is a likely o u t c o m e . W i t h the vast s i z e of t h e E u r o p e a n s i n g l e m a r k e t , t h e U n i t e d S t a t e s a n d Japan represent counterbalancing e c o n o m i c power. Currently first and seco n d in s i z e in G N P , t h e U n i t e d S t a t e s a n d J a p a n h a v e m u t u a l i n t e r e s t s in a new world order. H o w e v e r , a n e w world order based on military s u p e r p o w e r c a n n o t b e s u s t a i n e d by o u t s i d e f i n a n c i n g . T h e w o r l d ' s l a r g e s t

debtor

18

James H.

Mittelmcm

nation, the United States derives jobs and investment capital from Japan, which in turn relies on its North American ally for innovation in industry and military power to guarantee the supply of vital resources, especially oil from the Middle East. Yet for large numbers of people there is no hint of a new world order or upward mobility in a changing division of labor. Rather, life is marked by a deepening divide between rich and poor. The mosaic of globalization reflects a transformation of poverty in which three continents were most adversely affected by globalization to the marginalization primarily of a single world region and of enclaves in other regions. According to projections by the World Bank, in Asia the number in poverty will fall f r o m 805 million in 1985 to 435 million by the end of this century; and in Latin America and the Caribbean, from 75 million to 60 million in the same period. In subSaharan Africa, the number of poor will rise by 85 million, to 265 million in the year 2000. Thus, Asia's share of the world's poor will decline to 53 percent f r o m 72 percent in 1985; Latin America's and the Caribbean's will drop to 11.4 percent from 19.1 percent; and sub-Saharan Africa's will double from 16 percent to 32 percent (World Bank 1990: 139). In other words, there are holes in the global mosaic. Although the data point to a net reduction of poverty-stricken people, polarization is evident among regions —truncated globalization debars the bulk of Africa from gaining access to world society's productive processes. For the countries of Africa, the greatest challenge is to demarginalize when national options are severely constrained by the forces of globalization. Against a backdrop of transformation from a hegemonic and state-centered structure to a multipolar and politically decentered world system, globalization is both an agent and a product of social conflict. Globalization sets in train conflicts among competing capitalisms, generates deeper or reconfigured intraregional disparities, engenders interregional rivalries among neomercantilist coalitions, and has combined with local forces to consign, at the end of this millennium, 265 million people on one continent to poverty, with little hope for escape in sight. The foremost contradiction of our time is the conflict between the zones of humanity integrated in the global division of labor and those excluded f r o m it. Embedded in the foregoing overview are various analytical propositions that require scrutiny. Subsequent chapters will deepen the discussion by confronting my interpretations and reformulating the discourse over globalization. For the contributing authors, the ultimate challenges are to reconceptualize globalization and delimit alternative globalization projects. Going one step further, the task is to anticipate postglobalization by identifying the bearers of change and their strategies in a new double movement: the integration wrought by market forces and a transnational protectionist reaction against the disintegration of extant forms of social and political organization.

Dynamics

of Globalization

19

NOTES S o m e of the ideas in this chapter were first presented at the Dalhousie University International S y m p o s i u m "Surviving at the Margins: Political E c o n o m y and Foreign Policy in the South in the 1990s," 2 6 - 2 8 September 1991, Halifax, N o v a Scotia, organized by Timothy Shaw and Larry Swatuk. The chapter draws on my article "The Globalization of Social Conflict," in Volker Bornschier and Peter L e n g y e l , eds., World Society Studies, vol. 3: Conflict and Its Solution in World Society (New Brunswick: Transaction Publishers, 1994). I o w e a debt of gratitude to Robert W. Cox for sharing ideas, as well as to Stephen Gill and Linda Yarr for valuable c o m ments on a draft of this chapter. Finally, the research reported here (part of an ongoing project) was f u n d e d by grants f r o m the World Society Foundation and the Professional Staff C o n g r e s s of the City University of New York. I gratefully acknowledge these sources of support. 1. The definition of globalization as a compression of time and space builds on the theoretical lineage of D. Harvey (1989), Giddens (1990), Robertson (1992), and others. Following Polanyi, I have attached a notion of social e m b e d d e d n e s s . 2. Comparing present-day trends with those of "the decades of American technological hegemony," the New York Times ("Technology without Borders Raises Big Questions for the U.S.," 1 January 1992) reports that despite various transnational flows, only 10 percent of U.S. corporate research and development f u n d s is spent overseas. Motorola, for instance, derives half its revenue f r o m international sales and stations 40 percent of its w o r k f o r c e abroad, but only 2 0 - 2 5 percent of product development and 5 percent of basic research are conducted outside the United States.

Robert W. Cox

A Perspective on Globalization

Globalization compresses the time and space aspects relations. —James H. Mittelman (Chapter 1)

of

social

The world at the end of the Short Twentieth Century is in a state of social breakdown rather than revolutionary crisis. -Eric Hobsbawm (1994)

It is particularly important to take some distance from a term that has become fashionable in both academia and mass media in order to place it in historical perspective. The word globalization invokes this challenge. James Mittelman, in setting forth the guidelines for the symposium that resulted in this book, did well to stress the time and space dimensions within which the term is to be understood. 1 For world-systems theorists, capitalism has always been global, whether its origins are traced to the seventeenth-century Eurocentric world or to more ancient civilizations —global in vocation if not in geographic extent. In this perspective, there is nothing essentially different about the last three decades of the twentieth century. During what Eric Hobsbawm calls the Short Twentieth Century ( 1 9 1 4 1991), capitalism was challenged by another potentially global force: "real socialism," in its own terms, or "world communism," in the perception of its capitalist opponents. (For world-systems theory, consistent with its own premises, this was merely a deviant face of capitalism.) By the end of the Short Twentieth Century, real socialism was a spent force, leaving capitalism as the only apparent claimant to global reach. World-systems theory seemed vindicated. Real socialism had been just a blip on the screen.

THE CRISIS OF THE MID-1970S Nevertheless, in a closer perspective than that of megahistorical world-systems theory, there was a significant breaking point in the mid-1970s when

21

22

Robert

W. Cox

the specific form of economic and social relations that are now referred to as "global" began to be apparent. My first recollection of it was in reading an article by Bernadette Madeuf and Charles-Albert Michalet entitled "A New Approach to International Economics" (1978). The authors argued that it had become necessary to make a distinction between international economy and world economy. The international economy was what classical economic theory had concerned itself with: movements in trade, investments, and payments crossing national frontiers that were regulated by states and by international organizations created by states. The world economy, in contrast, was the sphere in which production and finance were being organized in cross-border networks that could very largely escape national and international regulatory powers. The perception of this distinction coincided with a number of changes in world political economy accentuated by the recession that hit the developed capitalist economies from 1973 and affected by extension the less developed countries. There was also a growing sclerosis of the economies of real socialism. The late 1970s was an era of generalized economic crisis. The crisis put an end to the hopes of what was still called the Third World for a new international economic order. Indeed, First World financing of Third World development was substantially reversed. Third World countries abandoned import substitution in favor of export promotion, which also meant sacrificing production for domestic consumption and satisfaction of basic needs in favor of earning foreign exchange. The conditions for rolling over foreign debt also required these countries to cut state expenditures, devalue their currencies, and remove restrictions on the movement of capital, all of which made the burden of adjustment fall most heavily on the poor and on national and local enterprises. It accentuated the separation between those small, privileged groups integrated with the world economy and the larger part of the population that remained outside. The more developed capitalist societies also felt financial and market discipline. Perhaps its major effect was to accelerate a restructuring of production away from mass production of standardized goods toward less energy- and labor-intensive methods and more capital- and knowledge-intensive ones. The Fordist mode of production —which had been based on a wellpaid labor force able to buy its own products and protected by institutionalized collective bargaining and by redistributive state policies acting as an economic stabilizer—came under attack. The new strategies emphasized a weakening of trade union power, cutting of state budgets (especially for social policy), deregulation, privatization, and priority to international competitiveness. Advances in technology in production and c o m m u nications, always the servant of dominant capital, enhanced all of these tendencies. The impact of these tendencies in different parts of the world accelerated migratory movements of populations, the direct causes of which were the

Perspective

on Globalization

23

destruction of previous means of existence (e.g., peasant agriculture in poor countries displaced by export-oriented capitalist farming, j o b loss in the mass production industries of richer countries from "restructuring") and political repression associated with regimes prepared to enforce the new economic rules by sacrificing the welfare of most of their people. All of these interacting and mutually reinforcing tendencies constitute one meaning of globalization — the complex of forces, born of the crisis of the mid-1970s, that reversed the different complex of forces that had become consolidated during the three decades following World War II. These were decades of economic growth, buttressed in the advanced capitalist countries by a corporatist social consensus, which also recognized the desirability of some minimal transfer of resources to aid development in the Third World.

GLOBALIZATION AS IDEOLOGY The relationship between international and world economies has been dialectical. The world economy grew by taking advantage of the territorial fragmentation of the international economy. This allowed capital to choose the most propitious sites in which to locate diverse phases of a geographically disseminated production process, taking account of differences in labor costs, environmental regulations, fiscal incentives, political stability, and so on. It also allowed capital to manage its accounts so that profits would accrue where the lowest taxes prevailed. The multinational corporations and banks, principal agents of globalization, henceforth represented themselves (and after a time were perceived by many governments and academic theorists) as primary agents of economic development. They were also a growing force for national and international deregulation in trade and finance. Globalization began to be represented as a finality, as the logical and inevitable culmination of the powerful tendencies of the market at work. The dominance of economic forces was regarded as both necessary and beneficial. States and the interstate system would serve mainly to ensure the working of market logic. Thus, in a second meaning, globalization became an ideology. The forces and policies that sustained the complex of tendencies just mentioned came to be regarded as inevitable ("there is no alternative") and in the long run beneficent, at least for some people. For others, different policies would be required (it must be recognized that many people, not just in poor countries but also in those that had been relatively rich, would remain outside the integrated sphere of the world economy). The ideology of globalization left understood but unstated the need for repressive police and military force to prevent destabilization of the world economy by outbursts of protest f r o m the disadvantaged outsiders.

24

Robert W. Cox

GLOBALISM AND THE BIOSPHERE A n o t h e r concern e m e r g e d also in the m i d - 1 9 7 0 s with a distinct and to s o m e extent c o m p e t i n g implication for the role of states: an ecological concern that the planet was reaching the limits of its capacity to sustain h u m a n settlement under prevailing conditions of p r o d u c t i o n , resource depletion, and attendant pollution. This concern also had global implications in both senses of that term —it involved the entire planet and it raised questions about the total organization of h u m a n life and work within the larger realm of nature. This concern is s o m e t i m e s referred to as " g l o b a l i s m " ("think globally, act locally"). G l o b a l i s m and globalization arose together as orientations for thought and action. Globalization and globalism were thus the product of specific historical conditions in the last three d e c a d e s of the twentieth century. They e m e r g e d first in the advanced capitalist societies, and with the k n o w l e d g e , prestige, and resources present in these societies they were disseminated as o b j e c t i v e truth a m o n g these societies' subordinate classes and to peoples in the rest of the world. A m o n g these subordinate classes and other peoples the contradictions of both g l o b a l i z a t i o n and g l o b a l i s m b e c a m e a p p a r e n t . G l o b a l i z a t i o n widened the gap in living conditions b e t w e e n most of the w o r l d ' s population and the relatively small segment integrated into global production and f i n a n cial networks. G l o b a l i s m raised the ethical question of what the rich, w h o were already c o n s u m i n g the lion's share of the w o r l d ' s resources and had done most of the polluting, could o f f e r to meet the aspirations of the poor for d e v e l o p m e n t and higher living standards.

SPACE AND TIME In 1889 the French philosopher Henri Bergson published his Essai sur les données immédiates de la conscience (which has been translated into English as Time and Free Will). Bergson broke with both Cartesian and Kantian traditions on the question of time; for h i m , there were two m e a n i n g s of time. T h e r e was what w e could call "clock time," which was a u n i f o r m , h o m o g e n e o u s , m e d i u m m e a s u r i n g f r o m outside whatever was h a p p e n i n g . T h i s , in effect, was time reduced to space. T h e sequence of events is spread out over this h o m o g e n e o u s m e d i u m . T i m e in this sense is nature's way of making sure that e v e r y t h i n g that is g o i n g to happen does not happen all at once. T h e other kind of time B e r g s o n rendered by the French word durée, of which " d u r a t i o n " is perhaps a m i s l e a d i n g translation. If it is taken to mean just the period elapsing b e t w e e n the beginning and end of a series of e v e n t s , w e fall back into the spatial view of time. By durée Bergson m e a n t lived

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t i m e , e x p e r i e n c e d t i m e —the s u b j e c t i v e f e e l i n g of acting and c h o o s i n g and of p r e s s u r e s limiting action and c h o i c e — t i m e f r o m w i t h i n , the t i m e in w h i c h w e e x p e r i e n c e both f r e e d o m and c o n s t r a i n t s . T h i s distinction is i m p o r t a n t w h e n it c o m e s to t h i n k i n g a b o u t social and political c h a n g e . T h e historian w h o tries to e x p l a i n an e v e n t , a r e v o l u t i o n , or the inertia of a society a t t e m p t s an i m a g i n a t i v e r e c o n s t r u c t i o n f r o m the evid e n c e of individual a c t i o n s , of the m e a n i n g s of c o l l e c t i v e a c t i o n s f o r participants in social m o v e m e n t s , and of the m e n t a l and p h y s i c a l c o n s t r a i n t s on a c t i o n . All this is durée. T h i s is the t i m e t h r o u g h w h i c h w e m a y u n d e r s t a n d historical structural c h a n g e . It is t i m e r e e x p e r i e n c e d by the historian and social analyst f r o m within the p r o c e s s of c h a n g e itself. B e r g s o n ' s t h o u g h t s a b o u t t i m e r e f e r r e d to individual p s y c h o l o g y . M o r e than half a century later, F e r n a n d B r a u d e l ( 1 9 8 0 a ) spelled out c a t e g o r i e s of t i m e as an aid to t h o u g h t in h i s t o r i o g r a p h y and the social s c i e n c e s . H e identified d i f f e r e n t f l o w s of t i m e in d i f f e r e n t f i e l d s of h u m a n activity— politics, e c o n o m y , c u l t u r e , t e c h n o l o g y , the structuring of society, and the d e v e l o p ment of l a n g u a g e . T i m e in these d i f f e r e n t f i e l d s m o v e d at d i f f e r e n t s p e e d s — s o m e t i m e s slowly, then a c c e l e r a t i n g , and then again m o r e slowly. T h e s e f i e l d s interacted but did not m o v e in c o n c e r t . T h e m o m e n t u m of c u l t u r e , f o r i n s t a n c e , m i g h t c o n t i n u e a f t e r politics had c e a s e d to be c r e a t i v e . S u c h w a s the c a s e , f o r i n s t a n c e , with s e v e n t e e n t h - c e n t u r y S p a n i s h high culture and possibly f o r U . S . p o p culture today. M o r e o v e r , B r a u d e l saw three levels of t i m e . E v e n t s time is the i m m e d i ately p e r c e p t i b l e level — i n s t a n t a n e o u s t i m e , or c y b e r n e t i c "real t i m e . " But e v e n t s do not e x p l a i n t h e m s e l v e s . T h e y h a v e to be p l a c e d within the c o n t e x t of what Braudel called conjonctures, or the set of f o r c e s that p r e p a r e the g r o u n d f o r e v e n t s and a c c o u n t f o r their c o n s e q u e n c e s . C o n j u n c t u r a l t i m e is m e d i u m t e r m , the span of an e c o n o m i c c y c l e , of a certain c o n f i g u r a t i o n of social f o r c e s , or of a certain p a r a d i g m of scientific k n o w l e d g e . T h e shift f r o m the c o m p l e x of f o r c e s that c h a r a c t e r i z e d the p o s t w a r d e c a d e s to those that c h a r a c t e r i z e d the e m e r g e n c e of g l o b a l i z a t i o n d i s c u s s e d earlier w a s such a c h a n g e in c o n j u n c t u r a l t i m e . At the d e e p e s t level is w h a t B r a u d e l called the longue durée, w h i c h involves structures of t h o u g h t ( m e n t a l i t é s ) that are very slow to c h a n g e : e c o n o m i c o r g a n i z a t i o n , social p r a c t i c e s , political institutions, l a n g u a g e , and v a l u e s . T h e s e structures are all c o h e s i v e and i n t e r d e p e n d e n t , yet e a c h m o v e s at a d i f f e r e n t p a c e . C o n j u n c t u r a l c h a n g e s that b e c o m e c o n s o l i d a t e d and stabilized c o u l d signal a c h a n g e in the longue durée. Structural c h a n g e , f o r B r a u d e l , results f r o m a " d i a l e c t i c of d u r a t i o n . " E v e n t s are c o n d i t i o n e d and s h a p e d by the s t r u c t u r e s of the longue durée, but e v e n t s m a y also c u m u l a t i v e l y c h a l l e n g e , u n d e r m i n e , and t r a n s f o r m these structures. T h e e x p l a n a t i o n of historical structural c h a n g e i n v o l v e s the interaction of all three levels of t i m e . W e l l - g r o u n d e d strategies f o r m a k i n g a better f u t u r e — f o r a realistic a p p l i c a t i o n of collective f r e e will — i n v o l v e as a

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starting point an u n d e r s t a n d i n g of the limits of the possible through an a w a r e n e s s of the longue duree. T i m e in the Braudelian sense is the m e d i u m in which the collective creative powers of h u m a n society continually invent the future within the limits of the possible. Space (and spatially conceived time) orients the m i n d toward the present c o m p l e x of relationships. T h e present seems f i x e d , determ i n e d . Within the spatial orientation of m i n d , the f u t u r e is imaginable only as the f u r t h e r d e v e l o p m e n t of tendencies apparent in the present. T h e ideology of globalization is sustained by space-oriented thinking. The possibility of transcending this ideology will d e p e n d on recovering the time d i m e n s i o n in thought that will e n a b l e h u m a n action to use the contradictions of globalization to envisage a possible alternative f u t u r e . T h e time dimension is the r e m a i n i n g m e d i u m of f r e e d o m .

THE CONTRADICTIONS OF GLOBALIZATION O n e contradiction of globalization is that social polarization exists both a m o n g and within countries. T h e social structure of the world shaped by globalization takes the f o r m of a three-part hierarchy. At the top are p e o p l e w h o are integrated into the global e c o n o m y , including e v e r y o n e f r o m the global e c o n o m y m a n a g e r s d o w n to the relatively privileged workers w h o serve global production and f i n a n c e in reasonably stable jobs. T h e second level in the hierarchy includes those w h o serve the global e c o n o m y in m o r e precarious e m p l o y m e n t —an e x p a n d i n g category segmented by race, religion, and sex as a result of the " r e s t r u c t u r i n g " of production by postF o r d i s m . T h e bottom level consists of s u p e r f l u o u s l a b o r — t h o s e e x c l u d e d f r o m the global e c o n o m y and w h o serve it only as a potentially destabilizing force; at this level are the objects of global poverty relief and riot control. W h o l e regions of A f r i c a belong to the bottom level. Most of the f o r m e r Soviet sphere is j o i n i n g this category as well, with excessive polarization of new rich and new poor. T h e success stories of the f o r m e r Third World (the newly industrializing countries [NICs]) constitute a very small p o p u l a t i o n . Most significant, p e r h a p s , is that polarization is increasing within so-called rich countries with high levels of u n e m p l o y m e n t , a decrease in h i g h - p a y i n g (integrated) j o b s and an increase in l o w - p a y i n g precarious w o r k , erosion of social services (health and e d u c a t i o n ) , and fiscal attack on redistributive policies. Tiny s e g m e n t s of poor-country populations are integrated into the world e c o n o m y n e t w o r k , while rich countries are generating their o w n internal Third Worlds ( U N R I S D 1995; Galbraith 1992). Another contradiction c o n c e r n s the loss of a u t o n o m o u s regulatory p o w e r by states. States and intergovernmental organizations play a role in enforcing the rules of the global e c o n o m y and in enhancing national c o m -

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petitiveness, but their powers of shielding domestic economies from negative effects of globalization have diminished. The cure for these negative effects is generally regarded as more globalization. Is there any regulatory power at the level of the global economy itself? There appears to be a mechanism for arriving at general policy consensus among rich-country political managers (through various unofficial and official bodies, from the Trilateral Commission and regular Davos meetings to the O E C D and G7 summits). I have referred to this partially visible, or transparent, complex as a nébuleuse (see Chapter 5). The visible form is a photo opportunity accompanied by an anodyne press communiqué. Far from being a sinister occult power, the nébuleuse may turn out to be a Wizard of Oz. Perhaps no one, or no coherent structure, is really in control. A third contradiction of globalization is that there is a widespread but uneven tendency toward decomposition of civil society. This takes the form both of a fragmentation of social forces and of a growing gap between the base of society and political leadership. References to the "political class" imply an alienation of people from their political institutions. The politicians are thought of as a distinct category of beings, serving their own interests, probably both corrupt and incompetent. This is markedly evident by recent events in Italy and Japan and in varying degrees in other advanced capitalist countries. People have lost confidence in politicians because of widespread corruption and, more specifically linked to the globalization effect, because of a conviction that politicians do not understand and cannot resolve the major problems confronting their societies. Where a break appears in this skepticism, it may be populist illusion propagated by a rich and powerful controller of mass media promising salvation —a Ross Perot or Silvio Berlusconi. In the poorest countries, there is evidence that people are turning their backs on the state and international organizations, which they see as their enemies rather than as possible supports. This tendency toward decomposition is accompanied by a resurgent affirmation of identities (defined by, for example, religion, ethnicity, or gender) and an emphasis on locality rather than wider political authorities. Locality here can be seen as a product of "globality" insofar as globalization has undermined the authority of conventional political structures and accentuated the fragmentation of societies. There is an open challenge as to whether new bases of political authority can be constructed from these fragments.

POTENTIAL FOR TRANSFORMATION Thought in the time dimension is dialectical. It begins with an understanding of the contradictions and proceeds to identify the potential for transformation based on concerted action by self-conscious social forces. It seems

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fairly evident that transformation is not going to come f r o m the summits of power in the state system and global economy. The nébuleuse will at best succeed in ad hoc confrontation of crises to sustain the status quo. For transformative potential we have to look both at latent tendencies within the summits of power and especially at the possibility of a recomposition of civil society at the base. We must also examine the long-term relationship of society with nature. I would signal three elements worthy of attention in a time-oriented perspective. The first is a tendency toward a differentiation of what Karl Polanyi (1957a) called substantive economies within the overarching concept of globalization. Both liberal and Marxist economics represent capitalism in formal terms as a single system with its own laws of motion. But we can see several distinct substantive capitalisms, all of which have significant differences for people living within them: a hyperliberal Anglo-American form (Cox 1987), a social market central and northern European form (Albert 1991), and an East Asian form with several variants (Johnson 1982; Fallows 1994). Large geographic zones may be organized very differently from the standpoint of the social and ethical content of the economy. The issues today in the European Union focus on the choice between the hyperliberal and the social market forms for future European society. Second, the process of decomposition and recomposition of civil society in all parts of the world, which will underpin any new forms of political authority and world order, will not follow a uniform pattern. This is where civilizations become an important object for study. We can think of civilizations as distinct realms of intersubjectivity rather than as geographic zones or religious or ethnic communities. By intersubjectivity, I mean the basic unarticulated assumptions shared by people concerning the nature of the real world; they are unarticulated because they are so naturally taken for granted. These visions of reality are represented through different mental structures, but these structures in turn have to be understood as distinct ways social practices have responded to material conditions of existence. Civilizations constitute the mental frameworks through which peoples understand and interpret their world and contrive their responses to the challenges that confront them. A new consensual world order could arise from an encounter of civilizations in a spirit of mutual respect. On this basis it should be possible to work toward a supraintersubjectivity that, while being aware of and respecting the intersubjectivities of different civilizations, would be capable of defining some common principles of consensual coexistence. The third object of concern is how to reconcile the complex mutation of human organization and the coexistence of different intersubjectivities with the biosphere (i.e., the interaction of humanity with other forms of life and

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life-sustaining substances within that thin envelope encompassing the planet f r o m the upper atmosphere to the seabeds). Only recently have we begun to understand the ways the biosphere has become an actor in the human drama. To the difficulty of mutual understanding among differently constituted human minds, expressed through different civilizations, is added the difficulty of achieving some mutual understanding of the role the biosphere plays in world politics. This will involve revision of our own mental frameworks. In formal economics, nature, represented by land, has been subordinated to market logic. Nature, however, has its own logic, based on the interdependencies of different forms of human and nonhuman life. So long as economic logic did not lead to a destabilization of nature, so long as there was enough slack in nature for the consequences of economic logic to be tolerated, this subordination of nature to the market went unnoticed. Now, however, the limits to nature's tolerance are being tested. The hole in the ozone layer, global warming, deforestation, soil erosion, the depletion of fish stocks, the loss of biodiversity—all these phenomena articulate nature's protest and imply that we need to rethink economics as being subordinate to a science of nature. This is more than an intellectual task. It implies a revision of our ways of producing and our model of consumption—our ways of life and work. This endeavor raises the ultimate challenge to the ideology of globalization. Consumption is the motor of capitalism, and the motivation of consumer demand is indispensable to capitalism's continuing development. There are significant cultural variations —for instance, Japanese people seem to have a greater propensity to save and North Americans a greater propensity for debt and consumption —but on the world scale, aspiration toward the U.S. and Western European consumption model has been the dynamic behind market liberalization in the Third World, China, and the former Soviet empire, and the driving force of economic globalization. It would seem that a fairly radical change in patterns of consumption will become essential to maintenance of the biosphere. Preparing for the 1992 Rio de Janeiro Earth Summit, U.S. president George Bush said, "Our lifestyle is not open to negotiation." He was implicitly acknowledging that a change of lifestyle is necessary to biospheric survival and at the same time that political survival in modern democracies makes it highly dangerous for politicians to advocate such change. All this leads to some pessimistic conclusions. As Eric Hobsbawm (1994) reasoned, the late twentieth century is in a state of social breakdown rather than revolutionary crisis. The forces that polarize society and fragment opposition among the disadvantaged and dispossessed remain dominant. They are sustained by the hegemonic ideology of globalization. Instances of revolt, such as has occurred in Chiapas in the south of Mexico, can be dealt with in isolation by dominant power so long as concerted

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transnational o p p o s i t i o n remains w e a k . Furthermore, the s e d u c t i o n o f c o n s u m e r i s m turns p e o p l e a w a y f r o m o p p o s i t i o n and m a k e s t h e m a c c o m p l i c e s o f the g l o b a l i z i n g f o r c e s . I e n d this chapter with a m e a s u r e o f h o p e . Perhaps a w a r e n e s s of the c o n s e q u e n c e s o f g l o b a l i z a t i o n , a d v a n c e d by work such as is e m b o d i e d in this b o o k , may shift thinking a w a y f r o m a p a s s i v e , s p a c e - o r i e n t e d presentm i n d e d n e s s toward a t i m e - o r i e n t e d strategy for action. If revolution is but a d i m prospect, social b r e a k d o w n is a d a n g e r o u s and d e p r e s s i n g c o n d i t i o n . O n l y realistically based action can ensure that g l o b a l i z a t i o n has not brought us to the "end o f history."

NOTE 1. Etymologically, the word global has two meanings that tend to become merged in the neologism globalization. One meaning refers to the planet earth (the French term mondialisation, used as an equivalent to globalization, is confined to this meaning). The other refers to a whole, or a set of factors conceived as a whole, giving globalization a totalizing connotation. The latter meaning is evoked by the consequences often perceived as those of the globalization process: a world increasingly homogenized —economically, socially, and culturally. The dialectical response to homogenization has been the affirmation of difference, equally present if lacking the material force of the apparently dominant homogenizing tendency. Globalization, in current usage, is to be understood in this dialectical manner.

Part The Thrust of Globalization: Production and the State

Saskia Sassen

3

The Spatial Organization of Information Industries: Implications for the Role of the State

T o d a y ' s global e c o n o m y is c o m m o n l y c o n c e p t u a l i z e d in t e r m s of the n e w t e c h n i c a l capacities f o r i n s t a n t a n e o u s t r a n s m i s s i o n of i n f o r m a t i o n o u t p u t o v e r any d i s t a n c e . A m o r e critical a c c o u n t of g l o b a l i z a t i o n f o c u s e s on the p o w e r of transnational f i r m s to o p e r a t e globally. D i f f e r e n t as they a r e , both a c c o u n t s f e e d into p r o p o s i t i o n s a b o u t the s h r i n k i n g role of the national state in an increasingly global e c o n o m y . O n the o n e h a n d , the a s c e n d a n c e of i n f o r m a t i o n t e c h n o l o g i e s has c o n t r i b u t e d to a s h a r p increase in the mobility and liquidity of capital. T h i s is particularly, t h o u g h not e x c l u s i v e l y , e v i d e n t in t o d a y ' s l e a d i n g i n f o r m a t i o n i n d u s t r i e s — i n t e r n a t i o n a l f i n a n c e and a d v a n c e d c o r p o r a t e services — w h i c h o p e r a t e g l o b a l l y and partly in electronic s p a c e s that e s c a p e c o n v e n t i o n a l j u r i s d i c t i o n s . O n the o t h e r h a n d , the key to g l o b a l i z a t i o n is f o u n d in the p o w e r of m u l t i n a t i o n a l c o r p o r a t i o n s and their c a p a c i t y to avoid the s t a t e ' s regulatory u m b r e l l a o n s i g n i f i c a n t c o m p o nents of its o p e r a t i o n . B o t h a c c o u n t s c o n t a i n i m p o r t a n t e l e m e n t s integral to e c o n o m i c g l o b a l i z a t i o n — t e c h n o l o g y , h y p e r m o b i l i t y , and p o w e r . But they leave out or m i n i m i z e (1) the i m p o r t a n c e of i n f r a s t r u c t u r e and w o r k p r o c e s s e s n e c e s s a r y f o r the o p e r a t i o n of global e c o n o m i c s y s t e m s and (2) the role of the state in i m p l e m e n t i n g the n e w g l o b a l e c o n o m i c s y s t e m s and in p r o d u c i n g the n e w legal f o r m s within w h i c h such s y s t e m s o p e r a t e . I n t r o d u c i n g place and the law into a n a l y s e s of e c o n o m i c g l o b a l i z a t i o n leads to a m o r e q u a l i f i e d e x a m ination of the shrinking role of the state in the g l o b a l e c o n o m y . M a n y of the strategic p l a c e s w h e r e global p r o c e s s e s m a t e r i a l i z e are e m b e d d e d in national territories and h e n c e fall, at least partly, u n d e r v a r i o u s s t a t e - c e n t e r e d regulatory u m b r e l l a s . A n d p r o d u c i n g and l e g i t i m a t i n g n e w f o r m s of legality r e m a i n tasks mainly in the h a n d s of states. To a large e x t e n t , in the current p h a s e of the global e c o n o m y these issues of s p a c e and the law are c o n f i n e d to the h i g h l y d e v e l o p e d c o u n t r i e s .

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This chapter uses the case of the leading information industries in the global e c o n o m y and international f i n a n c e and a d v a n c e d corporate services to e x a m i n e these issues. T h e s e industries are a m o n g the most intensive users of t e l e c o m m u n i c a t i o n s and c o m p u t e r n e t w o r k s , the indispensable technology of t o d a y ' s global e c o n o m y . Precisely b e c a u s e they are the most advanced and h y p e r m o b i l e industries, they push the matter of the role of the state to its limits. My a r g u m e n t is that w e need to g o b e y o n d the immateriality of information outputs and the hypermobility this entails to better understand questions of g o v e r n a n c e in the global e c o n o m y . A central proposition here is that w e cannot take the existence of a global e c o n o m i c system as a g i v e n , but rather we need to e x a m i n e the particular w a y s the conditions for e c o n o m i c globalization are produced. This requires e x a m i n i n g not only c o m m u n i c a t i o n capacities and the p o w e r of multinationals but also the infrastructure of facilities and work processes necessary for the implementation of global e c o n o m i c s y s t e m s , including the production of those inputs that constitute the capability for global control and the infrastructure of j o b s involved in this p r o d u c t i o n . T h e emphasis shifts to the practice of global control —the work of p r o d u c i n g and reproducing the organization and m a n a g e m e n t of a global production system and a global marketplace for f i n a n c e , both under conditions of e c o n o m i c concentration. P o w e r is essential in the organization of the world e c o n o m y , but so is production. T h e recovery of place and production also implies that global processes can be studied in great empirical detail. 1 T h e first part of this chapter e x a m i n e s how global processes, and in particular advanced information industries, materialize in particular places. We can see that in the case of these industries globalization is constituted through a global grid of strategic sites, which e m e r g e s as a new geography of centrality. T h e existence of such a grid may carry significant regulatory implications but it would require transnational legal/regulatory regimes and h e n c e considerable innovation around current r e g i m e s . The second part of the chapter discusses what w e could think of as elements for an analysis of the role of the state in the i m p l e m e n t a t i o n of the various systems and regimes necessary for the f o r m s of globalization evident in the current phase. 2

SPATIAL CONCENTRATION IN A GLOBAL INFORMATION ECONOMY Telematics and globalization h a v e e m e r g e d as f u n d a m e n t a l f o r c e s in the reorganization of e c o n o m i c space. T h i s reorganization ranges f r o m the spatial virtualization of a g r o w i n g n u m b e r of e c o n o m i c activities to the reconfiguration of the g e o g r a p h y of the built e n v i r o n m e n t for e c o n o m i c activity. W h e t h e r in electronic space or in the g e o g r a p h y of the built e n v i r o n m e n t , this reorganization involves institutional and structural c h a n g e s . O n e out-

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c o m e of these transformations has been captured in images of geographic dispersal at the global scale and the neutralization of place and distance through telematics in a growing number of economic activities. But is a space economy lacking points of physical concentration possible in an economic system characterized by significant concentration in ownership, control, and the appropriation of profits? In other words, can such an economic system operate without centers? Further, how far can forms of centrality constituted in electronic space go in replacing some of the functions commonly associated with geographic/organizational forms of centrality? I explore here the ways centrality remains a key property of the economic system. The transformation in the spatial correlates of centrality through new technologies and globalization engenders a whole new problematic around the definition of centrality in our economic system, where i) a share of transactions occurs through technologies that neutralize distance and place, and do so on a global scale; and ii) where centrality has historically been embodied in certain types of built environment and urban form, e.g., the central business district. Further, the fact of a new geography of centrality, even if transnational, would contain possibilities for regulatory enforcement that are absent in an economic geography lacking strategic points of agglomeration. New Forms of

Centrality

Simplifying an analysis made elsewhere (Sassen 1994), one can identify four forms assumed by centrality today. (See also generally Friedmann 1995; Knox a n d T a y l o r 1995; Castells 1989; Brotchie et al. 1995; Hall 1995; Fainstein 1993; Frost and Spence 1992; Abu-Lughod 1995.) First, while there is no longer a simple, straightforward relation between centrality and such geographic entities as the downtown or the central business district, the C B D remains a key form of centrality. But the C B D in major international business centers is one profoundly reconfigured by technological and economic change. Second, the center can extend into a metropolitan area in the form of a grid of nodes of intense business activity. One might ask whether a spatial organization characterized by dense strategic nodes spread over a broader region constitutes a new form of organizing the territory of the center rather than, as in the more conventional view, an instance of suburbanization or geographic dispersal. Insofar as these various nodes are articulated through cyber-routes or digital highways, they represent a new geographic correlate of the most advanced type of center. The places that fall outside this new grid of digital highways, however, are peripheralized. This regional grid represents a reconstitution of the concept of region. Far from neutralizing geography, the regional grid is likely to be embedded in conventional forms of communications infrastructure —notably, rapid rail and highways connect-

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ing to airports. Ironically p e r h a p s , conventional infrastructure is likely to m a x i m i z e the e c o n o m i c benefits derived f r o m telematics. I think this is an important issue that has been lost s o m e w h a t in discussions about the neutralization of g e o g r a p h y through telematics. T h i r d , w e are seeing the f o r m a t i o n of a transterritorial center constituted via telematics and intense e c o n o m i c transactions (Sassen 1991). T h e most p o w e r f u l of these new g e o g r a p h i e s of centrality at the interurban level binds the m a j o r international financial and business centers: N e w York, L o n d o n , T o k y o , Paris, F r a n k f u r t , Zurich, A m s t e r d a m , Los Angeles, Sydney, and H o n g K o n g . 3 But this g e o g r a p h y now also includes cities such as Sao P a u l o and M e x i c o City. T h e intensity of transactions a m o n g these cities, particularly through the financial m a r k e t s , trade in services, and investment has increased sharply, as have the orders of m a g n i t u d e involved. 4 At the same time, there has been a sharpening inequality in the concentration of strategic resources and activities b e t w e e n each of these cities and others in the same country. 5 For instance, Paris n o w concentrates a larger share of leading e c o n o m i c sectors and wealth in F r a n c e than it did fifteen years a g o , w h e r e a s Marseilles, once a m a j o r e c o n o m i c h u b , has lost share and is suffering severe decline. Fourth, new f o r m s of centrality are being constituted in electronically generated spaces. Electronic space is o f t e n considered purely technological and in that sense a space of innocence. But if we consider, for instance, that strategic c o m p o n e n t s of the financial industry operate there we can see that it is a space w h e r e profits are p r o d u c e d and p o w e r is thereby constituted. Insofar as these technologies strengthen the p r o f i t - m a k i n g capability of f i n a n c e and m a k e possible the hypermobility of finance capital, they also contribute to the o f t e n devastating impacts of the ascendance of finance on other industries, on particular sectors of the population, and on whole e c o n o m i e s . C y b e r s p a c e , like any other space, can be inscribed in a multiplicity of w a y s — s o m e b e n e v o l e n t or enlightening but others not (see Sassen 1994). I argue that structures f o r e c o n o m i c p o w e r are being built in electronic space and that their highly c o m p l e x configurations contain points of coordination and centralization. T h e s e four f o r m s of centrality are not necessarily mutually exclusive. On the contrary, a good share of the a g g l o m e r a t i o n of specialized service f u n c t i o n s in cities represents the nodes in larger transnational n e t w o r k s that correspond to the s e c o n d , third, and/or fourth f o r m s of centrality. This global grid of linkages and nodes constitutes a new geography of centrality upon which states can act, but only as international actors in an interstate effort. Spatial

Concentration:

Some Empirical

Referents

O n e of the clearest f o r m s of centrality is represented by the unexpected continued concentration of financial and corporate service functions in m a j o r

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cities in highly developed countries and the growing specialization of those centers in financial functions (Drennan 1992; Amin and Thrift 1992; Sassen 1991; Le Débat 1994). It represents in many ways a paradox at a time when the development of telematics maximizes the potential for geographic dispersal, leading experts to predict the demise of cities as economic units. 6 The case of Toronto, a city whose financial district was built up only in recent years, allows us to see to what extent the pressure toward physical concentration is embedded in an economic dynamic rather than simply being the consequence of having inherited a built infrastructure from the past, as was perhaps the case in older centers such as London or New York. It also shows that certain industries are subject to the pressure toward spatial concentration —notably, finance and its sister industries (Gad 1991; Todd 1995). We see similar growth in the financial concentration and specialization of the downtowns of such cities as Frankfurt and Zurich (Hitz et al. 1995). The case of Sydney illuminates the interaction of a vast, continental economic scale and pressures toward spatial concentration. Rather than strengthening the multipolarity of the Australian urban system, the developments of the 1980s —increased internationalization of the Australian economy; sharp increases in foreign investment; and a strong shift toward finance, real estate, and producer services — contributed to a greater concentration of major economic activities and actors in Sydney. Melbourne, long the center of commercial activity and wealth in Australia, lost a share of such activities and actors (Daly and Stimson 1992; O ' C o n n o r 1995). Finally, one might have expected that the growing number of financial centers now integrated into the global markets would have reduced the extent of concentration of financial activity in the top centers. One would further expect this given the immense increases in the global volume of transactions. 7 Yet the levels of concentration remain unchanged in the face of massive transformations in the financial industry and in the technological infrastructure this industry depends on. 8 Included in this trend toward ongoing concentration is the major move by large German banks to acquire and set up operations in London, now sometimes referred to as London am Main. Service Production and Service Their Impact on Centrality

Intensity:

What contributes to the importance of centrality in economic systems with immense technological capacities for global dispersal to the most advantageous sites? It is precisely the combination of the spatial dispersal of numerous economic activities and telematic global integration that has influenced a strategic role for major cities in the current phase of the world economy (Sassen 1991). Economic globalization has raised the scale and complexity

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of transactions, thereby feeding the growth of central functions (e.g., toplevel management, planning, coordination). Some of these central functions are embedded in corporate headquarters, but others are "produced" by specialized corporate service firms. A second process, one that intersects only partly with globalization, has given cities a strategic economic function. This process is the growth of service intensity in the organization of all industries (Sassen 1991: chap. 5; 1994: chap. 4). 9 It has contributed to massive growth in the demand for services by firms in all industries, from mining and manufacturing to finance and consumer services. 1 0 Cities are key sites for the production of services for firms. Hence, the increase in service intensity in the organization of all industries has had a significant growth effect on cities since the 1980s." Both processes —the growth of central functions and of service intensity in economic organization —are also evident at smaller geographic scales and lower orders of complexity than the global economy. Firms that operate regionally need not negotiate the complexities of international borders and the regulations of different countries. Yet they are still faced with a regionally dispersed network of operations that requires centralized control and servicing. Many of these central functions, or components of them, are not produced in-house but are bought f r o m specialized corporate service firms. Similarly, the growing service intensity in the organization of all industries has contributed to services growth in cities at different levels of a nation's urban system. Some of these cities cater to regional or subnational markets, others cater to national markets, and yet others cater to global markets. There is a large literature in the United States on the spatial distribution of top-level corporate functions and corporate services across the urban system; though there are theoretical and empirical disagreements, most studies show considerable growth of these activities in the 1980s at various levels of the urban system (Noyelle and Stanback 1984; Wheeler 1986; Holloway and Wheeler 1991; Lyons and Salmon 1995; Ward 1994). In the case of cities that are major international business centers, the scale, power, and profit levels of this new core of economic activities are vast. 1 2 In this context, globalization becomes a question of scale and added complexity in a process that is also taking place at lower levels of the urban hierarchy and with a national or regional orientation rather than a global one. The production process in advanced corporate services benefits from proximity to other specialized services. This is especially the case in the leading and most innovative sectors of these industries. Complexity and innovation often require multiple highly specialized inputs from several industries. The production of a financial instrument, for example, requires inputs from accounting, advertising, legal expertise, economic consulting, public relations, designers, and printers. The particular characteristics of

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production of these services, especially those involved in c o m p l e x and innovative operations, explain their p r o n o u n c e d concentration in m a j o r cities. P r o d u c e r services, unlike other types of services, are not necessarily dependent on spatial proximity to the c o n s u m e r s (i.e., f i r m s ) served. Rather, e c o n o m i e s occur in such specialized f i r m s when they locate close to others that produce key inputs or w h o s e proximity m a k e s possible joint production of certain service offerings. T h e accounting f i r m can service its clients at a distance, but the nature of its service d e p e n d s on proximity to specialists such as lawyers and p r o g r a m m e r s . F a c e - t o - f a c e c o m m u n i c a t i o n is often part of a production process that requires multiple s i m u l t a n e o u s inputs and f e e d b a c k s . At the current stage of technical d e v e l o p m e n t , i m m e d i a t e and simultaneous access to the pertinent experts is still the most e f f e c t i v e way, especially when dealing with a highly c o m p l e x product. T h e concentration of the most a d v a n c e d t e l e c o m m u n i c a t i o n s and c o m p u t e r network facilities in m a j o r cities is a key factor in what I refer to as the production process of these industries. 1 3 The acceleration of e c o n o m i c transactions and the premiu m put on time have also created new forces for a g g l o m e r a t i o n . Routine operations can easily be dispersed, but where time is of the e s s e n c e , as it is today in many of the leading sectors of these industries, the benefits of agglomeration are still extremely high. T h e r e is a strong suggestion in all of this that the agglomeration of the leading sectors of producer services in m a j o r cities actually constitutes a production c o m p l e x . This producer services c o m p l e x is intimately connected to the world of corporate headquarters, often thought of as f o r m i n g a joint h e a d q u a r t e r s - c o r p o r a t e services c o m p l e x . But we need to distinguish the two. A l t h o u g h headquarters still tend to be disproportionately concentrated in cities, many have moved out over the last t w o d e c a d e s . Headquarters can indeed locate outside cities, but they need a p r o d u c e r services complex s o m e w h e r e to buy or contract for the needed specialized services and f i n a n c i n g . Further, headquarters of f i r m s with very high overseas activity or in highly innovative and c o m p l e x lines of business tend to locate in m a j o r cities. In brief, f i r m s in more routinized lines of activity, with p r e d o m i n a n t ly regional or national m a r k e t s , appear to be increasingly free to m o v e or install their headquarters outside cities. Firms in highly competitive and innovative lines of activity and/or with a strong world market orientation a p p e a r to benefit f r o m being located at the center of m a j o r international business centers, no matter how high the costs. Both types of f i r m s , h o w e v e r , need a corporate services c o m p l e x to be located s o m e w h e r e . W h e r e this c o m p l e x is located is probably increasingly u n i m p o r t a n t f r o m the perspective of many, though not all, headquarters. F r o m the perspective of producer services f i r m s , such a specialized c o m p l e x is most likely to be in a city rather than, for e x a m p l e , a suburban o f f i c e park. T h e latter will be the site for p r o d u c e r services f i r m s but not f o r a services

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complex. And only such a complex is capable of handling the most advanced and complicated corporate demands. In brief, the combination of spatial dispersal and global integration has contributed to a strategic role for certain types of places in the current phase of the world economy. This is most evident with major cities. Beyond their sometimes long history as centers for world trade and banking, such cities now function as command points in the organization of the world economy; as key locations and marketplaces for the leading industries of this period — finance and corporate services; and as sites for the production of these services. 1 4 Both growing service intensity and globalization rely on and are shaped by the new information technologies. The growing service intensity in economic organization generally and the specific conditions under which information technologies are available combine to make cities once again a strategic "production" site, a role they had lost when large-scale mass manufacturing became the dominant economic sector. It is through these information-based production processes that centrality is constituted. But centrality emerges as significant precisely because it is a function of the vast global network of operations of the leading industries in the current phase of globalization. And the transnational character of this network has rendered national states less capable of regulating key sectors of their economies.

THE STATE AND THE NEW SPACE ECONOMY The analysis just presented points to a space economy for major new transnational economic processes that diverges in significant ways from the global/national duality presupposed in much analysis of the global economy. 15 The shrinking capacity of the state to regulate these industries cannot be explained simply by the fact that they operate in the global economy rather than in the national economy. The spatial organization of the leading information industries makes it clear that these are not mutually exclusive spaces. Rather, the globalization of finance and corporate services is embedded in a grid of strategic sites that are partly embedded in national territories. Further, firms that operate globally still require the guarantees of rights of property and contract they expect within their national territories. The analysis of these industries also makes it clear that insofar as transnationalization and deregulation have been a key to their growth and distinct contemporary character they have reduced the regulatory role held by the national state until quite recently. This is illustrated by the worldwide pressure experienced by national states to deregulate their financial markets to allow integration into the global markets. London saw its "big bang" of 1984 and Paris saw "le petit b a n g " a few years later under governments as

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diverse as the Tories in England and the Socialists in France. 1 6 The declining regulatory role of national states can be quite different between highly developed countries and less developed countries. This is illustrated by the case of the December 1994 Mexican crisis and the different roles played by the U.S. and Mexican governments. Perhaps the most telling aspect of this crisis was the extent to which the solution was conceived in financial terms and engineered by the U.S. secretary of the treasury rather than the secretary of state, as would have been the case twenty years ago. 1 7 It signals the extent to which the state itself has been transformed by its participation in the implementation of globalization and by the pressures of the globalization agenda. (See Chapters 1 , 5 , and 10.) Finally, advanced information industries make it clear that unlike in the prior eras of the world economy, the current forms of globalization do not necessarily contribute to reproduce or strengthen the interstate system. International finance especially reveals the extent to which the forms of internationalization evident in the last two decades have produced regulatory voids that lie beyond not only states but also the interstate system. This can be illustrated with the case of the foreign currency markets, which have reached orders of magnitude that have weakened the regulatory role of central bankers (notably, the impact of concerted international action on foreign exchange rates). I will examine these issues in greater detail to provide a more qualified understanding of the role played by the state in the current era of globalization than that contained in the widespread proposition about the declining significance of the state in a global economy. The Rote of the State in New Transnational

Regimes

Some of the features of economic globalization associated with the declining regulatory role of the state are by now well known. Globalization has contributed to a massive push toward deregulation across the board in many of the highly developed countries. Aman Jr. (1995) notes that though not all industries in a nation are equally subject to intense global competition, the existence of such competition in general contributes to an overall political context that encourages domestic regulatory reform in all industries: "Political movements and regulatory trends do not tend to discriminate among industries once the momentum for certain reforms is under w a y " (Aman Jr. 1995: 433). 1 8 The impact of global competition on the domestic politics of regulation goes well beyond the industries in which this competition is most intense. Economic globalization pushes local jurisdictions into competition for industries that operate nationally and/or transnationally. The possibility of moving from one jurisdiction to another with lower regulatory demands puts downward pressures on regulations across all jurisdictions—the quintessential race to the bottom. Whole countries are now

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e n g a g e d in this c o m p e t i t i o n . (For s o m e r e c e n t f o r m u l a t i o n s in w h a t is a vast literature, see C h a p t e r 4; Sklair 1991; B o n a c i c h et al. 1994; Social Justice 1993; B o s e and A c o s t a - B e l e n 1995; Competition and Change 1995.) G l o b a l i z a t i o n w a s a key f e a t u r e of the e x p a n s i o n of f i n a n c e a n d the a d v a n c e d c o r p o r a t e s e r v i c e s , not s i m p l y a m a t t e r of raising profits and lowe r i n g c o s t s , as with m a n y m a n u f a c t u r i n g i n d u s t r i e s . R e d u c i n g the e x i s t i n g r e g u l a t o r y role of states w a s the n e c e s s a r y m e c h a n i s m . We h a v e seen c o u n try a f t e r c o u n t r y in Latin A m e r i c a and A s i a d e r e g u l a t e stock and o t h e r f i n a n cial m a r k e t s to b e c o m e integrated into the global f i n a n c i a l m a r k e t . T h e c o m p e t i n g j u r i s d i c t i o n s in this c a s e h a v e typically been the capital cities, as these c o n c e n t r a t e the e x i s t i n g b a n k i n g , f i n a n c i a l , and top-level services sectors. ( T h e r e are e x c e p t i o n s , such as S a o P a u l o , w h i c h is B r a z i l ' s leading f i n a n c i a l c e n t e r but not the c o u n t r y ' s capital.) T h e r e clearly are also n o n g e o g r a p h i c j u r i s d i c t i o n s , such as m a r k e t s . H o w e v e r , as w e e x a m i n e d in the first s e c t i o n , key a s p e c t s of m a n y of the g l o b a l f i n a n c i a l m a r k e t s are e m b e d ded in p l a c e s t h r o u g h the material i n f r a s t r u c t u r e and the work p r o c e s s e s they r e q u i r e . T h e s e p l a c e s a r e , a g a i n , m o s t l y l e a d i n g b u s i n e s s centers of a c o u n try. F o r i n s t a n c e , the International B a n k i n g Facilities in the United States (sort of f r e e z o n e s f o r f i n a n c e ) are a l m o s t all located in N e w York City, t h o u g h they d o n ' t n e c e s s a r i l y h a v e to be b e c a u s e such facilities are not a geographic concept. O n e key p r o p e r t y of the c u r r e n t era is that the m o r e that national states i m p l e m e n t d e r e g u l a t i o n to raise the c o m p e t i t i v e n e s s of their n a t i o n s and localities within t h e m , the m o r e they c o n t r i b u t e to strengthen t r a n s n a t i o n a l n e t w o r k s and actors. C u r r e n t r e g u l a t o r y f r a m e w o r k s in p r o b a b l y m o s t of the highly d e v e l o p e d c o u n t r i e s w e r e not d e s i g n e d to h a n d l e this. O n e result is that w h i l e states m a y still be e x t r e m e l y (if not the m o s t ) p o w e r f u l actors in the w o r l d s c e n e , their role and p o w e r are n o l o n g e r as clear as in earlier eras. T h i s is especially true t o d a y , w h e n d e r e g u l a t i o n and t r a n s n a t i o n a l i z a t i o n are key characteristics of the s p a c e e c o n o m y of the leading i n f o r m a t i o n industries and g l o b a l i z a t i o n s e e m s to be driven by m u l t i n a t i o n a l c o m p a n i e s without strong national a t t a c h m e n t or i d e n t i f i c a t i o n . T h e g l o b a l i z a t i o n and d e r e g u l a t i o n of f i n a n c e s h o w that it is not s i m p l y a m a t t e r of a s p a c e e c o n o m y e x t e n d i n g b e y o n d a national r e a l m . W h a t d e r e g u l a t i o n in f i n a n c e m a k e s c l e a r is that it has had the e f f e c t of partly d e n a t i o n a l i z i n g national territory p r e c i s e l y b e c a u s e of the p r o n o u n c e d g l o b alization of this industry (Sassen 1991: pt. 1; 1996). T h i s can be illustrated with the e x a m p l e of the I n t e r n a t i o n a l B a n k i n g Facilities in the U n i t e d States. Yet, f i r m s o p e r a t i n g t r a n s n a t i o n a l l y n e e d to e n s u r e the f u n c t i o n s traditionally e x e r c i s e d by the state in the n a t i o n a l r e a l m of the e c o n o m y — n o t a b l y , g u a r a n t e e i n g p r o p e r t y rights and c o n t r a c t s (cf. C h a p t e r s 1 , 5 , and 10). I n s o f a r as e c o n o m i c g l o b a l i z a t i o n e x t e n d s the e c o n o m y b e y o n d the b o u n d a r i e s of the n a t i o n - s t a t e a n d h e n c e its s o v e r e i g n t y , this g u a r a n t e e w o u l d a p p e a r to be t h r e a t e n e d .

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In fact, globalization has been accompanied by the creation of new legal regimes and practices and the expansion and renovation of some older forms that bypass national legal systems. We are seeing the formation of transnational legal regimes and their penetration into national fields hitherto closed (see e.g., Trubek et al. 1993; Dezalay and Garth 1995). Further, national legal fields are becoming more internationalized in some of the major developed economies. Some of the old divisions between the national and the global are becoming weaker and, to some extent, neutralized. But these transnational regimes are assuming a specific form, one wherein the states of the highly developed countries play a strategic geopolitical role. The hegemony of neoliberal concepts of economic relations, with its strong emphasis on markets, deregulation, and free international trade, influenced policy in the 1980s in the United States and the UK and now increasingly also in continental Europe. This has contributed to the formation of transnational legal regimes that are centered in Western economic concepts. 1 9 Dezalay and Garth (1995) note that the "international" is itself constituted largely from competition among national approaches. Thus the international emerges as a site for regulatory competition among essentially national approaches, whatever the issue—environmental protection, constitutionalism, human rights, and so on (Charny 1991; Trachtman 1993). From this perspective, the "international" or the "transnational" has recently become a form of Americanization. The most widely recognized instance of this is of course the notion of a global culture that is profoundly influenced by U.S. popular culture. Though less widely recognized and more difficult to specify, this has also become very clear in international finance and in the advanced corporate services, a subject we return to later. Through the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), as well as the General Agreement on Tariffs and Trade (GATT), this vision has spread to the developing world. The competition among national legal systems or approaches is particularly evident in business law, where the Anglo-American model of the business enterprise and merchant competition is beginning to replace the Continental model of legal artisans and corporatist control over the profession (Dezalay 1992; see also Carrez 1991; Sinclair 1994). This holds even for international commercial arbitration, a system of private justice with deep roots in the Continental tradition, especially the French and Swiss traditions, which nonetheless is becoming increasingly Americanized. Globalization and government deregulation have not meant the absence of regulatory regimes and institutions for the governance of international economic relations. Among the most important such elements in the private sector today are international commercial arbitration and the variety of institutions that fulfill rating and advisory functions essential for the operation of the global economy. Over the past twenty years, international commercial

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arbitration has been t r a n s f o r m e d and institutionalized as the leading contractual method for the resolution of transnational c o m m e r c i a l disputes (Dezalay and Garth 1995; A k s e n 1990). In a m a j o r study on international c o m m e r c i a l arbitration ( s u m m a r i z e d in D e z a l a y and Garth 1995). Dezalay and Garth c o n c l u d e that it is a delocalized and decentralized market for the administration of international c o m m e r c i a l disputes, connected by more or less p o w e r f u l institutions and individuals w h o are both c o m p e t i t i v e and c o m p l e m e n t a r y . 2 0 It is in this regard far f r o m a unitary system of justice "organized perhaps around o n e great lex mercatoria— that might have been envisioned by s o m e of the pioneering idealists of l a w " (Dezalay and Garth 1995; see also C a r b o n n e a u 1990). 2 1 T h e e n o r m o u s growth of arbitration over the last decade arising out of the globalization of e c o n o m i c activity has p r o d u c e d sharp competition for the arbitration business. I n d e e d , it has b e c o m e big legal business (Salacuse 1991). Dezalay and Garth (1995) f o u n d that multinational legal f i r m s further sharpen the competition since they have the capacity to f o r u m shop a m o n g institutions, sets of rules, l a w s , and arbitrators. T h e large English and U.S. law f i r m s have used their p o w e r in the international business world to impose their conception of arbitration and more largely of the practice of law. 2 2 This is well illustrated by the case of France. French f i r m s rank a m o n g the top providers of i n f o r m a t i o n services and industrial engineering services in Europe and have a strong though not outstanding position in financial and insurance services. But France has f o u n d itself at an increasing disadvantage in legal and accounting services. French law firms are at a particular disadvantage given the d i f f e r e n c e between their legal system (the N a p o l e o n i c C o d e ) and A n g l o - A m e r i c a n law in a context w h e r e the latter d o m i n a t e s in international transactions. Foreign f i r m s with o f f i c e s in Paris d o m i n a t e the servicing of the legal needs of firms operating internationally, both French and foreign f i r m s operating out of France (Carrez 1991). Another instance of a private regulatory system is represented by debt security or bond rating a g e n c i e s , which have c o m e to play an increasingly important role in the global e c o n o m y . In his study of credit rating processes, Sinclair (1994) f o u n d that these agencies function as m e c h a n i s m s of " g o v e r n a n c e without g o v e r n m e n t . " He f o u n d that they have leverage because of their distinct gatekeeping f u n c t i o n s with regard to investment f u n d s sought by corporations and g o v e r n m e n t s . He posits that they can be seen as a significant f o r c e in the operation and expansion of the global econo m y . As with business law, the U.S. agencies have expanded their influence overseas (see generally Salacuse 1991; Aksen 1990). Sinclair (1994: 150) notes that ten years ago M o o d y ' s and Standard & P o o r ' s had n o analysts outside the United States; by 1993 they each had about one hundred, in E u r o p e , J a p a n , and Australia. T h e s e and other such transnational institutions and regimes raise ques-

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tions about the relation b e t w e e n state sovereignty and the g o v e r n a n c e of global e c o n o m i c processes. International c o m m e r c i a l arbitration is basically a private justice s y s t e m , and credit rating agencies are private gatekeeping systems. Along with other such institutions they have e m e r g e d as important g o v e r n a n c e m e c h a n i s m s w h o s e authority is not centered in the state. Yet they contribute to maintaining order at the top, o n e could say. D o e s the a s c e n d a n c e of such institutions and regimes entail a decline in state sovereignty? The State

Reconfigured

In m a n y ways the state is involved in this emerging transnational govern a n c e system. But it has itself u n d e r g o n e transformation and has participated in legitimating a new doctrine about its own role in the e c o n o m y (see Chapters 2 and 5). Central to this new doctrine is a g r o w i n g c o n s e n s u s a m o n g states to f u r t h e r the growth and strength of the global e c o n o m y . T h i s is illustrated by s o m e of the aspects of the D e c e m b e r 1994 crisis in M e x i c o discussed earlier (see n. 17). Many g o v e r n m e n t s n o w see their responsibilities going beyond foreign policy as traditionally conceptualized and extending into world trade, the global e n v i r o n m e n t , and global e c o n o m i c stability ( A m a n Jr. 1995: 4 3 7 ) . This participation of the state in the international arena is an extremely multifaceted and c o m p l e x matter, which cannot be adequately addressed here. S o m e of these roles in the international arena can be seen as benevolent (e.g., in matters c o n c e r n i n g the global environment); others, hardly so (e.g., the role of the g o v e r n m e n t s of the highly developed countries, particularly the United States, in pushing for w o r l d w i d e market r e f o r m and privatization). C o n f i n i n g the analysis here to the e c o n o m i c arena, the international role of the state has been read in rather diverse m a n n e r s , not necessarily mutually exclusive. For instance, according to s o m e (see C h a p t e r 5), m u c h of this new role of states in the global e c o n o m y is d o m i n a t e d by a furthering of a broad neoliberal conception to the point that it represents a constitutionalizing of this neoliberal project. Others e m p h a s i z e that e f f e c t i v e international participation by national g o v e r n m e n t s can contribute to the strengthening of the rule of law at the global level ( A m a n Jr. 1995; Young 1989; R o s e n a u 1992). Yet others see participation of the state in international systems (e.g., multilateral a g r e e m e n t s like G A T T ) as a loss of sovereignty because national g o v e r n m e n t s have to adjust s o m e of their policies to international standards. 2 3 An important question running through these d i f f e r e n t interpretations is whether the new transnational r e g i m e s and institutions are creating systems that strengthen the claims of certain actors (e.g., c o r p o r a t i o n s , the large multinational legal f i r m s ) and correspondingly w e a k e n the position of

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smaller players and states. Ruggie (1993: 143) has pointed out that the issue is not whether such new institutions and major economic actors will substitute national states but rather that there may be the possibility of major changes: "Global markets and transnationalized corporate structures . . . are not in the business of replacing states," yet they can have the potential for producing fundamental change in the system of states. What matters for the purposes of this chapter is that global capital has made claims on national states and these have responded through the production of new forms of legality. The new geography of centrality had to be produced, both in terms of the practices of corporate actors and the requisite infrastructure and in terms of the work of the state in producing new legal regimes. Representations that characterize the national state as simply losing significance fail to capture this very important dimension, reducing what is happening to a function of the global/national duality— what one wins, the other loses. I view deregulation not simply as a loss of control by the state but as a crucial mechanism to negotiate the juxtaposition of the global and the national. There are two distinct issues here. One is the formation of new legal regimes that negotiate between national sovereignty and the transnational practices of corporate economic actors. The other is the particular content of this new regime, one that contributes to strengthening the advantages of certain types of economic actors and to weakening those of others. That is to say, one could posit two distinct issues regarding governance. One is centered on the effort to create viable systems of coordination/order among the powerful economic actors now operating globally, such as international commercial arbitration and credit rating agencies discussed in the previous section. A second issue focuses on equity and distributive questions in the context of a globally integrated economic system with immense inequalities in the profit-making capacities of firms and in the earnings capacities of households. Furthermore, this is a global economic system increasingly dominated by finance to the point where the global financial markets can now pressure national governments to follow certain policies and not others. Even as supportive an organ as The Economist recently complained that perhaps the international financial markets are getting too much power to discipline national governments. To whom are the major economic actors and the global financial markets accountable? (See Sassen 1996 for a fuller discussion.) The international role of the state in the global economic arena has involved to a large extent furthering deregulation, strengthening markets, and pushing for privatization. By their very nature these measures easily lead to the position that such international participation does indeed entail a shrinking role of the state and a loss of sovereignty. But does it have to be this way? The participation of national states in the global environmental arena has led frequently to the signing of multilateral agreements aimed at

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s u p p o r t i n g m e a s u r e s that p r o t e c t t h e e n v i r o n m e n t . T h i s is n o t to say that t h e y a r e e f f e c t i v e , b u t t h e y c r e a t e a f r a m e w o r k that l e g i t i m a t e s b o t h t h e i n t e r n a t i o n a l p u r s u i t of a c o m m o n g o o d a n d t h e r o l e of n a t i o n a l s t a t e s in that p u r s u i t ( R o s e n a u 1992; Y o u n g 1 9 8 9 ) . T h e r o l e of t h e state in t h e i n t e r n a t i o n a l e c o n o m i c a r e n a , o n t h e o t h e r h a n d , s e e m s to h a v e b e e n l a r g e l y c o n f i n e d t o p u r s u i n g t h e g o a l of m a x i m i z i n g t h e p r o f i t a b i l i t y of c e r t a i n ( b u t n o t all) e c o n o m i c s e c t o r s a n d a c t o r s . 2 4 C a n national states pursue a b r o a d e r international e c o n o m i c

agenda,

o n e that a d d r e s s e s q u e s t i o n s of e q u i t y a n d m e c h a n i s m s f o r a c c o u n t a b i l i t y vis-à-vis the m a j o r global e c o n o m i c actors? International cooperation and m u l t i n a t i o n a l a g r e e m e n t s a r e o n t h e rise: a b o u t o n e h u n d r e d m a j o r t r e a t i e s and a g r e e m e n t s on the e n v i r o n m e n t h a v e g o n e into effect since 1972, though n o t all r e m a i n in f o r c e ( B i r n i e a n d B o y l e 1 9 9 2 ; Y o u n g 1 9 8 9 ) . A m a n Jr. ( 1 9 9 5 ) n o t e s that it is in t h e i n t e r e s t of t h e state to p l a y an i n c r e a s i n g l y a c t i v e r o l e at t h e g l o b a l l e v e l ( s e e a l s o R u g g i e 1993; J e s s o p 1 9 8 9 ) . In t h e l o n g e r t e r m it is m o r e likely t h a t s t r o n g e r l e g a l r e g i m e s will d e v e l o p o n a g l o b a l b a s i s if t h e g l o b a l i s s u e s i n v o l v e d h a v e a n a t i o n a l r e g u l a t o r y c o u n t e r p a r t . E v e n w h e n s u c h r e g u l a t o r y a p p r o a c h e s u s e t h e m a r k e t as a tool f o r c o m p l i a n c e . t h e y c a n s t r e n g t h e n a c c o u n t a b i l i t y a n d t h e r u l e of l a w ( n a t i o n a l l y a n d g l o b a l l y ) . T h e p a r t i c i p a t i o n of n a t i o n a l s t a t e s in n e w i n t e r n a t i o n a l

legal

r e g i m e s of this sort m a y c o n t r i b u t e to t h e d e v e l o p m e n t of t r a n s n a t i o n a l f r a m e w o r k s a i m e d at p r o m o t i n g e q u i t y . A l a r g e r t h e o r e t i c a l / p o l i t i c a l q u e s t i o n u n d e r l y i n g s o m e of t h e s e i s s u e s h a s to d o w i t h w h i c h a c t o r s g a i n l e g i t i m a c y f o r g o v e r n i n g t h e g l o b a l e c o n o m y a n d t a k i n g o v e r r u l e s a n d a u t h o r i t i e s h i t h e r t o e n c a s e d in t h e n a t i o n a l state ( s e e S a s s e n 1996 f o r a f u l l e r d i s c u s s i o n ) . T h e r e is a l s o a q u e s t i o n a b o u t t h e c o n d i t i o n of i n t e r n a t i o n a l p u b l i c law. D o t h e n e w e m e r g i n g s y s t e m s f o r g o v e r n a n c e a n d t h e c o n f i n e m e n t of t h e r o l e of n a t i o n a l s t a t e s in t h e g l o b a l e c o n o m y to f u r t h e r i n g d e r e g u l a t i o n , m a r k e t s , a n d p r i v a t i z a t i o n , i n d i c a t e a d e c l i n e of i n t e r n a t i o n a l p u b l i c l a w ( c f . K e n n e d y 1988; N e g r i 1 9 9 5 ) ?

CONCLUSION T h e i s s u e s d i s c u s s e d in this c h a p t e r p r o v i d e i n s i g h t i n t o t h e d y n a m i c s of c o n t e m p o r a r y g l o b a l i z a t i o n p r o c e s s e s as they m a t e r i a l i z e in s p e c i f i c p l a c e s a n d in n e w r e g u l a t o r y r e g i m e s . A f o c u s o n t h e p r o d u c t i o n p r o c e s s in i n f o r m a t i o n i n d u s t r i e s i l l u m i n a t e s t h e q u e s t i o n of p l a c e ( p a r t i c u l a r l y t h e k i n d of place

represented

by

cities)

in

processes

of

economic

globalization.

S p e c i a l i z e d s e r v i c e s a r e u s u a l l y u n d e r s t o o d in t e r m s of o u t p u t s r a t h e r t h a n t h e p r o d u c t i o n p r o c e s s i n v o l v e d . T h e i r c h a r a c t e r i s t i c s of p r o d u c t i o n a l l o w us to u n d e r s t a n d t h e l o c a t i o n a l c o n c e n t r a t i o n of l e a d i n g s e c t o r s in u r b a n c e n ters in t h e f a c e o f g l o b a l i z a t i o n , m a s s i v e i n c r e a s e s in t h e v o l u m e of i n t e r n a t i o n a l t r a n s a c t i o n s , a n d r e v o l u t i o n a r y c h a n g e s in t e c h n o l o g y t h a t n e u t r a l i z e

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distance. Concentration, then, remains a critical d i m e n s i o n particularly in the l e a d i n g sectors such as international f i n a n c e . There is, h o w e v e r , a multiplicity o f spatial correlates for this concentration. In this s e n s e w e s e e e m e r g i n g a n e w g e o g r a p h y o f the center, o n e that can include transterritorial s p a c e s c o n n e c t i n g major cities w o r l d w i d e through s p e c i f i c markets and transactions. T h e e x a m i n a t i o n o f international f i n a n c e and its operation in a g l o b a l grid of strategic p l a c e s s e e k s to contribute to an elaboration o f a different c o n c e p t i o n o f g o v e r n m e n t regulation and o f the sites for regulatory e n f o r c e ment. T h e fact that the major e c o n o m i c actors on the global s c e n e h a v e sought to frame their n e w identities and practices in legal f o r m s , many o f t h e m i n n o v a t i o n s , indicates that there is r o o m for national states to innovate as w e l l . Here I h a v e sought to e m p h a s i z e the possibility of a n e w regulatory c o n t e x t illustrated by s o m e of the characteristics of the leading information industries. T h e c o m p o n e n t s o f this n e w regulatory context are a n e w transnational e c o n o m i c g e o g r a p h y o f strategic sites with high concentrations of r e s o u r c e s , and a g r o w i n g internationalization o f both national states and the interstate s y s t e m .

NOTES The author thanks the Russell Sage Foundation for general support while a visiting scholar there in 1992-1993 and Ms. Vivian Kaufman for her invaluable assistance in preparing this paper. 1. There is a set of issues around the question of method that cannot be addressed here. See, for instance, the work of Smith and Timberlake (1995) on using network analysis (particularly the concept of centrality) to study cities in the global economy. (See also Sassen 1994: chap. 5, on empirical applications of some of the theorization about global cities.) 2. The second part of the chapter is from a larger project currently under way (see Sassen 1996). 3. In the case of a complex landscape such as Europe's, we see in fact several geographies of centrality— one global and others continental and regional (see Kunzmann and Wegener 1991). A central urban hierarchy connects major cities, many of which in turn play central roles in the wider global system of cities: Paris, London, Frankfurt, Amsterdam, Zurich. These cities are also part of a wider network of European financial/cultural/service capitals (some with only one function and others with several of these functions) that articulate the European region and are somewhat less oriented to the global economy than Paris, Frankfurt, or London. And then there are several geographies of marginality: the east-west divide and the north-south divide across Europe as well as newer divisions. In Eastern Europe, certain cities and regions (notably, Budapest) are rather attractive for purposes of investment, both European and non-European, whereas others will increasingly fall behind (notably. Romania, Yugoslavia, and Albania). We see a similar differentiation in the south of Europe: Madrid, Barcelona, and Milan are gaining in the new European hierarchy; Naples, Rome, and Marseilles are not. 4. The pronounced orientation to the world markets evident in such cities raises questions about the articulation with their nation-states, their regions, and the larg-

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er economic and social structure in such cities. Cities have typically been deeply e m b e d d e d in the e c o n o m i e s of their region, indeed often reflecting the characteristics of the latter. But cities that are strategic sites in the global e c o n o m y tend, in part, to disconnect from their region. This conflicts with a key proposition in traditional scholarship about urban s y s t e m s — n a m e l y , that these systems promote the territorial integration of regional and national e c o n o m i e s . 5. T h o u g h at a different order of magnitude, these trends also became evident during the late 1980s in a n u m b e r of m a j o r cities in the developing world that have become integrated into various world markets. Sao Paulo, Buenos Aires, B a n g k o k , Taipei, and Mexico City are only a few examples (see generally Sassen 1994; A r m s t r o n g and M c G e e 1985; Simon 1995; F r i e d m a n 1995; K o w a r i c k and C a m p a n a r i o 1986; Grosfoguel 1995). Many of the m a j o r cities in the developing world also have seen a new urban core fed by the deregulation of financial markets, an ascendance of finance and specialized services, and integration into the world markets. The opening of stock markets to foreign investors and the privatization of what were once public sector firms have been crucial institutional arenas for this articulation. Given the vast size of some of these cities, the impact of this new core on the broader city is not always as evident as in central London or Frankfurt, but the transformation is still very real. 6. Globalization, deregulation (an essential ingredient for globalization), and securitization have been key to this mobility —in the context of massive advances in telecommunications and electronic networks. One result is growing competition a m o n g centers for hypermobile financial activity. In my view there has been an overemphasis on competition in general and in specialized accounts on this subject. As I have argued elsewhere (Sassen 1991: chap. 7), there is also a functional division of labor among various major financial centers. In that sense we can think of a transnational system with multiple locations. 7. For e x a m p l e , international bank lending grew f r o m U.S. $1.89 trillion in 1980 to U.S. $6.24 trillion in 1991 —a fivefold increase in a mere ten years. New York, L o n d o n , and Tokyo accounted for 42 percent of all such international lending in 1980 and for 41 percent in 1991. according to data f r o m the Bank of International Settlements, the leading institution worldwide in charge of overseeing banking activity. There were compositional changes: J a p a n ' s share rose f r o m 6.2 percent to 15.1 percent, and the U K ' s share fell from 26.2 percent to 16.3 percent; the U.S. share remained constant. All increased in absolute terms. Beyond these three countries, Switzerland, France, Germany, and Luxembourg bring the total share of the top centers to 6 4 percent in 1991, which is just about the same share these countries had in 1980. O n e city, C h i c a g o , dominates the w o r l d ' s trading in futures, accounting for 60 percent of worldwide contracts in options and futures in 1991. 8. Along these lines, it is worth noting that much of the discussion around the formation of a single European market and financial system has raised the possibility, and even the need if it is to be competitive, of centralizing financial functions and capital in a limited number of cities rather than maintaining the current structure in which each country has a financial center. 9. Using input-output tables f r o m 1972 to 1987, Sassen and Orlow (1995) examined the use of service-based commodities in eleven four-digit Standard Industrial Classification (SIC) industries (ranging f r o m wholesale trade to mining). T h e service-based industries examined as the intermediate c o m m o d i t y input, d o w n to the four-digit SIC code, included, a m o n g others, finance and insurance and business services. For the sake of simplicity, the following figures cover the 1 9 7 2 - 1 9 8 2 period only because after this date the comparison becomes too complicated to describe in a footnote. Of all the industry combinations studied, the level of service inputs from the finance industry was most prominent (tripling from 1972 to 1982) in

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banking, wholesale trade, and insurance. The use of business services increased sharpest in the following industry groups: motor vehicles and equipment, insurance carriers, wholesale trade, and banking. The use of business services in banking m o r e than tripled f r o m 1972 to 1982. (See Sassen and Orlow 1995 for a full description; also see Sassen 1996.) 10. The expansion of producer services is a central feature of current growth in developed countries. In country after country we see a decline or slowdown in manufacturing alongside sharp growth in producer services. Whether in manufacturing or in warehousing, firms use more legal, financial, advertising, consulting, and accounting services. These services can be seen as part of the supply capacity of an e c o n o m y because they facilitate adjustments to changing economic circumstances; they are part of a broader intermediary space of e c o n o m i c activity. (See Delaunay and Gadrey 1987; Castells 1989; U N 1991b; U N C T A D 1993; Daniels 1991.) 11. T h o u g h disproportionately concentrated in the largest cities, producer services are actually growing at faster rates at the national level in most developed e c o n o m i e s . The crucial process feeding the growth of producer services is the increasing use of service inputs by firms in all industries. Households have also raised their consumption of services, either directly (e.g., the growing use of accountants for preparation of tax returns) or indirectly via the reorganization of c o n s u m e r industries (e.g., buying flowers or dinner f r o m franchises or chains rather than f r o m self-standing and privately owned m o m - a n d - p o p shops). Services directly bought by consumers tend to be located wherever population is concentrated. In that regard they are far less concentrated than producer services, especially those catering to top firms. The d e m a n d by households for specialized services, from accounting to architectural services, may be a key factor contributing to the growth of these services at the national level. 12. This suggests that we are seeing the formation of a new urban economy in these major cities. This is so in at least two regards. First, even though these cities have long been centers for business and finance, since the late 1970s there have been dramatic changes in the structure of the business and financial sectors, as well as sharp increases in the overall magnitude of these sectors and their weight in the urban economy. Second, the ascendance of the new finance and services c o m p l e x , particularly international finance, engenders what may be regarded as a new economic regime; that is, although this sector may account for only a fraction of the e c o n o m y of a city, it imposes itself on that larger economy. Most notably, the possibility for superprofits in finance has the effect of devalorizing manufacturing insofar as the latter cannot generate the superprofits typical in much financial activity. This is not to say that everything in the e c o n o m y of these cities has changed. 13. The telecommunications infrastructure also contributes to concentration of leading sectors in m a j o r cities. Long-distance c o m m u n i c a t i o n s systems increasingly use fiber-optic wires. These have several advantages over traditional copper wire: large carrying capacity, high speed, more security, and higher signal strength. Fiber systems tend to connect major c o m m u n i c a t i o n s hubs because they are not easily spliced and hence are not desirable for connecting multiple lateral sites. Fiber systems tend to be installed along existing rights of way, whether rail, water, or highway (Moss 1986, 1991). The growing use of fiber-optic systems thus tends to strengthen the m a j o r existing telecommunication concentrations and therefore the existing hierarchies. 14. The implantation of global processes and markets has meant that the internationalized sector of the economy has expanded sharply and has imposed a new valorization dynamic —that is, a new set of criteria for valuing or pricing various economic activities and outcomes. This has had devastating effects on large sectors of the urban e c o n o m y (Sassen 1991). High prices and profit levels in the international-

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ized sector and its ancillary activities, such as top-of-the-line restaurants and hotels, have made it increasingly difficult for other sectors to compete for space and investments. Many of these other sectors have experienced considerable downgrading and/or displacement, as, for e x a m p l e , n e i g h b o r h o o d shops tailored to local needs are replaced by upscale boutiques and restaurants catering to new high-income urban elites. 15. Various scholars are working along these lines in a variety of fields. See, for example, Mazlish and Buultjens (1993); G e r e f f i and Korzeniewicz 1990; Castells (1989); Smith and Timberlake (1995); Beneria (1989); Competition and Change (1995). 16. Globalization restricts the range of regulatory options of national governments, as these and many other cases (notably, the Mexican crisis) illustrate. A m a n Jr. (1995) shows how a global perspective on domestic regulatory politics helps explain the absence of radical differences in the regulatory o u t c o m e s of different U.S. administrations over the last fifteen years. T h e pressures of global competition, the nature of corporate entities involved, and domestic political pressures to minimize costs and maximize flexibility militate in f a v o r of new, more market-oriented forms of regulatory reform. 17. M e x i c o ' s crisis was defined rather generally in international political and business circles, as well as in much of the press, as the loss of confidence by the global financial markets in the Mexican e c o n o m y and g o v e r n m e n t leadership of that economy. The U.S. government defined it as a global e c o n o m i c security issue, one with direct impact on the U.S. economy, and it pushed hard to get the U.S. legislature and other governments in the highly developed countries to come to M e x i c o ' s aid. It opted for a financial solution, an aid package that would allow the Mexican government to pay its obligations to foreign investors and thereby restore confidence in the Mexican e c o n o m y by foreign (and national) investors. A financial response to this crisis was but one of several potential choices. For instance, there could have been an emphasis on promoting manufacturing growth and protecting small businesses and small h o m e o w n e r s from the bankruptcies now faced by many. The U.S. government could also have exhorted the Mexican g o v e r n m e n t to give up on restoring confidence in the global financial markets and to focus on the production of real value added in the Mexican economy. Furthermore, as mentioned in the text, this matter was handled not by the secretary of state but by the secretary of the treasury, w h o had been the so-called dean of Wall Street. There are two rather important novel elements here: that Treasury should have handled this international crisis and that the secretary of that agency was a f o r m e r top partner at G o l d m a n Sachs, one of the leading global financial firms. The point here involves not the potential for corruption but rather a question of what is seen as desirable economically. 18. This spread effect can also work in the opposite regulatory direction, as was the case with reform in the New Deal era (see H a w l e y 1969). 19. This hegemony has not passed unnoticed and is engendering considerable debate. For instance, a well-known issue that is emerging as significant in view of the spread of Western legal concepts is the critical examination of the philosophical premises about authorship and property that define the legal arena in the West (see, e.g., C o o m b e 1993). 20. International commercial arbitration represents one m e c h a n i s m for business disputing. The larger system includes arbitration controlled by courts, arbitration that is parallel to courts, and various court and out-of-court possibilities such as mediation. 21. Anglo-American practitioners tend not to support the Continental, highly academic notion of a lex mercatoria (see Carbonneau 1990). T h e so-called lex mercatoria was conceived by many as a return to an international law of business inde-

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pendent of national laws (Carbonneau 1990). Insofar as these practitioners are Americanizing the field, they are moving it further away from academic law and the lex mercatoria. 22. There was a time when the International C h a m b e r of C o m m e r c e (ICC), located in Paris, was the definitive center of the field of international commercial arbitration, and it was dominated by Continental jurists of great academic reputations. This has changed over the last ten years with the ascendance of the AngloAmerican law firms. But Dezalay and Garth (1995) note that although the ICC has lost its quasi-monopoly position, it remains the central institution for international commercial arbitration. It is a sort of U N of c o m m e r c e and international arbitration, with m e m b e r s f r o m about one hundred countries, national committees in sixty countries, and a powerful image worldwide of neutrality and legitimacy. It has double sponsorship in the form of a m a j o r business group and a group of learned jurists who were the founding fathers. ICC also has a close relation to the state in the form of support f r o m the French g o v e r n m e n t , the public/private careers of key figures in the arbitration community, and other such features. Thus the ICC is one of the key places where the politics of arbitration gets elaborated and expressed. 23. Agreements such as GATT and institutions such as the World Trade Organization ( W T O ) are seen by some sectors in the United States as a restriction on national sovereignty. For instance, there is concern that the W T O will be used to enforce GATT trade regulations to the point of overturning federal, state, and local laws since the W T O places the principle of free trade above all other considerations. This is then seen as jeopardizing a nation's right to enact its own consumer, labor, and environmental laws. 24. Many w h o supported GATT did not like the W T O because they did not like the idea of binding the United States to an international dispute resolution tribunal not fully controlled by the United States; they objected to the regulatory aspects of the W T O .

Gary Gereffi

^ ^

The Elusive Last Lap in the Quest for Developed-Country Status

In the 1950s and 1960s, the w o r l d e c o n o m y w a s an a g g r e g a t i o n of r e a s o n ably distinct d o m e s t i c e c o n o m i e s . T h e p r o d u c t i o n p r o c e s s t e n d e d to be organized within national b o u n d a r i e s . International trade c o n s i s t e d , to a large d e g r e e , of raw m a t e r i a l s f l o w i n g f r o m the p e r i p h e r y to the industrialized c o r e of the w o r l d e c o n o m y , w h i l e m a n u f a c t u r e d e x p o r t s w e r e sent by U . S . , E u r o p e a n , and J a p a n e s e f i r m s f r o m their h o m e b a s e s to all c o r n e r s of the g l o b e . D i r e c t f o r e i g n i n v e s t m e n t in m a n u f a c t u r i n g e m e r g e d as a r e s p o n s e to the protectionist p o l i c i e s i m p l e m e n t e d by c o r e a n d peripheral n a t i o n s alike that w i s h e d to d i m i n i s h the f o r e i g n e x c h a n g e drain of an e x c e s s i v e reliance on imports and to a u g m e n t the e m p l o y m e n t b e n e f i t s f r o m locally b a s e d p r o duction. S i n c e the 1960s, h o w e v e r , the w o r l d e c o n o m y has u n d e r g o n e a f u n d a mental shift t o w a r d an integrated and c o o r d i n a t e d global division of labor in p r o d u c t i o n and t r a d e . T o d a y the most d y n a m i c industries are o r g a n i z e d in transnational p r o d u c t i o n s y s t e m s . T h e r e are n e w p a t t e r n s of s p e c i a l i z a t i o n b e t w e e n c o u n t r i e s i n v o l v i n g the f r a g m e n t a t i o n and g e o g r a p h i c relocation of m a n y m a n u f a c t u r i n g p r o c e s s e s on a global scale in w a y s that slice t h r o u g h national b o u n d a r i e s . A s a l m o s t e v e r y f a c t o r of p r o d u c t i o n — m o n e y , t e c h n o l ogy, i n f o r m a t i o n , and g o o d s — m o v e s e f f o r t l e s s l y a c r o s s b o r d e r s , the very idea of distinct U . S . , J a p a n e s e , or G e r m a n e c o n o m i e s is virtually m e a n i n g less. In an era w h e r e p r o d u c t s c o n s i s t i n g of m a n y c o m p o n e n t s are m a d e in a w i d e variety of c o u n t r i e s , w h a t is an " A m e r i c a n " car, a " J a p a n e s e " c o m p u t er, a " K o r e a n " m i c r o w a v e o v e n , or a " G e r m a n " c a m e r a ? C o r p o r a t i o n s , capital, p r o d u c t s , and t e c h n o l o g y are b e c o m i n g i n c r e a s i n g l y d i s c o n n e c t e d f r o m their h o m e nations as i n v e s t o r s , m a n u f a c t u r e r s , t r a d e r s , and b u y e r s s i m u l t a neously s c o u r the g l o b e f o r p r o f i t a b l e o p p o r t u n i t i e s . T h i s c h a p t e r f o c u s e s on the m a i n f e a t u r e s of e c o n o m i c g l o b a l i z a t i o n , as well as its c o n s e q u e n c e s f o r T h i r d World d e v e l o p m e n t . T h e central argument is that T h i r d World p r o g r e s s is u n e v e n across as well as within r e g i o n s ; f u r t h e r s u c c e s s will require the a d o p t i o n of new d e v e l o p m e n t strategies that e m p h a s i z e the c r e a t i o n of a local institutional e n v i r o n m e n t c o n d u c i v e to

53

54

Gary

Gerejfi

technological upgrading and integrated industrial production. Given the emphasis on export-oriented development in the 1980s and 1990s, it is especially important to understand the nature of the global production systems that shape the Third World's insertion into the international economy. While transnational corporations have been a prominent feature of the Third World's industrial landscape since the 1950s, many of today's dynamic export industries are controlled by large retailers and brand-named designers in core countries, which in the past couple of decades have given the lion's share of their orders to overseas suppliers concentrated in East and Southeast Asia. Other areas of the Third World have been less successful, however, in exploiting the backward and forward linkages inherent in this type of export activity. The development options for Third World countries thus depend to a significant degree on the kinds of export roles they assume in the global economy and their ability to advance to more sophisticated, high-value industrial niches. The structure of the chapter is as follows. First, the current global manufacturing system is described with reference to recent production and trade trends in principal regions of the Third World. Second, the debate over Third World development strategies is assessed, with an emphasis on the need to exploit the synergies between inward- and outward-oriented development. Third, a global-commodity-chains perspective is introduced to reconceptualize the linkages across industrial sectors in the world economy. A distinction is drawn between producer-driven and buyer-driven chains, which represent alternative modes of organizing international industries. Triangle manufacturing is highlighted, along with several other mechanisms used to sustain Third World exports in the face of growing economic competition and political uncertainty. Fourth, several Third World strategies for "moving up" in the global economy are identified: government policies to increase productivity; new relations with foreign and domestic capital; and linkages with regional economic blocs. These options are evaluated in terms of their implications for integrated development and improved welfare in the Third World.

THE CONTEMPORARY ERA OF ECONOMIC GLOBALIZATION Modern industrialization is the result of an integrated system of global trade and production. Open international trade has encouraged nations to specialize in different branches of manufacturing and even in different stages of production within a specific industry. This process, fueled by the explosion of new products and technologies since World War II, has led to the emergence of a global manufacturing system in which production capacity is dispersed to an unprecedented number of developing as well as industrialized countries (Harris 1987). What is novel about this system is not that eco-

Developed-Country

Status

55

nomic activities are spread across national boundaries per se but rather that international production and trade are globally organized by core corporations that represent both industrial and commercial capital. Various factors have shaped the globalization of economic activities in recent decades. Innovative technologies in the transportation and communication fields have shrunk both space and time, thus permitting managers to run complex global organizations in an integrated fashion. Major breakthroughs in transport systems include the introduction of commercial jet aircraft, the development of vastly larger oceangoing vessels (superfreighters), and the shift to containerization, which simplifies transshipment from one mode of transport to another (e.g., f r o m sea to land) and increases the speed and security of shipments. Together with global communications systems utilizing satellites, cables, and faxes, these improvements radically reduce the time as well as the cost required to send goods, messages, and people from one part of the world to another. Finally, state-of-the-art information technologies, based primarily on microelectronics (such as C A D / C A M and C N C machinery), give "flexible" automation the potential to manufacture high-quality, diversified goods cheaply and efficiently in small batches as well as large volumes (see H o f f m a n 1985; Hoffman and Kaplinsky 1988). The heightened production capability of Third World countries, stimulated not only by low labor costs but also by the improved skill levels and growing productivity of workers, means that the global sourcing of production is becoming a virtual necessity for every corporation that seeks to enhance its competitive position worldwide. The old international division of labor, defined by capital's global search for raw materials and growing markets, has been supplemented by a new international division of labor in which capital chases cheap labor all over the globe. However, low wages are a relative condition. In the last decade, the East Asian newly industrializing countries (NICs) have experienced rapid increases in their domestic wage rates, along with significant exchange rate hikes vis-a-vis the U.S. dollar, which has made their exports more expensive in overseas markets. This has led to a search by manufacturers in these nations for new low-wage export platforms in various parts of Asia, Africa, and Latin America. A favorable international trading and investment regime was indispensable to the globalization of production in the postwar era. The relatively liberal international trading environment embodied in the provisions of the General Agreement on Tariffs and Trade (GATT) since World War II gave many Third World exporters extensive access to developed-country markets, especially the United States. Throughout the history of the GATT regime, however, a variety of exceptions has been made to the nondiscrimination norm. 1 In particular, protectionist policies in the core countries played a major role in fostering the globalization of economic activity. Tariffs, import quotas, and other restrictive measures were used by the European Community, the United States, and Canada for over thirty years to regulate

56

Gary Gereffi

trade in industries like textiles and a p p a r e l , f o o t w e a r , a u t o m o b i l e s , c o l o r t e l e v i s i o n s , and a p p l i a n c e s ( Y o f f i e 1983). Attention initially w a s f o c u s e d on m a n u f a c t u r e d e x p o r t s f r o m J a p a n and the East Asian N I C s . A l t h o u g h the intent of these p o l i c i e s w a s to protect d e v e l o p e d - c o u n t r y f i r m s f r o m a f l o o d of l o w - c o s t i m p o r t s that t h r e a t e n e d to d i s r u p t m a j o r d o m e s t i c industries, the result w a s exactly the o p p o s i t e : p r o t e c t i o n i s m s h a r p e n e d the c o m p e t i t i v e c a p a b i l i t i e s of T h i r d World m a n u f a c t u r e r s . G o v e r n m e n t s in both core and p e r i p h e r a l e c o n o m i e s alike t h u s used state policies to try to i m p r o v e the position of their c o u n t r i e s in g l o b a l p r o d u c t i o n and trading n e t w o r k s with an e m p h a s i s on m o v i n g f r o m h i g h - v o l u m e to h i g h - v a l u e e c o n o m i c activities. T h e s e b r o a d d e t e r m i n a n t s of e c o n o m i c g l o b a l i z a t i o n facilitated the i n t e r d e p e n d e n c e of n a t i o n s at all levels of d e v e l o p m e n t . T h r e e s p e c i f i c t r e n d s in the international e c o n o m y s e r v e to illustrate the nature of the c o n t e m p o r a r y global m a n u f a c t u r i n g s y s t e m in greater detail: the spread of d i v e r s i f i e d industrialization to large s e g m e n t s of the Third World; the shift t o w a r d e x p o r t - o r i e n t e d d e v e l o p m e n t strategies in peripheral n a t i o n s , with an e m p h a s i s on m a n u f a c t u r e d e x p o r t s ; and high levels of p r o d u c t specialization in the e x p o r t p r o f i l e s of m o s t T h i r d World c o u n t r i e s , along with c o n t i n u a l industrial u p g r a d i n g by e s t a b l i s h e d e x p o r t e r s a m o n g the N I C s . T h e s e p r o c e s s e s of c h a n g e had an u n e v e n i m p a c t across Third World r e g i o n s . Worldwide

Industrialization

A n e w global division of labor has c h a n g e d the pattern of g e o g r a p h i c specialization b e t w e e n c o u n t r i e s . T h e classic c o r e - p e r i p h e r y r e l a t i o n s h i p in w h i c h the d e v e l o p i n g n a t i o n s s u p p l i e d p r i m a r y c o m m o d i t i e s to the industrialized c o u n t r i e s in e x c h a n g e f o r m a n u f a c t u r e d g o o d s is o u t d a t e d . Since the 1950s, the g a p b e t w e e n d e v e l o p e d and d e v e l o p i n g c o u n t r i e s has been narr o w i n g in t e r m s of i n d u s t r i a l i z a t i o n . By the late 1970s, the N I C s as a w h o l e not only c a u g h t u p with but o v e r t o o k the core countries in their d e g r e e of i n d u s t r i a l i z a t i o n ( A r r i g h i a n d D r a n g e l 1986: 5 4 - 5 5 ) . A s d e v e l o p e d e c o n o m i e s shift o v e r w h e l m i n g l y t o w a r d services, v i g o r o u s industrialization has b e c o m e the h a l l m a r k of the p e r i p h e r y . T h i s can be seen by taking a closer look at p r o d u c t i o n and trade p a t t e r n s within the T h i r d W o r l d . Industry o u t s t r i p p e d a g r i c u l t u r e as a source of e c o n o m i c g r o w t h in all r e g i o n s of the T h i r d W o r l d . F r o m 1965 to 1990, i n d u s t r y ' s share of gross d o m e s t i c p r o d u c t ( G D P ) g r e w b y 13 p e r c e n t a g e p o i n t s in East and S o u t h e a s t A s i a , 10 p e r c e n t in s u b - S a h a r a n A f r i c a , 5 percent in South A s i a , and 3 percent in Latin A m e r i c a . A g r i c u l t u r e ' s share of regional G D P , on the other h a n d , fell by 16 p e r c e n t a g e p o i n t s in East and Southeast A s i a , 11 percent in S o u t h A s i a , 8 p e r c e n t in s u b - S a h a r a n A f r i c a , and 6 p e r c e n t in Latin America.2 M a n u f a c t u r i n g has been t h e c o r n e r s t o n e of d e v e l o p m e n t in East a n d S o u t h e a s t A s i a , as well as in Latin A m e r i c a . In 1990, 34 p e r c e n t of the G D P

Developed-Country

Slatus

57

of East and Southeast Asia was in the m a n u f a c t u r i n g sector, c o m p a r e d with 26 percent for Latin A m e r i c a , 17 percent for South A s i a , and only 11 percent for sub-Saharan A f r i c a . The m a n u f a c t u r i n g sector's share of G D P in s o m e d e v e l o p i n g nations, such as C h i n a (38 percent), Taiwan (34 percent), and South K o r e a (31 percent), was even higher than J a p a n ' s m a n u f a c t u r i n g / G D P ratio of 29 percent. T h e s e d i f f e r e n c e s in p e r f o r m a n c e are corroborated over time as well. T h e m a n u f a c t u r i n g sector exhibited m u c h greater d y n a m i s m in East and Southeast Asia than a n y w h e r e else in the Third World. B e t w e e n 1965 and 1990, m a n u f a c t u r i n g increased its share of G D P in these t w o regions by 10 percentage points, c o m p a r e d with net sectoral growth rates of 4 percent in sub-Saharan A f r i c a and 2 percent in South Asia and Latin America. Diversified,

Export-Oriented

Industrialization

World trade e x p a n d e d nearly thirtyfold in the three d e c a d e s since 1960. M a n u f a c t u r e d goods as a p e r c e n t a g e of total world exports increased f r o m 55 percent in 1980 to 75 percent in 1990. F u r t h e r m o r e , the share of the N I C s ' m a n u f a c t u r e d exports that can be classified as high tech soared f r o m 2 percent in 1964 to 25 percent in 1985, and those e m b o d y i n g m e d i u m levels of technological sophistication rose f r o m 16 percent to 22 percent during this same period ( O E C D 1988: 24). H o n g Kong and C h i n a topped the list of d e v e l o p i n g country exporters in 1993 with $ 1 3 5 billion and $92 billion in overseas sales, respectively, followed by Taiwan ($85 billion). South Korea ($82 billion), and Singapore ($74 billion). In the next tier, several of the Southeast Asian nations (Malaysia, Thailand, and Indonesia), along with Brazil and M e x i c o , generated substantial exports, ranging f r o m $30 billion to $47 billion. Exports accounted for 24 percent of G D P in East and Southeast Asia, in contrast to an e x p o r t / G D P ratio of 23 percent for sub-Saharan A f r i c a , 16 percent for the a d v a n c e d industrial nations, 11 percent for South Asia, and 10 percent for Latin A m e r i c a and the C a r i b b e a n . Saudi Arabia illustrates the declining fortunes of the w o r l d ' s m a j o r oil-exporting states. Its 1993 export total of $41 billion, while double that of its nearest Middle East competitor, United A r a b E m i r a t e s , is less than 4 0 percent of Saudi A r a b i a ' s 1980 exports (Table 4.1). In exports as in p r o d u c t i o n , m a n u f a c t u r e s are the chief source of the Third W o r l d ' s d y n a m i s m . In 1993, m a n u f a c t u r e d items constituted well over 90 percent of total exports in three of the four East Asian N I C s , and they were a p p r o x i m a t e l y three-quarters of all exports for the entirety of Asia. In Brazil and M e x i c o , the share of m a n u f a c t u r e s in total exports is over onehalf, while in sub-Saharan A f r i c a the m a n u f a c t u r i n g figure is nearly onequarter of all exports (Table 4.1). T h e r e is a strong " S o u t h A f r i c a e f f e c t " on sub-Saharan A f r i c a ' s regional total, however. If we exclude South A f r i c a , which accounts for just 7 percent of sub-Saharan A f r i c a ' s population but 38

58

Gary

T a b l e 4.1

Gereffi

G r o w t h of E x p o r t s in M a j o r W o r l d R e g i o n s , 1 9 8 0 - 1 9 9 3

Exports (U.S.S billions)

Exports/GDP (%)

Manufactured Exports/ Total Exports (%)

1980

1993

1980

N A 2,896.8 216.7 464.8 192.9 380.2 129.2 362.2

NA 8 24 12

16 7 20 9

NA 68 86 96

82 a 82 90 97

NA 19.7 19.8 17.5 19.4

308.1 135.2 84.7 82.2 74.0

NA 97 48 30 185

24 150 39 25 134

NA 93 91 90 54

74 a 93 93 93 80

Malaysia Thailand Indonesia Philippines

13.8 6.5 21.9 6.0

47.1 36.8 33.6 11.1

58 19 31 17

73 29 23 21

19 29 2 37

65 72 53 76

China

18.3

91.7

8

22

47

81

South Asia India Pakistan Bangladesh

NA 6.7 2.6 0.8

34.0 21.6 6.6 2.3

NA 5 12 7

11 10 14 9

NA 59 50 66

73 a 75 85 82

Latin America and Caribbean Brazil Mexico Argentina

NA 20.1 15.3 8.0

135.0 38.6 30.2 13.1

NA 10 9 6

10 9 9 5

NA 39 39 23

38 a 60 53 32

Sub-Saharan Africa South Africa Nigeria Kenya Tanzania

NA 26.1 26.0 1.3 0.5

NA 35 29 22 12

23 22 40 a 29 20

NA 54 1 16 16

24 a 73 2 29 a 15a

Middle East Saudia Arabia United Arab Emirates Iran

NA 109.1 20.6 13.5

NA 0 NA 1

NA 9 4a 4

Region/Country

1980

Advanced Industrial Countries United States Germany Japan East and Southeast Asia H o n g Kong Taiwan South Korea Singapore

1993

61.7 22.9 11.9 a 1.4 0.4 NA 40.9 20.5 16.7

NA 95 69 NA

NA 34 59 16

1993

Sources: World B a n k , World Development Report 1982, pp. 1 1 4 - 1 1 5 , 1 2 4 - 1 2 5 ; World Development Report 1983, pp. 1 6 6 - 1 6 7 ; World Development Report 1995, pp. 1 6 6 - 1 6 7 , 1 8 6 187. T h e 1980 data f o r T a i w a n are f r o m R e p u b l i c of C h i n a , Council for E c o n o m i c P l a n n i n g and D e v e l o p m e n t , Taiwan Statistical Data Book 1991, pp. 23, 199, 2 0 8 . while the 1993 calculation f o r e x p o r t s / G D P is f r o m the Taiwan Statistical Data Book 1994, pp. 27, 190. Notes: a. 1992. G D P = g r o s s d o m e s t i c p r o d u c t . N A = n o t available.

Developed-Country

Status

59

percent of its overall exports and 74 percent of its manufactured exports, the manufacturing share in the region's total exports falls from 24 percent to 10 percent. In every region of the world, the relative importance of primary commodities in exports as well as G D P has decreased, usually quite sharply, since 1970. Asian nations have moved fastest and furthest toward manufactured exports during this period. Sub-Saharan Africa and Latin America are still mostly primary commodity exporters, although to a lesser degree than in the past and with substantial subregional variation (Table 4.2). The maturity or sophistication of a country's industrial structure can be measured by the complexity of the products it exports. Here again, the East Asian NICs are the most advanced. In Singapore and South Korea, overseas sales of machinery and transport equipment, which utilize capital- and skillintensive technology, grew as a share of total merchandise exports by 44 percent and 36 percent, respectively, from 1970 to 1993. Taiwan's exports in this category increased by 23 percent and Hong Kong's by 12 percent. In Southeast Asia, Malaysia (39 percent) and Thailand (28 percent) have been strong performers in this sector, while in Latin America, Mexico (20 percent) and Brazil (17 percent) also made machinery and transport equipment a dynamic export base (Table 4.2). Textiles and clothing, the preeminent export sector in the East Asian NICs in the 1960s and 1970s, actually shrank as a proportion of total exports in these nations between 1970 and 1993. This fact highlights the workings of the product life cycle and industrial upgrading in the Asian region. While the NICs in East Asia were shifting into higher-value-added production in the 1980s and 1990s, clothing exports became a growth pole for countries at lower levels of development, such as Bangladesh, Pakistan, Sri Lanka, Indonesia, and Thailand. Furthermore, a more detailed look at this sector indicates that Taiwan, South Korea, and Hong Kong have increased their shipments of textile fibers, yarn, and fabrics to the same Asian nations that now are displacing the East Asian NICs as exporters of finished apparel. 3 The textiles and apparel complex, despite its status as a declining sector in developed countries, still represents the leading edge of economic globalization for many Third World nations. Geographic

Specialization

and Export

Niches

While the diversification of the N I C s ' exports toward nontraditional manufactured items is a clear trend, less well recognized is the tendency of the NICs to develop sharply focused export niches. In the footwear industry, for example, South Korea has specialized in athletic footwear, Taiwan in vinyl and plastic shoes, Brazil in low-priced women's leather shoes, Spain in medium-priced women's leather shoes, and Italy in high-priced fashion shoes. Mainland China traditionally was a major player in the low-priced end of the world footwear market, especially in canvas and rubber shoes.

T a b l e 4.2

S t r u c t u r e of M e r c h a n d i s e E x p o r t s by T y p e of I n d u s t r y , 1 9 7 0 - 1 9 9 3 Percentage Share of Merchandise Exports Textile Machinery and Primary Fibers, Textiles, Transport Commodities and Clothing Equipment

Region/Country

1993

A19701993

Other Manufactures

A19701993

1993

A19701993

1993

A19701993

5 3 5 2

-1 0 -1 -11

43 49 48 68

+8 +7 +1 +27

34 30 37 27

+2 +5 0 -13

+7

+ 19 + 12 +23 +36 +44

30 31 38 32 21

+ 16 -9 +8 +4 +7

1993

Advanced Industrial Countries 3 United States Germany Japan

18 18 10 3

-9 -12 -1

East and Southeast Asia 3 Hong Konga Taiwan South Korea Singapore

26 5 7 7 20

-41

+1 -17 -17 -50

20 40 15 19 4

-14 -22 -2

25 24 40 43 55

Malaysia Thailand Indonesia Philippines

35 28 47 24

-58 -64 -51 -69

6 15 17 9

+5 +7 + 17 +7

41 28 5 19

+39 +28 +5 + 19

18 30 31 49

+ 13 +30 +30 +43

Chinab

19

-9

31

+1

16

0

34

+8

South Asia India Pakistan b Bangladesh"

27 25 15 18

-26 -23 -22 -18

41 30 78 72

+ 13 +3 +22 +23

5 7 0 0

+2 +2 0 -1

28 38 7 9

+ 11 + 18 0 -6

Latin America and Caribbean 3 Brazil Mexico Argentina

62 40 47 68

-26 -46 -21 -18

3 4 3 3

+2 -5 -8 -5

14 21 31 11

+ 12 + 17 +20 +7

21 35 18 18

+ 13 +33 +7 + 16

Sub-Saharan A f r i c a 3 South Africa Nigeria Kenya3 Tanzania 3

76 27 98 71 85

-7 -32 0 -16 -2

2 3 0 3 7

+1 -3 -2 +2 +5

3 8 0 10 1

+1 +1 0 + 10 +1

19 63 2 16 8

+5 +35 +1 +5 -3

NA 91

NA -9

NA 0

NA 0

NA 2

NA +2

NA 7

NA +7

96 96

0 0

0 4

0 0

1 0

0 0

2 0

0 0

a

Middle East Saudi Arabia United Arab Emirates 3 Iran

-4

-4

Sources: World B a n k , World Development Report 1994. pp. 1 9 0 - 1 9 1 ; World Development Report 1995, pp. 1 9 0 - 1 9 1 . Notes: a. T h e data are for 1992 and A 1 9 7 0 - 1 9 9 2 . b.The data are for A 1 9 7 0 - 1 9 9 2 . N A = n o t available. A 1 9 7 0 - 1 9 9 3 = i n c r e a s e or d e c r e a s e in p e r c e n t a g e share of total exports f r o m 1970 to 1993.

Developed-Country

Status

61

Because of its low wages and vast production capacity, however, China now has displaced Taiwan and South Korea f r o m many of their midlevel niches, and it is challenging Brazil, Spain, and even Italy in the fashionable leather footwear market (Gereffi and Korzeniewicz 1990). Today China is the world's foremost volume exporter of inexpensive consumer goods, such as clothing, footwear, toys, and bicycles. Similar trends are apparent for many consumer items and even intermediate goods, such as semiconductors. South Korea, for instance, has focused on the mass production of powerful memory chips; Taiwan, by contrast, makes high-value designer chips that c a n y out special functions in toys, videogames, and electronic equipment. Singapore has upgraded its activities f r o m the assembly and testing of semiconductors to the design and fabrication of silicon wafers, while Singapore and Malaysia produce the majority of hard disk drives for the world's booming personal computer market. Although the location of hard disk drive production in Singapore and Malaysia reflects efforts by transnational corporations (TNCs) to reduce manufacturing costs, these nations were chosen as export sites primarily because of their skilled labor, well-developed transportation and communication infrastructures, and appropriate supporting industries (such as precision tooling). The global production systems discussed in this chapter raise a host of questions for Third World development. How can countries assure that they enter the most attractive export niches in which they have the greatest relative advantages? To what extent is a country's position in the global manufacturing system structurally determined by the availability of local capital, domestic infrastructure, and a skilled workforce? What is the range of development options available to Third World countries? While these queries cannot be answered fully here, various implications of current global changes for Third World development will be suggested.

THIRD WORLD DEVELOPMENT STRATEGIES National development strategies in the periphery have played an important role in forging new production relationships in the global manufacturing system. 4 Third World nations usually are claimed to have followed one of two alternative development strategies. The relatively large, resource-rich economies in Latin America (e.g., Brazil, Mexico, and Argentina), South Asia (e.g., India and Bangladesh), and Eastern Europe have pursued importsubstituting industrialization (ISI) in which industrial production was geared to the needs of sizable domestic markets. The smaller, resource-poor nations like the East Asian NICs adopted the export-oriented industrialization (EOI) approach that depends on global markets to stimulate the rapid growth of manufactured exports. Although the historical analysis of these transitions often is oversimplified, today it seems clear that many economies are opting

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for an expansion of manufactured or nontraditional exports to earn needed foreign exchange and raise local standards of living. The East Asian NICs best exemplify the gains from this path of development. In several important respects, however, the development-strategies literature challenges the conventional wisdom of those who believe that Latin America and other inward-oriented Third World regions can simply follow the East Asian model of development. First, the contrast between the outward-oriented and inward-oriented development strategies is frequently overdrawn. Each of the leading economies in East Asia and Latin America, for example, has pursued a combination of both ISI and EOI approaches. Export promotion always starts from a base in ISI; thus many Latin American nations with an ISI background now are pursuing EOI quite aggressively. This mix of development strategies helps us understand how industrial diversification (secondary ISI) has led to enhanced export flexibility and competitiveness (secondary EOI) in the East Asian and Latin American NICs in the 1980s and 1990s, signaling notable areas of convergence in the two regions. 5 Second, both inward and outward approaches have inherent vulnerabilities that prevent either f r o m being a long-term solution to development problems. For example, the benefits of ISI are limited by the following conditions: the size of the domestic market (which in Latin America and South Asia is skewed by severe income inequalities), ISI's import-intensive nature (consumer goods ISI pushes imports toward intermediate and capital goods industries, instead of eliminating imports in an absolute sense), its tendency to aggravate sectoral imbalances in an economy (industry is preferred over agriculture), and its foreign exchange vulnerability (the overvalued exchange rates associated with ISI discourage exports). Similarly, EOI has its own drawbacks: it is constrained by the technical impossibility of serving certain domestic needs through traded goods industries; EOI employment in labor-intensive industries is unstable because of competition from low-wage nations; and EOI is threatened by protectionism and slow growth in key overseas markets. 6 In addition, Fishlow cautions against what he calls a "fallacy of composition" —namely, if all developing countries tried to pursue EOI at the same time, the ensuing competition would drive down the gains for all (Fishlow 1985: 138). Third, export-oriented development strategies may well lead to the fragmentation rather than the integration of national economies. Whereas ISI policies of the past established a pattern of national segmentation in which parallel national industries were set up to supply highly protected domestic markets with finished goods, the turn to EOI has fostered a logic of transnational integration based on geographic specialization and global sourcing. As a result, national economies confront very different development challenges in the era of global capitalism than they have in the past. Fourth, unique cultural and historical factors make it difficult to gener-

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alize f r o m the East A s i a n e x p e r i e n c e . Various writers h a v e argued that C o n f u c i a n i s m c o n f e r s certain a d v a n t a g e s in the quest f o r e c o n o m i c d e v e l o p m e n t o v e r o t h e r t r a d i t i o n s , such as the I b e r o - C a t h o l i c or H i s p a n i c h e r i t a g e in Latin A m e r i c a , H i n d u i s m in S o u t h A s i a , and I s l a m in the M i d d l e E a s t and m u c h of A f r i c a . B e c a u s e C o n f u c i a n b e l i e f s place a h i g h value on hard w o r k , loyalty, respect f o r authority, and e d u c a t i o n , t h e s e c h a r a c t e r i s t i c s are t h o u g h t to h a v e facilitated the national c o n s e n s u s a r o u n d h i g h - s p e e d e c o n o m i c g r o w t h e v i d e n t in J a p a n and the East A s i a n N I C s since the 1950s and 1960s (see H o f h e i n z and C a l d e r 1982; P y e 1985; B e r g e r and H s i a o 1988). Simplistic cultural a r g u m e n t s , h o w e v e r , run into a variety of p r o b l e m s (see Ellison a n d G e r e f f i 1990: 3 9 4 - 3 9 7 ) . First, r e g i o n s are not culturally h o m o g e n e o u s . T a o i s m , B u d d h i s m , and C h r i s t i a n i t y , a l o n g with C o n f u c i a n i s m , all have large f o l l o w i n g s in East A s i a . S e c o n d , t i m i n g is a p r o b l e m . T h e C o n f u c i a n , H i n d u , I s l a m i c , and I b e r o - C a t h o l i c c i v i l i z a t i o n s h a v e existed f o r c e n t u r i e s , w h e r e a s the d y n a m i c s h i f t s in e c o n o m i c p e r f o r m a n c e that g a v e rise to the N I C s h a v e o c c u r r e d only in recent d e c a d e s . 7 T h i r d , d i s c u s s i o n s of culture h a v e been i n c o n s i s t e n t . T h e s a m e C o n f u c i a n b e l i e f s that n o w are c l a i m e d to facilitate rapid industrialization in East A s i a w e r e criticized by several g e n e r a t i o n s of Western s c h o l a r s f o r inhibiting e c o n o m i c d e v e l o p ment ( H a m i l t o n and K a o 1987). M o r e s o p h i s t i c a t e d cultural r e p r e s e n t a t i o n s are n e e d e d that see culture as historically situated and m e d i a t e d t h r o u g h institutions. M a n y scholars thus r e m a i n skeptical that d e v e l o p m e n t strategies are the p r e d o m i n a n t reason f o r the d i v e r g e n t patterns of g r o w t h in East Asia and m u c h of the rest of the T h i r d W o r l d . T w o m a j o r a l t e r n a t i v e s to d e v e l o p m e n t strategies as an e x p l a n a t i o n of East A s i a ' s s u c c e s s in recent d e c a d e s are (1) its linkages to the w o r l d s y s t e m (the East Asian N I C s b e n e f i t e d d i s p r o p o r tionately f r o m U . S . h e g e m o n y and the politics of the C o l d W a r e r a , w h i l e e c o n o m i c g r o w t h in o t h e r r e g i o n s w a s h a m p e r e d by their h e a v y reliance on transnational c o r p o r a t i o n s , e x t e r n a l d e b t , a n d / o r f o r e i g n aid) (see C u m i n g s 1984; D e y o 1987b), and (2) the institutional c o n f i g u r a t i o n of societies (the d e v e l o p m e n t a l state, the longevity of a u t h o r i t a r i a n r e g i m e s , the spread of e d u c a t i o n , industrial s t r u c t u r e s w h e r e local rather than f o r e i g n capital is in a p r i v i l e g e d p o s i t i o n , d y n a m i c e x p o r t - o r i e n t e d s u b c o n t r a c t i n g n e t w o r k s , and e n t r e p r e n e u r i a l f a m i l i s m h a v e all b e e n cited as g i v i n g an e d g e to East A s i a o v e r other r e g i o n s ) (see B e r g e r and H s i a o 1988; G e r e f f i and W y m a n 1990; H a g g a r d 1990). In g e n e r a l , the transferability of the E a s t A s i a n d e v e l o p m e n t model is v i e w e d as increasingly d i f f i c u l t to the e x t e n t that o n e ' s a s s e s s m e n t of its key f e a t u r e s shifts f r o m e c o n o m i c policies to local institutions to w o r l d - s y s t e m linkages to c u l t u r e . In s u m m a r y , the d e v e l o p m e n t - s t r a t e g i e s literature is not p r i m a r i l y c o n cerned with a c c o u n t i n g f o r the fact of e c o n o m i c g r o w t h in the N I C s . Both i n w a r d - o r i e n t e d and o u t w a r d - o r i e n t e d d e v e l o p m e n t strategies h a v e p r o v e n c a p a b l e of s p a w n i n g h i g h - g r o w t h e c o n o m i e s in distinct r e g i o n s of the

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w o r l d . Rather, its main e m p h a s i s has been t w o f o l d : to explain the determinants of policy choice that have led the N I C s in different regions of the world to adopt diverse s e q u e n c e s of ISI and EOI d e v e l o p m e n t paths, and to highlight the fact that similar d e v e l o p m e n t strategies have diverse institutional bases across societies, which shape the i m p l e m e n t a t i o n , sustainability, and local c o n s e q u e n c e s of these policies. This cross-regional agenda has diverted our attention, h o w e v e r , f r o m a universal p h e n o m e n o n —the globalization of production — w h i c h has r e d e f i n e d the roles of all nations in the world e c o n o m y . T h e theoretical suppositions and c o m p a r a t i v e m e t h o d s of this approach are f u n d a m e n t a l l y different f r o m those used in studies of d e v e l o p m e n t strategies, as w e will see later in the chapter.

GLOBAL COMMODITY CHAINS AND REGIONAL DEVELOPMENT Global c o m m o d i t y chains ( G C C s ) are rooted in transnational production systems that link the e c o n o m i c activities of f i r m s to technological and organizational networks that e n a b l e c o m p a n i e s to develop, m a n u f a c t u r e , and market specific c o m m o d i t i e s . In the transnational production systems that characterize global capitalism, e c o n o m i c activity is not only international in scope; it also is global in its organization. W h i l e internationalization refers simply to the g e o g r a p h i c spread of e c o n o m i c activities across national b o u n d a r i e s , globalization implies a d e g r e e of functional integration a m o n g these internationally dispersed activities. This administrative coordination is carried out by diverse corporate actors in centralized as well as decentralized e c o n o m i c structures. T h e c o m m o d i t y - c h a i n s perspective entails a f u n d a m e n t a l departure f r o m the d e v e l o p m e n t - s t r a t e g i e s approach in terms of its main units and levels of analysis, its chief substantive c o n c e r n s , and its principal research m e t h o d s (see G e r e f f i and K o r z e n i e w i c z 1994). 8 Economic globalization has reduced the theoretical centrality of the nation-state, which was the key unit of analysis in the d e v e l o p m e n t - s t r a t e g i e s literature. The global integration of g o o d s , services, capital, and labor markets is eroding the p o w e r of states to set e c o n o m i c rules within their borders. A l t h o u g h protectionist policies still shape the international f l o w of investment and trade, national regulatory regimes are giving way to international a g r e e m e n t s that cede sovereignty to broad regional trading blocs and transnational e c o n o m i c actors. As a result, crucial concepts in our social science lexicon, such as national d e v e l o p m e n t and d o m e s t i c industries, are n o w rendered problematic. T h e c o m m o d i t y - c h a i n s f r a m e w o r k targets the study of global capitalism, not national d e v e l o p m e n t . Industries and f i r m s , not nation-states, constitute its primary analytical units. D i f f e r e n t patterns of national develop-

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m e n t a r e an o u t c o m e , n o t t h e s t a r t i n g p o i n t , of this r e s e a r c h . F r o m a G C C p e r s p e c t i v e , d i v e r s e g l o b a l i n d u s t r i e s , w h e r e t h e d y n a m i c s of c a p i t a l i s t c o m p e t i t i o n a r e p l a y e d o u t , a r e t a k e n as m i c r o c o s m s of t h e w o r l d e c o n o m y . F i r m s a n d t h e e c o n o m i c n e t w o r k s that c o n n e c t t h e m a r e t h e e s s e n t i a l b u i l d ing b l o c k s of t r a n s n a t i o n a l p r o d u c t i o n s y s t e m s in w h i c h c o u n t r i e s p l a y a v a r i e t y of s p e c i a l i z e d a n d s h i f t i n g r o l e s . F i r m s d o n o t e x i s t in a v a c u u m , of c o u r s e . T h e i r b e h a v i o r is c o n d i t i o n e d b y f a c t o r s o p e r a t i n g at v a r i o u s l e v e l s of a n a l y s i s : g l o b a l e c o n o m i c a n d g e o p o l i t i c a l c o n d i t i o n s ; r e g i o n a l i n t e g r a tion s c h e m e s ( d e j u r e a n d d e f a c t o ) ; t h e e c o n o m i c p o l i c i e s of n a t i o n a l g o v e r n m e n t s ; t h e i m p a c t of d o m e s t i c i n s t i t u t i o n s a n d c u l t u r a l n o r m s o n e c o nomic activity; and the wage rates, skills, productivity, and degree

of

o r g a n i z a t i o n of local l a b o r f o r c e s . B u t n a t i o n - s t a t e s a r e n o t f r e e - f l o a t i n g a c t o r s e i t h e r . T h e G C C a p p r o a c h a r g u e s t h a t t h e d e v e l o p m e n t p r o s p e c t s of c o u n t r i e s a r e c o n d i t i o n e d , in l a r g e p a r t , by h o w t h e y a r e i n c o r p o r a t e d i n t o global industries. T h e r e a r e s i m i l a r i t i e s as w e l l as d i f f e r e n c e s b e t w e e n t h e G C C p e r s p e c tive a n d w o r l d - s y s t e m s t h e o r y . 9 B o t h a p p r o a c h e s a r e g l o b a l a n d e n c o m p a s s n a t i o n s at all l e v e l s of d e v e l o p m e n t w i t h i n t h e i r o v e r a r c h i n g

conceptual

f r a m e w o r k s (i.e., the t r i p a r t i t e w o r l d s y s t e m a n d G C C s ) . B o t h a s s e r t that t h e w o r l d e c o n o m y is o r g a n i z e d in an i n t e r n a t i o n a l d i v i s i o n of l a b o r m a d e u p of v e r t i c a l as w e l l as h o r i z o n t a l l i n k a g e s , w h o s e g e o g r a p h i c s c o p e a n d m o d e s of i n t e g r a t i o n v a r y o v e r t i m e . F i n a l l y , b o t h a r g u e that g l o b a l c a p i t a l i s m g e n e r a t e s an u n e q u a l d i v i s i o n of w e a l t h b e t w e e n a n d w i t h i n s o c i e t i e s , a n d t h e y try to i d e n t i f y t h e m e c h a n i s m s t h r o u g h w h i c h this o c c u r s a n d its d e v e l o p mental consequences. N o t w i t h s t a n d i n g these affinities, there also are significant contrasts between the G C C and w o r l d - s y s t e m s perspectives. First, the starting point f o r G C C a n a l y s i s is r e p r e s e n t e d b y p r o d u c t s a n d i n d u s t r i e s , r a t h e r t h a n b r o a d z o n e s of d e v e l o p m e n t ( c o r e , s e m i p e r i p h e r y , a n d p e r i p h e r y ) in t h e w o r l d e c o n o m y . W h i l e f i r m s a r e t h e m a i n u n i t s of a n a l y s i s in s t u d y i n g GCCs,

world-systems

theory

is p r e d o m i n a n t l y

state-centric.

Empirical

e x p l o r a t i o n s of w o r l d - s y s t e m s t h e o r y o f t e n rely o n m e a s u r e s of n a t i o n a l w e a l t h to d e f i n e a s t a t e ' s p o s i t i o n in t h e w o r l d e c o n o m y . A l m o s t n o a t t e n t i o n is g i v e n to t h e s t r u c t u r e of g l o b a l i n d u s t r i e s , c o r p o r a t e s t r a t e g i e s a n d r i v a l ries, and e c o n o m i c and social n e t w o r k s . S e c o n d , w o r l d - s y s t e m s

theory

f a v o r s a l o n g v i e w of h i s t o r y in w h i c h c h a n g e u s u a l l y is m e a s u r e d in c e n t u r i e s . T h e G C C f r a m e w o r k , o n t h e o t h e r h a n d , e m p l o y s t h e t o o l s of i n d u s try s t u d i e s t o f o c u s o n p a t t e r n s of i n t e r n a t i o n a l c o m p e t i t i o n that a r e c o n t e m p o r a r y a n d of m u c h s h o r t e r d u r a t i o n . T h i r d , G C C s t u d i e s try to b r i d g e t h e m a c r o - m i c r o g a p in c o m p a r a t i v e r e s e a r c h by h i g h l i g h t i n g t h e l o c a l s o c i a l c o n t e x t of g l o b a l p r o d u c t i o n . C o m m o d i t y c h a i n s " t o u c h d o w n " in c o m m u n i t i e s and industrial districts where o n e can e x a m i n e

households,

their c o n n e c t i o n s to e n t e r p r i s e s a n d s t a t e s , a n d r e l a t e d i s s u e s of g e n d e r s e g -

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mentation and racial/ethnic conflict in the workforce. From a G C C perspective, economic globalization actually strengthens the forces of localization in the world economy. What does G C C analysis explain? How does it handle regions? Commodity-chains research, first and foremost, is concerned with explaining the governance structures of coordination and control in global industries. Two distinct types of G C C s have emerged in recent decades, which for the sake of simplicity can be called producer-driven and buyer-driven commodity chains (see Figure 4.1). 1 0 Producer-driven commodity chains are those in which large, usually transnational, manufacturers play the central roles in coordinating production networks (including their backward and forward linkages). This is characteristic of capital- and technology-intensive industries such as automobiles, aircraft, computers, semiconductors, and heavy machinery. Buyer-driven commodity chains, on the other hand, are those in which large retailers, brand-name designers, and trading companies play the pivotal role in setting up decentralized production networks in a variety of exporting countries, frequently located in the Third World. This pattern of trade-led industrialization is common in labor-intensive consumer goods industries such as garments, footwear, toys, housewares, and consumer electronics. While producer-driven commodity chains controlled by giant industrial firms have a long history in the world economy, buyer-driven commodity chains dominated by commercial capital are newer and less well understood. Second, instead of seeing regions as the sum of geographically proximate nation-states, the G C C perspective allows us to empirically document the emergence and transformation of regional divisions of labor that vary by industry." The linkages between countries within a region are the flows of investment capital, technology, goods, services, and people that make up commodity chains. Regional divisions of labor tend to be internally structured in similar ways: core countries supply much of the technology, capital, and high-end services (communications, transportation, and banking); semiperipheral nations do relatively advanced manufacturing and low-end services (e.g., quality control, component sourcing); and the periphery carries out low-wage, routinized production. In East Asia's division of labor, Japan is the core, the East Asian NICs are the semiperiphery, while Southeast Asia and the People's Republic of China constitute the periphery. 12 An analogous regional division of labor exists in North America, with the United States as the core, Canada and parts of northern Mexico as a semiperiphery (making a range of capital-intensive and high-technology products like automobiles and their engines, computers, and electrical machinery), and the rest of Mexico plus a number of Central American and Caribbean nations forming the periphery (Gereffi 1993). A key conclusion that emerges from G C C research is that economic growth is not blocked by these regional divisions of labor; under appropriate local conditions,

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Figure 4.1 Organization of Producer-Driven and Buyer-Driven Global Commodity Chains

Producer-Driven Commodity Chains

Domestic and Foreign Subsidiaries and Subcontractors

Buyer-driven C o m m o d i t y C h a i n s

Note: Solid arrows are primary relationship'». dashed arrows ate secondary relationships.

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d e v e l o p m e n t can be fostered even within peripheral areas of the world e c o n omy. T h i r d , the G C C perspective explores m a n y of the institutional m e c h a n i s m s by which countries learn how to c o m p e t e in world m a r k e t s . N a t i o n s progress through fairly predictable industry d e v e l o p m e n t cycles in w h i c h organizational learning is continuous. At an early stage of an i n d u s t r y ' s d e v e l o p m e n t , p e o p l e learn h o w to m a k e and export products according to the price, quality, and delivery specifications of domestic and foreign buyers. Later, w h e n initial exports are threatened by l o w - w a g e c o m p e t i t o r s , or by protected or saturated overseas m a r k e t s , local producers typically p u r s u e several options to maintain a significant role in these industries. O n e is industrial upgrading to improve the kinds of products a firm m a k e s . A n o t h e r option is direct foreign investment in l o w - w a g e countries to duplicate the products that n o longer are competitive at h o m e . A third m e c h a n i s m is triangle m a n u f a c t u r i n g , whereby the erstwhile exporters b e c o m e intermediaries b e t w e e n established foreign buyers and new production sites in less d e v e l o p e d countries. T h e s e patterns of a d j u s t m e n t to industrial decline reveal surprising regularities in the kinds of institutions and information that must be generated if e c o n o m i c learning is to take place. This m e l d i n g of d e v e l o p m e n t and organizational insights is facilitated by the G C C perspective. Mapping

Global

Commodity

Chains

Global c o m m o d i t y chains have three main dimensions: an input-output structure (i.e., a set of products and services linked together in a s e q u e n c e of value-adding e c o n o m i c activities), a territoriality (i.e., spatial dispersion or concentration of production and marketing n e t w o r k s , comprising enterprises of different sizes and types), and a g o v e r n a n c e structure (i.e., authority and p o w e r relationships that determine how financial, material, and h u m a n resources are allocated and flow within a chain). T h e construction of G C C s thus involves m a p p i n g three types of e c o n o m i c networks, w h o s e units are products, countries, and organizations. At the product level, c o m m o d i t y chains e n c o m p a s s the full productionc o n s u m p t i o n cycle: raw material supply, the design and m a n u f a c t u r e of c o m p o n e n t s and finished g o o d s , export, w h o l e s a l e distribution, and retail. T h e s e products and services are c o n n e c t e d in a sequence of value-adding e c o n o m i c activities. A distinctive feature of this product m a p p i n g is that it includes both b a c k w a r d and f o r w a r d linkages f r o m the production stage rather than f o c u s i n g on m a n u f a c t u r i n g alone, as standard industrialization studies do. This allows o n e to show the relationship between industries ordinarily thought to be discrete (such as agriculture, p e t r o c h e m i c a l s , textiles, g a r m e n t s , shipping, wholesaling, and retailing for the apparel c o m m o d i t y chain).

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At the country level, the geography of the G C C is superimposed on this production system. One needs to identify where each of the products in the commodity chain is made. An interesting finding here is that virtually all G C C s include countries at every level of economic development. For example, although the apparel, automobile, and aircraft commodity chains represent vastly disparate levels of industrial sophistication, each chain involves core, semiperipheral, and peripheral nations in the world system. Thus, international divisions of labor are built into the very structure of GCCs. Finally, at the organizational level, the focus shifts to the kinds of firms that make, distribute, and market the products in G C C s . Among the issues to be addressed is the degree to which these companies are specialized or vertically integrated, large or small, and transnational or domestic, and whether they participate in interfirm networks across industry and country boundaries. The organizations that populate G C C s mold the chain's governance structure. Triangle

Manufacturing

One of the most important adjustment mechanisms for maturing export industries in East Asia is the process of "triangle manufacturing," which came into being in the 1970s and 1980s. The essence of triangle manufacturing is that U.S. (or other overseas) buyers place their orders with the NIC manufacturers they have sourced from in the past (e.g., Hong Kong or Taiwanese apparel firms), who in turn shift some or all of the requested production to affiliated offshore factories in one or more low-wage countries (e.g., China, Indonesia, or Vietnam). These offshore factories may or may not have equity investments by the East Asian NIC manufacturers: they can be wholly owned subsidiaries, joint-venture partners, or simply independent overseas contractors. The triangle is completed when the finished goods are shipped directly to the overseas buyer, under the U.S. import quotas issued to the exporting nation. Payments to the non-NIC factory usually flow through the NIC intermediary firm. Triangle manufacturing thus changes the status of the NIC manufacturer from a primary production contractor for the U.S. buyers to a middleman in the buyer-driven commodity chain. The key asset of the East Asian NIC manufacturers is their relationship with the foreign buyers, which is based on the trust developed through numerous successful export transactions. Since the buyer has no direct production experience, the buyer prefers to rely on the East Asian NIC manufacturers he or she has done business with in the past to assure that the buyer's standards in terms of price, quality, and delivery schedules will be met by untested contractors in other Third World locales. As the volume of orders in new production sites like China, Indonesia, or Sri Lanka increases, the pressure grows for the U.S. buyers to

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eventually bypass their East Asian NIC intermediaries and deal directly with the factories that fill their large orders. The process of third-party production began in the late 1960s when Japan relocated numerous plants and foreign orders to the East Asian NICs (often through Japanese trading companies, or sogo shosha) for both economic and environmental reasons. When U.S. import quotas were imposed on Hong Kong, Taiwan, South Korea, and Singapore in the 1970s, this led to the search for new quota-free production sites elsewhere in Asia. 1 3 In the 1980s, the shift toward triangle manufacturing accelerated because of domestic changes —increased labor costs, labor scarcity, and currency appreciations —in the East Asian NICs. Today, the East Asian NICs are extending their factory networks to far-flung production frontiers in Asia, Latin America, and Africa. 1 4 Triangle manufacturing has several important implications for Third World development. First, the increased pace of economic specialization in the world economy due to such manufacturing appears to be shortening the product cycles for countries pursuing export-oriented development. As industries have become globalized and producers in different parts of the world are more tightly linked, the pace of change has quickened and exporters in particular have shorter periods of time in which to exploit their competitive advantages. 1 5 These changes are due to a variety of causes, including rapid technological innovation, the growing number of buying seasons for fashion goods, the proliferation of new models of popular consumer products, 1 6 the spread of Third World manufacturing capabilities, and the speed with which the United States and other developed countries are imposing tariffs, quotas, and other import restrictions on successful exporting countries. As export windows for Third World manufacturers narrow more quickly, countries face the problems of boom-and-bust cycles of economic growth tied to fluctuating external demand and intense regional competition. One solution has been for Third World exporters to decrease their reliance on their traditional overseas markets, especially the United States, whose consumer demand has fueled East Asia's export growth for nearly three decades. By 1989, the four East Asian NICs had cut their dependence on the U.S. market to between one-quarter and two-fifths of their total exports. 1 7 The second implication of triangle manufacturing is for social embeddedness. Each of the East Asian NICs has a different set of preferred countries where they set up their new factories. Hong Kong and Taiwan have been the main investors in China (Hong Kong has taken a leading role in Chinese production of quota items like apparel made from cotton and synthetic fibers, while Taiwan is a leader for nonquota items like footwear, 1 8 as well as leather and silk apparel); South Korea has been especially prominent in Indonesia, Guatemala, the Dominican Republic, and now North Korea; and Singapore is a major player in Southeast Asian sites like Malaysia and

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Indonesia. T h e s e production networks are explained in part by social and cultural networks (e.g., ethnic or familial ties, c o m m o n language), as well as by unique features of a c o u n t r y ' s historical legacy (e.g., H o n g K o n g ' s British colonial ties gave it an inside track on investments in J a m a i c a and Mauritius). Finally, the difficulties involved in coordinating triangle m a n u f a c t u r i n g networks have led a n u m b e r of East Asian entrepreneurs to m o v e b e y o n d contract m a n u f a c t u r i n g by setting up their o w n retail outlets, with an e y e toward large Asian markets such as C h i n a and J a p a n , and by exporting their own branded products to a wide variety of E u r o p e a n and North A m e r i c a n locations. If there is a strong m o v e t o w a r d consolidated regional trading blocs, as many now predict, the territorial b o u n d a r i e s of transnational production systems m a y b e c o m e more clearly delineated within global regions.

THIRD WORLD STRATEGIES FOR "MOVING UP" IN THE GLOBAL ECONOMY Both technological a d v a n c e and organizational learning are required to climb the ladder of industrial d e v e l o p m e n t . Progress requires a d y n a m i c enterprise base, supportive state policies, and i m p r o v e m e n t in skills and higher wages in the w o r k f o r c e . For most nations in the Third World, reaching the status of core countries is an ever receding frontier, complicated by a growing technology gap and a constantly changing international environment. Third World nations have utilized several strategies in recent decades to try to improve their global positions. T h e s e include g o v e r n m e n t policies and organizational initiatives to increase productivity, new relations with foreign and local capital, and participation in regional e c o n o m i c blocs. 1 9 Narrowing

the Productivity

Gap

Third World regions c o n f r o n t a significant productivity g a p with regard to the developed nations. This g a p , which is a rough indicator of the effect of disembodied technological progress on long-term e c o n o m i c g r o w t h , is about 2.5 to 1 between Latin A m e r i c a and the O E C D countries, and it has grown wider over time. East Asia, by contrast, appears to have m a d e m a j o r strides in closing this g a p , while less a d v a n c e d regions like s u b - S a h a r a n A f r i c a and South Asia p r e s u m a b l y lag the furthest behind the global pacesetters. In the period 1 9 5 0 - 1 9 8 9 , Latin A m e r i c a ' s increase in j o i n t factor productivity was o n e - s e v e n t h that of the East Asian N I C s and o n e - f i f t h that of the developed nations ( E C L A C 1994a: 141). A m a j o r p r o b l e m is that most Third World countries fail to use internationally available " h a r d " and " s o f t " technologies. This is apparent in outdated e q u i p m e n t , obsolete pro-

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duction methods, a deficient organization of labor, rigidly vertical industrial relations, inadequate product quality, poor after-sales services, and so on. In their efforts to narrow the productivity gap, Third World states have pursued a variety of policy and institutional reforms. A coherent macroeconomic program that emphasizes stable exchange rates, low inflation, and moderate to high interest rates is widely assumed to be the necessary starting point for improved economic performance. This frequently is coupled with related mesoeconomic changes that shore up the institutional environment within which firms operate (e.g., improved infrastructure, linkages with the scientific and technological system, training, finance, and the promotion of new exports or overseas markets). There is much less agreement, however, on the role to be played by microeconomic policies that directly affect the operations of firms in specific industrial sectors. In general, industrial policy has been discredited in neoclassical versions of the EOI development model, despite the significant role of industrial policy in East Asia's high-growth "miracle" economies, such as Japan, South Korea, and Taiwan (see Johnson 1982; Amsden 1989; Wade 1990; Gereffi and Wyman 1990). Institutional support has been forthcoming from Third World governments to attract the foreign capital needed for export processing zones (EPZs). Serious questions have been raised, however, about the contributions made by these low-wage export industries to broader development objectives in the Third World, such as upgraded skills, technology transfer, backward linkages to local suppliers, and improved living conditions. The experience of Mexico typifies these dilemmas. Until the last decade, Mexico's maquiladora plants were relegated to a low-wage, export-processing role in the world economy. A major concern for Mexico was how to push beyond the enclave model of EOI represented by its traditional, labor-intensive maquiladora plants to adopt a more dynamic, industrially upgraded development strategy. This would generate higher incomes and better skills for Mexico's workers and at the same time allow Mexican exports to be internationally competitive in technologically advanced sectors. In the 1980s, a new wave of maquiladora plants began to push beyond this enclave model to a more sophisticated type of component-supplier production, making parts for capital- and technology-intensive consumer durable items like automobiles and computers (Gereffi 1996). To successfully carry out this shift, however, Mexico must move from its wagedepressing export strategy to more productivity-enhancing strategies. So far, it has taken the easy road to export expansion, since the sharp devaluations of the Mexican peso in the 1980s depressed real wages in the manufacturing sector by over 50 percent. The East Asian NICs, meanwhile, are moving in the opposite direction. They have diversified their exports in the face of a substantial appreciation (rather than devaluation) of their currencies, rising (not declining) real wages, and labor scarcity (rather than labor surpluses).

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A l t h o u g h p o l i c y r e f o r m s h a v e b e e n c e n t r a l c o n c e r n s of t h e p o l i t i c a l e c o n o m y literature on Third World d e v e l o p m e n t , scant attention has been g i v e n to t h e r o l e of local i n n o v a t i o n s in s t i m u l a t i n g e c o n o m i c g r o w t h a n d p r o d u c t i v i t y i n c r e a s e s in d e v e l o p i n g n a t i o n s . S e v e r a l k i n d s of i n n o v a t i o n s h o u l d b e d i s t i n g u i s h e d in t h e p r o c e s s of e c o n o m i c d e v e l o p m e n t . F i r s t , t h e r e are b r e a k t h r o u g h innovations — n e w products and p r o c e s s e s that allow leading f i r m s t o f u n d a m e n t a l l y r e d e f i n e t h e c o s t s t r u c t u r e of m o d e r n i n d u s t r i e s s o that o l d p r o d u c t s a n d t e c h n o l o g i e s b e c o m e o b s o l e t e . E x a m p l e s i n c l u d e t h e r e s t r u c t u r i n g of t h e t e l e c o m m u n i c a t i o n s i n d u s t r y a r o u n d f i b e r o p t i c s a n d s a t e l l i t e s y s t e m s ( i n s t e a d of c o p p e r c a b l e s ) a n d t h e i n f o r m a t i o n s c i e n c e r e v o l u t i o n that r e p l a c e d t h e m e c h a n i c a l a n d e l e c t r i c a l b u s i n e s s m a c h i n e s of s e v e r a l d e c a d e s a g o w i t h a d a z z l i n g a r r a y of h a n d h e l d a n d d e s k t o p c o m p u t e r s , p l u g g e d i n t o g l o b a l i n f o r m a t i o n n e t w o r k s . P a t h b r e a k i n g i n n o v a t i o n s of this sort t e n d to b e i n t r o d u c e d in t h e m o s t a d v a n c e d n a t i o n s , w h i c h h e l p s t h e m t o r e t a i n t h e i r c o m p e t i t i v e e d g e in t h e w o r l d e c o n o m y b y i n i t i a t i n g n e w product cycles. A s e c o n d f o r m of p r o g r e s s s t e m s f r o m less d r a m a t i c a d a p t i v e i n n o v a t i o n s , w h i c h a r e i n c r e a s i n g l y f o u n d in t h e N I C s , e s p e c i a l l y in E a s t A s i a . T h e s e i n n o v a t i o n s i n v o l v e t h e u s e of m o d e r n t e c h n o l o g i e s by s m a l l a n d m e d i u m - s i z e f i r m s in t r a d i t i o n a l as w e l l as a d v a n c e d s e c t o r s . In t h e e x p o r t o r i e n t e d g a r m e n t i n d u s t r i e s of S o u t h K o r e a , T a i w a n , a n d H o n g K o n g , f o r e x a m p l e , new synthetic materials, laser cutting m a c h i n e s , and c o m p u t e r a i d e d d e s i g n s a r e r o u t i n e l y e m p l o y e d to e n h a n c e t h e u p g r a d i n g of e x p o r t s destined for d e v e l o p e d - c o u n t r y m a r k e t s . A d a p t i v e innovations are c o m m o n p l a c e in t h e N I C s ' o t h e r m a j o r e x p o r t i n d u s t r i e s as w e l l , s u c h as f o o t w e a r , toys, semiconductors, and computers. A t h i r d f o r m of p r o d u c t i v i t y - e n h a n c i n g i n n o v a t i o n that is o f t e n o v e r l o o k e d in d e v e l o p i n g n a t i o n s is o r g a n i z a t i o n a l in n a t u r e . N u m e r o u s o r g a n i z a t i o n a l i n n o v a t i o n s h a v e b e e n c r i t i c a l to E a s t A s i a ' s e c o n o m i c s u p e r i o r i t y in r e c e n t d e c a d e s . J a p a n is w i d e l y a t t r i b u t e d w i t h p i o n e e r i n g " l e a n p r o d u c t i o n " as an a l t e r n a t i v e to m a s s p r o d u c t i o n

in t h e a u t o m o b i l e

industry

( W o m a c k , J o n e s , a n d R o o s 1 9 9 1 ) , a f o r m of m a n u f a c t u r i n g that is n o w b e i n g w i d e l y e m u l a t e d in o t h e r i n d u s t r i e s a n d by T N C s of all n a t i o n a l i t i e s . E a s t A s i a n p r o d u c t i o n a n d e x p o r t n e t w o r k s in p r o d u c e r - d r i v e n a n d b u y e r - d r i v e n c o m m o d i t y c h a i n s rely on a w i d e r a n g e of r e g i o n a l l y a d a p t i v e v e r t i c a l a n d horizontal organizational f o r m s (e.g., trading c o m p a n i e s , dense subcontracting n e t w o r k s , s p e c i f i c a t i o n c o n t r a c t i n g , a n d t r i a n g l e m a n u f a c t u r i n g ) , w i t h s t r o n g b a s e s in e t h n i c i t y , k i n s h i p , a n d local c o m m u n i t i e s . F i n a l l y , t h e o r i g i nal e q u i p m e n t m a n u f a c t u r i n g ( O E M ) a n d o r i g i n a l b r a n d n a m e m a n u f a c t u r ing ( O B M ) e x p o r t r o l e s c o n t a i n m a n y i n n o v a t i v e e l e m e n t s that a r e d y n a m i c s o u r c e s of c o m p e t i t i v e a d v a n t a g e in t h e w o r l d e c o n o m y . I m p r o v e m e n t s in t h e o r g a n i z a t i o n of p r o d u c t i o n r e p r e s e n t o n e of t h e s o c i a l f o u n d a t i o n s of E a s t A s i a ' s e x p o r t s u c c e s s , a n d it is a n a r e a w h e r e t h e r e is c o n s i d e r a b l e s c o p e f o r local i n n o v a t i o n s .

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New Relations

with Foreign and Local

Capital

Economic liberalization has forced Third World states to renegotiate their relationship with private capital, both foreign and local. Liberalization trends alone, however, are not sufficient to attract increased foreign direct investment (FDI). A country's stance toward foreign capital is only one element in a coherent and well-balanced national development policy package that typically includes both macroeconomic and political stability, good infrastructure, modern economic institutions, and a clear sense of the ground rules by which enterprises must operate. One of the most important lessons learned during the 1970s and 1980s is that FDI policy should involve explicit commitments with respect to key national priorities such as export promotion and technological innovation and that successful local firms represent an important element in national development strategies. In the past decade, FDI has grown dramatically in most of the Third World regions. By 1992, the global stock of FDI reached approximately $2 trillion, with worldwide outflows of FDI recording steady gains from 1982 until 1991 and 1992, when there were declines. Whereas developing countries account for only 5 percent of the global stock of FDI, they received about 25 percent of all inflows in 1991 (UNCTAD 1993: 1). The resurgence of FDI in the 1980s and 1990s was fostered by a variety of new economic conditions, such as advances in information technology, the growth of developing country markets, a convergence in national patterns of consumer demand, intense global competition, and the rise of FDI by East Asian and other Third World investors. There were facilitating factors at the policy level as well, including the liberalization of trade and investment regimes; the spread of privatization programs and debt-for-equity swaps; swings in exchange rates that boosted outward FDI from countries with strong currencies, particularly Japan; and regional integration schemes (such as the European Union and the North American Free Trade Agreement [NAFTA]) that are expanding trade and investment flows within as well as between regions. The trend toward a liberalization of FDI policies, which accelerated during the 1980s, is continuing. In 1992, seventy-nine new legislative measures were adopted in forty-three countries and all liberalized the rules on FDI; in 1991, eighty of eighty-two measures were more liberal. These regulatory reforms to attract FDI have been complemented by privatization programs. In 1990, more than seventy nations had active privatization initiatives and their sales of state enterprises totaled over $185 billion (UNCTAD 1993: 2; 1992: 86). Many countries in Latin America and South Asia, which had adopted highly regulatory environments and policies of assertive industrialization in the 1970s, have reopened sectors like mining and agriculture that previously were off limits to foreign capital, and they have lowered

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joint-venture requirements and other entry barriers in manufacturing and services. The recent wave of liberalization has had a particularly strong impact on services FDI. The transnationalization of services usually lags behind primary (natural resource) activities and manufacturing, despite the rapid growth of the service sector's share of G D P in many countries. This disparity is due largely to national restrictions on inward investments in services for strategic, political, or cultural reasons, which now appear to be lessening. Financial T N C s (banks and insurance firms) and trading companies (e.g., Japanese sogo shosha) account for two-thirds of the services FDI stock in developed countries and the majority of foreign service investments in many Third World nations. Old restrictions are starting to change in capitalintensive service industries as well —telecommunications, various forms of transportation, and public utilities —which could rival finance and trading as sources of services FDI. As the growth of services has been increasingly propelled by " s o f t " technologies (especially information science), the process of technology transfer has shifted from harder to softer technologies, where the contribution of T N C s is crucial ( U N C T A D 1993: chap. 3). Regional and global strategies by T N C s are replacing those geared to maximizing profits in individual countries. There has been an affinity among the ISI development strategies followed in most Third World regions in the 1960s and 1970s, the predominance of T N C s at the manufacturing stage, and the emergence of producer-driven commodity chains. Conversely, the move toward EOI in the 1970s and 1980s in East Asia coincided with the rise of networks and other nonequity ties with foreign buyers in the Third World and the prominence of buyer-driven commodity chains. Today, integrated international production allows foreign industrial and commercial capital to reap the benefits of economies of scale and scope as T N C strategies evolve toward greater functional and geographic integration, both within and across firms. The challenge for Third World governments is to harness the productive potential of T N C s while learning how to benefit from multiple ways of linking up with the global economy. The economic restructuring of the 1980s and 1990s has changed the incentives for leading NIC manufacturers. East Asian firms have responded to rising wage rates and labor shortages at home and protectionism abroad in three ways, which are not mutually exclusive: industrial upgrading to higher-value-added export products that take full advantage of East Asia's manufacturing expertise, skilled labor, and well-developed local supplier base; offshore sourcing to low-cost export platforms in the Third World for labor-intensive products in which the NIC manufacturers are no longer directly competitive but can assume middleman roles in triangle manufacturing networks; and diversification out of export sectors and into more profitable economic activities, such as services and real estate. These

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c h a n g e s , together with the relaxing of g o v e r n m e n t controls on the o u t f l o w of foreign e x c h a n g e f r o m the East Asian N I C s , are consolidating a two-tier pattern of cross-border F D I in m a n u f a c t u r i n g in Asia: f r o m Japan into the regional N I C s and f r o m the N I C s to C h i n a , Indonesia, M a l a y s i a , the Philippines, and T h a i l a n d . Shifting Patterns

of Regional

Integration

A great deal of attention has been given to the growth of regional e c o n o m i c blocs in the past d e c a d e . T h e s e blocs take t w o quite different f o r m s . On the one h a n d , the United States has j o i n e d the E u r o p e a n countries in p r o m o t i n g f o r m a l regional a g r e e m e n t s . Both the E u r o p e a n Union and N A F T A are trade-based regional blocs, created and sustained by g o v e r n m e n t policies. T h e Asia Pacific E c o n o m i c C o o p e r a t i o n ( A P E C ) f o r u m , by contrast, is a fledgling a g r e e m e n t that advocates free trade by the year 2 0 2 0 within a f r a m e w o r k of " o p e n r e g i o n a l i s m . " O n e of the issues at stake here is whether regional e c o n o m i c blocs are a stepping-stone to strengthening of multilateral institutions like the World T r a d e Organization ( W T O ) or whether regional integration is merely a d e f e n s i v e m a n e u v e r used to exclude certain groups of countries f r o m global m a r k e t s . If E u r o p e , North A m e r i c a , and Asia d o indeed set up f u l l - f l e d g e d trade b l o c s , closed to outsiders and open to insiders, regionally integrated T N C s are likely to capitalize on this trend by pursuing corporate strategies of globalization through regionalization. W h i l e trade tends to p r o m o t e regional integration, FDI appears to be better at spanning different regional blocs and moving toward global econ o m i c integration. T r a d e - b a s e d f o r m s of cross-border linkage, including E P Z s , outsourcing, and free-trade areas, are " s h a l l o w " f o r m s of e c o n o m i c integration. " D e e p " integration, on the other h a n d , involves the production of g o o d s and services as a result of transnational corporate strategies and network structures ( U N C T A D 1993: c h a p . 7). T h e world e c o n o m y seems to be evolving toward this more c o m p l e x f o r m of integrated international prod u c t i o n , containing a multitude of buyer-driven as well as producer-driven c o m m o d i t y chains. Strategic alliances have e x p a n d e d , particularly in industries with short product cycles and high r e s e a r c h - a n d - d e v e l o p m e n t costs, while competitive pressures are f o r c i n g f i r m s to seek cost savings f r o m all s e g m e n t s of global c o m m o d i t y c h a i n s . Latin A m e r i c a ' s experience in the 1980s shows that regional markets can be a step toward more extensive exports in the Third World. A c c o r d i n g to evidence f r o m twenty-eight industrial sectors in thirteen Latin American and Caribbean countries in 1979 and 1989, the principal changes in this period concern the destination of exports. In both years, production was geared mainly to the d o m e s t i c m a r k e t , with only marginal exports to the regional market. In 1989, h o w e v e r , about o n e - q u a r t e r of these sectors redirected their exports to extraregional m a r k e t s , without altering their primary focus on

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domestic markets. More competitive sectors in Latin America developed along different lines. During the 1980s, they shifted a majority of their output from domestic to external markets within the region. Of sectors that already were regional exporters in 1979, one-third used exports to Latin American markets as a training ground for subsequent entry into extraregional markets ( E C L A C 1994b: 3 6 - 3 7 ) . Thus, ISI production in Latin America is a platform for subsequent EOI, which in turn can expand f r o m regional to global markets. East Asian firms, by contrast, have used their lengthy experience as global exporters to move along the EOI path to the sophisticated O E M and O B M export roles, which involve a much deeper pattern of functional integration in global markets. The Asian region is at the forefront of both intraregional and interregional patterns of investment and trade. De facto regional integration in East Asia has been occurring through the strategies of Japanese, U.S., and European T N C s , largely in the absence of intergovernmental agreements. A regional division of labor has been fostered by the lowering of trade barriers, the shift of Japanese T N C s toward more offshore sourcing in low-cost production sites after the appreciation of the yen, and the emergence of new manufacturing centers in East and Southeast Asia. These tendencies are bolstered by geographic proximity and cultural affinities in the region. East Asia thus is characterized by a market-induced, rather than policy-induced, form of economic integration. The cross-regional impact of FDI from East Asia into Mexico and the Caribbean is of growing contemporary relevance. Burgeoning investments from Japan and the East Asian NICs in North America are leading to a deepening of multilateral ties between the two regions. In anticipation of NAFTA, which took effect on 1 January 1994, Asian investors set up transplant factories in Mexico and the Caribbean Basin to gain preferential access to the U.S. market. NAFTA extends the regional division of labor to the poorest countries in the hemisphere, and it leads to a r e v a l u a t i o n of the impact of low-wage EOI strategies on Mexico and the Caribbean. Today many of Mexico's traditional maquiladora exports are shifting to Caribbean venues, which are likely to become the favored locale for these low-wage activities. By the early 1990s, EPZs had become a leading source of exports and manufacturing employment in various Caribbean nations. In the Dominican Republic, for example, EPZs employed 142,300 Dominicans (primarily in garment assembly) in 1992 and generated $1 billion in trade, netting $300 million toward the balance of payments. In terms of employment, the Dominican Republic was the fourth largest E P Z economy in the world (the fifth if China's Special Economic Zones are included), and 11 percent of the more than three hundred E P Z firms in the Dominican Republic were Asian (see EIU 1993/94; Kaplinsky 1993; Portes, Itzigsohn, and Dore-Cabral 1994). Furthermore, East Asian projects were found to contribute more jobs, bigger investments, higher levels of local value added,

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and a greater utilization of skilled labor than the assembly-oriented sewing operations by other foreign firms (USITC 1989: 6/5). Despite these gains, one should be skeptical of the longer-term role that labor-intensive EOI can play in the development of Caribbean nations. Although export-processing activities such as those that have grown so rapidly in Mexico and the Caribbean Basin in recent years have undeniable benefits in j o b creation, foreign exchange earnings, and the fostering of industrial experience, they do not by themselves constitute a sufficient basis for a long-term development strategy. Export-processing industries are best seen as a transitional phenomenon, the first stage in a process of moving to a higher level of industrial development, in which domestic inputs and diverse services also are required. While many Caribbean nations are just now making the basic transition from farm to factory, Mexico is moving further up the industrial export ladder from clothes to complex components to computers. But these countries have a long way to go before matching the success of the East Asian NICs. The latter nations are shifting from being the principal suppliers of merchandise sold under foreign brand names in U.S. and European department stores to making goods for export under their own brand names with a growing emphasis on booming Asian markets. Hong Kong, Taiwanese, and Korean manufacturers thus are closing the buyer-driven commodity chains for items such as apparel, shoes, and consumer electronics (e.g., calculators, games, watches) by moving all the way from raw material supply through retailing within the Asian region, while the North American commodity chains are stymied by their weakest link —production. It is an open question whether Mexican or Caribbean manufacturers, or their U.S. or Asian counterparts, will step forward to fill this production gap for certain consumer goods in North America.

CONCLUSION Globalization is not inevitable, nor is it an unmixed blessing in terms of development. Its foundations are political as well as economic and therefore far from stable. Globalization also generates substantial social and cultural resistance because of its uneven and in some cases marginalizing consequences within as well as between countries and regions. The tumultuous changes wrought by economic globalization affect all regions of the world. The East Asian nations, which probably have consolidated their position the most during the past twenty-five years, are in the midst of a radical transformation in their industrial and export profiles, as low-wage industries are being shed for a technologically sophisticated and more service-oriented image. For other regions of the world, however, problems remain as coun-

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tries try to e s c a p e w a g e - d e p r e s s i n g e x p o r t s t r a t e g i e s , l o w p r o d u c t i v i t y , a n d m a r g i n a l f o r m s of i n t e g r a t i o n t o t h e w o r l d e c o n o m y . O n e of t h e c e n t r a l t a s k s in f a s h i o n i n g n a t i o n a l d e v e l o p m e n t s t r a t e g i e s is t o d e t e r m i n e h o w t o p l u g i n t o t r a n s n a t i o n a l p r o d u c t i o n s y s t e m s in a w a y that a l l o w s n a t i o n s to i n c r e a s e t h e i r p r o d u c t i v i t y a n d i n t e r n a t i o n a l c o m p e t i t i v e n e s s w h i l e g e n e r a t i n g a h i g h e r s t a n d a r d of l i v i n g f o r t h e l o c a l p o p u l a t i o n . A n i m p o r t a n t l e s s o n f r o m t h e c o u n t r i e s that h a v e b e e n s u c c e s s f u l in i n d u s t r i a l u p g r a d i n g a n d d i v e r s i f i e d e x p o r t i n g ( s u c h as t h e E a s t A s i a n N I C s ) h a s b e e n t h e p r o m i n e n t r o l e of l o c a l l y o w n e d f i r m s in t h e i r e x p o r t - o r i e n t e d i n d u s t r i e s . T h e v a s t m a j o r i t y of t h e e x p o r t s in t h e E a s t A s i a n N I C s , w i t h t h e e x c e p t i o n of S i n g a p o r e , a r e p r o d u c e d by d o m e s t i c a l l y o w n e d f i r m s . W h e t h e r l a r g e i n d u s t r i a l c o n g l o m e r a t e s , like S o u t h K o r e a ' s chaebol,

or densely networked

s m a l l a n d m e d i u m - s i z e f i r m s , as in H o n g K o n g a n d T a i w a n , d o m e s t i c e n t e r p r i s e s h a v e b e e n t h e k e y to E a s t A s i a ' s i n t e r n a t i o n a l c o m p e t i t i v e n e s s . In m o s t of t h e E a s t A s i a n N I C s , t h e state h a s i n d u c e d l o c a l p r i v a t e c a p ital to t a k e a m e r c a n t i l i s t i c a p p r o a c h to g l o b a l m a r k e t s , w h e r e o v e r s e a s s a l e s are equated with enhanced

national security and prestige. Exporting

is

v i e w e d as a m a t t e r of l o n g - t e r m n e c e s s i t y r a t h e r t h a n s h o r t - t e r m c o n v e n i e n c e . E a s t A s i a n g o v e r n m e n t s h a v e u s e d f i n a n c i a l a n d o t h e r c o n t r o l s to e x e r c i s e l e v e r a g e o v e r local e x p o r t e r s . D o m e s t i c e x p o r t e r s in E a s t A s i a t h u s h a v e a f a r g r e a t e r i n c e n t i v e t h a n d o f o r e i g n c o m p a n i e s n o t o n l y to e x p o r t b u t a l s o to e s t a b l i s h m o r e e x t e n s i v e b a c k w a r d l i n k a g e s to local s u p p l i e r s . A m a j o r r e a s o n t h e E a s t A s i a n N I C s h a v e b e e n s o s u c c e s s f u l in u p g r a d ing t h e i r e x p o r t i n d u s t r i e s is that t h e y h a v e h i g h l y e f f i c i e n t n e t w o r k s of s u p plier industries for intermediate g o o d s (e.g., plastics, textiles) and c o m p o nents (e.g., s e m i c o n d u c t o r s , c o m p u t e r chips, auto parts). T h e s e supporting i n d u s t r i e s a l l o w E a s t A s i a ' s e x p o r t e r s to r e c e i v e h i g h - q u a l i t y

i n p u t s at

w o r l d - m a r k e t p r i c e s . In a d d i t i o n , t h e E a s t A s i a n N I C s h a v e d e v e l o p e d a f u l l r a n g e of local d e s i g n , f i n a n c i a l , t r a n s p o r t a t i o n , a n d c o m m u n i c a t i o n s serv i c e s that g i v e t h e m m a j o r a d v a n t a g e s o v e r o t h e r T h i r d W o r l d p r o d u c t i o n s i t e s . H o w e v e r , t h e d i r e c t i o n s t h e E a s t A s i a n e c o n o m i e s c a n m o v e in t e r m s of i n d u s t r i a l u p g r a d i n g a r e c o n s t r a i n e d by t h e a v a i l a b i l i t y of t h e n a t u r a l r e s o u r c e s o n w h i c h t h e s e s u p p l i e r i n d u s t r i e s d e p e n d . T h e i m p o r t a n c e of these raw material supply networks for successful export industries creates o p p o r t u n i t i e s f o r r e s o u r c e - r i c h r e g i o n s of t h e T h i r d W o r l d . T h i r d W o r l d d e v e l o p m e n t i n v o l v e s a s c e n d i n g a l a d d e r of

industrial

c o m p l e x i t y that r e q u i r e s a d y n a m i c e n t e r p r i s e b a s e , a p p r o p r i a t e state p o l i c i e s , a n d an i m p r o v i n g set of skills a n d w a g e s in t h e w o r k f o r c e . W h e r e a s t h e least d e v e l o p e d r e g i o n s of t h e T h i r d W o r l d h a v e l i m i t e d i n d u s t r i a l e x p e r i e n c e , t h e y a r e on a t r a j e c t o r y t h a t m a n y o t h e r c o u n t r i e s w i t h rich as w e l l as p o o r r e s o u r c e b a s e s a l r e a d y h a v e t r a v e r s e d . T h e e x p e r i e n c e s of t h e m o s t a d v a n c e d r e g i o n s in t h e T h i r d W o r l d , like E a s t A s i a a n d L a t i n A m e r i c a , e m b o d y d i s t i n c t p a t h w a y s b u t w i t h s i m i l a r o b j e c t i v e s . R e a c h i n g t h e s t a t u s of

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core countries in the w o r l d e c o n o m y is an e v e r r e c e d i n g frontier, but the g a p can be c l o s e d by a c o m b i n a t i o n o f t e c h n o l o g i c a l d e v e l o p m e n t and institutional learning f r o m the best practices of s u c c e s s f u l nations around the world.

NOTES The research for this chapter was partially funded by grants from Taiwan's Chiang Ching-Kuo Foundation for International Scholarly Exchange (USA), the Social Science Research Council's Korea Program, and the Arts and Sciences Research Council at Duke University. I gratefully acknowledge these sources of support. 1. For a detailed discussion of the preferential arrangements that have proliferated under GATT, see Finlayson and Zacher (1983). 2. The percentages used in this section come from the World Bank (1992: 222-223). 3. For a vivid illustration of this transition in Taiwan, see Gereffi and Pan (1994). 4. For an interdisciplinary investigation of Third World development strategies with a focus on the Latin American and East Asian cases, see Gereffi and Wyman (1990). 5. For evidence regarding convergence, see Gereffi (1990a) and Bradford (1990). 6. A fuller discussion of the natural limits of ISI and EOI development strategies can be found in Gereffi (1990b: 2 4 2 - 2 4 6 ) . 7. For a polemical argument that these broad civilizations indeed are the fault lines for fresh conflicts in the post-Cold War world, see Huntington (1993). 8. This interdisciplinary volume illustrates the structure and dynamics of GCCs in a diverse set of industries, including agriculture, shipbuilding, apparel, footwear, automobiles, cocaine, and services. 9. World-systems theory is most closely identified with the work of Immanuel Wallerstein, who provided one of the earliest definitions of commodity chains: "A commodity chain is a network of labor and production processes whose end result is a finished commodity" (Hopkins and Wallerstein 1986: 159). 10. For a more complete discussion of this topic, see Gereffi (1994). 11. Henderson (1989) and Doner (1991) conducted exhaustive firm-level research that identified the structure and dynamics of regional divisions of labor in the East Asian semiconductor industry and the Southeast Asian automobile industry, respectively. 12. The Greater South China Economic Zone is a more specific subregional "growth triangle," which includes southern China's Guangdong and Fujian provinces, Taiwan, and Hong Kong (see Chen 1994). 13. Hong Kong offers an excellent illustration of this process. In the mid1960s, low prices were the main competitive advantage of the Hong Kong garment industry. However, the imposition of quotas forced textile and apparel firms to upgrade. European and U.S. import quotas were calculated in terms of the quantity of goods shipped, rather than their value. This arrangement, chosen in part because it was easier to enforce by the importing countries, had an unforeseen effect: "It encouraged the Hong Kong manufacturers to move from textiles to clothing and then

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f r o m simple to fancy clothing, in order to generate more income and e m p l o y m e n t per square yard" (Lardner 1988: 46). 14. Besides the People's Republic of China (the new giant in high-volume exporting from Asia), other socialist e c o n o m i e s in the region (such as Vietnam, C a m b o d i a , Laos, and North Korea) also are b e c o m i n g important production sites in the East Asian N I C s ' triangle manufacturing networks. 15. In the footwear industry, for e x a m p l e , the period of time required to set up successful export industries has grown ever shorter. While export-oriented f o o t w e a r complexes took more than twenty years to develop in Japan and fifteen years or so in countries like Taiwan and South Korea, estimates are that C h i n a ' s footwear industry will be fully mature in ten years or less. 16. Nike creates over one hundred new models of athletic shoes every year to stay ahead of its competitors, w h o try to imitate Nike's best-selling styles as soon as they reach the stores. 17. The U.S. market remains most important for Taiwan (39 percent of total exports), followed by South Korea (35 percent), Singapore (30 percent), and Hong Kong (27 percent) (Dicken 1992: 37). 18. After controls were relaxed on Taiwanese investments in the P e o p l e ' s Republic of China in the late 1980s, around five hundred f o o t w e a r factories were moved from Taiwan to China in less than two years. Although China recently passed Taiwan as the leading footwear exporter to the United States (in terms of pairs of shoes), it is estimated that nearly one-half of C h i n a ' s shoe exports come from Taiwanese-owned or -managed firms recently transferred to the mainland (author interviews with footwear industry experts in Taiwan). 19. This section of the chapter draws substantially from Gereffi 1995.

Leo Panitch

J

Rethinking the Role of the State

The development of what came to be known as the theory of the state in the late 1960s and early 1970s marked an important departure for the discipline of political science. The purpose and effect of the new theory was to provide a nuanced counterpoint to conventional liberal pluralist and social democratic understandings of the state, which were founded on the notion that the liberal democratic polity had during the twentieth century freed itself from the determining power of capital. The new theory was concerned with demonstrating that, far from having become independent of capital, the contemporary state had become an ever more integral element in its development and reproduction. It did not deny the state's autonomy from immediate pressures from capitalists but, on the contrary, theorized such autonomy as a functional condition—given the competitive nature of the economy and the capitalist class itself—for the defense and reproduction of the system (Miliband 1968, 1977; O ' C o n n o r 1973; O f f e 1984; Poulantzas 1973, 1978). Indeed, the outstanding contribution of the new theory was to provide useful tools for analyzing both the variations and the limits of this relative autonomy of the state. It provided a framework for understanding the real effects that popular and working-class pressures could have, in terms of positive state responses to the demand for reform, while demonstrating the way these reforms could be limited and contained through the institutionalization of opposition and through the state's own reading of the conjunctural requirements of capital accumulation. By the late 1970s and early 1980s a considerable reaction emerged against the growing influence of the new state theory. This involved a challenge to the notion of relative autonomy, stressing once again the state's independence from determination by the capitalist economy and class structure. The great irony of all these variants of the state autonomy approach was that they emerged just as limits of even the relative autonomy of the state were severely tested (Nordlinger 1981; Skocpol 1985; Korpi 1983). The instability of Keynesian policies and corporatist structures became more and more manifest in a new era of capitalist crisis f r o m the mid-1970s on. By the early 1980s, with the rise of the Thatcher-Reagan regime, governments and bureaucrats proudly enveloped themselves in an ideology that

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proclaimed the necessity of state subordination to the requirements of capital accumulation and markets and even to the norms and opinions of capitalists themselves. During the decade, moreover, as social democratic regimes (including even Sweden's) found their freedom of maneuver restrained by the new limits to capitalist growth and a renewed ideological militancy on the part of capitalists, they soon abandoned all pretext that the mixed economy had not all along been a capitalist one and that the welfare state had not always been dependent on and necessarily contained within the limits of capital accumulation. Rarely has an academic theory been less apposite to its times than the one that asserted state autonomy against the theory of the capitalist state (Cammack 1989, 1990). No one today can deny the immense structural power and global reach of capitalism as a system and of capitalists as a class. But very few embrace the insights and tools of analysis of the theory of the state as a way of understanding the role the state is playing in the construction of a global capitalism. Rather, we increasingly witness a claim that this global capitalism has now escaped the state, that it now operates beyond the state's control. To take one example of a new conventional wisdom, Held regards globalization as a distinctively new international o r d e r i n v o l v i n g the e m e r g e n c e of a global e c o n o m i c s y s t e m w h i c h stretches b e y o n d the c o n t r o l of a single state (even of d o m i n a n t states); the e x p a n s i o n of n e t w o r k s of t r a n s n a t i o n a l linkages and c o m m u n i cations o v e r w h i c h particular states h a v e little i n f l u e n c e ; the e n o r m o u s g r o w t h in international o r g a n i z a t i o n w h i c h can limit the s c o p e for action of the most p o w e r f u l states; the d e v e l o p m e n t of a global military o r d e r . . . w h i c h can r e d u c e the r a n g e of policies a v a i l a b l e to g o v e r n m e n t s and their citizens.

He concludes that, since this new global order has apparently escaped the control of democratic institutions located at the national level, "democracy has to become a transnational affair." Strategic priority must be given to "the key groups, agencies, associations and organizations of international civil society." Their capacity as agencies for democratic control must be extended through an appropriate recasting of the territorial boundaries of systems of accountability, representation, and regulation and fortified by entrenched transnational bills of social, economic, and civil rights (Held 1992: 3 2 - 3 4 ) . There are various problems in defining globalization this way and in addressing democratic dilemmas in the face of this concept. The premise that globalization is a process whereby capital escapes or overtakes the nation-state tends to be misleading in two senses. First, there is often an overestimation of the extent to which nation-states were capable of controlling capital in an earlier era. The undeniable evidence that has accumulated recently of the determining power of capital today becomes, paradoxically, the basis for asserting that the state used to be autonomous from capital,

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even a determining p o w e r over it, but that capital has m a n a g e d to get out of the state's clutches by going global. And if the nation-state's m o d e s of regulation are a s s u m e d to have once been an e f f e c t i v e p o w e r o v e r capital, this tends to e n c o u r a g e the idea that all that is needed is for similar m o d e s to s o m e h o w be adopted at the global level. But even f o r those not given to such illusions, there is the problem of tending to ignore the extent to which t o d a y ' s globalization is authored by states and is primarily about reorganizing rather than bypassing t h e m . A false d i c h o t o m y b e t w e e n the national and the international is p r o m o t e d , which diverts attention f r o m the need to develop new strategies for t r a n s f o r m i n g the state, even as a m e a n s of developing an appropriate international strategy. This reflects a continuing theoretical misconception that the state and capital must be seen as t w o independent spheres rather than as parts of a totality. T h e p r e d o m i n a n c e of this misconception is due in s o m e part to h o w little the theory of state has had to say about trends toward the internationalization of capital and the state. With a f e w important e x c e p t i o n s , contributions to understanding the specific role of the state amid the c o n t e m p o r a r y process of globalization have lagged far behind the process itself. A f t e r exploring three key theoretical contributions, this chapter will m o v e to an e x a m i n a t i o n of the role of the state in the context of the North A m e r i c a n f r e e trade initiatives. It will then consider the limits and possibilities of various strategic alternatives to globalization.

THE INTERNATIONALIZATION OF THE STATE T h e apparent subjection of even a d v a n c e d capitalist social f o r m a t i o n s in recent d e c a d e s to the competitive logics and exigencies of w o r l d w i d e prod u c t i o n , trade, and finance has meant that the nature of state intervention has changed considerably but not that the role of the state has necessarily been d i m i n i s h e d . Far f r o m witnessing a bypassing of the state by a global capitalism, we see very active states and highly politicized sets of capitalist classes working to secure what Gill (focusing primarily on the E u r o p e a n Union but pointing to much b r o a d e r tendencies of this kind) aptly termed a " n e w constitutionalism for disciplinary n e o - l i b e r a l i s m " (Gill 1992). In the few years past we have witnessed, at the world and regional levels, states as the authors of a regime that defines and g u a r a n t e e s , through international treaties with constitutional e f f e c t , the global and d o m e s t i c rights of capital. This process may be understood in a m a n n e r quite a n a l o g o u s to the emergence of the so-called laissez-faire state during the rise of industrial capitalism, which involved a very active state to see through the separation of polity f r o m e c o n o m y and guarantee legally and politically the rights of contract and property. We may recall, with C o r r i g a n and Sayer, the long "revolution in g o v e r n m e n t " in England f r o m 1740 to 1850: " W e should understand . . .

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what later became celebrated and dominant as 'political economy' to be simultaneously the discovery of economy (and 'the economy' argued for as a self-sufficient 'private' realm governed by the laws of the market) and a politicization of a moral code (entailing specific forms of 'policing') which makes that possible" (Corrigan and Sayer 1985: 105). Similarly, as regards the emergence of the modern corporation in the United States through the nineteenth century, Wolfe showed this could not properly be understood as "a triumph of laissez-faire." Laws could be changed only if the bodies that passed them were controlled; this meant that in order to take the corporation out of the public sphere and place it in the private one, the industrialists had to enter the public sphere themselves. Ironically, a political battle had to be fought in order to place an important —in the nineteenth century perhaps the most important—institution outside of politics. One had to have power in the state in order to make it impotent. Few clearer e x a m p l e s exist of how the struggle over legal parameters cannot be accepted as a given but b e c o m e s part of the activity of the state itself. (Wolfe 1977: 22)

We are living through something like this in our own time. Capitalist globalization also takes place in, through, and under the aegis of states; it is encoded by them and in important respects even authored by them; and it involves a shift in power relations within states that often means the centralization and concentration of state powers as the necessary condition of and accompaniment to global market discipline. When the new theory of the capitalist state was developed two decades ago, two key contributions were made on the subject of the relation between capital and the state in the context of internationalization. In 1971 Murray offered a seminal contribution to what he termed "the territorial dialectics of capitalism" to the end of developing "a framework which would allow a more substantial approach to the problem of the effects of an internationalization of capital on existing political institutions" (Murray 1971: 8 4 - 1 0 8 ) . Far from conceiving this as a process to be understood in terms of capital "escaping" the state, Murray demonstrated that as capital expanded territorially one of the key problems it had to confront was how to ensure that state economic functions continued to be performed. At issue was the structural role of the capitalist state in relation to "what may most aptly be called economic res publica, those economic matters which are public, external to individual private capitals." This included guaranteeing property and contract; standardizing currency, weights, and measure; ensuring the availability of key inputs of labor, land, finance, technology, and infrastructure; generally orchestrating macroeconomics; regulating conditions of work, consumption, and external diseconomies such as pollution; and providing ideological, educational, and communications conditions of production and trade. With the performance of these intranational functions there stood the

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f u n c t i o n of i n t e r n a t i o n a l m a n a g e m e n t of e x t e r n a l r e l a t i o n s p e r t a i n i n g to a n y o r all of t h e s e d i m e n s i o n s . A n y c a p i t a l t h a t e x t e n d e d itself b e y o n d t h e territ o r i a l b o u n d a r i e s of a s t a t e that h a d h e r e t o f o r e p e r f o r m e d t h e s e f u n c t i o n s h a d to e i t h e r t a k e t h e s e f u n c t i o n s o n t h e m s e l v e s o r h a v e t h e m p e r f o r m e d by some

other public authority. Historically

this w a s o f t e n

accomplished

t h r o u g h c o l o n i a l i s m a n d t h e n n e o c o l o n i a l i s m . In t h e c o n t e m p o r a r y e r a , a n d e s p e c i a l l y as r e g a r d s t h e a d v a n c e d c a p i t a l i s t s t a t e s , it h a s p r i m a r i l y b e e n a m a t t e r of " s t a t e s a l r e a d y p e r f o r m i n g o r b e i n g w i l l i n g to p e r f o r m t h e f u n c t i o n s of t h e i r o w n a c c o r d . " T h u s , f o r e i g n c a p i t a l c a m e t o b e s e r v i c e d o n t h e s a m e b a s i s as d o m e s t i c c a p i t a l . T o s p e a k in t e r m s of f u n c t i o n s is n o t n e c e s s a r i l y i m p r o p e r l y " f u n c t i o n a l i s t " i n s o f a r as t h e r a n g e of s t r u c t u r e s that m i g h t u n d e r t a k e t h e i r p e r f o r m a n c e a n d t h e c o n d i t i o n s that m i g h t m e a n t h e i r n o n p e r f o r m a n c e a r e p r o b l e m a t i z e d . M u r r a y e x p l i c i t l y d i d this a n d a d d r e s s e d t h e p o s s i b i l i t y that " t h e c o n t r a d i c t i o n s o f t h e i n t e r n a t i o n a l s y s t e m will b e s u c h as to p r e v e n t t h e i r f u l f i l l m e n t at a l l . " Yet h e s a w n o r e a s o n w h y , d e s p i t e t h e m a j o r i n c r e a s e in t h e i n t e r n a t i o n a l i z a t i o n of t r a d e , i n v e s t m e n t , a n d f i n a n c e c a p i t a l in t h e 1 9 5 0 s a n d 1 9 6 0 s , t h e p e r f o r m a n c e of b o t h i n t r a n a t i o n a l a n d i n t e r n a t i o n a l

state

f u n c t i o n s c o u l d not c o n t i n u e t o b e c o n t a i n e d w i t h i n t h e s y s t e m of n a t i o n s t a t e s . E s p e c i a l l y as r e g a r d s " t h e intranational

p e r f o r m a n c e of p u b l i c e c o -

n o m i c functions for extended capital," Murray stressed the positive advant a g e s to c a p i t a l in b e i n g a b l e to p l a y o f f o n e n a t i o n - s t a t e a g a i n s t a n o t h e r . " T h u s , " h e s t a t e d , " e v e n w h e r e t h e r e is e x t e n s i v e t e r r i t o r i a l n o n - c o i n c i d e n c e b e t w e e n d o m e s t i c s t a t e s a n d t h e i r e x t e n d e d c a p i t a l s , t h i s d o e s n o t i m p l y that t h e s y s t e m of a t o m i s t i c n a t i o n - s t a t e s is o u t d a t e d . T h e [ n o t i o n ] . . . that ' m u l t i n a t i o n a l corporations and nations are therefore f u n d a m e n t a l l y incomp a t i b l e w i t h e a c h o t h e r ' is not n e c e s s a r i l y t r u e " ( M u r r a y 1971: 102). O n t h e o t h e r h a n d , M u r r a y d i s c e r n e d t h e c o n t r a d i c t i o n s e n t a i l e d in a p r o c e s s t h a t w a s e x p o s i n g e x c h a n g e r a t e s a n d n a t i o n a l m o n e t a r y s y s t e m s to a n i n t e r n a t i o n a l m o n e y m a r k e t , e a s i n g t h e p r o c e s s of i n t e r n a t i o n a l s p e c u l a t i o n a n d o p e n i n g s o u r c e s of c r e d i t o u t s i d e t h e c o n t r o l of n a t i o n a l a u t h o r i t i e s . H e s a i d , " T h e r e is a c c o r d i n g l y a t e n d e n c y f o r t h e p r o c e s s of i n t e r n a t i o n a l i z a t i o n to i n c r e a s e t h e p o t e n t i a l e c o n o m i c i n s t a b i l i t y in t h e w o r l d e c o n o m y at t h e s a m e t i m e as d e c r e a s i n g t h e p o w e r of n a t i o n a l g o v e r n m e n t s to c o n t r o l e c o n o m i c a c t i v i t y w i t h i n t h e i r o w n b o r d e r s . " A t t e m p t s by s t a t e s t o c o r r e c t b a l a n c e of p a y m e n t s d e f i c i t s in t h e c o n t e x t of this e c o n o m i c i n s t a b i l i t y led to t h e a d o p t i o n of p o l i c i e s that " f u r t h e r w e a k e n t h e n a t i o n a l c a p i t a l a n d i n c r e a s e t h e d o m i n a t i o n of f o r e i g n c a p i t a l w i t h i n t h e n a t i o n a l e c o n o m y . " Murray concluded that, precisely because capital was always a political o p p o r t u n i s t that w o u l d t a k e s u p p o r t f r o m w h a t e v e r p u b l i c a u t h o r i t y it c o u l d , " e x i s t i n g s t a t e s o f t e n s u f f e r e d a d e c r e a s e in t h e i r p o w e r s as a r e s u l t of i n t e r n a t i o n a l i z a t i o n . . . [yet] w e a k e r s t a t e s in a p e r i o d of i n t e r n a t i o n a l i z a t i o n c o m e t o suit n e i t h e r t h e i n t e r e s t s of t h e i r o w n b e s i e g e d c a p i t a l n o r of t h e f o r e i g n i n v e s t o r " ( M u r r a y 1971: 1 0 9 ) . A s if r e c o g n i z i n g t h e u n r e s o l v e d a m b i -

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g u i t i e s in his a p p r o a c h o v e r w h e t h e r t h e t e r r i t o r i a l d i a l e c t i c s of c a p i t a l e x t e n d e d or d i m i n i s h e d t h e r o l e of t h e s t a t e , M u r r a y e n d e d his a r t i c l e by c a l l i n g f o r an " e l a b o r a t i o n of t h e c o n n e c t i o n s b e t w e e n n o t o n l y s t a t e s , b u t the states and their capitals." T h r e e y e a r s later, in a b r i l l i a n t l y o r i g i n a l a n a l y s i s , P o u l a n t z a s t o o k u p e x a c t l y w h e r e M u r r a y l e f t o f f b y e x p l i c i t l y p r o b l e m a t i z i n g t h e n o t i o n of s t a t e s a n d " t h e i r " c a p i t a l s . H e i n s i s t e d t h a t " c o m m o n f o r m u l a t i o n s of t h e p r o b l e m s u c h as ' w h a t c a n — o r c a n n o t — t h e state d o in t h e f a c e of t h e g r e a t m u l t i n a t i o n a l f i r m s ' [ a n d ] ' h o w f a r h a s t h e state lost p o w e r s in t h e f a c e of t h e s e i n t e r n a t i o n a l g i a n t s ? ' a r e f u n d a m e n t a l l y i n c o r r e c t " ( P o u l a n t z a s 1974: 70-88). P o u l a n t z a s ' s i m m e d i a t e c o n c e r n w a s with u n d e r s t a n d i n g the d o m i n a n t r o l e U . S . c a p i t a l h a d c o m e to p l a y in E u r o p e , i n c l u d i n g t h e p r o c e s s w h e r e by E u r o p e a n s t a t e s " t a k e r e s p o n s i b i l i t y f o r t h e i n t e r e s t s of t h e d o m i n a n t c a p i t a l . " T h i s i n v o l v e d n o t o n l y g r a n t i n g t h e s a m e t y p e of c o n c e s s i o n s a n d s u b v e n t i o n s to U . S . c a p i t a l as it d i d to i n d i g e n o u s c a p i t a l b u t a l s o a c t i n g as a " s t a g i n g p o s t " by s u p p o r t i n g U . S . c a p i t a l in its f u r t h e r e x t e n s i o n o u t s i d e E u r o p e . T h i s c o u l d " g o s o f a r as to h e l p A m e r i c a n c a p i t a l c i r c u m v e n t t h e A m e r i c a n state itself ( t h e a n t i - t r u s t l e g i s l a t i o n , f o r e x a m p l e ) . T h e i n t e r n a t i o n a l r e p r o d u c t i o n of c a p i t a l u n d e r t h e d o m i n a t i o n of A m e r i c a n c a p i t a l is s u p p o r t e d by v a r i o u s n a t i o n a l s t a t e s , e a c h s t a t e a t t e m p t i n g in its o w n w a y to latch o n t o o n e o r o t h e r a s p e c t of t h i s p r o c e s s . " T h i s d i d n o t m e a n (in c o n t r a s t to M u r r a y ) t h a t t h e s t a t e ' s p o l i c i e s w e a k e n e d n a t i o n a l c a p i t a l . R a t h e r , it m e a n t that its i n d u s t r i a l p o l i c i e s i n c r e a s i n g ly w e r e c o n c e r n e d

with promoting "the concentration and

international

e x p a n s i o n of t h e i r o w n i n d i g e n o u s c a p i t a l " by l i n k i n g it w i t h t h e i n t e r n a t i o n a l r e p r o d u c t i o n of U . S . c a p i t a l ( P o u l a n t z a s 1974: 7 3 ) . N o r d i d the c o n c e n t r a t i o n of p o w e r by t r a n s n a t i o n a l c a p i t a l t a k e p o w e r a w a y f r o m t h e state: T h e current i n t e r n a t i o n a l i z a t i o n of capital n e i t h e r s u p p r e s s e s nor b y p a s s e s n a t i o n - s t a t e s , either in the direction of a p e a c e f u l integration of capitals " a b o v e " the state level (since e v e r y p r o c e s s of internationalization is a f f e c t e d u n d e r the d o m i n a n c e of the capital of a d e f i n i t e c o u n t r y ) , or in the direction of their e x t i n c t i o n by an A m e r i c a n super-state, as if A m e r i c a n capital purely and s i m p l y d i r e c t e d the o t h e r imperialist b o u r g e o i s i e s . T h i s i n t e r n a t i o n a l i s a t i o n , on the o t h e r h a n d , d e e p l y a f f e c t s the politics and institutional f o r m s of t h e s e states by including t h e m in a s y s t e m of interconnections w h i c h is in no w a y c o n f i n e d to the play of external and m u t u a l pressures b e t w e e n j u x t a p o s e d states and c a p i t a l s . T h e s e states t h e m s e l v e s take c h a r g e of the interest of the d o m i n a n t imperialist capital in its d e v e l o p m e n t within the " n a t i o n a l " social f o r m a t i o n , i.e., in its c o m p l e x relation of i n t e r n a l i z a t i o n to the d o m e s t i c b o u r g e o i s i e that it d o m i n a t e s . ( P o u l a n t z a s 1974: 7 3 )

Transnational capital's interpénétration with domestic bourgeoisies may h a v e r e n d e r e d t h e n o t i o n of a n a t i o n a l b o u r g e o i s i e i n c r e a s i n g l y a r c a n e . B u t

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even an internal bourgeoisie "implicated by multiple ties of d e p e n d e n c e in the international division of labour and in the international concentration of capital" still maintained its own e c o n o m i c f o u n d a t i o n and base of capital a c c u m u l a t i o n at h o m e and a b r o a d , as well as exhibited specific political and ideological features with a u t o n o m o u s e f f e c t s on the state. N o r was this struggle one in which only d o m i n a n t classes and fractions were at play: " W h i l e the struggles of the p o p u l a r masses are m o r e than ever developing in concrete c o n j u n c t u r e s d e t e r m i n e d on a world basis . . . it is still the national f o r m that prevails in these struggles, h o w e v e r international they are in their essence. This is due for one thing to uneven d e v e l o p m e n t and the concrete specificity of each social f o r m a t i o n ; these features are of the very essence of capitalism, contrary to the belief upheld by the various ideologies of 'globa l i s a t i o n ' " (Poulantzas 1974: 78). Poulantzas r e m i n d e d us that the internationalization of the state was a d e v e l o p m e n t that could not "be reduced to a simple contradiction of a mechanistic kind between the base (internationalization of production) and a superstructural cover (national state) which no longer c o r r e s p o n d s to it." N o r could the state be reduced to " a mere tool or instrument of the d o m i n a n t classes to be manipulated at will, so that every step that capital took towards internationalization would automatically induce a parallel ' s u p e r n a t i o n a l ization' of states." If the f o c u s of attention was on relations and struggles a m o n g social forces, we would see that these did not shift to s o m e hyperspace b e y o n d the state. Rather, global class interpénétrations and contradictions needed to be understood in the context of specificities of the nationstate's continuing central role in o r g a n i z i n g , sanctioning, and legitimizing class d o m i n a t i o n within capitalism.

THE ANTINOMIES OF ROBERT COX Only with C o x ' s Production, Power, and World Order (1987) did a full-scale study a p p e a r of the internationalization of the state f o u n d e d on a historical materialist understanding of the role of "social f o r c e s in the m a k i n g of history" rather than a false counterposition between globalizing capital and the p o w e r of states. T h e impact of C o x ' s book in challenging the d o m i n a n t realist approach to the study of international relations has been c o m p a r a b l e to that of M i l i b a n d ' s The State in Capitalist Society in challenging the pluralist a p p r o a c h to the study of c o m p a r a t i v e politics almost twenty years earlier. Writing over a d e c a d e later than M u r r a y and P o u l a n t z a s , m o r e o v e r , C o x was in a better position to analyze the changing modalities of the internationalization of the state induced by the new era of e c o n o m i c instability and crisis since the m i d - 1 9 7 0 s . C o x ' s a p p r o a c h , like M u r r a y ' s , is g r o u n d e d in his u n d e r s t a n d i n g of the " i n d i s p e n s a b l e f u n c t i o n s " the state has to p e r f o r m in a capitalist society,

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f r o m g u a r a n t e e i n g p r o p e r t y a n d c o n t r a c t s , to d i s m a n t l i n g o b s t r u c t i o n s to m a r k e t s , to e n s u r i n g t h e s o u n d n e s s of m o n e y ( C o x 1987: 1 3 2 - 1 3 3 ) . C o x is c o n c e r n e d , h o w e v e r , to g o b e y o n d this: " I n o r d e r to c o m p r e h e n d t h e r e a l hist o r i c a l w o r l d it is n e c e s s a r y t o c o n s i d e r d i s t i n c t i v e forms

of state

. . . [and]

t h e c h a r a c t e r i s t i c s of t h e i r h i s t o r i c b l o c s , i.e., the c o n f i g u r a t i o n of social f o r c e s u p o n w h i c h s t a t e p o w e r u l t i m a t e l y r e s t s . A p a r t i c u l a r c o n f i g u r a t i o n of s o c i a l f o r c e s d e f i n e s in p r a c t i c e t h e l i m i t s or p a r a m e t e r s of state p u r p o s e s , a n d t h e m o d u s o p e r a n d i of s t a t e a c t i o n , d e f i n e s , in o t h e r w o r d s , t h e d'etat

raison

f o r a p a r t i c u l a r s t a t e . " W i t h i n t h e s e p a r a m e t e r s , t h e state e x e r c i s e d

p o w e r a n d c h o i c e in t h e o r g a n i z a t i o n a n d d e v e l o p m e n t of p r o d u c t i o n a n d c l a s s e s , a l t h o u g h its a c t i o n s " i n t h e s e m a t t e r s a r e , in t u r n , c o n d i t i o n e d b y t h e m a n n e r in w h i c h t h e w o r l d o r d e r i m p i n g e s u p o n t h e s t a t e " ( C o x 1 9 8 7 : 105). C o x s i t u a t e s t h e i n t e r n a t i o n a l i z a t i o n of t h e state in t h e s p e c i f i c c o n t e x t of t h e rise a n d f a l l of t h e h e g e m o n i c w o r l d o r d e r of P a x A m e r i c a n a . U n d e r t h e d e c i s i v e s h i f t in " r e l a t i v e e c o n o m i c - p r o d u c t i v e p o w e r s " in f a v o r of t h e U n i t e d S t a t e s a n d its l e a d e r s h i p o u t s i d e t h e S o v i e t s p h e r e a f t e r 1 9 4 5 , t h e " p u t t i n g i n t o p l a c e of t h e n e w o r d e r i n v o l v e d the t r a n s f o r m a t i o n of state s t r u c t u r e s " f r o m t h o s e that h a d e x i s t e d in t h e p r e w a r n o n h e g e m o n i c s y s t e m of n a t i o n a l i s t / w e l f a r e s t a t e s . T h e p o i n t is that t h e n e w o r d e r e n t a i l e d a transf o r m a t i o n , n o t a d i m i n u t i o n , o f t h e state — a r e o r g a n i z a t i o n of t h e s t a t e ' s s t r u c t u r e a n d r o l e in its e x t e r n a l a n d i n t e r n a l a s p e c t s . W i t h i n t h e f r a m e w o r k of i n t e r s t a t e a g r e e m e n t s f o r g e d at B r e t t o n W o o d s , P a x A m e r i c a n a " w a s held in p l a c e by a c o n f i g u r a t i o n of d i f f e r e n t f o r m s of state w h o s e c o m m o n f e a t u r e w a s t h e r o l e e a c h p l a y e d in a d j u s t i n g n a t i o n a l e c o n o m i c p o l i c i e s to t h e d y n a m i c s of t h e w o r l d e c o n o m y . " It w a s h e l d a l s o u n d e r t h e c o n t i n u e d surv e i l l a n c e , i n c e n t i v e s , a n d s a n c t i o n s of n e w i n t e r n a t i o n a l f i n a n c i a l institut i o n s ( t h e I M F a n d W o r l d B a n k ) , w h i c h " b e h a v e d as a c c e s s o r i e s to U . S . policy." T h e p r o c e s s of e s t a b l i s h i n g a n d i n t e r n a l i z i n g a " n o t i o n of i n t e r n a t i o n a l o b l i g a t i o n " to t h e w o r l d e c o n o m y c o n s t i t u t e s , f o r C o x , " t h e m e a n i n g given t o t h e t e r m internationalizing

of the

state":

First, there is a process of interstate consensus formation regarding the needs or requirements of the world economy that takes place within a common ideological framework (i .e., common criteria of interpretation of economic events and common goals anchored in the idea of an open world economy). Second, participation in this consensus formation is hierarchically structured. Third, the internal structures of states are adjusted so that each can best transform the global consensus into national policy and practice, taking account of the specific kinds of obstacles likely to arise in countries occupying the differently hierarchically arranged positions in the world economy. (Cox 1987: 254) W h e r e a s Poulantzas p r o c e e d e d f r o m within ("states themselves take c h a r g e of t h e i n t e r e s t s of t h e d o m i n a n t i m p e r i a l i s t capital in its d e v e l o p m e n t w i t h i n t h e ' n a t i o n a l ' s o c i a l f o r m a t i o n " ) , C o x p r o c e e d s f r o m t h e o u t s i d e in:

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H e begins with international c o n s e n s u s f o r m a t i o n , a g r e e m e n t s , and obligations, to which internal state structures are then a d j u s t e d . To be sure, C o x is c a r e f u l to say that this " w a s not necessarily a p o w e r structure with lines of f o r c e running exclusively t o p - d o w n , nor w a s it one in which the bargaining agents were whole nation-states." Bureaucratic f r a g m e n t s of states were e n g a g e d in a process of b a r g a i n i n g , with the h e g e m o n i c p o w e r structure "tacitly taken into account" a n d , " t h r o u g h ideological o s m o s i s , were internalized in the thinking of participants" (Cox 1987: 2 5 6 - 2 5 9 ) . In the interwar era the state's political accountability was solely turned inward so that the state acted as a b u f f e r protecting the d o m e s t i c e c o n o m i e s f r o m external f o r c e s . But the internationalization of the state after 1945 involved establishing a c o m p r o m i s e between the international and d o m e s t i c obligations of states. T h e state now took the f o r m of a mediator between the externally established policy priorities and the internal social f o r c e s to which it also still r e m a i n e d accountable. " T h e centre of gravity shifted f r o m national e c o n o m i e s to the world e c o n o m y , but states were recognised as having a responsibility to b o t h " (Cox 1987: 2 5 4 - 2 5 5 ) . T h e state was not less p o w e r f u l in terms of controlling the national e c o n o m y than b e f o r e the war. State intervention, as C o x points out, had proved incapable of pulling the e c o n o m y out of the 1930s depression; b e f o r e the war no less than after, the state was primarily reactive, lacking "the ability to conceive and carry through an organization of production and distribution that would replace the market. It could tinker or ' f i n e t u n e ' ; it could not d e s i g n " (Cox 1987: 189). Rather than a loss of p o w e r , the internationalization of the state after 1945 reflected a shift in p o w e r inside the state, entailing "a restructuring of the hierarchy of state a p p a r a t u s e s . " In appearance there was "virtually n o t h i n g " to signal this c h a n g e in structure; rather the goals pursued and the uses to which the structures were put c h a n g e d . A g e n c i e s with direct links to the "client groups of national e c o n o m y , " such as ministries of labor and industry and institutions of tripartite corporatism that had d e v e l o p e d in the interwar era, were not displaced. I n d e e d , they and the social f o r c e s attached to t h e m remained "relatively p r i v i l e g e d " and even " p r e e m i n e n t . " But they were subordinated to prime ministerial and presidential o f f i c e s , foreign o f f i c e s , treasuries, and central b a n k s in such a way that they b e c a m e "instruments of policies transmitted through the worlde c o n o m y linked central a g e n c i e s " (Cox 1987: 2 1 4 , 2 2 0 - 2 2 1 , 2 2 8 , 2 2 9 , 2 6 6 , 281). A new stage in the internationalization of the state arose, h o w e v e r , in the w a k e of the crisis in the p o s t w a r order that e m e r g e d in 1 9 6 8 - 1 9 7 5 . This crisis has led to the further e x p a n s i o n of "the breadth and depth of the global e c o n o m y , " even while u n d e r m i n i n g U.S. h e g e m o n y . T h e internationalizing of production and finance that grew through the 1950s and 1960s under the umbrella of Pax A m e r i c a n a , together with d o m e s t i c inflationary pressures, industrial militancy, and declining profits under conditions of full

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employment, engendered this crisis. The Bretton Woods exchange rates arrangement was abandoned, and the limits of the domestic fine-tuning capacity of tripartism were severely tested. Although Cox thus sees the crisis as having been generated as much by domestic contradictions as international ones, he nevertheless once again portrays the reconstruction of the state in the new era f r o m the outside in. A new doctrine redefining the role of states "was prepared by a collective effort of ideological revision undertaken through various unofficial agencies —the Trilateral Commission, the Bilderberg conferences, the Club of R o m e , and other prestigious forums — and then endorsed through more official agencies like the O E C D " (Cox 1987: 259, 2 8 2 - 2 8 3 , 289). This doctrine, virtually identical as Cox portrays it to the governing philosophy of what he calls the Thatcher-Reagan hyperliberal state form ("the fullest, most uncompromising instance of a liberal state"), attacked the postwar compromise in both senses of the term: the domestic compromise that tied in labor and welfare interests and the international compromise of mediating between national interests and the global order. Inside the state, there is a further shift in power away from those agencies most closely tied to domestic social forces and toward those in closest touch with the transnational process of consensus formation. As summarized by Cox in a recent essay: There is, in e f f e c t , no explicit political or authority structure for the global economy. There is, nevertheless, something that remains to be deciphered, something that could be described by the French word "nebuleuse" or by the notion of "governance without g o v e r n m e n t . " There is a transnational process of consensus formation a m o n g the official caretakers of the global economy. This process generates consensual guidelines, underpinned by the ideology of globalisation, that are transmitted into the policy-making channels of national governments and big corporations. . . . The structural impact on national governments of this centralisation of influence over policy can be called the internationalising of the state. Its c o m m o n feature is to convert the state into an agency for adjusting national e c o n o m i c practices and policies to the perceived exigencies of the global economy. The state b e c o m e s a transmission belt from the global to the national economy, where heretofore it had acted as the bulwark d e f e n d i n g domestic welfare f r o m external disturbances. Power within the state b e c o m e s concentrated in those agencies in closest touch with the global e c o n o m y —the offices of presidents and prime ministers, treasuries, central banks. T h e agencies that are more closely tied with domestic clients —ministries of industries, labour ministries, e t c , — b e c o m e subordinated. This p h e n o m e n o n , which has b e c o m e so salient since the crisis of the post-war order, needs much more study. (Cox 1992: 3 0 - 3 1 )

Cox had identified this same shift in power as the constitutive element in the reconstruction of the state in the Bretton Woods era. Although he does not make this explicit, it appears that now the corporatist and welfarist state

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a p p a r a t u s e s and the social f o r c e s allied with t h e m lose the " p r e e m i n e n t " and " r e l a t i v e l y p r i v i l e g e d " position they h a d p r e v i o u s l y r e t a i n e d . B u t since they h a d already b e e n s u b s t a n t i v e l y r e n d e r e d " s e c o n d a r y " e v e n in the p o s t - 1 9 4 5 e r a ( C o x 1987: 2 6 6 , 2 8 3 ) , the s u b s t a n t i v e c h a n g e he has in m i n d in the post1975 era a p p e a r s related to the role of the a l r e a d y d o m i n a n t state a p p a r a t u s e s of t r e a s u r i e s , central b a n k s , p r i m e m i n i s t e r ' s o f f i c e s , and so o n . T h e y s e e m less and less to be in a b a r g a i n i n g r e l a t i o n s h i p with the f o r c e s repres e n t i n g the global e c o n o m y a n d m o r e and m o r e their a g e n t s . N o t a b l y , f o r C o x , as f o r G o r d o n ( 1 9 8 8 ) , g l o b a l i z a t i o n r e f l e c t s less the e s t a b l i s h m e n t of a stable n e w i n t e r n a t i o n a l r e g i m e of capital a c c u m u l a t i o n than an a s p e c t of the d e c a y of the old social s t r u c t u r e of a c c u m u l a t i o n . A s C o x puts it, the t e n d e n c y to g l o b a l i z a t i o n is " n e v e r c o m p l e t e , " and there is " n o t h i n g i n e v i t a b l e " a b o u t its c o n t i n u a t i o n . " A n y a t t e m p t to depict it m u s t not be t a k e n teleologically, as an a d v a n c e d stage t o w a r d s the inevitable c o m pletion of a latent structure. R a t h e r it should be t a k e n dialectically, as the d e s c r i p t i o n of t e n d e n c i e s that, as they b e c o m e r e v e a l e d , m a y a r o u s e o p p o s i tions that c o u l d strive to c o n f o u n d and r e v e r s e t h e m " ( C o x 1987: 2 5 3 , 2 5 8 ) . Even with this said, h o w e v e r , C o x ' s a c c o u n t of w h a t is i n v o l v e d in the t e n d e n c y to g l o b a l i z a t i o n still r e f l e c t s to s o m e extent the limits of the " o u t side in" o r i e n t a t i o n of his a p p r o a c h to the i n t e r n a t i o n a l i z a t i o n of the state. T h e notion of the state m o v i n g f r o m b e i n g a b u f f e r to b e i n g a m e d i a t o r to finally b e c o m i n g a t r a n s m i s s i o n belt ( C o x 1992: 3 0 - 3 1 ; 1987: 2 5 9 ) is t o o f o r m a l in its distinction of stages in the r e l a t i o n s h i p b e t w e e n global and national e c o n o m y . It is also (and against the spirit of C o x ' s a p p r o a c h ) t o o " t o p - d o w n " in its e x p r e s s i o n of c o n t e m p o r a r y p o w e r r e l a t i o n s . I w o u l d a r g u e that the role of states r e m a i n s o n e not only of internalizing but also of m e d i a t i n g a d h e r e n c e to the u n t r a m m e l e d logic of international capitalist c o m p e t i t i o n within its o w n d o m a i n , e v e n if only to e n s u r e that it can e f f e c tively m e e t its c o m m i t m e n t s to act globally by policing the new w o r l d o r d e r on the local terrain. It is in t e r m s of the d i f f i c u l t y of such m e d i a t i o n that C o x ' s o w n insights on " t h e t e n d e n c y t o w a r d limited d e m o c r a c y " as a m e a n s of limiting p o p u l a r d o m e s t i c p r e s s u r e s on the state c a n , in f a c t , best be a p p r e c i a t e d . W h a t n e e d s to be i n v e s t i g a t e d is w h e t h e r the i m p o r t a n t shifts in the h i e r a r c h y of state a p p a r a t u s e s really are a b o u t b r i n g i n g to the f o r e those most i n v o l v e d with the international " c a r e t a k e r s of the g l o b a l e c o n o m y " or w h e t h e r a m o r e general p r o c e s s is at w o r k . T h i s p r o c e s s is d e t e r m i n e d m o r e f r o m within the state itself, w h e r e b y e v e n those a g e n c i e s w i t h o u t such direct international links (but that n e v e r t h e l e s s directly facilitate capital a c c u m u lation and articulate a c o m p e t i t i v e n e s s i d e o l o g y ) gain status, w h i l e t h o s e that f o s t e r e d social w e l f a r e and articulated a class h a r m o n y orientation lose status. W h e t h e r that loss of status is c o n s i d e r a b l e , or e v e n p e r m a n e n t , h o w e v e r , d e p e n d s partly on the t r a n s f o r m a t i o n s that these latter a g e n c i e s are going t h r o u g h in t e r m s of b e i n g m a d e (or m a k i n g t h e m s e l v e s ) m o r e a t t u n e d

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to the exigencies of global competitiveness and fiscal restraint. Ministries of labor, health, and welfare are perhaps not so much being subordinated as being restructured. As for the structure of power at the international level, a nébuleuse or a "governance without government" is not well captured through the notion of a "global centralisation of influence over policy" and the "transmission belts" that emanate f r o m them. Indeed, in an insightful passage in Production, Power, and World Order Cox himself traced the "decline of centralized m a n a g e m e n t characteristic of the world economy of Pax Americana" so that the world economy increasingly was better represented as "a system than as an institution." For the 1960s he could identify a set of institutions with the U.S. Treasury at the apex and its policy criteria being internationalized through the IMF, World Bank, and other such agencies. But "during the 1970s, private transnational banks assumed such an important role that the top management structure could no longer be convincingly represented exclusively in terms of state and interstate institutions." T h e key development here was that private international credit expanded for lack of any agreement on how the official intergovernmental structures in the system could be reformed. The impasse on reform was the consequence of stalemate between the United States and the European countries on the future role of the dollar. . . . In the absence of agreement on m a n a g e m e n t by official institutions, dollar hegemony shifted to the financial market, that is to say, to the very largely unmanaged dollar itself. . . . Authority weakened at the apex of the international financial system. Crisis did not produce effective centralization. U.S. power was too great to be brought under any externally imposed discipline but was no longer great enough to shape the rules of a consensual order. (Cox 1987: 3 0 0 - 3 0 3 )

Cox does not see this problem as having been resolved by the early 1990s. Indeed, he stresses in his 1992 essay the "parlously fragile condition" of international finance in a context where even the G7 governments have not been able to "devise any effectively secure scheme of regulation." It becomes particularly clear here that there is an unresolved antinomy in Cox. On the one hand, there is an image of an increasingly centralized supranational management structure, founded on ideological consensus among the elites that populate transnational institutions and forums. He claims that the disintegration of the norms of postwar hegemonic order led to an intensification among the advanced capitalist countries of "the practice of policy harmonization [which] became correspondingly more important to the maintenance of consensus. The habit of policy harmonization had been institutionalized during the preceding two decades and was, if anything, reinforced in the absence of clear norms. Ideology had to substitute for legal obligation" (Cox 1987: 259). Is it this that transmits and links hyperliberal

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policy f r o m c o u n t r y to c o u n t r y ? O n the o t h e r h a n d , there is a n o t h e r i m a g e of an u n r e g u l a t e d s y s t e m of international f i n a n c e — w h i c h a p p e a r s to be u n r e g u l a t e d , m o r e o v e r , in g o o d part b e c a u s e of an inability to f o r g e policy c o n s e n s u s at an interstate level. D o e s this s y s t e m of international f i n a n c e define the i n t e r n a t i o n a l i z a t i o n of the state in t e r m s of h y p e r l i b e r a l i s m , m a k ing a c c o u n t a b l e national policy m a k e r s of w h a t e v e r ideological orientation to the n o t - s o - h i d d e n h a n d of f i n a n c i a l m a r k e t s ? T h e a n t i n o m i e s in the C o x i a n f r a m e w o r k h a v e led o n e r e c e n t critic, looking f o r a m o r e o r t h o d o x and n e a t e r pattern of d e t e r m i n a t i o n s , to t h r o w uo his h a n d s in f r u s t r a t i o n : [ C o x ' s ] f r a n t i c a t t e m p t to e s c a p e t h e t w i n e v i l s of " e c o n o m i s m " a n d i d e a l i s m o f f e r s little m o r e t h a n a v e r s i o n of W e b e r i a n p l u r a l i s m o r i e n t e d to t h e s t u d y of the i n t e r n a t i o n a l o r d e r . . . . V a r i a b l e s w h i c h c o m p r i s e a social o r d e r — t h e e c o n o m y , t h e p o l i t y , the civil s o c i e t y — a r e g i v e n n o o v e r a l l s t r u c t u r e but r a t h e r e a c h h a s a real a u t o n o m y w h i c h p r e c l u d e o v e r d e t e r m i n a t i o n . . . . T h i s f a c t o r a p p r o a c h is r e f l e c t e d in C o x ' s a n a l y s i s to t h e e f f e c t that in the i n t e r a c t i o n b e t w e e n m a t e r i a l c a p a b i l i t i e s , i d e a s a n d i n s t i t u t i o n s n o d e t e r m i n i s m e x i s t s , a n d r e l a t i o n s h i p s are r e c i p r o c a l . T h e q u e s t i o n of lines of f o r c e is an h i s t o r i c a l o n e to be a n s w e r e d b y a s t u d y of the p a r t i c u lar c a s e . H o w e v e r l a u d a b l e in t h e o r y , the true c o n s e q u e n c e of this p o s i t i o n is to p r o d u c e a pluralist e m p i r i c i s m w h i c h l a c k s the p o w e r to e x p l a i n e i t h e r t h e s y s t e m i c c o n n e c t i o n b e t w e e n v a l u e s , social r e l a t i o n s and i n s t i t u t i o n s or t h e e x t e n t to w h i c h t h e h i s t o r i c a l a p p e a r a n c e of c a p i t a l as a social r e l a t i o n t r a n s f o r m s the social o r d e r in s u c h a w a y that all r e l a t i o n s are s u b s u m e d u n d e r t h e c a p i t a l r e l a t i o n as t h e b a s i s f o r v a l o r i s a t i o n . ( B u r n h a m 1991: 77-78)

If the c h a r g e of a certain e m p i r i c i s m is p e r h a p s not entirely off the m a r k , the g e n e r a l level at w h i c h B u r n h a m d e m a n d s p r i m a c y be given to " t h e c a p ital r e l a t i o n " is hardly any a n s w e r . I n d e e d , C o x w o u l d readily grant determination at this level but then ask: so w h a t ? C e r t a i n l y B u r n h a m ' s a d d i t i o n a c r i t i q u e of C o x f o r a l l e g e d l y failing to r e c o g n i z e that " t h e state m e e t s the irterests of c a p i t a l - i n - g e n e r a l by e n f o r c i n g the d i s c i p l i n e of the m a r k e t through the rule of law and the rule of m o n e y " is entirely m i s p l a c e d . C o x explicitly r e c o g n i z e s this as r e g a r d s b o t h the liberal state of the m i d - n i n e teenth c e n t u r y and the h y p e r l i b e r a l state of the late t w e n t i e t h c e n t u r y ( C o x U 8 7 : 1 3 2 - 1 3 3 ) . But he w a n t s to k n o w w h a t d i s c i p l i n e s the state to d o this — and w h a t m a k e s it d o it a g a i n in a n o t h e r f o r m in a n o t h e r historical c o n j u n c ture? T h e role of the state is not best c o n c e i v e d as s o m e t h i n g g i v e n by the cipital relation o n c e and f o r all, but neither is it best c o n c e i v e d in t e r m s of a t r a n s m i s s i o n belt f r o m the g l o b a l e c o n o m y to the national e c o n o m y . T h e role of e a c h state is still d e t e r m i n e d by s t r u g g l e s a m o n g social forces a l w a y s located within e a c h social f o r m a t i o n . E v e n t h o u g h t h e s e social f o r c e s are also, to recall P o u l a n t z a s , " i m p l i c a t e d by m u l t i p l e tiers of

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d e p e n d e n c e in an international division of labour and in the international concentration of capital," and although the struggles may be seen as " m o r e than ever d e v e l o p i n g in c o n j u n c t u r e s d e t e r m i n e d on a world basis," the specific national f o r m still prevails in these struggles because of uneven develo p m e n t and the specificity of each social f o r m a t i o n . (Is it really to international f i n a n c e that g o v e r n m e n t s in L o n d o n and O t t a w a are a c c o u n t a b l e when they prepare their b u d g e t s ? Or are they accountable to international f i n a n c e b e c a u s e they are accountable to the City of L o n d o n or to Bay Street?) It is precisely in light of d o m e s t i c as well as international c o n c e r n s about the continuing salience of p o p u l a r struggles at the level of the nationstate that we need to locate current attempts at constitutionalizing neoliberalism. T h e internationalization of the state in the 1990s appears to be taking the f o r m , in the continuing a b s e n c e of the ideological c o n s e n s u s or capacity to bring about a transnational regulation of capital m a r k e t s , of interstate treaties designed to legally e n f o r c e upon f u t u r e g o v e r n m e n t s general adherence to the discipline of the capital market. This arises out of a g r o w i n g fear on the part of both d o m e s t i c and transnational capitalists, as the crisis continues, that ideology cannot continue to substitute for legal obligation in the internationalization of the state.

FORCED TO BE FREE: THE CASE OF N O R T H AMERICAN FREE TRADE T h e North A m e r i c a n Free T r a d e A g r e e m e n t ( N A F T A ) , which c a m e into effect on 1 January 1994, most certainly fits the bill of constitutionalizing neoliberalism. Far more important than the reduction in tariffs, as Pres. Bill Clinton himself repeatedly intoned in the fevered run-up to the congressional vote on N A F T A , were the guarantees the agreement provided for U.S. investment in M e x i c o . A s R o b i n s o n ' s incisive analysis d e m o n s t r a t e s , international trade a g r e e m e n t s like N A F T A not only "prohibit discrimination b e t w e e n national and foreign o w n e d c o r p o r a t i o n s [but also] create new corporate private property rights, possessed by both national and foreign investors. . . . It will f u n c t i o n as an e c o n o m i c constitution, setting the basic rules g o v e r n i n g the private property rights that all g o v e r n m e n t s must respect and the types of e c o n o m i c policies that all g o v e r n m e n t s must e s c h e w " (Robinson 1993: 3; cf. Deblock and R i o u x 1993; Grinspun and K r e k l e w i c h 1994). N A F T A ' s investment c h a p t e r proscribes attempts by g o v e r n m e n t s to establish p e r f o r m a n c e r e q u i r e m e n t s on foreign transnational corporations ( T N C s ) (except in the auto sector). It also d e f i n e s investor rights that are protected under the a g r e e m e n t very broadly to include not only majority shareholders but minority interests, portfolio i n v e s t m e n t , and real property held by any c o m p a n y incorporated in a N A F T A country regardless of the

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country of origin. T h e m o n o p o l i e s and state enterprises chapter not only requires public enterprises to operate "solely in a c c o r d a n c e with c o m m e r c i a l c o n s i d e r a t i o n s " and to refrain f r o m using " a n t i c o m p e t i t i v e practices" such as "the discriminatory provision of a m o n o p o l y good or service, cross-subsidization or predatory c o n d u c t " (all of which is the bread and butter of T N C s themselves) but also requires public enterprises to m i n i m i z e or eliminate any nullification or i m p a i r m e n t of benefits that investors might reasonably expect to receive under N A F T A . T h e intellectual property rights c h a p t e r (which grants copyright protection of up to twenty years to a vast array of t r a d e m a r k s , patents, s e m i c o n d u c t o r and industrial d e s i g n s , trade secrets, satellite signals, and so on) goes furthest of all to "extend existing property rights by quasi-constitutionally protecting t h e m against f u t u r e d e m o c r a t i c g o v e r n m e n t s with the threat of trade sanctions . . . even though the effect of these rights is to restrict rather than e n h a n c e the f r e e f l o w of ideas across national b o u n d a r i e s " (Robinson 1993: 22). Taken together, these various provisions have the effect of redesigning the Mexican and C a n a d i a n states' relation to capital to fit the mold m a d e in the United States by establishing and guaranteeing state d e f e n s e of " n e w private property rights that go well b e y o n d those recognised in C a n a d i a n and M e x i c a n law, if not that of the United States" (Robinson 1993: 20). It is particularly important to stress that this is not s o m e t h i n g imposed on the C a n a d i a n and Mexican states by U.S. capital and state as external agents. Rather, it reflects the role adopted by the M e x i c a n and C a n a d i a n states in representing the interests of their bourgeoisies and bureaucracies as these are already penetrated by U.S. capital and administration. As John H . Bryan Jr., president of Sara Lee C o r p o r a t i o n , put it, the " m o s t important reason to vote for N A F T A is to lock in [ M e x i c o ' s ] r e f o r m s " ( B u s i n e s s Week, 22 N o v e m b e r 1983: 94). This was all the more pressing insofar as there was a widespread awareness a m o n g North American elites (long b e f o r e the C h i a p a s revolt on the day N A F T A c a m e into effect) of popular discontent with the hyperliberal policies M e x i c o had adopted over the past d e c a d e , and a concern that any eventual o p e n i n g up of M e x i c o ' s limited d e m o c r a c y might e n d a n g e r the reelection of a PRI (Institutional Revolutionary Party) g o v e r n m e n t . Shortly b e f o r e the passage of the a g r e e m e n t , an article in the Toronto Globe and Mail's Report on Business (1 N o v e m b e r 1993) q u o t e d A l v a r o C e p e d a Neri of M e x i c o C i t y ' s La Jornada as saying: " T h e booty of privatisation has m a d e multimillionaires of 13 f a m i l i e s , while the rest of the population —about 80 million M e x i c a n s —has been subjected to the s a m e gradual i m p o v e r i s h m e n t as though they had suffered through a war." T h e M e x i c a n state was not only acting in terms of the interests of its d o m e s t i c bourgeoisie, nor was it just c o n c e r n e d with providing f u r t h e r security guarantees to U.S. capital in M e x i c o . It was also, in P o u l a n t z a s ' s t e r m s , "taking responsibility for the interests of the d o m i n a n t capital" by e n d o r s i n g N A F T A as an exemplary "staging p o s t " for a r e n e w e d U.S. imperialism

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throughout Latin America and as a model for a similar constitutionalizing of neoliberalism on a global scale. The chairman of Salomon Inc. did not mince his words when he said that the defeat of NAFTA "would be a slap in the face to all leaders in the Western Hemisphere who have chosen the capitalist road over government-controlled economies"; nor did the Foreign Affairs Committee chairman in the House of Representatives, Lee Hamilton: "The question is U.S. leadership in the world" (Business Week, 22 N o v e m b e r 1993: 35). What is especially notable, in fact, is that the greatest threat to the actual conclusion of NAFTA came not from Mexico or Canada but from the opposition within the United States itself. The side deals on the environment and labor undertaken by Clinton were designed to allow for the necessary compromises within the U.S. social formation; this succeeded to the extent that it divided the environmental movement. If the labor side deal failed to do the same it was because, not surprisingly, it did not go as far as the environmental side deal and did not allow for challenges to be made by Canadian or U.S. groups affected by NAFTA to challenge the nonenforcement of Mexican labor laws. As regards the economic woes of the heartland of the empire, it is clear that the direct impact of NAFTA can only be minuscule. As Thurow (1993) pointed out, a worst-case scenario would entail the loss of 480,000 U.S. jobs over the next five years; the best case would see the addition of 170,000 jobs: The small stream of j o b s produced or lost by NAFTA will not be noticed in a sea of 130 million American workers. . . . With a gross domestic product (GDP) only 4 to 5 percent of the United States, Mexico will not be an economic locomotive for America. . . . From 1973 to 1992 the per capita American G D P after correcting for inflation rose 27 percent. Yet over the same period average wages for the bottom 60 percent of male workers fell 20 percent in real terms. . . . Earnings prospects are collapsing for the bottom two-thirds of the work force. . . . After suffering two decades of falling real wages it is not surprising that Ross Perot can appeal to millions of Americans w h o lash out at the Mexicans in their frustration. . . . America is now a First World e c o n o m y with a large, growing Third World e c o n o m y in its midst.

NAFTA's predecessor was the U.S.-Canadian Free Trade Agreement (FTA), which served as the first staging post for hemispheric free trade and even for the Tokyo round of the General Agreement on Tariffs and Trade (GATT). The Canadian experience under the FTA certainly demonstrates that the constitutionalizing of neoliberalism exacerbates rather than contains the tendencies of the new global capitalism to generate successive social and economic crises. One study of Canadian employment trends since the inauguration of the FTA begins with a quotation f r o m a currently popular Leonard Cohen song: "I have seen the future, brother; it is murder":

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Official unemployment rose from 7.5% to 11.3% from December 1988 to August 1993. The ranks of the jobless swelled by 576,000, bringing the total to 1.6 million. Adding those who dropped out of the work force, the unemployment level rose to 2 million, doubling from 7.5% to 14%. If we include involuntary part-time workers which amounts to hidden unemployment, the "real" unemployment rate is currently at 20% of the work force. . . . Free trade supporters, though admitting that jobs have been lost in the low wage/low skill sectors of the economy, claim that the FTA is assisting the high-tech sectors, which comprise the emerging new economy of the 21st century, to grow and create high value added permanent jobs. The record of the first four years does not bear this out. . . . It is clear that despite positive signs in a few subsectors [only four—pharmaceuticals, computer services, accounting services, and management consultant services—to a total of 28,000 new jobs], the j o b creation numbers are minuscule. There is no sign of an expanding knowledge economy (either in manufacturing or services) to absorb the 434,000 workers displaced from the old and new manufacturing/resource economy, the 111 ,000 construction workers and the 104,000 workers displaced from the private sector, old and new, service economy, due to restructuring and recession. The public service sectors —education, health and social services, and government administration —absorbed 148,000 workers, but, given the extreme financial stress that these sectors are currently experiencing and the disinclination to change policy direction, even partial absorption by public sectors is not likely to continue in the future. The future is indeed bleak. (Campbell 1993: 1 - 6 ) It w a s a mark of h o w d e e p the lines o f U . S . i m p e r i a l i s m ran in Canada that every i s s u e , f r o m social p o l i c y to d e f e n s e to Q u e b e c ' s status in Canada, w a s interpreted during the c o u r s e o f the 1988 federal e l e c t i o n through the prism of the pros and c o n s o f the F T A . All sides o f the debate took the position that the free trade a g r e e m e n t w a s a historic departure, an e p o c h a l turning point for Canada. Either it w o u l d f i n a l l y free Canadian b u s i n e s s f r o m the fetters o f tariffs and regulation, e x p o s e it f u l l y to the rigor o f c o m p e t i t i o n , and lay o p e n a vast continental market for exports and i n v e s t m e n t or it w o u l d m e a n the e n d of Canada as w e h a v e k n o w n it for 121 years, shifting its e c o n o m i c axis s o u t h w a r d , i m p o s i n g the rule o f b u s i n e s s , d e s t r o y i n g the w e l f a r e state, undermining Canadian culture, and subverting national sovereignty. B o t h v i e w s were m i s l e a d i n g . T h e o u t c o m e o f the free trade e l e c t i o n marked not a n e w chapter but rather the punctuation mark in a very l o n g historical s e n t e n c e o f e c o n o m i c and cultural integration with U . S . capitalism. Canada had particular status as a rich d e p e n d e n c y in the U . S . e m p i r e partly b e c a u s e o f its g e o g r a p h i c and cultural proximity to the U n i t e d States. But a l s o , as in the United States, the d e v e l o p m e n t of c a p i t a l i s m in Canada w a s predicated on a class structure that facilitated capitalist industrialization (Panitch 1 9 8 1 ) . A h i g h - w a g e proletariat and a prosperous class o f small farmers d r e w U . S . capital to Canada not o n l y in search o f resources (and not at all in search o f c h e a p labor) but to sell to a market distinctly similar to the U . S . market. T h e national tariff d e s i g n e d to integrate an e a s t - w e s t e c o n o m y

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and protect Canadian industry from competition from the south (and the flight of Canadian workers to the south) had the paradoxical effect of inducing the first U.S. T N C s to j u m p the tariff barrier and sell to Canada's (and sometimes through Canada to the British empire's) mass market. They were welcomed with open arms by the state as good corporate citizens and funded by Canada's substantial and powerful financial capitalists. During the first half of the twentieth century, Canada's status changed from that of a privileged white dominion in the old British empire to a state formally fully sovereign, but in substance quite dependent in a new kind of imperialism with a degree of direct foreign (U.S.) ownership unparalleled anywhere on the globe. This status was still a privileged one, and Canadians shared in the spoils that went with U.S. hegemony in the postwar order. Any dependent country has a degree of autonomy. This is especially true of a rich country with a substantial industrial proletariat not as easily subjected to the same pressures as U.S. workers to accede to imperial demands of unswerving loyalty in a Cold War and therefore more open to socialist political ideas and mobilization. Canada's welfare state, however poor a cousin to those in northern Europe, eventually came to surpass what the New Deal had inaugurated in the United States. This gave Canada a badge of civility compared with U.S. society. Some public corporations and regulatory bodies took on the additional role of protecting what residual autonomy Canadian economy and culture could retain. But in doing this they did not so much challenge the fact of as negotiate the scope of Canada's dependency. From this perspective we can see that the free trade treaty of 1988 was designed not to inaugurate but rather to constitutionalize, formalize, and extend Canada's dependence on the United States in a world now marked by economic instability amid rampant financial speculation and strong trade rivalries. Far from wanting to prove their entrepreneurial virility by taking the risk of becoming globally competitive, Canadian domestic capitalists sought to minimize the risk that Americans, when in a protectionist mood, might treat them, their exports, and their investments as merely "foreign." In turn, the Canadian government promised to give up those weak devices it had theretofore retained as a means of negotiating the scope of dependency. Margaret Atwood (following Antonio Gramsci) used a very Canadian metaphor to describe what the Mulroney government had done in entering into the FTA: in medieval bestiaries the beaver was noted for biting off its own testicles when frightened and offering them to its pursuer. Even so, the free trade agreement failed to remove all restraints on U.S. protectionism. Many opponents of the FTA pointed this out, implying they might be content with the deal if it promised even fuller integration. But what most opponents were really objecting to was the whole dependent path of Canadian development; they wanted to avoid a punctuation mark being put at the end of Canada's long sentence of dependence. To defeat the deal would be to leave open the possibility of a "nevertheless" or a " h o w e v e r " —

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which might yet be written at some point in the future. They were encouraged by the emergence of a visible strain of anti-Americanism, even of antiimperialism. An indigenous cultural community had long been straining to define Canadian identity in the face of dependence. The labor movement, once a strong if subordinate sponsor of continentalism, had also experienced a shift toward Canadianization as the U.S. labor movement proved ever weaker and more abject in the face of economic instability. And considerable domestic ecology, peace, and feminist movements had emerged, often with socialists in leadership positions and with greater salience in relation to Canadian governments than such movements had in the United States. The a n t i - f r e e trade forces were encouraged as well by the fact that the Canadian electorate showed no great enthusiasm for the Thatcher-Reagan hyperliberal state model. Just as the 1980s began, Canadians had opted for a Liberal platform that promised to install a "fair tax" system rather than supply-side economics and to foster a Canadian capitalist class with distinctive national goals and ambitions through the National Energy Programme (NEP) and a strengthened Foreign Investment Review Agency. It had indeed been in reaction to all this, as well as to cries for protectionism in the U.S. Congress, that the business community launched free trade and pursued it with such remarkable unanimity. When the N E P was established, Canadian capitalists, no less than U.S. ones, were determined not only to get rid of it at the first opportunity but to disable permanently such interventions by the state. They feared that popular pressures were pushing the state to become not the handmaiden to business it had usually been but a countervailing power to it. Greed was at play here also. Some elements of Canadian business had become full players on a continental plane while others harbored ambitions that they too might reap substantial profits if Canada embraced its continental destiny. This demonstrated that the point had long passed when business in Canada was interested in "reclaiming" the Canadian economy. The continuing political predominance of business, despite the mood of the electorate and the volubility of progressive forces, was seen when opposition from a unified capitalist class destroyed the tax reforms advanced in the 1981 budget. It was also seen when the liberal government responded to the recession of 1981-1982 by removing the right to strike from some one million of the three million organized workers in Canada. Yet the ideological impact of hyperliberalism still remained limited. In 1984 even the Conservatives sensed that they could not get elected on a Thatcher-Reagan platform. Brian Mulroney ran a typically Canadian brokerage campaign promising everything to everybody and declaring the welfare state a sacred trust. This did not make it a sacred trust, of course, given the powerful business pressures to which the government was beholden, but it emboldened people to defend the welfare state as soon as the Tories tried to undo it. The decision to go for the free trade agreement, under considerable

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pressure from the Business Council on National Issues (a powerful lobby that comprised the most powerful domestic and U.S. corporations), thus took on a double purpose. The agreement was to make permanent the dominance of business by formalizing continental integration in the face of U.S. protectionism and Canadian economic nationalism and to introduce Reaganomics by the back door of the free market ethos and provisions of the free trade deal. A popular coalition, funded by the labor movement and led by the leadership of the abovementioned new social movements, marshaled against the FTA with remarkable fervor and determination to force the free trade election of 1988. Alongside a trenchant critique of the details and implications of the FTA, the a n t i - f r e e trade coalition took a different tack. And it proved a shrewd one. It chose to mythologize the Canadian state as if it had always been a repository of Canadian independence and social justice. This was myth indeed. But nationalisms are built on myths, and this one became uncontested in the election with remarkable ideological consequences. The small badge of civility that a welfare state lends to Canadian social life compared with that in the United States laid the basis for Canadian national identity to be defined in the 1988 election in almost Scandinavian terms, where pride in the welfare state was rather more justified. In this context, the outcome of the free trade election was, despite the narrow victory by the Tories and the subsequent introduction of the FTA, rather ambiguous. Certainly, the victory of the business forces confirmed the historical trend toward continental integration. An exclamation mark had been added to Canada's historical sentence of dependence. Paradoxically, the election also confirmed the absence of an ideological mandate to carry through Reaganomics in Canada. The Tories and the business community accepted the anti-free trade forces definition of patriotism as at least involving a defense of the welfare state. The freedom to trade and invest by business was bought at the ideological cost of pledging allegiance to medicare and other social programs. Insofar as the popular coalition forged during the campaign against free trade set the terms of the debate and forced its opponents to adopt a defense of the welfare state as a central element in the definition of Canadianism, it provided a strong ideological basis for defensive struggles. The seeds of the destruction of the Conservative Party, reduced in the 1993 election to only two seats in the House of C o m m o n s , were sown amid the ambiguity of the 1988 victory on free trade. But the a n t i - f r e e trade coalition, and much less the opposition parties, never made clear what its alternative really was. The experience with the 1980-1984 Liberal government had already shown that a policy for more economic independence and social justice could not rely on the cooperation of business. Yet the a n t i - f r e e trade coalition was afraid to spell out the conclusion that the alternative had to involve fundamental challenges to capital's power and radical democratization of the state. It was afraid to do so

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because the Canadian people had been so little prepared for such a departure, with the N D P ' s (Canada's social democratic party) failure in this respect particularly glaring. A defense of the welfare state promises only stalemate so long as the power and mobility of capital remains untouched. In the context of C a n a d a ' s reinforced dependency amid global economic instability and financial speculation, a clear alternative to free trade and unbridled capitalist competition remains to be articulated.

A PROGRESSIVE COMPETITIVE ALTERNATIVE? There are those w h o . . . believe that we can take on the challenge of c o m petitiveness and retain our socialist values; indeed they believe that c o m petitiveness will create the very economic success essential to sustaining social programs. They are mistaken. In the first place they are wrong because, in the particular case of Canada, there is no capitalist class with the interest or capacity to develop a strong industrial base. . . . But they are more than just mistaken. The f r a m e w o r k for competitiveness they invite us to accept is ultimately dangerous. . . . Once it is accepted, its hidden aspects . . . such as attacks on social programs —quickly reassert themselves. O n c e we decide to play on the terrain of competitiveness, we cannot then step back without paying a serious price. Having legitimated the importance of being competitive (when we should have been mobilising to defend our social values), w e would be extremely vulnerable to the determined attacks that will inevitably c o m e in the n a m e of "global realities." . . . The c o m petitive model ultimately asks how the corporate sector can be strengthened. Our perspective asserts that it is the very strength of that sector that limits our f r e e d o m and belittles the meaning of " c o m m u n i t y . " (Gindin and Robertson 1992: 3 2 - 3 3 , 3 9 )

The global recession of the 1990s is testimony to the economic failure of global hyperliberalism. Far from state policies having no effect, global trade competition among states has ushered in "an unstable vicious circlc of 'competitive austerity'" whereby the cumulative effect of each state's policies is immense in the misery it causes. As Albo summarizes: "Each country reduces domestic demand and adopts an export-oriented strategy of dumping its surplus production, for which there are fewer consumers in its national economy given the decrease in workers' living standards and productivity gains all going to the capitalists, in the world market. This has created a global demand crisis and the growth of surplus capacity across the business cycle" (Albo 1994: 144-170). Unfortunately, however, the program for a more progressive form of competitiveness that has been advanced by most mainstream parties of the center-left does not constitute much of an alternative. For a considerable period through the 1970s and well into the mid-1980s, a large portion of the center-left (often represented in intellectual life by the "state autonomists") refused to acknowledge that the crisis of the Keynesian/welfare state was a structural one, pertaining to the very

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n a t u r e of c a p i t a l i s m a n d t h e c o n t r a d i c t i o n s it g e n e r a t e s in o u r t i m e . T h e i r r e s p o n s e to t h e c r i s i s , c l e a r l y v i s i b l e in t h e C a n a d i a n f r e e t r a d e d e b a t e , w a s to p o i n t to r e l a t i v e l y l o w u n e m p l o y m e n t l e v e l s in S w e d e n as e v i d e n c e of t h e continuing

viability

of

tripartite

corporatism

in

sustaining

the

K e y n e s i a n / w e l f a r e s t a t e ( P a n i t c h 1 9 8 6 , e s p . c h a p s . 1, 4 - 6 ) . T h i s i n v o l v e d , h o w e v e r , i g n o r i n g o r d o w n p l a y i n g t h e v e r y c o n t r a d i c t i o n s a n d c o n f l i c t s that w e r e u n d e r m i n i n g e v e n t h e S w e d i s h m o d e l . E v e n t u a l l y this n a i v e s t a n c e w a s d i s p l a c e d by an a t t e m p t to e m u l a t e c o u n t r i e s that w e r e m o s t s u c c e s s f u l in t h e e x p o r t - l e d c o m p e t i t i v e r a c e . B u t r a t h e r t h a n a l l o w m a i n s t r e a m e c o n o m i s t s , w i t h t h e i r n e o l i b e r a l l o g i c of d e r e g u l a t i o n , f r e e m a r k e t s , p r i v a t i z a t i o n , a n d a u s t e r i t y , to d i c t a t e t h e t e r m s of t h e r a c e , a " p r o g r e s s i v e c o m p e t i t i v e n e s s " s t r a t e g y is a d v a n c e d w h e r e b y l a b o r a n d t h e state a r e u r g e d to t a k e t h e i n i t i a t i v e a n d s e i z e t h e h a n d of b u s i n e s s in r u n n i n g t o w a r d c o m p e t i t i v e s u c cess. A t t h e c o r e of t h e s t r a t e g y , still i n s p i r e d l a r g e l y by a d i f f e r e n t f a c e t of S w e d i s h c o r p o r a t i s m , is to s u p p o r t a n d g u i d e b o t h w o r k e r s a n d c a p i t a l i s t s t o w a r d h i g h - t e c h / h i g h - v a l u e - a d d e d / h i g h - w a g e p r o d u c t i o n . T h e k e y to this is p u b l i c p o l i c y p r o m o t i n g t h e w i d e s p r e a d t r a i n i n g of a h i g h l y s k i l l e d , h i g h l y f l e x i b l e , a n d h i g h l y m o t i v a t e d l a b o r f o r c e a n d e n c o u r a g i n g e n t e r p r i s e s to t a k e f u l l a d v a n t a g e of r e c e n t t e c h n o l o g i c a l d e v e l o p m e n t s in m i c r o e l e c t r o n ics, to t h e e n d of p r o d u c i n g h i g h - q u a l i t y c o m m o d i t i e s at h i g h p r o d u c t i v i t y levels through

flexible

p r o d u c t i o n m e t h o d s . E q u a l l y f o u n d e d on an a c c e p -

t a n c e of t h e i r r e v e r s i b i l i t y of g l o b a l i z a t i o n , b u t c o n v i n c e d that its c o n n e c t i o n w i t h h y p e r l i b e r a l i s m is o n l y a m a t t e r of t h e i d e o l o g i c a l c o l o r a t i o n of p o l i t i c i a n s t o o c l o s e l y a t t a c h e d t o n e o c l a s s i c a l e c o n o m i s t s , this a p p r o a c h

still

w a n t s to g i v e s t r a t e g i c p r i o r i t y to t h e s t a t e . O n c e s h o r n of an i d e o l o g y of f r e e m a r k e t s as t h e p r e m i s e of state p o l i c y in t h e p r o c e s s of g l o b a l i z a t i o n , t h e p r o g r e s s i v e c o m p e t i t i v e n e s s s t r a t e g y e x p e c t s t h e s t a t e to b e a b l e to s u s t a i n a s u b s t a n t i a l s o c i a l w a g e if it e x p l i c i t l y c o n n e c t s w e l f a r e a n d e d u c a t i o n to t h e p u b l i c p r o m o t i o n of flexible p r o d u c t i o n a n d t e c h n o l o g i c a l i n n o v a t i o n in s e c t o r s that can w i n in a g l o b a l e x p o r t - l e d c o m p e t i t i v e r a c e . R e l a t i v e p r o s p e r i ty ( c l e a r l y b a s e d o n a n e x t e n s i o n of t h e a d v a n t a g e s of r e l a t i v e o v e r a b s o l u t e s u r p l u s - v a l u e e x t r a c t i o n ) w o u l d f a l l to s t a t e s that c a n g u i d e c a p i t a l a n d l a b o r to a d o p t this " s m a r t " s t r a t e g y . T h a t s u c h a s t r a t e g y is c h i m e r i c a l a n d d a n g e r o u s is in f a c t d e m o n s t r a t e d b y t h e e x p e r i e n c e in N o r t h A m e r i c a of t h e C l i n t o n D e m o c r a t i c a d m i n i s t r a t i o n a n d t h e O n t a r i o N D P g o v e r n m e n t e l e c t e d in 1990. T h e p r o g r e s s i v e c o m p e t i t i v e n e s s s t r a t e g y p r e s e n t s a p r o g r a m of vast e c o n o m i c r e a d j u s t m e n t f o r b o t h l a b o r a n d c a p i t a l , w i t h little r e g a r d f o r h o w , in t h e i n t e r i m , t h e l o g i c of c o m p e t i t i v e a u s t e r i t y c o u l d b e a v o i d e d . It p r e s u m e s that m a s s u n e m p l o y m e n t is p r i m a r i l y a p r o b l e m of s k i l l s a d j u s t m e n t to t e c h n o l o g i c a l c h a n g e r a t h e r t h a n o n e a s p e c t of a c r i s i s of o v e r p r o d u c t i o n . A s w e l l , it f o s t e r s t h e i l l u s i o n that t h e r a t e of e m p l o y m e n t g r o w t h in h i g h - t e c h s e c t o r s c a n b e s u f f i c i e n t to o f f s e t t h e r a t e of u n e m p l o y m e n t g r o w t h in o t h e r s e c t o r s . F u r t h e r ,

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it e i t h e r e v e n m o r e u n r e a l i s t i c a l l y a s s u m e s a rate of g r o w t h of w o r l d m a r k e t s m a s s i v e e n o u g h t o a c c o m m o d a t e all t h o s e a d o p t i n g this s t r a t e g y o r

blithe-

ly i g n o r e s t h e i s s u e s a s s o c i a t e d w i t h e x p o r t i n g u n e m p l o y m e n t to t h o s e w h o d o n o t s u c c e e d at this s t r a t e g y u n d e r c o n d i t i o n s of l i m i t e d d e m a n d ( a n d w i t h t h e a t t e n d a n t c o n s e q u e n c e this w o u l d h a v e f o r s u s t a i n i n g d e m a n d ) . F i n a l l y , it i g n o r e s t h e r e a l i t y that c a p i t a l c a n a l s o a d a p t l e a d i n g t e c h n o l o g i e s in l o w w a g e e c o n o m i e s a n d that t h e c o m p e t i t i v e p r e s s u r e s o n c a p i t a l in this c o n t e x t p u s h d o w n w a g e s e v e n in h i g h - t e c h s e c t o r s a n d l i m i t t h e c o s t s t o it of t h e s o c i a l w a g e a n d a d j u s t m e n t p o l i c i e s s o c e n t r a l to t h e w h o l e s t r a t e g y ' s p r o g r e s s i v e l o g i c in t h e f i r s t p l a c e . It is h a r d l y s u r p r i s i n g that A l b o c o n c l u d e s f r o m all t h i s that e v e n " t h e p r o g r e s s i v e c o m p e t i t i v e n e s s s t r a t e g y will b e f o r c e d to a c c e p t , as m o s t s o c i a l d e m o c r a t i c p a r t i e s h a v e b e e n w i l l i n g to d o , t h e s a m e ' c o m p e t i t i v e a u s t e r i t y ' as n e o - l i b e r a l i s m . . . as a c o l d n e c e s s i t y of present e c o n o m i c c o n d i t i o n s " (Albo 1994: 157). C o x , w h o t e r m s this s t r a t e g y " s t a t e c a p i t a l i s t " a n d s e e s it as t h e o n l y p o s s i b l e m e d i u m - t e r m a l t e r n a t i v e to t h e h y p e r l i b e r a l f o r m of s t a t e , m a k e s it q u i t e c l e a r that it is, in e f f e c t , " g r o u n d e d in an a c c e p t a n c e of t h e w o r l d m a r ket as t h e u l t i m a t e d e t e r m i n a n t of d e v e l o p m e n t " : T h e state capitalist f o r m i n v o l v e s a d u a l i s m b e t w e e n , on the o n e h a n d , a c o m p e t i t i v e l y e f f i c i e n t w o r l d - m a r k e t - o r i e n t e d sector a n d , on the other, a protected w e l f a r e sector. T h e s u c c e s s of the f o r m e r m u s t p r o v i d e r e s o u r c e s f o r the latter; the sense of solidarity implicit in the latter w o u l d p r o v i d e the drive and legitimacy f o r the f o r m e r . . . . In its m o s t radical f o r m , state c a p italism b e c k o n s t o w a r d an internal socialism sustained by capitalist success in w o r l d - m a r k e t c o m p e t i t i o n . T h i s would be a s o c i a l i s m d e p e n d e n t on capitalist d e v e l o p m e n t , i.e.. on s u c c e s s in the p r o d u c t i o n of e x c h a n g e values. B u t , so its p r o p o n e n t s a r g u e , it w o u l d be less v u l n e r a b l e to external d e s t a b i l i z a t i o n than a t t e m p t s at socialist s e l f - r e l i a n c e w e r e in w e a k c o u n tries. ( C o x 1987: 2 9 2 - 2 9 4 )

C o x s e e s t h i s o p t i o n ( " w i t h or w i t h o u t its s o c i a l i s t c o l o u r a t i o n " ) as l a r g e l y l i m i t e d to late i n d u s t r i a l i z i n g c o u n t r i e s ( s u c h as F r a n c e , J a p a n , G e r m a n y , Brazil, and South Korea) with strong institutional and ideological traditions of " c l o s e c o o r d i n a t i o n b e t w e e n t h e s t a t e a n d p r i v a t e c a p i t a l in t h e p u r s u i t of c o m m o n g o a l s . " H e is w e l l a w a r e that this t y p e of s t a t e c a p i t a l i s m , w h i l e i n c o r p o r a t i n g that p o r t i o n of t h e w o r k i n g c l a s s a t t a c h e d to t h e w o r l d - m a r k e t o r i e n t e d s e c t o r o r e m p l o y e d in t h e w e l f a r e s e r v i c e s s e c t o r , w o u l d n e v e r t h e less e x c l u d e m a n y p e o p l e ( " d i s p r o p o r t i o n a t e l y t h e y o u n g , w o m e n , i m m i g r a n t or m i n o r i t y g r o u p s , a n d t h e u n e m p l o y e d " ) w h o w o u l d r e m a i n in a p a s s i v e r e l a t i o n s h i p to t h e w e l f a r e s e r v i c e s a n d w i t h o u t i n f l u e n c e in p o l i c y making. Amid

a n o m i c e x p l o s i o n s of v i o l e n c e f r o m t h e s e g r o u p s ,

Cox

e x p e c t s that t h e state c a p i t a l i s t a l t e r n a t i v e ' s " h i s t o r i c b l o c w o u l d b e t h i n " a n d that this m i g h t e n t a i l t h e k i n d of r e p r e s s i o n a n d i n s u l a t i o n f r o m d e m o c ratic p r e s s u r e s t h a t w o u l d p a r t i c u l a r l y m a k e i l l u s o r y t h e p r o s p e c t s t h e state

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c a p i t a l i s t s t r a t e g y h o l d s o u t f o r an " i n t e r n a l s o c i a l i s m . " Still, as of 1 9 9 2 , C o x t o o k t h e p o s i t i o n that state c a p i t a l i s t s t r a t e g i e s in J a p a n a n d E u r o p e c o n s t i t u t e d " t h e o n l y p o s s i b l e c o u n t e r w e i g h t s to total g l o b a l i z a t i o n at t h e l e v e l of s t a t e s . " H e h e l d o u t p a r t i c u l a r h o p e that t h e E u r o p e a n C o m m u n i t y , w h e r e t h e " u n r e s o l v e d i s s u e o v e r t h e s o c i a l c h a r t e r i n d i c a t e s a s t a l e m a t e in t h e c o n flict o v e r t h e f u t u r e n a t u r e of t h e n a t i o n s t a t e a n d of t h e r e g i o n a l a u t h o r i t y , " m i g h t y e t b r i n g to t h e f o r e " a c a p i t a l i s m m o r e r o o t e d in s o c i a l p o l i c y a n d m o r e b a l a n c e d d e v e l o p m e n t , " o n e r e f l e c t i n g t h e c o n t i n u i n g i n f l u e n c e of social d e m o c r a t i c and older c o n s e r v a t i v e traditions. G i v e n the limited mediu m - t e r m o p t i o n s of t h o s e w h o a r e l o o k i n g f o r an a l t e r n a t i v e that w o u l d g o b e y o n d c h o o s i n g b e t w e e n rival f o r m s of c a p i t a l i s m , C o x u r g e s t h e m to l o o k p o s i t i v e l y u p o n " t h e i d e o l o g i c a l s p a c e that is o p e n e d by this c o n f r o n t a t i o n of h y p e r l i b e r a l i s m a n d state c a p i t a l i s t o r c o r p o r a t i s t f o r m s of d e v e l o p m e n t " ( C o x 1992: 3 1 , 4 1 ; cf. Cox

1987:292,297-298).

Yet w h a t is t h e e v i d e n c e of s u c h a c o n f r o n t a t i o n ? C o x e x h i b i t s h e r e an u n f o r t u n a t e t e n d e n c y to t u r n j u x t a p o s e d i d e a l - t y p e s , c o n s t r u c t e d f o r t h e p u r p o s e s of a n a l y t i c c l a r i t y , i n t o r e a l - w o r l d c o n f r o n t a t i o n s f o r w h i c h t h e r e is all t o o little e v i d e n c e . T h e i n s t i t u t i o n a l a n d i d e o l o g i c a l s t r u c t u r e s that C o x p o i n t s to as t h e b a s i s f o r a s t a t e c a p i t a l i s t p r o g r e s s i v e c o m p e t i t i v e n e s s a l t e r n a t i v e to h y p e r l i b e r a l g l o b a l i z a t i o n a r e in f a c t b e i n g s u b s u m e d as s u b s i d i a r y s p o n s o r s of g l o b a l i z a t i o n in a m a n n e r q u i t e a n a l o g o u s to t h e w a y h e s a w trip a r t i t e i n s t i t u t i o n s of n a t i o n a l e c o n o m i c p l a n n i n g as h a v i n g b e c o m e s u b s i d i a r y e l e m e n t s in a d j u s t i n g d o m e s t i c e c o n o m i e s to t h e w o r l d e c o n o m y in the p o s t w a r order. B o t h in E u r o p e a n d in N o r t h A m e r i c a , m i n i s t r i e s of l a b o r ( a n d t h e trip a r t i t e f o r u m s a n d a g e n c i e s t h e y s p o n s o r ) , as w e l l as m i n i s t r i e s of w e l f a r e a n d e d u c a t i o n , a r e b e i n g r e s t r u c t u r e d to c o n f o r m w i t h t h e p r i n c i p l e s of g l o b al c o m p e t i t i v e n e s s . H o w e v e r , t h e i r c a p a c i t y t o r e t a i n t h e i r l i n k s to t h e s o c i a l f o r c e s they r e p r e s e n t in t h e s t a t e d e p e n d s o n t h e i r ability to tailor this r e c o n s t r u c t i o n a l o n g t h e l i n e s of p r o g r e s s i v e c o m p e t i t i v e n e s s p r i n c i p l e s . In this w a y , s o c i a l g r o u p s that w o u l d o t h e r w i s e b e c o m e d a n g e r o u s l y m a r g i n a l i z e d a n d d i s a f f e c t e d as a r e s u l t of t h e s t a t e ' s s p o n s o r s h i p of g l o b a l c o m p e t i t i v e n e s s m a y b e c o m e a t t a c h e d to it by t h e a p p e a l a p r o g r e s s i v e c o m p e t i t i v e n e s s s t r a t e g y m a k e s , e s p e c i a l l y t h r o u g h t h e i d e o l o g y a n d p r a c t i c e of t r a i n i n g , to w o r k i n g p e o p l e w h o a r e u n e m p l o y e d (or w h o f e a r t h e y s o o n m i g h t b e ) as w e l l as t h e l e a d e r s of t h e u n i o n s , s o c i a l a g e n c i e s , a n d o t h e r o r g a n i z a t i o n s w h o s p e a k f o r t h e m . I n s o f a r as t h e y a r e s u c c e s s f u l in t h i s , m o r e o v e r , m i n istries m a y p r e v e n t t h e i r f u r t h e r loss of s t a t u s in t h e h i e r a r c h y of state a p p a r a t u s e s a n d e v e n r e c a p t u r e s o m e of t h e i r p r e v i o u s l y f o r e g o n e s t a t u s . T h e progressive c o m p e t i t i v e n e s s strategy u n d e r t a k e s n o greater challenge to the s t r u c t u r e of t h e state or t o t h e l o g i c of g l o b a l c o m p e t i t i v e n e s s t h a n t h a t of i n s i s t i n g that m o r e state e c o n o m i c o r c h e s t r a t i o n c a n b e an e f f e c t i v e a n d h u m a n e h a n d m a i d e n to c o m p e t i t i o n . T h u s , this s t r a t e g y e n d s u p b e i n g n o t an a l t e r n a t i v e to b u t a s u b s i d i a r y e l e m e n t in t h e p r o c e s s of n e o l i b e r a l c a p i t a l i s t restructuring and globalization.

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In North America, the most often cited guarantee that the progressive competitiveness strategy will not dissolve into the logic of competitive austerity is the European C o m m u n i t y ' s social charter. It is pointed to as a model for other international agreements that would constitutionalize a high level of labor rights, social standards, and corporate codes of conduct. On this basis, Robinson argues: "If globalization can mean more than one thing . . . then the irreversibility of globalization no longer necessarily leads to neoconservative economic and social policy prescriptions. In this light, national competitiveness, too, can mean more than one thing, depending upon whether it is achieved by cutting labour and environmental costs to T N C s , or promoting technological innovation and reducing the social, political, and environmental externalities associated with largely unregulated global market competition" (Robinson 1993: 44). This approach almost always involves vastly inflating the salience and significance of the European social charter. Robinson acknowledges its weakness but fails to inquire whether the reason "the most powerful labour movements in the world have made only very limited progress towards an adequate EC social dimension" is because of its incompatibility with even the progressive competitiveness strategy of global competitiveness. The trenchant critique made by Robinson of NAFTA's side deals as a cosmetic means of buying off domestic opposition is not apparently seen by him (and so many others) as entailing a deeper lesson regarding such incompatibility. Lipietz has recently provided a chilling account of how moderate EEC social democrats "set up a Europe of traders and capital," hoping that a social dimension would follow but failing to understand that they had already "thrown away their trump cards by signing the Single Act of 1985": A single market for capital and g o o d s without c o m m o n f i s c a l , social and e c o l o g i c a l p o l i c i e s could not fail to set o f f a d o w n w a r d c o m p e t i t i o n b e t w e e n m e m b e r states, e a c h n e e d i n g to bring its trade into balance. To deal with the threat of "social d u m p i n g , " Jacques D e l o r s counted on a push after the event by unions in peripheral and social democratic countries to i m p o s e c o m m o n statutory or contractual bases throughout the c o m m u n i t y . This has not happened, despite the (half-hearted) protestations of the European parliament. . . . [ A t t e m p t s to harmonise VAT failed . . . [and] lack o f harmonization on capital taxation is m u c h more serious. . . . Even more serious w a s the surrender o v e r social Europe. In S e p t e m b e r 1 9 8 9 , the European C o m m i s s i o n p r o p o s e d an insipid S o c i a l Charter. . . . In D e c e m b e r 1991, at Maastricht . . . legislative p o w e r in Europe w a s handed over to coordination by national g o v e r n m e n t s ; a state apparatus on autopilot. S o c i a l Europe w a s o n c e more sacrificed, and reduced to a "zeroCharter," with Britain opting out. . . . In e s s e n c e , as it is presently e m e r g ing, Europe will be u n i f i e d only for the sake o f capital, to a l l o w it to e s c a p e from state control; that is, from the tax authorities and from social legislation. (Lipietz 1992: 1 5 6 - 1 5 9 )

It is, of course, not really an escape from state control —Lipietz's account would make no sense if it were. The governments of Europe are not trying

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to assert control over capital at the nation-state level while trying to foreswear control at the regional level. The states, including those led by social democrats, as Lipietz avers, are the political authors of the Europe of traders and capitalists. Of course they reflect capital's domination in each social formation in doing so. But the notion that this capital is ready to sustain, as the basis of regional trade rivalries, a rival state capitalist form "rooted in social policy and territorially balanced development" is belied by all the facts before us. Indeed, Cox may have been closer to the mark when he suggested in 1987 that the decline of U.S. hegemony and the competitive pressures in the world system were acting on all states in such a way as to encourage an "emulative uniformity" (Cox 1987: 2 9 8 - 2 9 9 ) . But his expectation at the time that this might involve common "adoption of similar forms of state-capitalist development geared to an offensive strategy in world markets and sustained by corporatist organization of society and e c o n o m y " rings true only if we see state capitalism as a subsidiary element sustaining competitive austerity, even in Europe. As Albo notes: "It is not the AngloAmerican countries who are converting to the Swedish or German models but Germany and Sweden who are integrating the 'Anglo-American m o d e l ' " (Albo 1994: 168). Even if U.S. hegemony in international institutions has declined somewhat, the continued direct imbrication of U.S. capital in Europe as a powerful social force with which the European bourgeoisies remain interpenetrated still induces an "emulative uniformity." Poulantzas may have been wrong in his estimation in 1974 that each of the European bourgeoisies were too enmeshed in a structure of dependence on U.S. capitalists to allow for a major extension of intraregional cooperation in Europe. But he was not wrong in insisting that U.S. capital must be seen as a strong presence within Europe rather than as standing outside it. Indeed, part of the reason for the failure of a "social Europe" has to do with the mobilization of U.S. firms in Europe against it from the early 1980s on (Lambert 1991: 16). The multidimensional spread of direct foreign investment, with mutual interpenetration among European, Japanese, and U.S. capitals, reinforces this tendency for emulative uniformity (Magdoff 1992).

CONCLUSIONS It would indeed appear that there is no way of posing an alternative to neoliberal globalization that avoids the central issue of the political source of capitalist power, globally and locally: the state's guarantee of control of the major means of production, distribution, communication, and exchange by private, inherently undemocratic banks and corporations. It is inconceivable that there can be any exit from today's crisis without a planned reorientation and redistribution of resources and production on a massive scale.

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Yet how can this be conceived as feasible, let alone made a basis for political mobilization? This chapter has suggested that those who want to install a transnational democracy in the wake of the nation-state allegedly having been bypassed by globalization simply misunderstand what the internationalization of the state really is all about. Not only is the world still very much composed of states, but insofar as there is any effective democracy at all in relation to the power of capitalists and bureaucrats it is still embedded in political structures that are national or subnational in scope. Those who advance the case for an international civil society to match the nebuleuse that is global capitalist governance usually fail to appreciate that capitalism has not escaped the state but rather that the state has, as always, been a fundamental constitutive element in the very process of extension of capitalism in our time. Picciotto, who himself wants to give strategic priority to international popular organization as the best way forward, is nevertheless careful to warn against "naive illusions that social power exists quite independently of the state." He calls for "more sophisticated analyses of the contradictions of the state and the ways they can be exploited to build the strength of popular movements, while remaining aware that the national state is only a part of the overall structure of power in a global capitalist society" (Picciotto 1991: 60). The international constitutionalization of neoliberalism has taken place through the agency of states, and there is no prospect whatsoever of getting to a more egalitarian, democratic, and cooperative world order beyond global competitiveness, without a fundamental struggle with domestic and global capitalists over the transformation of the state. Indeed, the contemporary era of the globalization of capital may have finally rendered the distinction between national and foreign capital that has underpinned the two-centuriesold search for a cross-class "producer" alliance between labor and national capital more or less irrelevant as a strategic marker for the left. It is necessary to try to reorient strategic discussions toward the democratic transformation of the state rather than toward the transcendence of the state or the fashioning of a progressive competitive state. At the most general level this means envisaging a state whose functions are not tied to guaranteeing the economic res publica for capitalism. We have seen how the internationalization of the state entails a turning of the material and ideological capacities of states to more immediate and direct use, in terms of both intranational and international dimensions, to global capital. The first requirement of a strategy to counter globalization must be to seek the transformation of the material and ideological capacities of states so that they can serve to realize popular, egalitarian, and democratic goals and purposes. This does not mean attempting to take the state as it is presently organized and structured and trying to impose controls over capital with these inappropriate instruments. Nor does it mean trying to coordinate such controls internationally while resting on the same state structures. The point must be

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to restructure the hierarchy of state apparatuses and reorganize their m o d u s operandi so as to d e v e l o p radically different material and ideological capacities. " O n e of principal tasks of the capitalist state," Harvey notes, "is to locate p o w e r in the spaces which the bourgeoisie controls, and d i s e m p o w e r those spaces which the oppositional m o v e m e n t s have the greatest potential to c o m m a n d " (Harvey 1989: 237). Any m o v e m e n t against globalization will need to take this lesson out of the book of capital to relocate p o w e r to the benefit of progressive social f o r c e s . T h e same might be said about the important role the state can play in the distribution of time as an aspect of power. Radical proposals for a statutory reduction in the w o r k i n g day to as little as four hours not only are directed at coping with the appalling maldistribution of e m p l o y m e n t in c o n t e m p o r a r y capitalism but, as M a n d e l and G o r z both note, are necessary to establish the conditions for the extension and d e e p e n i n g of d e m o c r a c y by providing the time for extensive involvement in c o m m u n i t y and w o r k p l a c e d e c i s i o n m a k i n g (Mandel 1992: 202; G o r z 1989: 159). To e m p h a s i z e the continuing importance of struggles to t r a n s f o r m the state does not mean that territorial boundaries within which claims to state sovereignty are e m b e d d e d ought to be seen as i m m u t a b l e . Poulantzas insightfully pointed to the regional disarticulations that resulted f r o m the extended reproduction of international capital within the f r a m e w o r k of existing nation-states. T h e integration of national with international capital upsets the old bases for national capital's unity. At the same t i m e , regional discontents with state policies that are increasingly articulated with the needs of the global e c o n o m y have provided fertile ground for a resurgence of old nationalisms with a separatist p u r p o s e . Right-wing nationalisms, and the parochialisms and intolerances they both reflect and engender, must be c o m b a t e d on every front. But it is not a l w a y s necessary for the left to o p p o s e the b r e a k u p of an existing state, just as it is not wise to dismiss out of hand attempts at international rearticulation of sovereignties through the creation of regional federations. T h e question is only w h e t h e r the locus of p o w e r is thereby shifted to where d e m o c r a t i c and inclusive m o v e m e n t s oppositional to capital can e x p a n d their space and p o w e r s through a reorganization of sovereignties. For instance, though m a n y people are d i s m a y e d by the prospect of Q u e b e c leaving the C a n a d i a n f e d e r a t i o n at the very m o m e n t w h e n France is j o i n i n g a federal E u r o p e , it is by n o m e a n s necessarily the case that the existing Canadian federal state lays a f i r m e r f o u n d a t i o n for d e m o c r a t i c challenges to capital than would close and a m i c a b l e cooperation b e t w e e n an independent Q u e b e c and a restructured C a n a d i a n state. I n d e e d , more might be expected f r o m t w o nation-states each of w h o s e raison d ' é t a t was expressly more egalitarian and d e m o c r a t i c in p u r p o s e rather than binational and territorial. ("Ad mare usque ad mare," it has o f t e n been pointed out on the

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Canadian left, does not quite match "Liberty, equality, and fraternity" as an expression of raison d'état.) A federal Europe does not have to extend democratic powers rather than disperse them more thinly in relation to a greater centralization of state powers oriented to fulfilling capital's res publica on a continental terrain. Moreover, a federal state composed of the existing states of Europe continues to rest on the modus operandi of these states. As every Canadian knows, capitalist forces are as capable of playing off the units of a federation against one another and against the center as they are of doing so with sovereign nation-states. Indeed, the process may be more easily obscured behind an interminable debate over the division of constitutional powers. Lipietz, while taking as a starting point that "the struggles and social compromises are still settled at the level of the old-established nations of Europe," would like to see social and political unification as quickly as possible insofar as this would be democratically structured to overcome the terrible condition of competitive austerity. But he admits that though it "is better to have a Europe which is progressive (in the alternative sense of the word) than a France, a Sweden, etc., which are progressive in isolation . . . the present dilemma does not lie here. We are asked to choose between a Europe of possibly alternative states, and a united Europe which is liberalproductivist. My response is that if this is the choice, the first solution is better." He admits that in the short term it is unrealistic to expect a united Europe to be based on anything other than liberal-productivism. But it is no less unrealistic to expect that this will change in the future without a prior change in the configuration of social forces and restructuring of state apparatuses in the member countries (Lipietz 1992: 135-139). A possibly alternative state to those sponsoring globalization amid competitive austerity today would have to be based on a shift toward a more inwardly oriented economy rather than one driven by external trade considerations. This in turn would have to mean greater emphasis on a radical redistribution of productive resources, income, and working time than on conventional economic growth. This could be democratically grounded only, as Albo puts it, insofar as "production and services [were] more centred on local and national needs where the most legitimate democratic collectivities reside." Democratically elected economic planning bodies at the microregional level should be the first priority in a program for an alternative state. These bodies should be invested with the statutory responsibility for engineering a return to full employment in their communities and funded through direct access to a portion of the surplus that presently is the prerogative of the private financial system to allocate. This alternative could not be realized without at least some trade controls and quite extensive controls over the flow of capital. (Indeed, it is improbable that such capital control can be realized without bringing the financial system within the public domain and radically reorganizing it in

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terms of both its structure and its function.) Of course, this would require interstate cooperation to install managed trade (rather than autarky) and to make capital controls effective. Have we then gone through this exercise only to come full circle —right back to the internationalization of the state? Certainly not. International agreements and treaties between states will most certainly be required, but they will have the opposite purpose to the constitutionalizing of neoliberalism. They will be explicitly designed to permit states to effect democratic control over capital within their domain and to facilitate the realization of alternative economic strategies. The feasibility of this alternative scenario rests entirely on conditions that still remain to be established. It is all too easy (and demobilizing) to predict the immense pressure and exertion of naked power that would emanate from international capital and dominant states to a country that was even near the point of embarking on such a strategic alternative. Such a prediction ignores the prior material (including in the economic-technical sense) and political conditions that would bring the possibility of change onto the historical agenda. Even the technical feasibility of short-term capital controls is an open question today. Yet the instability of the world financial system is such that we are likely to see the discovery of means of control and regulation, whether before or after an international financial collapse. But it is, above all, the political conditions that need to be created. The impact of domestic and external resistance is unpredictable in abstraction from the character, strength, and effectiveness of the social forces within states that must mobilize to put the alternative on the agenda. Cox is extremely insightful on this when he insists at the end of Production, Power, and World Order that once "a historical movement gets under way, it is shaped by the material possibilities of the society in which it arises and by resistance to its course as much as by the . . . goals of its supporters." Yet this is why, he insists, "critical awareness of the potentiality for change . . . concentrates on the possibilities of launching a social movement rather than on what that movement might achieve. . . . In the minds of those who opt for change, the solution will most likely be seen as lying not in the enactment of a specific policy program as in the building of new means of collective action informed by a new understanding of society and polity" (Cox 1987: 393-394). This will happen within states or not at all, but it will not happen in one state alone while the rest of the world goes on running with the bourgeoisie around the globe. Alternatives arise within international political time. The movement-building struggles arise in conjunctures that are more than ever determined on a world basis. Movements in one country have always been informed and inspired by movements abroad; this will surely prove to be the case as opposition builds to the evils globalization is visiting on peoples, including, increasingly, those in the developed capitalist countries. There is no need to conjure up an international civil society to install a transnational

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d e m o c r a c y . R a t h e r w e a r e l i k e l y to w i t n e s s a s e r i e s of m o v e m e n t s that will b e e x e m p l a r y f o r o n e a n o t h e r , e v e n t h o u g h n a t i o n a l s p e c i f i c i t i e s will c o n t i n u e to p r e v a i l . It is to b e h o p e d , of c o u r s e , that t h e s e m o v e m e n t s will b e solidaristic with one another, even though international solidarity

move-

m e n t s c a n n o t b e m o r e t h a n c r i t i c a l s u p p l e m e n t s to t h e s t r u g g l e s that m u s t t a k e p l a c e in e a c h s t a t e .

NOTE A much earlier version of this chapter was originally presented as a paper at the seminar El Mundo Actual: Situación y Alternativas, at U N A M , Mexico City, in December 1993, and subsequently revised and published in The Socialist Register 1994. This extensively revised and expanded chapter has benefited greatly from the criticisms and suggestions of Robert Cox, Peter Damaskopolous, Stephen Gill. Bob Marshall, and Jim Mittelman.

Part The Counterthrust to Globalization: Political and Cultural Resistance

Glenn Adler

Global Restructuring and Labor: The Case of the South African Trade Union Movement

At the end of the t w e n t i e t h c e n t u r y the g l o b a l division of labor ( G D L ) a p p e a r s an irrepressible f o r c e — s p r e a d i n g n e w t e c h n o l o g i e s and labor p r o c e s s e s t h r o u g h o u t the w o r l d , s u b j e c t i n g w h o l e r e g i o n s to p o w e r f u l multinational c o r p o r a t e institutions, d i s s o l v i n g f a m i l i a r d i v i s i o n s in the interstate s y s t e m and u n d e r m i n i n g the s o v e r e i g n t y of states, r e m a k i n g civil society and spurring s u b n a t i o n a l f r a g m e n t a t i o n . B e f o r e the o n s l a u g h t of such i m p e r sonal and u n a c c o u n t a b l e p r o c e s s e s , o r d i n a r y p e o p l e a p p e a r quite p o w e r l e s s to d e f e n d t h e m s e l v e s , m u c h less to o f f e r a l t e r n a t i v e s to the i m p e r a t i v e s of global capitalist p r o d u c t i o n . T h e c o l l a p s e of " a c t u a l l y existing s o c i a l i s m " and the parallel i m p o v e r i s h m e n t of T h i r d World liberation m o v e m e n t s as b e a r e r s of d e m o c r a c y and e c o n o m i c d e v e l o p m e n t c o n t r i b u t e to a " p o l i t i c s of d i s i l l u s i o n m e n t " in w h i c h the possibilities f o r h u m a n e d e v e l o p m e n t are increasingly c o n s t r a i n e d , if not r e p u d i a t e d by the global s y s t e m ( M i t t e l m a n , C h a p t e r 1). W i t h o u t d e n y i n g the rather bleak possibilities o p e n to i n d i v i d u a l s , g r o u p s , and m o v e m e n t s in the T h i r d W o r l d , it is c u r i o u s that the e m e r g i n g literature on the G D L generally o v e r l o o k s i m p o r t a n t d y n a m i c s that s u g g e s t alternative d i r e c t i o n s . In p a r t i c u l a r , the literature p a y s limited attention to the i m p r e s s i v e g r o w t h of labor m o v e m e n t s in the n e w l y industrializing c o u n t r i e s ( N I C s ) and to the e x p a n s i o n of w o r k i n g - c l a s s political and economic demands. In large part this s h o r t c o m i n g d e r i v e s f r o m p r o b l e m s in the theoretical f o r m u l a t i o n of the G D L as a c o n c e p t , w h i c h can be traced to the interpretation of the division of labor as an e c o n o m i c a n d t e c h n i c a l p r o c e s s rather than as a c o n t r a d i c t o r y and c o n f l i c t u a l social r e l a t i o n s h i p . F u r t h e r m o r e , m u c h of the analytical w o r k on the G D L o p e r a t e s f r o m an elite and statist p e r s p e c tive, with a bias t o w a r d m a c r o e c o n o m i c , rather than social and h i s t o r i c a l , variables. It thus b e c o m e s e x t r e m e l y d i f f i c u l t f o r the literature to e x p l a i n m o v e m e n t s e m e r g i n g f r o m civil society, particularly those that d e v e l o p as a

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result of the industrialization process itself. Without taking labor seriously as an actor in the G D L it is difficult to assess where challenges are likely to emerge, as well as the substance of such challenges and their likelihood of success. However, the profound pessimism described here seems based less on an actual analysis of counterhegemonic projects than on an unfounded fatalism. By contrast, this chapter begins from an interpretation of the division of labor as a creative process marked by social relations of inequality between capital and labor. The division of labor may give rise to collective actors (including labor movements) that are not just epiphenomena to be read off logically from economic structures. These actors are capable of self-conscious engagement in collective action, and just as they are affected by structures so too can they be a cause of structural change. As a result, collective actors growing out of the division of labor—in particular, the labor movement—must be studied in their own right as important components of the G D L . An inability to account for how labor movements are generated and develop weakens our understanding of the G D L . This is especially true in addressing the supreme challenge of making economic revitalization compatible with democratization, as labor movements are not simply obstructions to be conquered and controlled but may be essential participants in economic policy and important bearers of democratic politics. They thus provide a bridge between these twin concerns; indeed, in many societies they are among the foremost advocates of such policies. Surprisingly, these are not the actors that, a generation ago, radical analysts believed would bring change in the Third World. In place of peasantbased liberation movements and centralized vanguard socialist parties, labor movements in the NICs are contributing to a more incremental, reformist, and negotiated form of change in keeping with social democracy and corporatism rather than socialist revolution. 1 This suggests not only a more feasible politics of transition but, f r o m the point of view of democratization, a more desirable one as well. The first part of this chapter examines the theoretical status of the concept of division of labor and the forms of collective action it may engender. The second locates these more general arguments in the case study of the modern South African labor m o v e m e n t , as an empirical example of the processes of class formation and the possibilities for transformation in the NICs. South Africa is often identified as a unique case from which generalizations are difficult, because of the peculiar distortions caused by apartheid. But there are persuasive reasons to believe that developments there in fact describe an emerging pattern within globalization —at least within the NICs —which suggests the need for further research on similar trends elsewhere.

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THE GLOBAL DIVISION OF LABOR: WHERE ARE THE WORKERS? T h e e m e r g e n c e in the late twentieth century of a global division of labor is of course not the first time that industrial capitalism has reconstituted the world system. T h e origins of m o d e r n social science lay in nineteenth-century e f f o r t s to m a k e sense of the destabilizing social and political e f f e c t s of the first w a v e of capitalist industrialization. On the eve of the revolutions of 1848 M a r x and Engels described a capitalism that had established itself on a global basis: T h e b o u r g e o i s i e , b y the r a p i d i m p r o v e m e n t of all i n s t r u m e n t s of p r o d u c t i o n , b y the i m m e n s e l y f a c i l i t a t e d m e a n s of c o m m u n i c a t i o n , d r a w s all, e v e n t h e m o s t b a c k w a r d , n a t i o n s into c i v i l i s a t i o n . . . . It c o m p e l s all n a t i o n s , o n p a i n of e x t i n c t i o n , to a d o p t t h e b o u r g e o i s m o d e of p r o d u c t i o n . . . . In o n e w o r d , it c r e a t e s a w o r l d a f t e r its o w n i m a g e . ( M a r x a n d E n g e l s , 1964: 6 4 - 6 5 )

T h e spread of the capitalist m o d e of production t r a n s f o r m e d all m a n n e r of social and political relations in its wake. 2 In M a r x and E n g e l s ' s f a m o u s phrase: All f i x e d , f a s t - f r o z e n r e l a t i o n s , w i t h their train of a n c i e n t a n d v e n e r a b l e p r e j u d i c e s a n d o p i n i o n s are s w e p t a w a y , all n e w - f o r m e d o n e s b e c o m e antiq u a t e d b e f o r e t h e y c a n o s s i f y . All that is solid m e l t s into air, all that is h o l y is p r o f a n e d . ( M a r x and E n g e l s , 1964: 6 3 )

Despite the massive increase in productive capacity brought about by the new m o d e of production, Marx and Engels believed the lot of ordinary people subject to the new division of labor was one of increased pauperization, of alienation f r o m the qualities that d e f i n e workers as h u m a n beings. For M a r x , the capitalist m o d e of production was not an unfettered j u g gernaut but a process that generated its own o p p o s i t i o n . At its heart was a division of labor that he conceived as c o m p o s e d of social relations b e t w e e n contradictory classes. T h e very success of the capitalist m o d e of production created the revolutionary working class that M a r x optimistically a s s u m e d would lead to its d o w n f a l l . Without accepting the teleological f r a m e w o r k Marx constructs, the essential point is that the capitalist division of labor creates new f o r m s of solidarity a m o n g those subject to its d o m i n a t i o n , and such solidarity can be the basis for dramatic —if not revolutionary— collective action. Weber and D u r k h e i m , no less than M a r x , appreciated the injurious impact of the capitalist division of labor, though they both rejected the assumption of a teleological progression toward a revolutionary class-for-

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i t s e l f . F o r W e b e r , it w a s t h e c a p i t a l i s t m a r k e t e c o n o m y a n d its d e m a n d s f o r p r e c i s i o n , s p e e d , a n d e f f i c i e n c y that p r o v i d e d t h e m o t i v e f o r c e b e h i n d t h e s p r e a d of b u r e a u c r a t i c r a t i o n a l i t y t h r o u g h all s p h e r e s of l i f e . T h e m i n u t e d i v i s i o n of l a b o r , strict h i e r a r c h y , a n d i m p e r s o n a l i t y of i n d u s t r y i m p o s e o n all t h e stern d i s c i p l i n e of a s c e t i c C a l v i n i s m , t h e " c o s m o s of t h e m o d e r n e c o n o m i c o r d e r " ( G e r t h a n d M i l l s 1946: 2 1 5 ; W e b e r 1930: 181). T h e d i v i s i o n of l a b o r w a s t h u s t h e s o u r c e of t h e p r o f o u n d d i s e n c h a n t m e n t W e b e r i d e n t i f i e d as c h a r a c t e r i s t i c of t h e m o d e r n a g e , s p a w n i n g " s p e c i a l i s t s w i t h o u t s p i r it, s e n s u a l i s t s w i t h o u t h e a r t " ( W e b e r 1 9 3 0 : 182). O f c o u r s e W e b e r d i d n o t v i e w t h e d i v i s i o n of l a b o r as s p o n t a n e o u s l y g e n e r a t i n g c l a s s - b a s e d c o l l e c tive action. Such " c o m m u n a l action" f l o w i n g f r o m class interests was far m o r e likely w h e r e t h e c o n t r a s t b e t w e e n t h e l i f e c h a n c e s of o w n e r s a n d w o r k ers w a s n o l o n g e r s e e n as a g i v e n b u t as r e s u l t i n g f r o m t h e s t r u c t u r e o f t h e e c o n o m i c o r d e r ( G e r t h a n d M i l l s 1 9 4 6 : 184). D u r k h e i m s a w t h e d e v e l o p m e n t of t h e d i v i s i o n of l a b o r as t h e d i s t i n c tive f e a t u r e of m o d e r n s o c i e t y . T h e s i m p l e d i v i s i o n of l a b o r of p r i m i t i v e s o c i e t i e s b o u n d p e o p l e t o g e t h e r t h r o u g h c o m m o n a l i t y . All p e r f o r m e d s i m i lar t a s k s a n d w e r e l i n k e d t h r o u g h a c o m m o n set of n o r m s a n d v a l u e s — t h e c o l l e c t i v e c o n s c i e n c e — g r o w i n g o u t of t h e s e c o m m o n a c t i v i t i e s . M o d e r n i n d u s t r y d e s t r o y e d t h e s e b o n d s b y t r a n s f o r m i n g t h e d i v i s i o n of l a b o r t h r o u g h t h e g r o w i n g s p e c i a l i z a t i o n of f u n c t i o n a n d o c c u p a t i o n s . T h e d i f f e r e n t i a t i o n of t a s k s , w h i l e a l l o w i n g f o r t h e r e a l i z a t i o n of h u m a n p o t e n t i a l t h r o u g h e d u c a t i o n a n d skills d e v e l o p m e n t , d i d not a u t o m a t i c a l l y g e n e r a t e a n e w s o l i d a r i t y a m o n g w o r k e r s . I n d e e d , t h e m o d e r n d i v i s i o n of l a b o r p r o d u c e d c h a r a c t e r i s t i c p a t h o l o g i e s , s u c h as a n o m i e . In p a r t i c u l a r , it c o u l d lead to c o n f l i c t a m o n g w o r k e r s , e s p e c i a l l y w h e n the a s s i g n m e n t of t a s k s d i d not c o r r e s p o n d to t h e n a t u r a l d i s t r i b u t i o n of t a l e n t s — t h e f o r c e d d i v i s i o n of l a b o r — s u c h as o c c u r r e d w h e n i n h e r i t a n c e d i s t o r t e d p e o p l e ' s l i f e chances. F o r D u r k h e i m t h e c e n t r a l p r o b l e m in m o d e r n s o c i e t y w a s t h e c r e a t i o n of a n e w f o r m of s o l i d a r i t y a r t i c u l a t i n g t h e d i v e r s e p a r t s i n t o a f u n c t i o n a l w h o l e . H e b e l i e v e d s u c h s o l i d a r i t y w o u l d g r o w o u t of t h e d i v i s i o n of l a b o r i t s e l f , f r o m t h e i n t e r d e p e n d e n c e it c r e a t e d a m o n g w o r k e r s . A s it p r o v i d e s t h e s o u r c e of s o l i d a r i t y , t h e d i v i s i o n of l a b o r w o u l d b e c o m e t h e f o u n d a t i o n o f a new moral order. In p a r t i c u l a r , t h e d i v i s i o n of l a b o r w a s t h e b a s i s f o r n e w c o l l e c t i v e o r g a n i z a t i o n s that w o u l d c o n s t i t u t e t h e r u l e s f o r r e g u l a t i n g a n d

restraining

h u m a n d e s i r e s . T h e o c c u p a t i o n a l g r o u p , o r c o r p o r a t i o n , w a s to b e c o m p o s e d of all t h e p a r t i c i p a n t s in a p a r t i c u l a r i n d u s t r y , w h o w o u l d t h e m s e l v e s m a k e t h e r u l e s g o v e r n i n g t h e i r c o l l e c t i v e l i f e . It c o u l d b e l o c a l , n a t i o n a l , o r i n t e r n a t i o n a l in e x t e n t , d e p e n d i n g o n t h e b r e a d t h of t h e o c c u p a t i o n c o n c e r n e d . In t h e a b s e n c e of a s t r o n g c o l l e c t i v e c o n s c i e n c e , s u c h r u l e - m a k i n g a l l o w e d f o r t h e r e g u l a t i o n of h u m a n a c t i v i t y in a p a r t i c u l a r f i e l d of e n d e a v o r . T h e o c c u p a t i o n a l g r o u p w a s an e n d in itself:

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A group is not only a moral authority which dominates the life of its members; it is also a source of life sui generis. From it comes a warmth which animates its members, making them intensely human, destroying their egotisms. (Durkheim 1930: 26) T h e g r o u p t h u s c o u l d a r r i v e at l e g i t i m a t e r u l e s of b e h a v i o r w h i l e l i n k i n g d i s p a r a t e i n d i v i d u a l s in a c o m m o n a n d m e a n i n g f u l e n t i t y . F o r all t h r e e t h e o r i s t s t h e d i v i s i o n of l a b o r n o t o n l y s e r v e d as t h e s o u r c e o f t h e c h a r a c t e r i s t i c c o n f l i c t s a n d c l e a v a g e s in m o d e r n s o c i e t y , it a l s o p r o v i d e d t h e i n t e g u m e n t f r o m w h i c h n e w f o r m s of s o l i d a r i t y w o u l d e m e r g e l i n k i n g w o r k e r s ( a n d , in D u r k h e i m ' s c o n c e p t i o n , w o r k e r s a n d o w n e r s ) in m e a n i n g f u l a n d p o w e r f u l n e w w a y s . N o n e of t h e t h e o r i s t s a p p r o a c h e d t h e d i v i s i o n of l a b o r as a t e c h n i c a l o r p u r e l y e c o n o m i c p h e n o m e n o n . F o r e a c h , t h e d i v i s i o n of l a b o r w a s of i n t e r e s t as an e s s e n t i a l l y s o c i a l p r o c e s s , c o m p o s e d of c o m p l e x a n d c o n t r a d i c t o r y r e l a t i o n s a m o n g i n d i v i d u a l s a n d g r o u p s . W h i l e it d i s s o l v e d o l d f o r m s of a s s o c i a t i o n s a n d m e a n i n g s , it w a s s i m u l t a n e o u s l y t h e s o u r c e of n e w , a n d p o t e n t i a l l y r a d i c a l , f o r m s of s o c i a l o r g a n i z a t i o n . F o r b o t h M a r x a n d D u r k h e i m t h e s e f o r m s w e r e not n e c e s s a r i l y c o n f i n e d w i t h i n state b o r d e r s ; b o t h a s s e r t e d t h e t h e o r e t i c a l p o s s i b i l i t y

(for

M a r x , n e c e s s i t y ) of i n t e r n a t i o n a l s o l i d a r i s t i c o r g a n i z a t i o n . T h i s s o c i a l a n d r e l a t i o n a l a s p e c t of t h e d i v i s i o n of l a b o r is o v e r l o o k e d in t h e G D L l i t e r a t u r e . T h e d i v i s i o n of l a b o r is m o r e t h a n a m e c h a n i c a l c l a s s i f i c a t i o n o f c o u n t r i e s in t h e i n t e r n a t i o n a l p o l i t i c a l e c o n o m y a c c o r d i n g to t h e i r l e v e l of i n d u s t r i a l p r o d u c t i o n o r t h e c o m p o s i t i o n of t h e i r e x p o r t s . A s it e n t a i l s s t r u c t u r e d r e l a t i o n s h i p s b e t w e e n p r o d u c e r s , it d e s c r i b e s

relations

b e t w e e n h u m a n b e i n g s , a d i v i s i o n of l a b o r e r s . W i t h i n a s y s t e m of p r i v a t e p r o p e r t y , it w i l l y - n i l l y i n v o l v e s a s y m m e t r i c a l p o w e r r e l a t i o n s b e t w e e n o w n e r s a n d n o n o w n e r s , b e t w e e n c a p i t a l i s t s a n d w o r k e r s . B y f a i l i n g to g r a s p w h a t M a r x w o u l d d e s c r i b e as t h e s o c i a l r e l a t i o n s of p r o d u c t i o n , t h e G D L o m i t s as a t h e o r e t i c a l p r o b l e m t h e v a r i o u s p o s s i b i l i t i e s f o r c o l l e c t i v e e c o n o m i c s e l f - o r g a n i z a t i o n , w h i c h M a r x , W e b e r , a n d D u r k h e i m s a w as d i s t i n g u i s h i n g m o d e r n i n d u s t r y f r o m its p r e d e c e s s o r s . In t h e c o r e , s e m i p e r i p h e r y , a n d p e r i p h e r y , w o r k e r s h a v e d e v e l o p e d t h e o r g a n i z e d c a p a c i t y to d i s r u p t o r c o n t r i b u t e to e c o n o m i c g r o w t h , a n d t h e i r s t r e n g t h at t h e p o i n t of p r o d u c t i o n h a s p r o v i d e d a p l a t f o r m f o r b r o a d e r p o l i t ical i n i t i a t i v e s . R e c e n t a n a l y s e s of l a b o r in t h e N I C S h a v e i d e n t i f i e d o r g a n i z e d l a b o r ' s a b i l i t y to c h a l l e n g e state e c o n o m i c d e v e l o p m e n t

programs

t h r o u g h its p o w e r to d r i v e u p w a g e s , o b s t r u c t p r o d u c t i v i t y d r i v e s , a n d resist austerity ( D e y o 1987a). T h i s a p p r o a c h is t a k e n f u r t h e s t in a r e c e n t p r o v o c a t i v e c r i t i q u e of b o t h p l u r a l i s t a n d M a r x i s t a p p r o a c h e s to d e m o c r a c y by R u e s c h e m e y e r , S t e p h e n s , and Stephens (1992). T h e y assert that trade unions (and the w o r k i n g class m o r e b r o a d l y ) h a v e p l a y e d a d e c i s i v e r o l e in t h e d e v e l o p m e n t of d e m o c r a t ic p o l i t i e s a n d a r e p e r h a p s t h e m o s t i m p o r t a n t s o c i a l f o r c e s t r u g g l i n g f o r t h e

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extension of the franchise and the establishment and extension of the welfare state (Rueschemeyer, Stephens, and Stephens 1992). 3 For them, democracy is promoted not by the capitalist market nor by the bourgeoisie per se but rather by the revolutionary effect of capitalist development on the division of labor and the class structure. Indeed, they argue that democracy grows less out of consensus than out of class conflict, in particular from struggles by the bourgeoisie against landed oligarchs and in turn by the working class against the upper classes. Capitalism strengthens the working and middle classes while weakening the landed upper class. Thus, not only do workers have an interest in extending democratic political rights as a means to achieve their interests, but, relative to other subordinate groups, capitalists' dependence on their labor confers potential organizational capacity with which to press home their demands and to insulate themselves somewhat from the hegemony of dominant classes. Trade unions and other working-class groups thus bridge economic and political realms and production and consumption, and they play vital roles in the most critical sectors of societies. They represent forces that are indeed taken seriously by states and that are often at the center of state-led efforts over development—as an ally or antagonist in the struggle for development, as an object of co-optation and/or repression. Despite their centrality to politics, there is surprisingly little analysis in the GDL literature of labor movements as active agents capable of placing their stamp on the content and form of the national —and indeed international—political economy. Excellent research has illuminated the lot of unorganized workers, drawing particular attention to intra- and interstate migration (Mittelman 1994a; Sassen 1991, 1988; Harrod 1987; Cohen 1987). But many writers stop short of extending their investigations to the role of organized workers. When writers on the GDL have addressed the question of working-class collective actors, they have tended to view such groups as less significant to political development than other social groups, such as the middle class or large capitals. 4 Texts that move labor to the center of the analysis invariably treat it as a more or less passive actor, controlled either by the bureaucracy of developmentalist regimes or by its own peak-level organizations that do the state's bidding under corporatist arrangements. 5 The working class and trade unions are seen largely as external to the main political conflicts among elites and as the objects of state economic policies and repression. Workers are not located in production but in the consumption realm, where they mobilize in response to the austerity programs that diminish their standard of living and occasionally burst into spontaneous protest and strikes. 6 Austerity certainly affects workers as consumers, but the theories overlook the specific characteristics of workers in production and the way workers' place in production—hence their power—changes under capital-intensive industrialization. In leaving unexplored the impact of the GDL on

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w o r k e r s in both production and c o n s u m p t i o n , these analyses also overlook w o r k e r s ' capacity to d e f e n d themselves against capital and the state and to d e v e l o p alternative strategies for d e v e l o p m e n t . 7 Labor b e c o m e s an object of inquiry, but truly objectified, a thing subject to the c o n s c i o u s control of othe r s — e i t h e r state elites or the union bosses w h o control corporatist labor bodies. Workers d o not appear as a c o n s c i o u s social f o r c e , capable of selfinterested action. 8 Other writers, w h o accept in principle that labor may act as an a u t o n o m o u s social f o r c e , are skeptical about its capacity to counter the p o w e r of capital and developmentalist states ( H a w o r t h and R a m s a y 1988, 1984; E n d e r w i c k 1985; Waterman 1984; Portes and Walton 1981). Labor is thus generally treated in an economically reductionist, ahistorical m a n n e r , and often f r o m an elite perspective. T h e s e theoretical p r o b l e m s result in an often static picture in which unions and labor m o v e m e n t s are seen as passive, reacting to rather than causing c h a n g e . Certainly, these s h o r t c o m i n g s lead to difficulties in the understanding of labor a n y w h e r e , but they pose special problems in e x a m i n a t i o n s of workers and their unions in the N I C s , where the d e v e l o p m e n t of strong, militant industrial unionism — the " n e w u n i o n i s m " in Latin A m e r i c a and elsewhere —is a very recent phen o m e n o n . 9 Given the empirical evidence on the importance of labor movements in particular states, it is crucial to ask under what conditions labor can d e v e l o p as a collective actor. To a n s w e r this question it is f r u i t f u l to approach trade unions through the c o n c e p t s developed by social m o v e m e n t theory. Such an approach allows for a more nuanced understanding of the double m e a n i n g implicit in the term movement: the visibly o b v i o u s f o r m s of public protest suggesting m o v e m e n t as motion, mobility, and action toward certain goals and the less visible, though equally crucial, organizational considerations key to movements as c a m p a i g n s , as more or less consciously directed social action. By e m p h a s i z i n g the duality of m o v e m e n t as motion and as deliberate strategy (i.e., as mobilization), social m o v e m e n t theory helps o v e r c o m e the tendency to view collective action as a mysterious reflex e x p l o d i n g , e m a nating, or otherwise arising unexplained f r o m structural conditions. Too sharp a distinction between labor m o v e m e n t s and other " n e w " social m o v e m e n t s — t h e peace, green, w o m e n ' s , and religious f u n d a m e n t a l i s t m o v e m e n t s — o b s c u r e s important c o m m o n a l i t i e s b e t w e e n these c o n t e m p o r a r y f o r m s . 1 0 Indeed, late industrialization and political authoritarianism in the N I C s p r o d u c e p o w e r f u l labor and political m o v e m e n t s e m p l o y i n g f o r m s of action very similar to those identified by analysts of new social m o v e m e n t s . T h e concept social m o v e m e n t unionism has been usefully applied in South A f r i c a n labor studies to account for the d e v e l o p m e n t of the m o d e r n labor m o v e m e n t . Capitalist exploitation and apartheid meant that labor had to be both economically and politically e n g a g e d . I n d e e d , the union m o v e ment has been characterized by new social m o v e m e n t - t y p e patterns of organization adapted to a struggle against an authoritarian e n e m y : local devolu-

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tion of leadership and power; a repertoire of tactics and strategies of mass protest; and a willingness to align with community and political groups on a principled basis. The focus on social movement unionism brings together the two salient features of South Africa's modern development: deepening racial differentiation amid intensifying class stratification. It shows the necessity of linking class with other social processes. 1 2 South African case studies will show how the transformative impact of the GDL on workers' conditions of life opened up potentials for collective action. Import substitution industrialization changed the scale of production in South African manufacturing, enhanced workers' skills, and raised the costs to capital of replacing workers. The collective organization that workers constructed enabled them to intervene in the G D L as an actor allied with foreign trade unions, international trade secretariats, and social movements to influence foreign governments and multinational corporations (MNCs). However, the economic and political foundations of workers' collective organization have been profoundly affected by recent changes in the G D L as South Africa reintegrates into the international system, from which it had been excluded by sanctions. In particular, trade liberalization threatens the survival of import substitution industries in which labor is best organized and raises the prospect of painful (perhaps impossible) adjustment and widespread retrenchment. In this new context, labor has not operated simply as a constraining or negative force to be overcome by the state and capital but as a domestic actor influencing the development policy of the South African state. It has served as a source of counterhegemonic ideas for industrial development, economic reconstruction, and political democratization. Thus, the labor movement, whose initial growth was stimulated by conditions in the GDL —in the form of import substitution industrialization —is now in a position to influence the country's responses to changes in the GDL that undermine that model of development. These two roles will be investigated through two case studies: analyses of the labor movement's involvement in the international campaign for sanctions against South Africa and in postapartheid policy formulation.

SOUTH AFRICAN CASE STUDIES The New Labor

Unionism

The first trade unions in South Africa were established in the 1880s by immigrant miners who rushed to the Witwatersrand goldfields. 1 3 These craft unions were extremely militant, and from the 1890s to the 1920s led a number of strikes culminating in the "Rand Revolt" of 1922. Industrial unions emerged as secondary manufacturing grew in the 1930s. Although they developed large memberships and economic power, these unions were

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racially divided in their membership, leadership, and even in organizational structure. With passage of the first national labor law in 1923, Africans were barred from the industrial relations system. African workers could enter tame unions "parallel" to white-led unions (and under white control), or joined vulnerable independent organizations led by leftists on the margins of the officially recognized movement. South Africa first attempted to diversify f r o m mining and agriculture in the 1920s through state-led industrialization policies. Despite these policies and industrial growth during World War II, South African industry was still relatively backward before 1960. Manufacturing was generally characterized as low-skill and labor-intensive, based in small enterprises. It remained highly dependent on machinery and raw materials from abroad, which were financed from profits on traditional primary goods exports (Innes 1984: 169). In the midst of the worldwide expansion of manufacturing in the 1960s, many leading South African corporations and government policymakers advocated the increased deepening of import substitution through a concerted program of import controls, government financial support, and tax incentives. Import substitution stimulated a sustained industrial expansion that marked a structural shift in the character of South African manufacturing. From the 1960s, capital goods manufacture increased in importance and represented the most significant sectors of manufacturing, far outpacing older consumer-oriented industries. The shift brought with it an increase in the capital intensity in manufacturing. The first employment effect was to create jobs in new enterprises with larger average workforces, more capital-intensive processes, and an emphasis on semiskilled labor. The boom led not only to a massive increase in manufacturing employment but also to the expansion of the black proportion of the workforce —from 61 percent in 1948 to 75 percent in 1968 (Innes 1984: 188). What set the 1960s expansion apart from previous booms was not simply the absolute increase in black employment but the qualitative change in blacks' average skill levels. These increased as blacks occupied more highly skilled positions opening in the new industries or filled jobs that had previously been the preserve of whites under closed shop agreements or racial employment quotas. In 1956, Africans occupied only approximately 4 0 percent of semiskilled positions. In 1969 the percentage passed an important threshold when Africans filled more than half (55 percent) of all semiskilled occupations; in 1979 the percentage had increased to nearly twothirds (Schneier 1983: 28). Finally, the growth of secondary industrialization and mechanization was not confined to urban manufacturing but extended into agriculture, with important consequences for both rural and urban social relations. The rapid capitalization and mechanization of agriculture in the 1960s and 1970s resulted in the massive expulsion from white farms of black migrants, labor

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t e n a n t s , a n d p e r m a n e n t w o r k e r s ( D e K l e r k 1984; S i m k i n s 1 9 8 4 ) . A p a r t h e i d p o l i c i e s a i m e d at e r a d i c a t i n g f a r m s o w n e d by b l a c k s in w h i t e a r e a s — t h e s o c a l l e d b l a c k s p o t s — f u r t h e r u n d e r m i n e d t h e r u r a l p o l e of A f r i c a n s u b s i s t e n c e . T h e c o m b i n a t i o n of m e c h a n i z a t i o n a n d r u r a l r e m o v a l s s i g n i f i c a n t l y l i m i t e d b l a c k u r b a n w o r k e r s ' e x i t o p t i o n a n d c o n s i g n e d t h e m to s e e k i n g s u r v i v a l w i t h i n t h e o p p o r t u n i t i e s a v a i l a b l e in S o u t h A f r i c a ' s c i t i e s . T h e d e e p e n i n g of i m p o r t s u b s t i t u t i o n i n d u s t r i a l i z a t i o n f r o m t h e 1 9 6 0 s t h u s c o n s t i t u t e d a s i g n i f i c a n t s h i f t in t h e c h a r a c t e r of p r o d u c t i o n in t h e S o u t h A f r i c a n e c o n o m y as a w h o l e a n d p r o v i d e d o b j e c t i v e c o n d i t i o n s f o r t h e d e v e l o p m e n t of i n d u s t r i a l u n i o n i s m . T h e c h a n g e s in t h e d i v i s i o n of l a b o r s p u r r e d b y t h e g r o w t h of m a s s p r o d u c t i o n a s s e m b l y line i n d u s t r i e s a r e t y p i c a l of i m p o r t s u b s t i t u t i o n a r o u n d t h e w o r l d . H o w e v e r , in S o u t h A f r i c a t h e i m p a c t of r a c e o n t h e d i v i s i o n of l a b o r p r o d u c e d s p e c i f i c g r i e v a n c e s f o r b l a c k w o r k e r s a n d p r o v i d e d an i m p e tus for collective action. T h e e m p l o y m e n t relationship was deeply scarred by r a c i s m , a n d b l a c k w o r k e r s e x p e r i e n c e d p r o f o u n d d i s c r i m i n a t i o n r e s p e c t to w a g e s a n d w o r k i n g c o n d i t i o n s , p r o m o t i o n , a n d t h e

with

despotic

b e h a v i o r of s u p e r v i s i o n . T h e c o m b i n a t i o n of i n t e n s i f i e d a s s e m b l y - l i n e w o r k a n d d i r e c t r a c i a l o p p r e s s i o n p r o d u c e d d e e p g r i e v a n c e s and e n c o u r a g e d t h e v i e w that t h e S o u t h A f r i c a n p o l i t i c a l a n d e c o n o m i c s y s t e m s w e r e u n j u s t . F r o m t h e p a s s a g e of t h e f i r s t n a t i o n a l l a b o r law in 1923 until

1979,

African workers were prohibited f r o m joining registered trade unions and e n g a g i n g in f o r m a l c o l l e c t i v e b a r g a i n i n g w i t h i n t h e o f f i c i a l i n d u s t r i a l r e l a t i o n s s y s t e m . I n d e e d , u n d e r t h e a p a r t h e i d s y s t e m an a l t e r n a t i v e f r a m e w o r k of A f r i c a n r e p r e s e n t a t i o n w a s e s t a b l i s h e d u n d e r t h e d i r e c t a u t h o r i t y of t h e D e p a r t m e n t s of L a b o u r a n d N a t i v e A f f a i r s . T h e s e a d m i n i s t r a t i v e c o n t r o l s w o r k e d e f f i c i e n t l y w h e n s t r o n g r e p r e s s i o n in t h e 1960s f o r c e d b l a c k political a n d l a b o r o r g a n i z a t i o n s i n t o e x i l e o r q u i e s c e n c e . B u t t h e

economic

c h a n g e s of t h e 1 9 6 0 s r e n d e r e d t h e m u n w o r k a b l e , a n d they w e r e u n a b l e to c o p e w i t h t h e m a s s i v e i n c r e a s e in b l a c k w o r k e r m i l i t a n c y d u r i n g a n d a f t e r t h e D u r b a n s t r i k e s of 1 9 7 3 . A f r i c a n w o r k e r s w e r e g r a n t e d f u l l r i g h t s w i t h i n t h e e s t a b l i s h e d i n d u s t r i a l r e l a t i o n s s y s t e m o n l y in 1981. T h r o u g h o u t the 1970s and 1980s the official (white) labor m o v e m e n t w a s d e c l i n i n g : m e m b e r s h i p w a s f a l l i n g a n d w h i t e u n i o n s w e r e u n a b l e to s u s tain white w o r k e r s ' standard of living. W h i l e one m o v e m e n t fell, another a r o s e , as b l a c k w o r k e r s built a n e w l a b o r m o v e m e n t on a f o r m a l l y n o n r a c i a l class basis. U n i o n s organizing a m o n g blacks soon overtook the racist unions to b e c o m e t h e c e n t r a l i n s t i t u t i o n s of S o u t h A f r i c a n l a b o r . T h r o u g h their s e l f o r g a n i z a t i o n , b l a c k w o r k e r s c r e a t e d n e w f o r m s of w o r k e r

organization,

stressing democratic grassroots practices and merging shop-floor and broade r p o l i t i c a l c o m m i t m e n t s in w h a t h a s b e e n d e s c r i b e d as s o c i a l m o v e m e n t u n i o n i s m . T h e s e i n n o v a t i o n s m a r k e d a f u n d a m e n t a l d e p a r t u r e in t h e h i s t o r y of t h e S o u t h A f r i c a n l a b o r m o v e m e n t .

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T h o u g h the 1973 D u r b a n strikes vented g r i e v a n c e s a c c u m u l a t e d over t h e y e a r s of s o - c a l l e d l a b o r p e a c e d u r i n g t h e r e p r e s s i v e 1 9 6 0 s , t h e y w e r e n o t spontaneous eruptions. Student and w o r k e r activists had been organizing for t w o y e a r s b e f o r e t h e o u t b r e a k o c c u r r e d , a n d in its a f t e r m a t h t h e y w o r k e d to t r a n s f o r m the w o r k e r s ' militancy into solid organizations. In t h e i r o r g a n i z a t i o n a l e f f o r t s t h e s e a c t i v i s t s p r i o r i t i z e d b u i l d i n g d e c e n tralized w o r k p l a c e structures that could survive state repression. T h e strateg y e m p h a s i z e d " t h e d e v e l o p m e n t of a c a d r e of s h o p s t e w a r d s

integrally

l i n k e d i n t o t h e c o n s t i t u t i o n a n d d e c i s i o n - m a k i n g s t r u c t u r e of t h e u n i o n s " (Cheadle

1 9 8 7 : 7 ) . In this r e s p e c t , t h e i m p e r a t i v e s of c a r e f u l o r g a n i z i n g

a g a i n s t an a u t h o r i t a r i a n s t a t e a n d u n d e r d r a c o n i a n l a b o r l e g i s l a t i o n i n t e r s e c t e d w i t h t h e s t r u c t u r a l e c o n o m i c c h a n g e s that g e n e r a t e d a m a s s of s e m i s k i l l e d w o r k e r s w i t h l e v e r a g e in p r o d u c t i o n . T a k e n t o g e t h e r , t h e s e c o n d i tions provided the f o u n d a t i o n for industry-based

unionism and a

shop

s t e w a r d s y s t e m of u n i o n o r g a n i z a t i o n . T h e u n i o n s that g r e w in D u r b a n d e c i d e d to b u i l d s t r o n g s h o p f l o o r s t r u c t u r e s in e v e r y f a c t o r y , r a t h e r t h a n r o l l i n g u p h i g h m e m b e r s h i p f i g u r e s in a p a p e r o r g a n i z a t i o n . T h i s e m p h a s i s w a s c a p t u r e d in t h e s l o g a n that it w a s " b e t t e r to h a v e a 1 0 0 0 m e m b e r s in o n e f a c t o r y t h a n a t h o u s a n d in a h u n d r e d f a c t o r i e s . " T h e c o l l e c t i v e s t r e n g t h on t h e f a c t o r y f l o w " p u t p r e s s u r e o n t h e i r e m p l o y e r in a w a y that t h e d i s p e r s e d m e m b e r s h i p in 100 f a c t o r i e s c o u l d n o t " (Cheadle 1987:8). T h e u n i o n s c o n c e n t r a t e d t h e i r o r g a n i z i n g e f f o r t s on s e m i s k i l l e d o p e r a t o r s in t h e m o s t a d v a n c e d i m p o r t s u b s t i t u t i o n s e c t o r s , s u c h as m e t a l , t e x t i l e , a n d c h e m i c a l i n d u s t r i e s . T h e y a l s o f o u n d that b y t a r g e t i n g m u l t i n a t i o n a l c o r p o r a t i o n s i n t e r n a t i o n a l p r e s s u r e c o u l d b e u s e d to b o l s t e r o r g a n i z i n g d r i v e s . T h e D u r b a n u n i o n s s o o n f o r m e d t h e first t r a d e u n i o n c e n t e r s i n c e t h e 1 9 6 0 s repression

drove

the A f r i c a n

National

Congress

(ANC)-aligned

South

A f r i c a n C o n g r e s s of T r a d e U n i o n s ( S A C T U ) i n t o e x i l e . T h i s c e n t e r g r e w i n t o t h e F e d e r a t i o n of S o u t h A f r i c a n T r a d e U n i o n s ( F O S A T U ) , w i t h t w e n t y t h o u s a n d p a i d - u p m e m b e r s in ten i n d u s t r i a l u n i o n s . W h e n A f r i c a n w o r k e r s g a i n e d f u l l t r a d e u n i o n r i g h t s in 1981 F O S A T U ' s m e m b e r s h i p

increased

a l m o s t o v e r n i g h t to n i n e t y - f i v e t h o u s a n d . In its s t r e s s o n b u i l d i n g i n d u s t r i a l o r g a n i z a t i o n F O S A T U

eschewed

p o l i t i c a l a l l i a n c e s w i t h t h e l e a d i n g o r g a n i z a t i o n s of t h e n a t i o n a l i s t m o v e m e n t . 1 4 F u r t h e r m o r e , t h e y s t r e s s e d s t r a t e g i c a n d t a c t i c a l f l e x i b i l i t y in a p p l y ing t h e i r p r i n c i p l e s of b u i l d i n g a w o r k e r s ' m o v e m e n t a n d p r o v e d w i l l i n g to p a r t i c i p a t e in c e r t a i n o f f i c i a l i n s t i t u t i o n s , w h e n t h e y c o u l d d o s o on t h e i r o w n t e r m s a n d in w a y s that a d v a n c e d t h e i r l o n g - t e r m i n t e r e s t s . W h i l e a d v o c a t i n g a r a d i c a l v i s i o n , t h e y p u r s u e d a s t r a t e g y of r e f o r m , a s t r a t e g i c u s e of p o w e r that h a s b e e n l a b e l e d r a d i c a l r e f o r m ( A d l e r a n d W e b s t e r 1 9 9 5 ) . T h e l o n g - t e r m g o a l s of e l i m i n a t i n g a p a r t h e i d a n d i n a u g u r a t i n g s o c i a l i s m w e r e to b e a c h i e v e d — a t least in t h e s h o r t - to m e d i u m - t e r m — v i a l e g a l m e a n s of

128

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s t r u g g l e . T h e s t r a t e g y of r a d i c a l r e f o r m c r e a t e d n u m e r o u s c o n f l i c t s b e t w e e n F O S A T U and e m e r g i n g a b o v e g r o u n d nationalist political groupings inside South

Africa committed

to

revolutionary

rupture,

who

misinterpreted

F O S A T U ' s p o s i t i o n a s o n e of c o - o p t a t i o n a n d r e f o r m i s m . W h e n t h e s e p o l i t ical m o v e m e n t s b e g a n t o l a u n c h m i l i t a n t t r a d e u n i o n s a f t e r 1979, t h e d i f f e r e n c e s o f t e n led to o u t r i g h t c o n f l i c t b e t w e e n t h e i n d u s t r i a l u n i o n s a n d t h e politically engaged unions, with sometimes disastrous c o n s e q u e n c e s

for

both. F O S A T U n o n e t h e l e s s e m p h a s i z e d b u i l d i n g b r o a d u n i t y , and in 1985 it h e l p e d f o r m a n e w f e d e r a t i o n , t h e C o n g r e s s of S o u t h A f r i c a n T r a d e U n i o n s ( C O S A T U ) , w h i c h w o u l d s o o n b e c o m e t h e l a r g e s t t r a d e u n i o n c e n t e r in S o u t h A f r i c a n h i s t o r y . In 1 9 9 0 C O S A T U c l a i m e d m o r e t h a n 1.2 m i l l i o n members

organized

COSATU

emerged

in

fourteen

industrial

from a compromise

unions

between

(Baskin

1991:448).

the industrial

unions,

g r o u p e d a r o u n d F O S A T U a n d the m o r e p o l i t i c a l l y o r i e n t e d (but o r g a n i z a t i o n a l l y w e a k e r ) u n i o n s a f f i l i a t e d to t h e U n i t e d D e m o c r a t i c F r o n t , an internally b a s e d A N C - a l i g n e d

political m o v e m e n t o p p o s i n g apartheid. As a

result, C O S A T U w o u l d be aligned with the A N C , while the political m o v e m e n t e n d o r s e d s h o p - f l o o r - b a s e d i n d u s t r i a l u n i o n i s m as t h e m o s t a p p r o p r i a t e s t r a t e g y f o r t h e l a b o r m o v e m e n t ( F i n e a n d W e b s t e r 1989; E i d e l b e r g

1993;

Adler and Webster 1995). T h e c o n s o l i d a t i o n of t h e l a b o r m o v e m e n t h a s o c c u r r e d w i t h a r e l a t i v e ly l i m i t e d a m o u n t of f r a g m e n t a t i o n o n s k i l l , r e g i o n a l , r a c i a l , o r p o l i t i c a l g r o u n d s . D e s p i t e a h i s t o r y of s t r o n g w h i t e c r a f t u n i o n s a n d m i l i t a n t A f r i c a n "all-in," or general, unions, industrial unions are the most c o m m o n repres e n t a t i v e f o r m t o d a y . T h e d e v e l o p m e n t of n a t i o n a l i n d u s t r i a l u n i o n s is in part a c c o u n t e d f o r by t h e i n d u s t r y - b a s e d s t r u c t u r e of c o l l e c t i v e b a r g a i n i n g d e f i n e d u n d e r t h e L a b o u r R e l a t i o n s A c t , as w e l l as by the s t r a t e g i c c h o i c e s of the n e w u n i o n s , w h i c h o r g a n i z e d o n t h e b a s i s of " o n e i n d u s t r y , o n e u n i o n " to m a x i m i z e t h e i r p o w e r ( E i d e l b e r g 1 9 9 3 ) . 1 5 F u r t h e r m o r e , t h e n e w u n i o n s s o o n set a b o u t d e v e l o p i n g n a t i o n a l c o o r d i n a t i n g s t r u c t u r e s a n d d e v e l o p e d a m o d e l of s t r o n g n a t i o n a l u n i o n s b o u n d t o g e t h e r in a tight f e d e r a t i o n to s e r v i c e t h e a f f i l i a t e s . 1 6 B y 1994 n e a r l y 4 0 p e r c e n t of t h e n o n f a r m , n o n d o m e s t i c l a b o r f o r c e w a s o r g a n i z e d in t r a d e u n i o n s ; a n d d e s p i t e a l a r g e n u m b e r of i n d e p e n d e n t u n i o n s a n d t h e e x i s t e n c e of f o u r o t h e r u n i o n f e d e r a t i o n s , C O S A T U ' s m e m b e r s h i p is g r e a t e r t h a n t h e c o m b i n e d m e m b e r s h i p of t h e o t h e r f e d e r a t i o n s a n d u n i o n s . In f a c t , t h e t w o n e x t - l a r g e s t f e d e r a t i o n s h a v e d i s c u s s e d m e r g i n g w i t h C O S A T U to f o r m o n e superfederation ( M a c u ñ 1995). A merger w o u l d create a massive trade union c e n t e r as w e l l as h e l p o v e r c o m e r e m a i n i n g p o l i t i c a l a n d r a c i a l d i v i s i o n s in t h e l a b o r m o v e m e n t . 1 7 T h u s , not o n l y h a v e t h e n e w u n i o n s b e e n e f f e c t i v e in o r g a n i z i n g w o r k e r s i n t o p o w e r f u l g r a s s r o o t s s t r u c t u r e s , b u t they h a v e a l s o d e v e l o p e d t i g h t l y s t r u c t u r e d n a t i o n a l c o o r d i n a t i n g b o d i e s that o f f e r w o r k e r s unprecedented strategic power.

South African Trade Union Movement

Unions and the International Sanctions The Shop Floor Meets the GDL

129

Movement:

As the antiapartheid struggle m o v e d into its decisive phase in the mid1980s, the international social m o v e m e n t for sanctions against South A f r i c a won u n p r e c e d e n t e d victories. T h e e n a c t m e n t of various local and state d i v e s t m e n t and sanctions laws in the United States p r o m p t e d a trickle of corporate w i t h d r a w a l s f r o m South A f r i c a , which g r e w to a flood a f t e r S e p t e m b e r 1986 w h e n the U.S. C o n g r e s s passed the C o m p r e h e n s i v e AntiApartheid Act ( C A A A ) . 1 8 T h o u g h these strategies were publicly supported by the new unions inside South A f r i c a , they had m a n y private misgivings about policies that could lead to the closure of f i r m s and the loss of hard-earned m e m b e r s h i p . T h e actual w i t h d r a w a l s were hailed as victories for the antiapartheid movem e n t , but the unions were caught without e f f e c t i v e strategies for r e s p o n d i n g , especially since the disinvestments usually took the f o r m of a buyout by South African capital or a merger with a n o n - U . S . f i r m . In these deals, worker rights were in j e o p a r d y , especially w h e r e unprofitable c o m p a n i e s used the restructuring of o w n e r s h i p as an e x c u s e to reverse trade union gains. Workers feared that the assets of the c o m p a n y (which they had helped create) either would be repatriated or w o u l d fall under the control of a new o w n e r w h o might repudiate their collective bargaining rights. 1 4 It was especially difficult for South A f r i c a n unions to respond as the precise nature of such restructuring was usually obscure and because c o m munication links between the internal unions and the external antiapartheid m o v e m e n t were poor. U n i o n s ' questioning of w i t h d r a w a l s was often misconstrued outside the country as opposition to sanctions. T h e sorts of d e m a n d s appropriate to contesting corporate restructuring were unprecedented in South A f r i c a and caused considerable c o n f u s i o n a m o n g w o r k e r s . D e m a n d s for curtailing the d e c i s i o n m a k i n g p o w e r of capital (including assurances that vested interests, such as pension f u n d s , would not be c o m p r o m i s e d ) , for o p e n i n g the b o o k s , for rights of consultation, and for representation on corporate boards were entirely new. South A f r i c a n unions had traditionally f o l l o w e d a policy of "militant a b s t e n t i o n i s m , " in which they r e f u s e d such options out of a reluctance to " c o - m a n a g e apartheid." Even if unions had raised such issues, South African corporate law and m a n a g e m e n t hostility militated against success. At least initially, M N C s were m u c h m o r e sophisticated actors in the G D L than either nationally based unions or their international social m o v e m e n t allies. In 1986 and 1987, unions were badly beaten in a n u m b e r of prominent battles over sanctions, and their defeats p r o m p t e d a thorough rethinking of strategy. C O S A T U r e f o r m u l a t e d its o w n d i s i n v e s t m e n t policy (which previously had said nothing about h o w f i r m s should leave) by identifying a n u m ber of central d e m a n d s f o c u s i n g on curtailing m a n a g e m e n t s ' unilateral

130

Glenn

power

over

Adler

disinvestment

decisionmaking.

At

its J u l y

1987

congress

C O S A T U r e d r a f t e d its s a n c t i o n s r e s o l u t i o n to d e m a n d that c o r p o r a t i o n s g i v e a d e q u a t e a d v a n c e n o t i c e t o e n a b l e n e g o t i a t i o n s to o c c u r o v e r t h e t e r m s of withdrawal. The federation demanded

that d e p a r t i n g c o m p a n i e s h a v e a

m o r a l o b l i g a t i o n to r e t u r n p r o f i t s a c c u m u l a t e d u n d e r a p a r t h e i d " s o t h a t t h e s o c i a l w e a l t h of S o u t h A f r i c a r e m a i n s t h e p r o p e r t y of t h e p e o p l e of S o u t h A f r i c a f o r t h e b e n e f i t of a l l . " S u b s e q u e n t r e v i s i o n s of t h e r e s o l u t i o n c a l l e d f o r o n e - y e a r ' s a d v a n c e n o t i c e of w i t h d r a w a l , f u l l d i s c l o s u r e of t h e d i s i n v e s t m e n t p l a n , c o m p e n s a t i o n , a n d r e c o g n i t i o n of u n i o n r i g h t s s h o u l d t h e c o m p a n y b e s o l d to e i t h e r a local o r an i n t e r n a t i o n a l c o r p o r a t i o n . U n i o n s p a i d c l o s e a t t e n t i o n to b u i l d i n g s t r o n g e r ties to o v e r s e a s o r g a n i z a t i o n s in t h e a n t i a p a r t h e i d m o v e m e n t , a l l i e d u n i o n s a n d i n t e r n a t i o n a l t r a d e u n i o n s e c r e t a r i a t s , a n d t h e U . S . m e d i a . D u r i n g s p e c i f i c b a t t l e s s u c h links a f f o r d e d S o u t h A f r i c a n u n i o n s g r e a t e r p u r c h a s e o n the M N C h e a d o f f i c e . S o m e u n i o n s l a u n c h e d U . S . - s t y l e c o r p o r a t e c a m p a i g n s to p r e s s u r e M N C s to b a r g a i n o v e r w o r k e r s ' d i s i n v e s t m e n t r i g h t s , w h i l e o t h e r s e x p l o r e d t h e integ r a t e d u s e of s t r i k e s , n e g o t i a t i o n s , a n d l o c a l a n d i n t e r n a t i o n a l m e d i a b l i t z e s . T h e s e t a c t i c s c a m e t o g e t h e r in a p o w e r f u l w a y in t h e C O S A T U - a f f i l i a t ed C h e m i c a l W o r k e r s ' Industrial U n i o n ' s "responsible d i s i n v e s t m e n t " c a m p a i g n a g a i n s t M o b i l , w h e n t h e g i a n t M N C s o l d its S o u t h A f r i c a n o p e r a t i o n s to a n o t o r i o u s a n t i - u n i o n m i n i n g h o u s e . T h e u n i o n s u e d t h e c o m p a n y in t h e S o u t h A f r i c a n c o u r t s to h a v e t h e s a l e d e c l a r e d i l l e g a l , b e g a n a t w o - w e e k s t r i k e of M o b i l i n s t a l l a t i o n s , p i c k e t e d its c o r p o r a t e o f f i c e s , a n d ran n e g a t i v e a d v e r t i s e m e n t s in l o c a l p a p e r s . It r e c e i v e d s u p p o r t f r o m t h e I n t e r n a t i o n a l C h e m i c a l a n d E n e r g y W o r k e r s ' F e d e r a t i o n , as w e l l as f r o m U . S . l a b o r a n d a n t i a p a r t h e i d o r g a n i z a t i o n s . U . S . u n i o n s p r e s s e d M o b i l in t h e U n i t e d S t a t e s to m e e t t h e d e m a n d s , a n d a n t i a p a r t h e i d g r o u p s p r e s e n t e d r e s o l u t i o n s at a n n u a l s h a r e h o l d e r s m e e t i n g s c o n d e m n i n g t h e c o m p a n y . T h i s c o a l i t i o n of labor, church, and political groups targeted Mobil during S o w e t o Day (16 J u n e ) c o m m e m o r a t i o n s in m a j o r U . S . c i t i e s ( A d l e r 1 9 9 0 ) . In the e n d , t h e c o m b i n e d p r e s s u r e s b r o u g h t to b e a r o n M o b i l w o n s i g n i f i c a n t c o n c e s s i o n s f r o m the c o m p a n y . T h e trade unions' social m o v e m e n t character facilitated these

new

s t r a t e g i e s . W o r k e r s d i d n o t v i e w t h e b r o a d a n t i a p a r t h e i d m o v e m e n t as alien t o t h e i r i n t e r e s t s ; i n d e e d , t h e i r o w n i n v o l v e m e n t in t h e l a b o r m o v e m e n t w a s g r e a t l y i n f l u e n c e d b y d e s i r e s f o r j u s t i c e in a s y s t e m that d e n i e d f u n d a m e n tal h u m a n r i g h t s . W o r k p l a c e a n d b r o a d e r p o l i t i c a l d e m a n d s w e r e m e r g e d in t h e d e v e l o p m e n t of " s o c i a l m o v e m e n t u n i o n i s m . " F u r t h e r m o r e , t h e " m o v e m e n t " c h a r a c t e r of t h e t r a d e u n i o n s m e a n t that they w e r e c o m f o r t a b l e w i t h t h e g u e r r i l l a - t y p e s t r a t e g i e s a n d t a c t i c s of c o r p o r a t e c a m p a i g n s a n d o t h e r f o r m s of i n t e r n a t i o n a l p o l i t i c a l s t r u g g l e . T h e s e w e r e not b u r e a u c r a t i c a n d o f f i c e - b o u n d u n i o n s u n u s e d to w a r s of m a n e u v e r . S o c i a l m o v e m e n t u n i o n i s m r e q u i r e d a h i g h d e g r e e of

coordination

South African Trade Union Movement

131

among trade unions and between them and the formations of the antiapartheid political movement both inside and outside of South Africa. The formation of COSATU greatly facilitated such coordination, as it created a single, national organization with legitimate decisionmaking structures through which the labor movement could make strategic decisions. Indeed, COSATU played an extremely crucial role in this process, as most political organizations had been formally banned during the mid-1980s state of emergency. The labor movement —though restricted in its open espousal of politics—was never formally proscribed, and it became the center of public resistance. Furthermore, C O S A T U ' s close links to the A N C (in contrast to FOSATU's stress on political independence) facilitated extremely close ties to the ANC-aligned international sanctions movement. Over time, the exiled African National Congress, the South African Communist Party, and the internal movements against apartheid formed an overarching body or broad front known as the Mass Democratic Movement to coordinate the last phases of the struggle against apartheid. Such institutions promoted the elaboration of common strategies against the apartheid regime both inside and outside South Africa. In addition to more sophisticated strategies and tactics in contesting the terms of disinvestment, one extremely important variable emerged in the unions' campaign for "responsible" disinvestment. A union's existing strength on the shop floor emerged as a necessary condition for success in resisting the M N C s ' unilateral decisionmaking. The two most prominent examples concerned workers from the National Union of Metalworkers of South Africa ( N U M S A ) . In the first, workers' resistance to General Motors's 1986 disinvestment was broken after a three-week strike in the Eastern Cape city of Port Elizabeth. Support dissipated once the company threatened to dismiss the workforce and manipulated preexisting differences between African and coloured workers and weaknesses in the union's factory leadership. As a result of the union's defeat, the company (renamed Delta Motors after it was sold to its top management) embarked on a thorough rationalization and austerity drive, featuring extensive layoffs and the rooting out of unionists. General Motors opened South Africa in 1926 as part of the c o m p a n y ' s first expansionary rush to establish assembly plants in the Third World (Adler 1994). From its founding, the South African operation was closely integrated with the parent company in Detroit; machinery, tooling, and designs were supplied either f r o m the United States or from Opel in Germany, and top executives of the wholly owned subsidiary were seconded from either the head office or other foreign subsidiaries rather than developed locally. Its disinvestment was no less a part of a global strategy than was the original establishment of the plant. Though motivated by local political factors and the CAA A, the withdrawal was articulated to a comprehen-

132

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sive restructuring of the multinational during a period of profound crisis in the mid-1980s, which saw it close eleven plants and lay off nearly thirty thousand workers in the United States. Furthermore, the method of withdrawal saw the first deployment in South Africa of the repertoire of corporate practices perfected in the global merger mania of the 1980s. G M engineered and financed a leveraged buyout of its loss-making subsidiary to its own managers, who would maintain license links to Opel in Germany and Isuzu in Japan (respectively, wholly owned and GM-dominated companies) ensuring that the M N C retained its place in the South African market without falling foul of the provisions of the C A A A . The autoworkers' union was completely mystified by this new and bewildering exercise in corporate camouflage, and it repeatedly raised inappropriate demands (such as for severance pay) on the mistaken assumption that the subsidiary would be closing d o w n . Nor were the South African and international antiapartheid movements any better attuned to the sophistication of G M ' s strategy— they invariably hailed the company's compliance with the legislation. Indeed, the corporate consultants who engineered the scheme were canny enough to claim a substantial U.S. tax break for the parent company on the losses accumulated by the South African subsidiary; indeed, the sale was consummated as the loophole was scheduled to disappear. By contrast, workers at Goodyear in the nearby city of Uitenhage successfully challenged the company's June 1989 sale to a South African conglomerate and redefined the terms of the transfer. Like G M , Goodyear had a long-standing presence in South Africa, having established a plant in Uitenhage in 1946 as part of the global expansion of tire and rubber manufacturing in the Third World paralleling the global extension of Ford's and G M ' s assembly networks. 2 0 The local subsidiary was consistently profitable, and indeed Goodyear's disinvestment was prompted by a move in the U.S. Congress the year before to eliminate protections against double taxation for U.S. companies operating in South Africa. Where G M sold an unprofitable firm and as a result managed to win significant tax gains, Goodyear was prompted to sell before sanctions-inspired changes in U.S. tax codes eliminated a source of profit and imposed new tax obligations on the parent company. When workers learned about the proposed sale of the Goodyear subsidiary to a South African mining and manufacturing conglomerate, they immediately submitted a list of demands to the company. When these were refused, workers embarked on a legal strike in support of their demands. The company dismissed its workforce of twelve hundred after strikers spurned its ultimatum to return to work. N U M S A successfully organized a campaign through other COSATU affiliates to blacken Goodyear products, and workers at other tire companies donated a portion of their wages to a strike fund.

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M o s t i m p o r t a n t , G o o d y e a r workers s u c c e s s f u l l y organized the highly politicized U i t e n h a g e black t o w n s h i p s to r e f u s e to scab on the strikers —a direct b e n e f i t of the trade u n i o n s ' social m o v e m e n t character. A f t e r a ten-week strike, the M N C c o n c e d e d to the w o r k e r s ' core d e m a n d s , including a c o m m i t m e n t that c o n d i t i o n s of service w o u l d be fully r e s p e c t e d , granting ex gratia p a y m e n t s to w o r k e r s , and agreeing that the workers w o u l d be able to control their p e n s i o n f u n d . 2 1 T h e G e n e r a l M o t o r s plant had a l w a y s been a weakly organized affiliate of N U M S A . N o t only was the w o r k f o r c e deeply divided b e t w e e n A f r i c a n and c o l o u r e d w o r k e r s , but m a n a g e m e n t w a s out of step with best practice s t a n d a r d s in South A f r i c a n industrial relations. F u r t h e r m o r e , the workers had never f o u g h t and w o n a protracted strike. By contrast, in 1989 G o o d y e a r w a s an e x t r e m e l y well organized factory. T h o u g h in the early 1980s it had been the site of internecine conflicts b e t w e e n progressive unions, N U M S A had m o u n t e d an e f f e c t i v e c a m p a i g n f r o m 1985 to reorganize the w o r k f o r c e on a solid basis; strong shop stewards w o r k e d to o v e r c o m e d i f f e r e n c e s b e t w e e n c o l o u r e d s and A f r i c a n s . T h e organizing gains were consolidated in a series of disputes in 1988 around m a n a g e m e n t ' s disciplinary abuses, culminating in a s u c c e s s f u l m o n t h - l o n g strike in May. Workers at General M o t o r s had been the first to enter the new and conf u s i n g terrain of industrial struggle over international sanctions and did so amid r a n k - a n d - f i l e divisions and little e x p e r i e n c e in strike action. G o o d y e a r w o r k e r s , h o w e v e r , c o n d u c t e d their strike three years later, after more sophisticated d o m e s t i c and international strategies had been d e v e l o p e d , and did so with battle-tested factory organization. In the context of these t w o strikes, ordinary s h o p - f l o o r workers b e c a m e important actors in a d r a m a of international political e c o n o m y , engaging in tests of strength with p o w e r f u l M N C s . T h e shop floor b e c a m e a terrain of conflict in the global division of labor, upon which w o r k e r s ' self-conscious organization held out the possibility of c h e c k i n g the a w e s o m e p o w e r of international capital. As a result, the normally m u n d a n e and provincial ( f r o m the point of view of the G D L ) concerns of factory organization, c o m m u n i t y n e t w o r k s , and even the personalities and strengths of individual shop stewards had important ramifications for processes at the level of the world system. Unions and Reconstruction: The Future of South Africa's Location

in the

GDL

As asserted earlier, d e v e l o p m e n t in the N I C s creates new social forces that can c h a l l e n g e the political and e c o n o m i c basis on which they t h e m s e l v e s e m e r g e d . L a b o r m o v e m e n t s in particular are not static p h e n o m e n a ; different m o v e m e n t s , with different organizational bases and different strategies, e m e r g e at d i f f e r e n t times, in part as a c o n s e q u e n c e of d e v e l o p m e n t . T h e s e

134

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movements in turn may become self-conscious actors addressing the broad policy questions of the day. In recent years the labor movement in South Africa has come to play an increasingly central macroeconomic role and has in fact become recognized by big business and sections of the state as the source of the most innovative thinking on development. 2 2 The labor movement's long-standing commitment to militant abstentionism (the refusal to collaborate in state and management structures) shifted in the late 1980s to a policy of conditional participation (Von Holdt 1991). 23 This shift was dictated by a major threat to the unions' survival when the government attempted to reverse the liberalization in labor relations by passing the repressive Labour Relations Amendment Act ( L R A A ) of 1988. The unions chose to fight the L R A A through social-movementstyle mass action as well as negotiation with business elites and ultimately with the state. These efforts led to the eventual repeal of the L R A A and the passage of a new labor code drawn up by the leading union federations and capital. Though promulgated before the full transition to democracy, the new Labour Relations Act was immediately labeled the first piece of postapartheid legislation and was widely seen to have ushered in a new era characterized by the politics of reconstruction (Schreiner 1991). In the process, the labor movement logically extended a strategy of negotiation backed up with industrial action first developed on the shop floor to contest managerial authority. This strategy has been increasingly employed to influence broad state policy, motivated by a desire to address the macroeconomic and political conditions that determine the traditional union bargaining issues of wages and working conditions. COSATU was thus the primary force behind the creation of the National Economic Forum (NEF), a tripartite negotiating body where economic policy could be discussed with capital and the state in a more coordinated, global manner. After the 1994 elections the N E F was reconstituted as the National Economic Development and Labour Council ( N E D L A C ) , a statutory body in which labor, business, the state, and representatives of civil society formations are meant to reach negotiated agreements on macroeconomic policy. N E D L A C ' s first brief was to devise a new labor law, and after months of bargaining it forwarded a bill to the minister of labor that powerfully entrenches labor's power while moving the industrial relations system in the direction of codetermination. 2 4 The new bill grants labor statutory organizing rights that should greatly facilitate the enrollment of new members. It also for the first time in South African history grants all workers —including farm laborers, domestic servants, and civil servants —similar rights within the same industrial relations framework. Furthermore, new provisions greatly ease historic restrictions on the right to strike (as well as employers' right to lockout) and encourage (though do not compel) centralized bargaining through industrywide statu-

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tory councils. T h e most innovative f e a t u r e , the establishment of w o r k p l a c e f o r u m s (modeled in part on G e r m a n - s t y l e w o r k s councils) provides w o r k e r rights for consultation and joint d e c i s i o n m a k i n g on crucial enterprise issues. T h e s e r e f o r m s grant labor considerable new p o w e r s to influence d e v e l o p ment f r o m the s h o p - f l o o r and enterprise levels, to sectoral and m a c r o e c o nomic policymaking. Trade union leaders have also been p l a y i n g an extremely important role in the political transition. T h e y were p r o m i n e n t l y placed on the A N C ' s election list, and many w h o began their union i n v o l v e m e n t in s h o p - f l o o r m o v e ments are now sitting on the front b e n c h e s in Parliament and taking up important ministerial portfolios in the new G o v e r n m e n t of National Unity ( G N U ) . 2 5 This electoral role does not e x h a u s t the labor m o v e m e n t ' s involvement in politics. Local, regional, and national labor leaders have played a central role in p e a c e k e e p i n g and dispute resolution structures across the country. A f u r t h e r m o v e m e n t of labor leaders into politics occurred a f t e r the N o v e m b e r 1995 local g o v e r n m e n t elections, as shop stewards and union activists w h o played prominent roles in c o m m u n i t y d e v e l o p m e n t were drawn into f o r m a l g o v e r n m e n t positions ( B u h l u n g u 1994a, b). A f t e r the creation of the National E c o n o m i c F o r u m , labor sought similar participation in negotiating f o r u m s dedicated to e d u c a t i o n , h o u s i n g , and local g o v e r n m e n t policy. T h e s e societal corporatist-type a r r a n g e m e n t s developed in the interregnum between the collapse of apartheid and the installation of a majority-rule g o v e r n m e n t , and they increasingly d e f i n e a new m o d e of interest representation and policy f o r m a t i o n . As a result, the labor m o v e m e n t has operated at the center of debates and struggles at every level of the society about the f o r m and direction of social c h a n g e and has been one of the central participants in p r o c e s s e s to p r o m o t e an a u t o n o m o u s and strong civil society. Since the 1994 elections, labor has been one of the strongest critics of undemocratic tendencies in the A N C - l e d G N U . 2 6 It has also led a series of strikes against p r o m i n e n t e m p l o y e r s and has s u c c e s s f u l ly fended off criticisms f r o m e m p l o y e r s (and even f r o m sections of the A N C ) that m a s s mobilization for w o r k e r s ' rights is an inappropriate "sectional" indulgence in a period of reconstruction. Despite d e v e l o p i n g this interventionist role, there is a g r o w i n g sense that the labor m o v e m e n t is living on b o r r o w e d time and that in the f u t u r e its position could worsen considerably. In part this is due to difficulties related to the rapid g r o w t h of m e m b e r s h i p in the c o n t e x t of an organizational culture hostile to bureaucratic f o r m s of m a n a g e m e n t . In addition, the a d v a n c e of key intellectuals into g o v e r n m e n t service and business has deprived the m o v e m e n t of important strategists at the very m o m e n t when strategic innovation is most needed. H o w e v e r , the most p r o f o u n d difficulties f o r the m o v e m e n t c o m e f r o m the context in which it o p e r a t e s , as the South A f r i c a n political e c o n o m y c o m e s under increasing pressure f r o m globalization. Ironically, the South A f r i c a n transition to d e m o c r a c y has been a c c o m -

136

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Adler

p l i s h e d in l a r g e p a r t t h r o u g h o r g a n i z a t i o n s s u c h as l a b o r that d r e w t h e i r strength f r o m the c o u n t r y ' s isolation f r o m the G D L . Not only did labor g r o w in i m p o r t - s u b s t i t u t i o n m a n u f a c t u r i n g i n d u s t r i e s , b u t t h e s a n c t i o n s s t r a t e g y proved extremely costly to both business and the state, while

material

resources generated through international solidarity fueled the d e v e l o p m e n t of m a s s o p p o s i t i o n o r g a n i z a t i o n s . H a v i n g a c c o m p l i s h e d d e m o c r a t i z a t i o n — if o n l y in its i n f a n c y — t h e l a b o r m o v e m e n t n o w f a c e s a c o n s i d e r a b l y l e s s hospitable global context. G l o b a l i z a t i o n p o s e s a n i m m e d i a t e c h a l l e n g e to t h e v i a b i l i t y of c o r e manufacturing sectors, most prominently automobile and c o m p o n e n t s , textile, c h e m i c a l s , and c o n s u m e r appliances. M a n y

of t h e s e a r e

currently

u n c o m p e t i t i v e in i n t e r n a t i o n a l t e r m s a n d a r e c h a r a c t e r i z e d by l o w p r o d u c tivity, l o w o u t p u t a n d o v e r c a p a c i t y , a n d a p o o r r e c o r d of e m p l o y m e n t c r e a t i o n ( J o f f e et al. 1 9 9 5 ) . C o i n c i d e n t a l l y , t h e y a r e a l s o a m o n g t h e s e c t o r s w i t h t h e h i g h e s t u n i o n d e n s i t i e s a n d f o r m t h e b a c k b o n e of t h e l a b o r m o v e m e n t ' s industrial muscle (Macun

1993). T h e G N U ' s a c c e p t a n c e of t h e f r e e t r a d e

p r i n c i p l e s e s t a b l i s h e d in t h e r e c e n t G A T T a g r e e m e n t h a s r e v e r s e d g e n e r a t i o n s of p r o t e c t i o n i s t i n d u s t r i a l a n d t r a d e p o l i c i e s a n d h a s p u t t h e v i a b i l i t y of s u c h i n d u s t r i e s in d o u b t . In t h e a u t o m o b i l e s e c t o r , f o r e x a m p l e , p r o t e c t i o n will be r e d u c e d f r o m an e f f e c t i v e 115 p e r c e n t at p r e s e n t t o 4 0 p e r c e n t in 2 0 0 2 . In a v a r i e t y of i n d u s t r i e s b i p a r t i t e a n d t r i p a r t i t e f o r u m s h a v e b e e n e s t a b l i s h e d to r e s t r u c t u r e t h e t r a d e r e g i m e to b r i n g t a r i f f s in line w i t h intern a t i o n a l n o r m s a n d t o d e v e l o p a d j u s t m e n t p o l i c i e s to a v o i d d e i n d u s t r i a l i z a tion and j o b l o s s . W h i l e t r a d e l i b e r a l i z a t i o n t h r e a t e n s t h e m a t e r i a l b a s i s of t h e

labor

m o v e m e n t , t h e c u l t u r a l a n d i n t e l l e c t u a l i m p a c t of g l o b a l i z a t i o n h a s a f f e c t e d t h e very t e r m s on w h i c h d e v e l o p m e n t is d i s c u s s e d in the c o u n t r y . A r g u m e n t s supporting f r e e trade, fiscal p r u d e n c e , and a m o r e limited d e v e l o p m e n t role f o r t h e state h a v e g a i n e d c u r r e n c y in i n t e l l e c t u a l c i r c l e s of the e r s t w h i l e opposition

and

have

shaped

the

policies

adopted

by

the

GNU

itself

( A d e l z a d e h a n d P a d a y a c h e e 1994). L a b o r ' s h i s t o r i c c o m m i t m e n t to n a t i o n a l i z a t i o n , w o r k e r c o n t r o l of t h e m e a n s of p r o d u c t i o n , a n d a s t r o n g l y interv e n t i o n i s t s t a t e h a v e m e t , not s u r p r i s i n g l y , w i t h little f a v o r in a c o n t e x t of cross-class G N U (with representation f r o m p o w e r f u l g r o u p i n g s f r o m the old regime) quickly " n o r m a l i z i n g " S o u t h A f r i c a ' s relations with the G D L . 2 7 N o n e t h e l e s s , l a b o r h a s a t t e m p t e d to i n f l u e n c e this d e v e l o p m e n t d e b a t e , g u i d e d in p a r t by a n i m p r e s s i v e p o l i c y r e v i e w that C O S A T U

sponsored

b e t w e e n 1991 a n d 1 9 9 4 . T h e w o r k of t h e I n d u s t r i a l S t r a t e g y P r o j e c t of t h e E c o n o m i c T r e n d s R e s e a r c h G r o u p h a s s h i f t e d t h e t e r m s of t h e d e v e l o p m e n t d e b a t e by i n s e r t i n g a w o r k i n g - c l a s s p e r s p e c t i v e i n t o p o l i c y m a k i n g , r a i s i n g i s s u e s of p r o d u c t i v i t y a n d i n t e r n a t i o n a l c o m p e t i t i v e n e s s w h i l e p r i o r i t i z i n g e m p l o y m e n t creation, j o b security, and training.28 These policy formulations are contested by capital and have m e t resistance even within the labor m o v e m e n t , w h e r e t h e y a r e t h e s u b j e c t of c o n t i n u i n g d e b a t e , p a r t i c u l a r l y f o r t h e i r

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qualified acceptance of trade liberalization and a high-value-added exportoriented growth strategy (Etkind and Harvey 1993). N o n e t h e l e s s , they constitute a portion of the labor m o v e m e n t ' s contribution to debates over the transformation of South A f r i c a ' s e c o n o m y and society. 2 9 In 1993 these ideas shaped the content of the Reconstruction A c c o r d originally advocated by C O S A T U , a broad statement of e c o n o m i c and social policies to guide f u t u r e d e v e l o p m e n t . T h e p r o g r a m , as well as the f e d e r a tion's positions advanced in the various policy f o r u m s described earlier, d o not represent the interests of a relatively w e l l - o f f , relatively skilled, e m e r gent aristocracy of e m p l o y e d w o r k e r s . Rather, the labor m o v e m e n t ' s f o r m u lations have been aimed at the broad interests of the w o r k i n g class — e m p l o y e d or not —and at policies to satisfy the basic needs of the population. After being debated and rewritten by C O S A T U and its alliance partners (the A N C and the South A f r i c a n C o m m u n i s t Party), the d o c u m e n t e m e r g e d as the Reconstruction and D e v e l o p m e n t P r o g r a m m e ( R D P ) , the alliance's core policy p r o g r a m and the centerpiece of its c a m p a i g n in the April 1994 elections. 3 0 T h e package of m a c r o e c o n o m i c and social targets was m e a n t to guide policy in the new g o v e r n m e n t (Cargill 1993). T h o u g h not a socialist d o c u m e n t , the R D P represented a significant attempt to m o v e policy beyond socially and e c o n o m i c a l l y conservative goals by taking as its point of departure p e o p l e ' s basic needs. A central idea underlying the p r o g r a m was that social m o v e m e n t s such as labor, w o m e n , youth and student organizations, and associations of the u n e m p l o y e d and the aged would be part of an organized pact to reconstruct society. D e m o c r a c y , the d o c u m e n t p r o m i s e d , would not be c o n f i n e d to periodic elections but was viewed rather as an active process enabling f o r m a t i o n s of civil society to contribute to reconstruction and d e v e l o p m e n t . N o t w i t h s t a n d i n g the claims m a d e for the R D P as an election m a n i f e s t o , it has evolved into a rather different d o c u m e n t in the process of being transformed into a white paper and official policy in the G N U . In its most recent f o r m , the d o c u m e n t has placed far less e m p h a s i s on state intervention, has granted wide latitude to the fiscally conservative Finance Ministry while affirming the independence of the monetarist South A f r i c a n Reserve B a n k , and has lost the central e m p h a s i s on transparency and participation in policymaking. 3 1 Against this thrust the labor m o v e m e n t has d e v e l o p e d what one analyst has described as a "creative challenge to the global agenda of neo-liberalism" (Webster 1995). W h i l e accepting "the constraints imposed by the need to maintain international c o m p e t i t i v e n e s s in a capitalist world e c o n o m i c system," Webster argues that the labor m o v e m e n t can exert pressure on the G N U " t o w a r d s redistributive policies by mobilising pressure f r o m civil society, c o m m u n i t i e s and the w o r k p l a c e . " Such pressure d e p e n d s on l a b o r ' s ability to maintain a strategic balance between mobilization in civil society

138

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( t h e d e p l o y m e n t of s o c i a l - m o v e m e n t - t y p e a c t i v i t y ) a l o n g s i d e p a r t i c i p a t i o n in t r i p a r t i t e i n s t i t u t i o n s . It r e m a i n s an o p e n q u e s t i o n w h e t h e r t h e s e e f f o r t s c a n h o l d n e o l i b e r a l i s m at b a y . It is c e r t a i n , h o w e v e r , t h a t S o u t h A f r i c a ' s r e a c t i o n to g l o b a l i z a tion will b e p r o f o u n d l y s h a p e d by l a b o r a n d o t h e r s o c i a l m o v e m e n t s , a c t o r s t h a t h a v e h i s t o r i c a l l y r e c e i v e d little a t t e n t i o n w i t h i n t h e a c a d e m i c l i t e r a t u r e o n t h e s u b j e c t . A n y a s s e s s m e n t of t h e c o u n t r y ' s c h a n g i n g l o c a t i o n in t h e G D L m u s t t a k e l a b o r i n t o a c c o u n t , n o t s i m p l y as an o b j e c t t o b e r e p r e s s e d in p u r s u i t of d e v e l o p m e n t a l i s t g o a l s b u t as a s e l f - c o n s c i o u s a c t o r in its o w n right pursuing e c o n o m i c g r o w t h and democratization.

CONCLUSION T h i s c h a p t e r b e g a n w i t h t h e o b s e r v a t i o n that t h e l i t e r a t u r e o n t h e G D L o v e r l o o k e d l a b o r m o v e m e n t s as s e l f - c o n s c i o u s a c t o r s in t h e p o l i t i c a l e c o n o m i e s of T h i r d W o r l d s t a t e s . S u c h an o v e r s i g h t a p p e a r e d s u r p r i s i n g c o n s i d e r i n g t h e g r o w i n g i m p o r t a n c e of l a b o r m o v e m e n t s in a n u m b e r of N I C s . In o v e r l o o k ing s u c h p r o c e s s e s , it w a s a s s e r t e d t h a t t h e G D L l i t e r a t u r e r i s k e d i g n o r i n g certain creative possibilities for bringing about sustainable economic growth and democratization. It m a y b e t r u e that t h e S o u t h A f r i c a n c a s e r e p r e s e n t s an u n u s u a l f o r m of labor m o v e m e n t organization and political, e c o n o m i c , and social intervent i o n . P e r h a p s t h e u n i q u e c o m b i n a t i o n of e c o n o m i c a n d p o l i t i c a l g r i e v a n c e s c a u s e d by a p a r t h e i d g e n e r a t e d a p e c u l i a r set of s t r u g g l e s , w h i c h m a y not b e r e p l i c a t e d e l s e w h e r e in t h e N I C s , let a l o n e in t h e m o r e i m p o v e r i s h e d r e g i o n s of t h e p e r i p h e r y . It

is

likely,

however,

that

these

Globalization —the rapid development

of

criticisms import

are

substitution

misplaced. industries

f r o m t h e 1960s f e d by b o t h f o r e i g n a n d d o m e s t i c i n v e s t m e n t — h e l p e d c r e a t e the

structural

conditions

that

spawned

the

modern

labor

movement.

F u r t h e r m o r e , t h e l a b o r m o v e m e n t h a s b e e n a b l e to d e v e l o p t h e i n t e l l e c t u a l , strategic, and tactical resources and, p e r h a p s m o r e important, the political p o w e r to s h a p e t h e c o u n t r y ' s r e s p o n s e to c o n t e m p o r a r y c h a n g e s in t h e G D L , p a r t i c u l a r l y t h o s e that h a v e u n d e r m i n e d t h e f o u n d a t i o n s of i m p o r t s u b s t i t u tion. The labor m o v e m e n t has pioneered new societal corporatist arrangem e n t s a n d h a s p r o m o t e d t h e d e v e l o p m e n t of a s t r o n g civil s o c i e t y — a n e c e s s a r y c o n d i t i o n of d e m o c r a t i z a t i o n . To s t a t e t h e s e i n n o v a t i o n s d o e s n o t s u g g e s t that l a b o r ' s r e s p o n s e s w i l l b e s u c c e s s f u l , n o r that t h e l a b o r m o v e m e n t will a v o i d b e c o m i n g an i s o l a t e d a r i s t o c r a c y ; r a t h e r , at least f o r n o w , South A f r i c a ' s d e v e l o p m e n t c a n n o t be u n d e r s t o o d without recognizing the c e n t r a l r o l e l a b o r p l a y s as an a c t o r in n a t i o n a l p o l i c y m a k i n g . T h e s a m e g l o b a l c o n d i t i o n s that h e l p e d c r e a t e the l a b o r m o v e m e n t in S o u t h A f r i c a s t i m u l a t e d v i g o r o u s l a b o r m o v e m e n t s e l s e w h e r e in t h e w o r l d ,

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m o s t notably in Brazil but a l s o in M e x i c o , South K o r e a , and e l s e w h e r e in Latin A m e r i c a and East A s i a . T h e s e organizations h a v e exerted important i n f l u e n c e on both e c o n o m i c and political transition in these countries. Their a b s e n c e f r o m d i s c u s s i o n s o f g l o b a l i z a t i o n d o e s not s u g g e s t their irrelevance but rather indicates a major gap in the scholarly literature that will n e e d to be addressed in the years to c o m e . A c o m p a r a t i v e research a g e n d a on labor m o v e m e n t s and e c o n o m i c and political transition in the N I C s may y i e l d major insights into the d y n a m i c s o f o p p o s i t i o n in t h e s e countries, as w e l l as into the c h a l l e n g e s b e i n g generated to the G D L , their content, and their likelihood of success. T h e South A f r i c a n c a s e study s u g g e s t s that labor has p l a y e d a s i g n i f i cant role in e c o n o m i c reconstruction and d e m o c r a t i z a t i o n . T h i s chapter has attempted to identify the e m e r g e n c e in South A f r i c a o f a c o d e t e r m i n i s t , tripartite p r o c e s s that o p e n s p o s s i b i l i t i e s for c o u n t e r h e g e m o n i c d e v e l o p m e n t p o l i c i e s . If labor c a n play such a role and such institutions can d e v e l o p in South A f r i c a , it is incumbent upon analysts of the G D L to a s s e s s where e l s e in the Third World similar p r o c e s s may already have g a i n e d a t o e h o l d .

NOTES I wish to thank Ann Griffiths, Diane Singerman, and Jim Mittelman, as well as the participants at the workshop Globalization: Opportunities and Challenges, for extremely valuable comments on an earlier draft of this chapter. 1. Haggard (1990) seems to recognize such possibilities when he very tentatively suggests that social democratic forms of representation may hold out the promise of an efficient, yet more humane, growth path in the NICs. However, the insight is not pursued. 2. Though Marx and Engels were certainly mistaken about the bourgeois mode of production creating replicas of European capitalism, they clearly grasped the historically transformative impact of capitalism on the periphery. Their arguments alert us to globalization as a phenomenon of long duration and broad historical sweep, insights often lacking from discussions in which contemporary forms of globalization are seen as a historically unprecedented event. 3. In an argument that carefully examines the influence of the state and transnational power relations on democracy, the authors place social class at the center of their analytical framework. In asking what benefits and losses different classes could expect from extensions of political inclusion, they turn both Leninists and pluralists such as Barrington Moore on their head. The bourgeoisie may favor (and be able to win) an extension of political representation from a landed aristocracy, "but it rarely fought for further extensions once its own place was secured," as such a move could well threaten its newly won prerogatives. They conclude that the working class is the most frequent proponent of full democratization "because this promised to include the class in the polity where it could further pursue its interests." Their conclusions are drawn from a fairly unique comparative research framework, analyzing cases drawn from Western Europe, the Caribbean, and Latin America (Rueschemeyer, Stephens, and Stephens 1992: 6, 8, 46, 50). 4. The otherwise excellent work in Gereffi and Wyman (1990a) demonstrates this tendency.

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5. The contributors to the extremely valuable collection edited by Bergquist refreshingly place labor at the center of development struggles in the Third World, yet they fail to escape f r o m a reductionist treatment of workers and their organizations characteristic of the structuralist world-systems approach they criticize (Bergquist 1984). A similar w e a k n e s s befalls the contributions to debates on labor in the changing international division of labor (Boyd, C o h e n , and Gutkind 1987), as well as some of the early works by the new generation of writers on Latin American labor (Middlebrook 1981; Erickson 1977; Mericle 1977). 6. H a g g a r d ' s sweeping comparative analysis of industrialization in the East Asian and Latin American N I C s is unusual in its recognition of labor's central role in development. Yet in his f r a m e w o r k labor is generally an object to be controlled and/or co-opted by state elites in their pursuit of "insulation" f r o m the constraining forces of civil society. He often takes as given the state's power to restructure labor relations and to repress unions and workers; however, his own evidence shows that labor continually regroups and challenges elites. The obvious tensions and outright conflicts between the state and capital, between states, and between foreign and local capital somehow dissipate when these actors confront workers, who remain noticeably unable to exploit such divisions among their adversaries. Without one focusing on labor as an a u t o n o m o u s actor, these continual reassertions of militancy are impossible to understand and seem to arise out of the blue (Haggard 1990). Martin (1990) demonstrates how political struggles by antisystemic movements (including labor m o v e m e n t s ) are integrally related to the development of the semiperiphery, though none of the authors in this edited collection explicitly focus on trade unions. 7. See Bergquist's criticism of Latin American structuralist treatments of labor (Bergquist 1986: 2 - 1 4 ) . T h e r e are important exceptions. Becker shows how the development of capital-intensive mining and the increasing penetration by foreign capital in Peru contributed to the growth of an industrial proletariat with the skills and capabilities to organize independent unions to protect its interests (Becker 1983). Similarly, studies have demonstrated how the development of semiskilled operative labor under import substitution industrialization transformed the basis of the labor movement in a range of Latin American countries, creating the conditions for the self-organization of a new, militant force for e c o n o m i c advance and political democratization (Keck 1992; Middlebrook 1987; Winn 1986; Humphrey 1982). 8. The major exception is the excellent work by Deyo (1989, 1987a). 9. Indeed, the overriding theme of the work presented in Nash and FernandezKelly (1983) portrays trade unions as corrupt, bureaucratic, and defensive of insider (largely male) workers' interests. While this portrait is certainly accurate with regard to official unions, the contributions to that volume do not generally examine the practices of the new unionism in the Third World. In Brazil especially, but also in M e x i c o , South Korea and e l s e w h e r e , trade unions emerged in import substitution industries in the 1970s and 1980s with a n u m b e r of c o m m o n characteristics. These unions were usually shop-floor based, prioritizing decentralized structures and democratic practices emphasizing the role of factory leaders such as shop stewards; they also prioritized the importance of worker control over production as well as over their own organizations. As a result, they invariably grew in opposition to established unions locked into the classic state-corporatist structures of interest mediation and asserted (by contrast to the often corrupt official unions) an authenticity in their representation of worker interests. Finally, these unions were often e n m e s h e d in complicated relations with other oppositional social forces and pro-democracy m o v e m e n t s , often struggling to assert alliances based on mutual interest between independent organizations. In the f a c e of more populist tendencies in opposition political groupings, u n i o n s ' claims to independence were often misconstrued (by political activists and scholars alike) as assertions of a labor aristocracy. For works

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analyzing the new unionism, see Seidman (1994); Keck (1992); Middlebrook (1987); and Roxborough (1984). 10. An overdrawn contrast is often made between new and old social movements (Touraine 1982; Inglehart 1990; Rucht 1992). Klandermans and Tarrow argue convincingly for an approach that sees similarities between these movements and attempt to synthesize theoretical traditions in social movement studies (Klandermans andTarrow 1988: 17;Tarrow 1991: 63-66). Olofsson (1988) has written a strong critique of new social movements theory. 11. Waterman (1991) and Munck (1988) developed the concept and applied it to Third World labor movements. Webster (1988) first applied the concept to the South African labor movement. Seidman's (1994) comparison of labor movements in Brazil and South Africa shows that social movement unionism can help account for militant industrial unionism in the authoritarian NICs, even in what appear to be dramatically different cases. 12. South African sociologists and historians have used insights drawn from social movement literature to explain the development of industrial and political organization. Sitas (1984, 1985) has studied union formation among migrant workers in the single-sex hostels of the East Rand metal industry, where union organization occurred through regional or clan affiliations. He labels these cultural formations "defensive combinations," which provided protection for workers in the harsh environment of the hostels and foundries; these same informal social networks provided the base for collective organization by the Metal and Allied Workers' Union. For an analysis of the ways rural associations provided the foundation for popular protest in formal political organizations, see Delius (1993). For an overview of the development of theoretical and methodological approaches to labor in South Africa, see Webster (1991). 13. The material in this section was developed in my doctoral thesis (Adler 1994) and in a recent collaboration with Eddie Webster (Adler and Webster 1995). For overviews of trade unionism in South Africa, see Seidman (1994); Baskin (1991); Friedman (1987); Webster (1983). 14. The position was motivated by a tactical fear that such involvements would jeopardize hard-won gains by provoking a state reaction before structures could be consolidated, as well as by left-wing class-based criticisms of nationalist politics. 15. At the time of its launch in 1985, COSATU comprised thirty-three separate industrial, general, and white-collar unions. The industrial union policy saw these consolidated within three years into the present fourteen. 16. In addition to offering a forum to address common problems and to resolve differences, the federation provides educational services for the affiliates, finance, and legal support. It is the venue where common positions are developed, including political alliances, policies regarding sanctions and general opposition to apartheid, and, more recently, reconstruction and development. FOSATU pioneered practices to guard against oligarchic tendencies in federations by entrenching the constitutional position of the shop steward as a locally and directly elected worker leader. Elected officials at all levels of both the unions and the federation must be employed workers (in practice, shop stewards); all structures, from local branches to the national congress, must be composed of numerical majorities of workers; and full-time officials are not voting members of these bodies (Baskin 1991). 17. The two federations are the National Council of Trade Unions, which organizes black workers on the basis of a political program at odds with COSATU (one combining black consciousness and pan-Africanism rather than nonracialism) and the Federation of South African Labour, which has traditionally organized white workers in the public sector. 18. The evidence for this section relies on Adler (1990, 1989).

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19. Indeed, the National Union of Metalworkers of South Africa alleged that in 1985 Ford Motor C o m p a n y used monies f r o m the workers' pension f u n d (on which the union had no representation) to finance its merger with another South African motor assembler. 20. In contrast to the terminal automobile industry, where only the final assembly stage was transferred, technical considerations allowed tire and glass c o m p a n i e s to locate the entire manufacturing process close to the point of sale where they could easily service the automobile assembly plants. In Latin America, for e x a m p l e , the first tire plant was opened in Argentina in 1931, and by 1947 there were nineteen tire plants operating across the continent as either subsidiaries or licensees of the m a j o r international producers (Chandler 1989). The first South African tire plant opened in 1935 when Firestone began operations in Port Elizabeth (Adler 1994). 21. The pension agreement w a s an unprecedented concession in South A f r i c a , as workers have historically been excluded f r o m the management of such f u n d s ; at the time, the f u n d ' s actuarial reserve was estimated to be nearly $20 million. This was an extremely important gain, not only for the principle of worker control but because of the union's previous experience at Ford. 22. The leading South African m a n a g e m e n t consultant described the u n i o n s ' researchers' work as "thorough and uncomfortably realistic, and far more sophisticated than business policy w o r k " (Andrew Levy and Associates 1993). On the labor m o v e m e n t and e c o n o m i c policy making, see J o f f e , Mailer, and Webster (1995). 23. Many of the ideas that follow are drawn from Adler and Webster (1995). 24. The legal drafting team w a s led by Halton Cheadle, one of the most prominent labor lawyers in South Africa and a long-standing legal strategist and adviser to COSATU. 25. The G o v e r n m e n t of National Unity comprises a coalition of the parties receiving the largest shares of the vote in the April 1994 elections. Created through multiparty negotiations in 1993 and 1994, the G N U rules under an interim constitution, which will be in force through elections scheduled for 1999. In the m e a n t i m e , a Constitutional Assembly, drawn f r o m the new Parliament, is drafting a final constitution. 26. For e x a m p l e , labor has been a vociferous opponent of high salaries paid to ministers, senior civil servants, and m e m b e r s of parliament (MPs) and an advocate of transparency in policymaking and appointments processes; it has also c h a m p i o n e d a code of conduct for parliamentarians and civil servants. The labor m o v e m e n t has also played a behind-the-scenes role with the South African C o m m u n i s t Party and socialist-oriented A N C M P s attempting to bolster the position of the parliamentary caucus against the cabinet. More recently, labor was the strongest critic of the 1995 budget, lodging a critique of its neoliberal agenda while attacking the absence of "transparency" in its creation. 27. This intellectual debate has been materially affected by the reestablishment of public links between the G N U and the World Bank and the IMF. as well as other bilateral and multilateral international institutions. At the same time, m a n y leading labor intellectuals have b e c o m e M P s and have taken up top policymaking positions in civil service, which has been seen by some c o m m e n t a t o r s as the beginning of a degenerative "brain drain" from the labor m o v e m e n t (Buhlungu 1994b). T h e latter does not mean that such intellectuals will inevitably be co-opted; it is also possible that they will exert an important labor-oriented influence on government policy. However, taken together these two d e v e l o p m e n t s might indicate the beginning of a reduction in labor's intellectual influence in national development policy debates. 28. The Industrial Strategy Project emphasizes the linkages among productivity growth, redistribution, and social welfare. Its f r a m e w o r k for redressing productivity problems is built around "the active participation of workers in both the

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conception and execution of production" (Joffe et al. 1993: 96; J o f f e and Lewis 1992). 29. For further discussion of labor's impact on the political transition, and the revisions this suggests in established theories of transition to democracy, see Adler and Webster (1995). 30. The R D P drafting team included as well representatives f r o m the South African National Civics Organisation and the National Education Coordinating Committee. 31. Two leading critics of the R D P white paper have argued that it "represents a very significant compromise to the neo-liberal, 'trickle d o w n ' economic policy preferences of the old regime, despite assurances f r o m key e c o n o m i c ministers in the G N U that only the language of the W[hite] P[aper] has been changed to a c c o m m o date a wider constituency of interests" (Adelzadeh and Padayachee 1994: 2).

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New Social Movements: Democratic Struggles and H u m a n Rights in Africa

A s w e e n t e r the t w e n t y - f i r s t c e n t u r y , the w o r l d is w i t n e s s i n g r e v o l u t i o n a r y c h a n g e s in the w a y h u m a n b e i n g s are o r g a n i z i n g p r o d u c t i o n , c o n s u m p t i o n , a n d other a s p e c t s of social relations. T h i s c o m p r e s s i o n of the t i m e - s p a c e a s p e c t s of social relations — a l l o w i n g the e c o n o m y , p o l i t i c s , c u l t u r e , and ideo l o g y of o n e c o u n t r y to p e n e t r a t e a n o t h e r —is c a l l e d g l o b a l i z a t i o n ( M i t t e l m a n , C h a p t e r 1). T h i s rapid i n t e r p e n e t r a t i o n of social r e l a t i o n s , i n v o l v i n g w o r l d f a c t o r i e s , labor f l o w s , l e n d i n g f a c i l i t i e s , c o m m u n i c a t i o n s , n e w k n o w l e d g e and i n f o r m a t i o n t e c h n o l o g i e s , and n e w cultural n o r m s , is m a k i n g national b o r d e r s less relevant w h i l e s e v e r i n g f a m i l y ties, u n d e r m i n ing e s t a b l i s h e d authority, and straining the b o n d s of local c o m m u n i t y . T h e key agents of g l o b a l i z a t i o n h a v e been a f e w h u n d r e d industrial and f i n a n c i a l c o r p o r a t i o n s . By d e v e l o p i n g the arts of p l a n n i n g , p r o d u c t i o n , and m a r k e t i n g , the global c o r p o r a t i o n is r u s h i n g into the v a c u u m left by the increasing inability of national g o v e r n m e n t s to o f f e r vision. T h i s g r o w t h in the structural p o w e r of capital indicates the shift in the b a l a n c e of p o w e r in the w o r l d e c o n o m y f r o m territorially b a s e d g o v e r n m e n t s to c o m p a n i e s that r o a m the w o r l d ( B a r n e t and C a v a n a g h 1994). T h i s p r o c e s s is also facilitated by the g l o b a l drive f o r liberalization of m a r k e t s and the rapid r e d u c t i o n of the c o m m a n d i n g role of the state in national p l a n n i n g . In short, the state itself facilitates g l o b a l i z a t i o n , acting as an a g e n t in the p r o c e s s . D e s p i t e talks of structural e c o n o m i c r e f o r m by g o v e r n m e n t s a c r o s s the g l o b e , n o g o v e r n ment can realistically p r o v i d e e c o n o m i c stability, d e v e l o p m e n t , and social p r o g r e s s within its b o r d e r s on a s u s t a i n e d basis u n a f f e c t e d by the f o r c e s of globalization. Globalization, therefore, encompasses contradictory trends, with v a r y i n g d e g r e e s of p r e s s u r e on the state, society, and the e c o n o m y . But if the o u t c o m e of g l o b a l i z a t i o n is m o r e h a r d s h i p and f u r t h e r marginalization f o r the m a j o r i t y of p o o r A f r i c a n p e a s a n t s and the T h i r d World as a w h o l e , o n e m u s t ask what the losers can d o to d e f e n d t h e m s e l v e s f r o m the r e m o t e f o r c e s of g l o b a l i z a t i o n and d o m e s t i c social f o r c e s that facilitate

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it. Why do ordinary people decide to engage the state through the "exit" option, and how can localized "everyday forms of resistance" be channeled toward establishing a more just political and economic order? This chapter attempts to respond to these questions by examining the various forms of resistance being waged f r o m below (independent of traditional political parties) and outside the state. It also examines the extent to which donor-driven democratization initiatives deflect the projects of popular groups from below and splinter civil society.

GLOBALIZATION TENDENCIES AND THE AFRICAN CONDITION The 1980s have been characterized as the "lost development decade" for Africa. This is reflected in weak growth in the productive sectors, poor export performance, mounting debt, deterioration in social conditions, environmental degradation, and increasing decay in institutional capacity. Of the forty-seven countries classified by the UN as least developed, no fewer than thirty-two are found in sub-Saharan Africa. Zambia, Zaire, and Madagascar were added to the list in 1992 by the UN General Assembly. Only diamondrich Botswana has managed to become the first country to graduate from the club of the destitute (Harsh 1992; UN 1991a). The possibility of other African countries following in the footsteps of Botswana is exceedingly dim. Most countries may instead experience the same tragic fate of Somalia and Rwanda, which have descended into a desperate spiral of anarchy, looting, famine, and self-destruction. These developments are taking place against the background of unprecedented changes in global economic and political relationships in which Africa will have a very marginal role to play. Africa's current economic and political crisis is said to be the result of a combination of numerous economic and financial factors, both internal and external, often cited with varying degrees of importance. Included among them are the two rounds of oil price hikes, the world economic recession , the deterioration in the terms of trade, and the absence of an "enabling" domestic political environment (World Bank 1989a). While these factors have played a role in aggravating Africa's economic problem, the discussion along these lines fails to take into account the negative impact of powerful forces in the world economy. Some of the key components of the globalization drive are evident in five areas: 1. 2. 3. 4. 5.

Advancement in biotechnology and microtechnology Increasing differentiation among developing countries Decreased diffusion of investment Structural adjustment as an ideology of development Competing trading blocs

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The first broad change shaping the world economy is the advent of quantum advances in biotechnology and microtechnology. The establishment of a global communications network, new patterns of industrial organization, the development and spread of microelectronics (including automation), and the development of advanced or synthetic materials are affecting world economic ties. This change was largely responsible for the emergence of a global production network wherein pieces of a once continuous assembly line were divided internationally, most often to take advantage of lower labor costs for unskilled work in developing countries. With less labor involved in automated processes now possible through microelectronic technology, multinational corporations (MNCs) are already beginning to move their production facilities closer to Northern consumer markets. Except where changes in existing patterns of production would be costly, where patterns of production are firmly established (as with car parts in Brazil and Mexico), and in newly industrialized countries (NICs) and some of the second-tier developing countries where investment will remain fairly attractive, MNCs will probably move away from further Third World production. For this reason and because the rampant political and economic instability in Africa is inimical to investment, Africa does not really have a comparative advantage in either low-cost labor or agricultural commodities anymore. South Asia, for example, provides a stable investment environment, low-cost labor, better infrastructure, and a more highly educated work force. A second major trend in the world economy is an increase in the differentiation among so-called developing countries, as well as different communities within developing countries. While some social groups with particular skills or capital benefit from their links to global production systems, others lacking similar skills will remain detached from the world economy. Though this phenomenon is especially apparent worldwide, it is applicable to Africa, with some countries doing better than others. We will increasingly witness more "black holes" in the emerging global economic landscape. The increasing differentiation among developing countries means that only a handful of African nations may be able to attract small amounts of investment (e.g., Egypt, South Africa, Zimbabwe, Kenya). But this will in turn increase regional disparities. These forms of polarization could become major impediments to regional integration and harmonization of development policies in almost all spheres. Further, regional polarization is exacerbating the migration of millions of skilled and unskilled Africans to growth centers such as Johannesburg, Nairobi, Harare, Lagos, and other emerging centers linked to the forces of globalization. This differentiation among countries brings us to the third global trend, that of decreased diffusion of investment to certain developing countries. As Frank (1991) points out, "The real struggle is between the U.S., the EU, and Japan." These three power blocs are the major global investors, but they are

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also the major recipients of investment. Fully 80 percent of investment worldwide is among this economic power triad. As investment becomes concentrated among these powers, few developing countries, other than some of the NICs and second-tier countries, will benefit. The solidification of investment patterns that exclude Africa means that there will be little hope for most African nations to attract foreign investment (UN 1991b). A World Bank report stated that new flows of external finance to developing countries rose by 13 percent in 1993 to $177 billion, up f r o m $153 billion in 1992 (World Bank 1993). Despite the flurry of news reports about McDonald's setting up shop in Moscow or IBM investing in Eastern Europe, Asia was the largest recipient of foreign direct investment (FDI), followed by Latin America and the Caribbean. China, Mexico, Argentina, Malaysia, and Thailand accounted for almost 60 percent of the $47 billion FDI flowing to developing countries in 1993. The report also stated that 70 percent of U.S. private investment during 1990-1992 went to Latin America and the Caribbean, 18 percent to East Asia, and only 7 percent to Europe and Central Asia. The regional pattern of FDI flows is increasingly affected by preferential trade schemes and regional economic integration. Africa's share was almost negligible. And much of the direct investment is made up of hightechnology investment in telecommunications and transportation, implying a significant shift of FDI from manufacturing to services. The fourth major trend in global relations is the widespread and onesided application of structural adjustment as a response to the new international conditions of the 1980s and 1990s. We have witnessed a shift in development paradigm f r o m development planning and an active and commanding role for the state to devaluation, deregulation, liberalization, and privatization —in short, installing market fundamentals under the iron discipline of the International Monetary Fund (IMF), the World Bank, and the General Agreement on Tariffs and Trade (GATT). African countries are told to "adjust" to a virtual cessation of bank lending, less aid, the lowest commodity prices in years, ever more stringent expectations on the part of the multinational corporations about appropriate investment climate, and, although this remains unsaid, increased threats of economic sanctions by the Group of Seven (G7) countries if a country violates the rule of the game. In fact, structural adjustment and global integration are mutually reinforcing. While the process of globalization gave birth to structural adjustment as a response to the world economic crisis, the adoption of reform measures has in turn widened and deepened the thrust toward global integration. Although neither the I M F short-term stabilization programs nor the World Bank longer-term structural adjustment programs (SAPs) have met with much success, "African states cannot now avoid adjustment conditionalities as they have become the sine qua non of short term economic (and regime!) survival" (Shaw and N y a n g ' o r o 1992; World Bank 1994). Nevertheless, SAPs are likely to lead to conflict between the state and civil soci-

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ety (Beckman 1992: 8 3 - 1 0 5 ) . In reality, economic reform programs require more flexible domestic and international political structures to deal with increasingly autonomous groups in civil society— families detached from the f a r m , workers who have lost their jobs, export producers whose products have declined in value as a result of artificial substitution, and elements in society that are integrated closely in the world economy and that benefit from trade. For weak African states, the challenge for the next decade is how to expedite the democratization process while revitalizing the economy. I see no long-term improvement for most Africans in the free-market policies now in vogue from Zimbabwe to Senegal. The current boom in a handful of countries implementing IMF-mandated economic reform cannot be sustained as long as it is based on depressed wages for the masses and the sale of state industries at bargain-basement prices. The task for social movements is to renounce these externally imposed policies and to offer alternatives that are designed to better the lives of the vast majority of the African poor. Social movements must coordinate their activities to attack a form of conditionality that sees social services and minimum wages as inefficient while bloated military expenditures, political repression, and presidential looting of the public treasury are decidedly ignored. The emergence of three trading blocs —the North American Free Trade Agreement (NAFTA), the European Union, and an incipient East Asian bloc under the leadership of Japan —signifies the consolidation of the NorthSouth divide, although Mexico and the Southeast Asian countries are generally regarded as part of the South. This will intensify Northern protectionism, especially through the proliferation of nontariff barriers (e.g., intellectual property rights, food safety standards, etc.). Africa will find itself ever more vulnerable and isolated if it chooses (or is obliged) to remain a collection of fifty small, competing exporters dependent on these regional giants to purchase its output and to supply its needs (Lang and Hines 1993). There is a compelling need to reverse this state of vulnerability, to strengthen regional markets, and to rationalize existing resources by establishing viable subregional economic integration schemes. Yet economic cooperation within and among groups of African nations has been difficult to achieve. The Southern African Development Community (SADC), the Economic Community of West African States (ECOWAS), and the Preferential Trade Area for East and Southern African States (PTA), now renamed the C o m m o n Market Area for East and Southern African States ( C O M E S A S ) , represent feeble efforts at such cooperation. In fact, intra-African trade barely accounts for 6 percent of total African trade with the rest of the world (Cheru 1992a). Countries that are not linked to any of the three major trading blocs will be completely shut out from effectively participating in global trade. The general rule seems to be that the door to Europe is open but certain countries are not going to be let in! With the successful conclusion of the Uruguay Round of trade negotiations in 1993, non-

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tariff barriers to trade such as in standards and intellectual property rights will be effectively used to bar commodity-producing African countries from exporting to the major trading blocs. This news comes on top of rapid advances made in biotechnology, which are making traditional African exports useless as a result of substitution (such as fiber optics for copper and corn syrup for sugar beets) (Raghavan 1991). The marginalization of Africa will extend to the diplomatic arena as well. Hutchful (1991) strongly argues that the dissolution of the Soviet Union and the socialist voting bloc in which some African countries participated, especially in the U N , means the further geopolitical isolation of Africa. This marginalization was evident during the UN Conference on Environment and Development ( U N C E D ) negotiations, as well as the Uruguay Round, where African needs were never addressed. In the U N C E D process, for example, issues of particular importance to Africa, such as the dumping of toxic waste, debt and commodity prices, and desertification, were given scant consideration. This is in stark contrast with the considerable international concern expressed over deforestation, ozone depletion, and global warming (Khor 1992b; Shiva 1992). Marginalization was aggravated by the inability of African countries to organize themselves effectively at the caucus level. In short, the U N C E D process underscored Africa's marginalization within multilateral forums. One issue that will keep Africa at center stage of the G7 strategy is the debt equation. The debt will be a mechanism to keep Africa within the emerging international economic order. This link with the world economy through dependence on exports to generate foreign exchange to pay the debt is creating a situation where weak African states are managed by trade instead of managing trade. As a result, developing countries are accountable more to foreign creditors and investors, international financial institutions, and industrialized countries than to their own people. In much of Africa, governments have increasingly ceded sovereignty to supranational institutions (e.g., the IMF, World Bank, GATT) while losing the capacity to manage domestic affairs on their own (Gill and Cheru 1993). This new economic and political conjuncture should not necessarily be viewed negatively. It could instead provide a compelling occasion to redirect African foreign policy away from global integration and toward selfreliance and new regionalism, to recognize informal economies, and to encourage informal politics, particularly civil society at a regional level (Shaw 1994). The flag bearers of this new renaissance are based in the church, the informal sector, human rights movements, environment movements, and development communities that have sprung up all across Africa in the last decade to articulate alternative visions of survival and democratic governance. Needless to say, the vibrancy of these new institutions in civil society contrasts with the paucity of their strategic power and resources. The biggest challenge in the coming decades will be how to strengthen these

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internal f o r c e s , which are best placed to d e f e n d the d e m o c r a t i c project in their respective c o m m u n i t i e s . T h e crucial challenge for A f r i c a n social m o v e m e n t s is therefore how to develop a long-range strategic and sustainable e c o n o m i c agenda and to generate the necessary r e s o u r c e s n e e d e d to fulfill this o b j e c t i v e . This requires the rehabilitation of both states and market at the national level, the d e m o c ratization of civil society, capacity building and institutionalization, and the continued coordination of activities with other social m o v e m e n t s at the regional and transnational levels (Shaw and N y a n g ' o r o 1992). This is necessary b e c a u s e p r o b l e m s that affect the poor and the marginalized cut across national borders. T h e N o r t h - S o u t h p o p u l a r alliance b e c o m e s even more crucial when viewed in the context of the considerable p o w e r held by elites and firms that underpin the globalization process. Learning from the Past: The Burdened History of African

Peasants

T h e p o s t i n d e p e n d e n c e history of A f r i c a is replete with e x a m p l e s of broken promises and unfulfilled d r e a m s . Since the 1950s, A f r i c a n society has gone through three different political and social e x p e r i e n c e s , all of t h e m to the detriment of the urban p o o r and peasants. Broadly s p e a k i n g , the three phases include the independence struggle, the p o s t i n d e p e n d e n c e e x p e r i m e n t with d e v e l o p m e n t and nation building, and the post-1970s e x p e r i e n c e with economic r e f o r m , d o m i n a t e d by the policy of structural a d j u s t m e n t and debt crisis m a n a g e m e n t . We are n o w in a fourth phase, characterized by an unprecedented drive for d e m o c r a t i z a t i o n . Peasants and the urban poor saw their living conditions deteriorate and their democratic rights evaporate during the first three phases, and phase f o u r is unlikely to bring substantial economic and political c h a n g e s to the majority, except m a y b e in South A f r i c a , where civil society is vibrant and strong. To begin with, one o b s e r v e s a striking similarity b e t w e e n the m o v e m e n t for d e m o c r a c y today and the m a s s mobilization c a m p a i g n for i n d e p e n d e n c e that took place in the 1950s. Issues of landlessness, taxation without representation, exploitation of peasants by parastatal boards, lack of basic services, and the denial of f u n d a m e n t a l rights and c o m m u n i t y control of decisions are all pressing today, just as they were thirty-five years ago. Similarly, the d e m o c r a c y m o v e m e n t has drawn people of diverse social and political b a c k g r o u n d s under the leadership of the middle classes, which was also the case in the i n d e p e n d e n c e struggle. W h i l e the slogan of " s e c o n d liberation" implies a vision of social development and political c h a n g e f u n d a m e n t a l l y different f r o m the first liberation, the lack of a broad-based p r o g r a m of e c o n o m i c and social r e f o r m and the exclusion of civil society by elite-led parties points to the limitations of the present democratization project. T h e r e exists widespread f e a r that the

152

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s e c o n d l i b e r a t i o n m i g h t t u r n o u t t o b e as d i s a p p o i n t i n g as t h e f i r s t a n d t h a t the " n e w d e m o c r a t s " might turn their backs on the p o o r majority, as the l e a d e r s of t h e n a t i o n a l i s t m o v e m e n t s h a d d o n e . E l e c t i o n s in Z a m b i a , K e n y a , C a m e r o o n , a n d e l s e w h e r e h a v e t u r n e d o u t to b e i n e f f e c t u a l . It is c o m m o n k n o w l e d g e t h a t t h e v a s t m a j o r i t y of A f r i c a n s a r e p e a s a n t s and landless agricultural workers. Without peasant production, one cannot t a l k a b o u t a n y m e a n i n g f u l d e v e l o p m e n t in A f r i c a . Yet the p o s t i n d e p e n d e n c e d e v e l o p m e n t m o d e l h a s b e e n v e r y s i m i l a r to t h e c o l o n i a l

development

m o d e l , w h i c h s t i f l e d p e a s a n t a u t o n o m y a n d p r o d u c t i o n . T h e last thirty y e a r s in A f r i c a c a n b e s t b e c h a r a c t e r i z e d as a p e r i o d of p a c i f i c a t i o n of A f r i c a n p e a s a n t s by b o t h s o c i a l i s t a n d c a p i t a l i s t r e g i m e s a n d t h e s o c i a l c l a s s e s w h o m t h e y r e p r e s e n t as t h e y a t t e m p t e d to p u s h t h r o u g h a m b i t i o u s

development

p r o g r a m s ( C h e r u 1 9 8 9 ; S a n d b r o o k 1 9 8 5 ) . A s t h e state e x t e n d e d its a d m i n i s t r a t i v e a n d r e g u l a t o r y w i n g s to t h e f u r t h e s t r u r a l o u t p o s t s , t h e c a p a c i t y of p e a s a n t s to initiate g r a s s r o o t s d e v e l o p m e n t a u t o n o m o u s l y on t h e b a s i s of l o c a l reality w a s s e v e r e l y c i r c u m s c r i b e d . L i k e t h e c o l o n i a l s y s t e m , n e i t h e r participation nor accountability

h a s b e e n p a s s e d on to local

structures

( H y d e n 1983; C o u l s o n 1 9 8 0 ; R a h m a t o 1 9 8 5 ) . U n d e r t h e g u i s e of " d e v e l o p m e n t a n d n a t i o n b u i l d i n g , " elite b u r e a u c r a t s a n d p a r t y l o y a l i s t s , f a r r e m o v e d f r o m t h e r e a l i t y of r u r a l l i f e , b e g a n to d i c t a t e w h a t p e a s a n t s can a n d c a n n o t p r o d u c e , f o r w h o m t h e y c a n sell t h e i r o u t p u t s , a n d at w h a t p r i c e ( B a t e s 1981; W o r l d B a n k 1 9 8 9 a ) . In s o m e i n s t a n c e s , t h e f o r c e d r e m o v a l of p e a s a n t s a n d p a s t o r a l i s t s f r o m f e r t i l e a r e a s to m a r g i n a l l a n d s to m a k e w a y f o r e x p o r t p l a n t a t i o n s h a s b e e n j u s t i f i e d b y t h e a u t h o r i t i e s on t h e g r o u n d s of a d v a n c i n g t h e national interest (Cheru

1992b; R o s e n b l u m and Williamson

1987). T h e

o n s e t of d r o u g h t o n l y c o m p o u n d e d r u r a l p o v e r t y a n d h u n g e r . R u r a l p e o p l e n o w c o n s t i t u t e t h e largest s i n g l e g r o u p of r e f u g e e s and d i s p l a c e d p e r s o n s (Timberlake 1986). B y t h e m i d - 1 9 7 0 s , t h e e u p h o r i a of i n d e p e n d e n c e had long d i s a p p e a r e d a n d t h e m i l i t a r y h a d e n t r e n c h e d itself as t h e s o l e c o n d u c t o r of state p o l i t i c s in m a n y p a r t s of A f r i c a . T h e m u c h p u b l i c i z e d d e v e l o p m e n t d e c a d e h a d g i v e n w a y to g r e a t e r d i s i l l u s i o n m e n t , a n d m a n y p e o p l e f o u n d t h e m s e l v e s on t h e b r i n k of s t a r v a t i o n ( S a n d b r o o k 1985; B a r r a c l o u g h 1991). V a r i o u s i n d e x es of e c o n o m i c d e v e l o p m e n t r e g i s t e r e d a d e c l i n e . A g r i c u l t u r a l s t a g n a t i o n , p o o r e x p o r t p e r f o r m a n c e , u n d e r u t i l i z a t i o n of c a p a c i t y in i n d u s t r i e s , g r o w i n g indebtedness, and significant social erosion characterized the

continent

(World Bank 1989a). Not only were d e v e l o p m e n t policies antipeasant and a n t i p o o r , but e v e n p r o j e c t s a n d p r o g r a m s d e s i g n e d to h e l p t h e p o o r w i t h a s s i s t a n c e f r o m t h e n e w " l o r d s of p o v e r t y " e n d e d u p m a r g i n a l i z i n g t h e m (Hancock

1989). T h e familiar cry f r o m the p o o r b e c a m e " P l e a s e

don't

develop us!" W h e n A f r i c a e n t e r e d t h e 1 9 8 0 s , n e w p r e s s u r e s w e r e p l a c e d on i m p o v e r i s h e d a n d d i s i l l u s i o n e d A f r i c a n m a s s e s . S i n c e t h e d e m a n d s of t h e p o s t c o l o n i a l state f o r m o r e r e v e n u e s h a v e s t e a d i l y i n c r e a s e d s i n c e t h e m i d - 1 9 7 0 s

Human

Rights

in Africa

153

to pay foreign d e b t , e x p e n s i v e oil i m p o r t s , bloated military e x p e n d i t u r e , and presidential looting of the public treasury, peasants and the urban poor were expected to sacrifice once more for the extravagant mistakes of the powerf u l . "Tighten y o u r belts, eat less, and pay m o r e " toward the national debt b e c a m e the order of the day. As I M F p r o g r a m s began to take a bite (through drastic reductions of social e x p e n d i t u r e s ) , large n u m b e r s of peasants began to drop out of the f o r m a l e c o n o m y to guard against threats to their subsistence ( O n i m o d e 1988; Rau 1991). This is logical b e c a u s e , for peasants, the f u t u r e is not necessarily more k n o w a b l e —they prefer security and subsistence over uncertain progress (Gran 1984; Berry 1994). It is no w o n d e r that g o v e r n m e n t s in A f r i c a have not been able to mobilize the population for d e v e l o p m e n t in a constructive manner. As many people began to draw a direct connection b e t w e e n their e c o n o m i c plight and the paucity of basic liberties, local grievances very quickly escalated into popular challenges to the established systems of g o v e r n m e n t . Ordinary people now want to construct a new political and e c o n o m i c reality on their own terms, with a f u t u r e based on participation, local control, and the meeting of basic h u m a n needs ( U N E C A 1990). This has created tension between peoples and states ( C h a z a n and Rothchild 1988; B e c k m a n 1992). In response, the state has tried to keep control over informal organizations through cooptation of their key s p o k e s p e r s o n s . Democracy

in Africa:

One Step Forward,

Two Steps

Backward

While d e m o c r a c y as an idea has t r i u m p h e d in much of A f r i c a , in practice it is in p r o f o u n d trouble. Although there are many reasons for this state of affairs, t w o e l e m e n t s stand out. First, participation of citizens in the political process cannot be ordered f r o m a b o v e , or even f r o m outside. S e c o n d , participation cannot function under conditions of absolute poverty and visible inequality. For d e m o c r a c y to e m e r g e , there must be significant social reform and a reduction of e c o n o m i c inequalities ( N y o n g ' o 1987; Cheru 1989). Satisfying basic needs and providing education are important prerequisites for this. In the absence of real c h a n g e in p e o p l e ' s lives, zero-sum mentalities and destructive competition will prevail instead of m o d e r a t i o n , thus u n d e r m i n i n g the chances of democratic transitions. Yet much of the debate on d e m o c r a c y in A f r i c a has paid only lip service to f u n d a m e n t a l social r e f o r m s . T h e r e exists an intense suspicion of the state and the parties in much of Africa. All too o f t e n , elections deteriorate to the f o r m a l legitimation of autocratic rule and diminish the role of civil society. Instead of being liberating, multiparty systems might lead to new f o r m s of old hierarchies. Political leaders seek time to pursue p o w e r and profit by patterns of bargaining, manipulation, and deceit. This does not build local capacity or national purpose.

154

Fantu Cheru

K e n y a is a g o o d e x a m p l e of a c o u n t r y w h e r e t h e i n s t i t u t i o n of f o r m a l d e m o c r a c y h a s f a i l e d t o b r o a d e n p o p u l a r p o l i t i c a l p a r t i c i p a t i o n in a m e a n i n g f u l w a y . T h e c o l l a p s e of o n e - p a r t y s t a t e s is rarely a c c o m p a n i e d by a s u b s t a n t i a l r e o r i e n t a t i o n of p o w e r r e l a t i o n s , t h e r u r a l - u r b a n d i m e n s i o n in part i c u l a r . S o c i a l r e f o r m a g e n d a s that c o u l d h a v e e s t a b l i s h e d t h e b a s i s f o r broader popular participation and greater social justice have been

aban-

d o n e d . F u r t h e r m o r e , a m u l t i p a r t y s y s t e m , w i t h t h e o l d g u a r d at t h e h e l m , is n o t g o i n g to c h a n g e t h e u b i q u i t o u s c o r r u p t i o n , m a r g i n a l i z a t i o n of r u r a l p e o p l e , a n d e t h n i c i d e n t i f i c a t i o n p a t t e r n s . T h e r e f o r e , in K e n y a , p a r t i c i p a t i o n is without empowerment. A d d i n g f u e l t o t h e f i r e is that W e s t e r n g o v e r n m e n t s a n d d o n o r s h a v e b e e n i n s i s t i n g that aid m u s t b e c o n d i t i o n e d o n t h e i m p l e m e n t a t i o n of f r e e e l e c t i o n s a n d f r e e m a r k e t s w i t h o u t r e a l i z i n g that t h e f u l l e x p r e s s i o n

of

democratic values requires more than a procedure for electing officials. D e m o c r a c y is a w a y of l i f e , w i t h a set of t r a d i t i o n s a n d i n s t i t u t i o n s . M o r e i m p o r t a n t , it r e q u i r e s a n i n d e p e n d e n t j u d i c i a r y that c a n e n f o r c e r i g h t s , p r o t e c t t h e o p p o s i t i o n , a n d e n s u r e not o n l y that e l e c t i o n s a r e d e m o c r a t i c b u t that d a i l y l i f e is d e m o c r a t i c as w e l l . T h e " n e w " p o l i t i c a l c o n d i t i o n a l i t y t h e W e s t e r n d o n o r s h a v e b e e n insisting that A f r i c a n g o v e r n m e n t s i m p l e m e n t t e n d s to c o n t r a d i c t t h e e c o n o m i c r e f o r m c o m i n g u n d e r t h e r u b r i c of I M F / W o r l d B a n k s t r u c t u r a l a d j u s t m e n t . R e p r e s s i o n a n d a u t h o r i t a r i a n i s m h a v e r e p r e s e n t e d t h e f l i p s i d e of d o n o r - d r i v e n s t r u c t u r a l a d j u s t m e n t p r o g r a m s ( B e c k m a n 1992: 8 3 - 1 0 5 ) . In a b i d to g a i n e x t e r n a l l e g i t i m a c y , A f r i c a n g o v e r n m e n t s w e r e w i l l i n g to s u p p r e s s d o m e s t i c o p p o s i t i o n t o a u s t e r i t y m e a s u r e s . T h i s in turn has b a c k f i r e d a n d c r e a t e d p o p u l a r r e s i s t a n c e a g a i n s t n e w l y e l e c t e d d e m o c r a t i c r e g i m e s . In Zambia, for example, when

the M o v e m e n t

for Multiparty

Democracy

( M M D ) b e c a m e a p a r t y in p o w e r , it s t r e n g t h e n e d t h e s t r u c t u r a l a d j u s t m e n t p o l i c y that hits h a r d a g a i n s t t h e u r b a n p o o r . In a d d i t i o n , t h e n e w g o v e r n m e n t i n t r o d u c e d an a g g r e s s i v e a n t i s q u a t t e r p o l i c y a n d b u l l d o z e d s o m e h o u s i n g a r e a s r i g h t a f t e r t h e e l e c t i o n ( S c h l y s t e r 1 9 9 3 ) . S e e n in this c o n t e x t , A f r i c a n d e m o c r a t i z a t i o n is c o s m e t i c a n d t e m p o r a r y . T h e c h a l l e n g e in A f r i c a a n d e l s e w h e r e t o d a y is h o w to m a k e e c o n o m i c revitalization compatible with democracy. While multiparty elections and u n i v e r s a l s u f f r a g e a r e i m p o r t a n t f o r m a l c r i t e r i a , t h e y a r e by n o m e a n s s u f f i c i e n t to j u d g e t h e d e m o c r a t i c q u a l i t i e s of a s o c i e t y . In i m p o v e r i s h e d s o c i e t i e s s u c h as in A f r i c a , d e m o c r a c y m u s t g o b e y o n d f r e e e x p r e s s i o n a n d t h e i n c l u s i o n of d i v e r s e g r o u p s in n a t i o n a l p o l i t i c s . T h e r e m u s t b e an o r g a n i c link b e t w e e n p o l i t i c a l f r e e d o m a n d f r e e d o m f r o m h u n g e r , i g n o r a n c e , a n d d i s e a s e . T h e r e f o r e , p e o p l e m u s t s e e t h e r e s u l t s of d e m o c r a c y in an i m p r o v e d s t a n d a r d of l i v i n g , b e t t e r e d u c a t i o n , b e t t e r h o u s i n g , a n d a c c e s s to h e a l t h c a r e . In t h e a b s e n c e o f real c h a n g e s in p e o p l e ' s l i v e s , z e r o - s u m m e n t a l i t i e s a n d d e s t r u c t i v e c o m p e t i t i o n s will p r e v a i l i n s t e a d of m o d e r a t i o n , t h u s u n d e r -

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m i n i n g the process of d e m o c r a t i c transitions. In short, the p o p u l a r m o v e m e n t f o r political c h a n g e in A f r i c a was generated by a quest for basic cons u m p t i o n items and everyday survival rather than f o r a multiparty d e m o c r a cy. T h e m e a n i n g of multiparty d e m o c r a c y on a local level r e m a i n s rather confused.

SPEAKING TRUTH TO POWER: DEMOCRACY AND SOCIAL MOVEMENTS IN AFRICA In reaction to top-down democratization initiatives, a challenge to d e m o c r a cy as an ideology of domination has e m e r g e d f r o m the mobilization of social m o v e m e n t s seeking to reassert popular control. This terrain has increasingly been occupied by civic associations, w o m e n ' s g r o u p s , peasant associations, e n v i r o n m e n t a l g r o u p s , and h u m a n rights organizations, pressing d e m a n d s on the state through the "politics of c l a i m s , " n o n p a y m e n t of taxes, open peasant insurrection, urban riots, or collective actions to find solutions to c o m m o n p r o b l e m s (Pradervand 1989; Rau 1991; Scott 1993). T h e new social m o v e m e n t s a d v a n c e the idea that d e v e l o p m e n t is a h u m a n right whose a c h i e v e m e n t requires popular participation and control. T h e desire to define issues in these terms has forced local social m o v e m e n t s to link up with other groups e l s e w h e r e in the world that are grappling with similar p r o b l e m s . T h e s e global n e t w o r k s are being facilitated by the various c o m m u n i c a t i o n s and transportation h a r d w a r e that are also a result of the c o n d i t i o n s for globalization (Ekins 1992; During 1989). This has p r o f o u n d ly c h a n g e d the nature of social organizing. At this point, a note of caution is in order. Despite the critical role social m o v e m e n t s are playing, we must not romanticize t h e m , for they presently lack a coordinating m e c h a n i s m . T h e e m e r g i n g civil society in A f r i c a , as in Eastern E u r o p e , is riven by deep c l e a v a g e s and tensions, which can threaten both e c o n o m i c restructuring and political liberalization. T h e real d a n g e r is that pro- and antidemocratic f o r c e s coexist side by side. T h e s e forces m a y be either elitist or populist, atavistic and divisive or constructive and cohesive e l e m e n t s projecting a vision of an alternative order ( M i t t e l m a n , C h a p t e r 1). For e x a m p l e , can we equate the spread of n o n g o v e r n m e n t a l organizations ( N G O s ) with d e m o c r a c y ? A f t e r all, N G O s do not have electoral constituencies and thus are not accountable to a n y o n e except the agencies that fund t h e m . Is the vibrancy of independent social m o v e m e n t s an indication of the growth and d e v e l o p m e n t of a strong and viable civil society that can serve as a base f o r democratization? Is the space that exists s o m e w h e r e b e t w e e n the " p r i v a t e " realm and the organization and institutions constituted by the state (i.e., the public realm), w h e r e everyday life is e x p e r i e n c e d , d i s c u s s e d ,

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comprehended, contested, and reproduced and where hegemony is built and contested? Future research must examine these important questions i f we are to understand popular challenges to globalization. What distinguishes progressive social movements from others is that they are inclusive and articulate the demands o f poor people and politically disenfranchised groups; they represent alternative forms o f political articulation; they are often at odds with their own governments; and they always seek to attain objectives that entail other paths to economic development, political control, and social organization (Stavenhagen

1 9 9 2 ) . T h e most

promising elements with the capacity to initiate fundamental change are the informal sector, ecology movements, peasant movements, church organizations, and human rights movements. T h e s e groups not only pursue single issues but are increasingly conducting interactive campaigns, focusing on matters o f a structural nature. F o r e x a m p l e , environmental groups now focus not only on issues o f resource management and pollution control but also on trade, debt, immigration, human rights, and other issues that the first-generation environmental movements would not have considered because they were presumed to be outside the realm o f ecological campaigns.

The Informal Sector T h e predominance o f informality in African urban centers is beyond dispute. T h e retreat o f the state in key areas o f social services has left enormous gaps that have been filled by local initiatives. From Johannesburg to Dakar, large numbers o f people are now engaged in the parallel economy:

shelter,

employment, law and order, transportation, garbage collection, catering services,

trade,

and

even

household

credit

supply

(Mabogunje

1991).

Therefore, the informal sector and social networks in urban sectors are neither exotic nor pathological. T h e y constitute a dynamic and enduring force that has shaped African cities. Squatter settlements, for e x a m p l e , represent not simply a shelter entity or a mere collection o f shacks. T h e y are sociopolitical entities, with their own rules, forms o f organization, and internal hierarchies. While they may be functional to capital in the role they play in supplementing the reproduction o f labor, they also constitute a node o f resistance and defiance against state domination. T h e same applies to unregistered markets, street vendors, backyard artisans, pirate taxis, and the entire arena o f social reproduction for the majority o f the urban population. Under the apparent chaos in this sector is a substantial degree o f order. What explains the resilience and dynamism o f the informal sector? Research has demonstrated that they are maintained by the solidarity and the organic nature o f the institutional and organizational superstructure embedded within this sector. There is a high degree o f participation, accountability and commitment and a sense o f obligation in informal sector activities

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(Jules-Rosette 1981). Over time, new types of voluntary associations develop that often blossom into different kinds of political and social movements, whose importance spreads beyond the limits of the specific local shantytown or settlement (e.g., the matatu taxi drivers in Kenya, the market women of Ghana). The

Church

The challenge to the state from below is further being strengthened by the growing fundamentalist movements in largely Islamic countries and the growth of indigenous churches whose appeal to a broader base of African society is growing everyday. Church involvement in development activities has been contributing for good measure to the strengthening of the popular sector (Hyden 1985). Both Islam and Christianity are now at a political crossroads —choosing a path, seeking change in the material conditions of their followers, or ignoring political and economic conditions in expectation of a better life in the spiritual hereafter. Islamic fundamentalism and indigenous Christianity have developed into institutions that can offer viable opposition to government policy and have continued to do so despite government pressure and coercion (Mazrui 1990). Is the world prepared to accept these movements as legitimate expressions of public dissent? Or will it simply disregard them because they adhere to Christianity or Islam? Peasant

Resistance

Ordinary peasants know that the postcolonial state has lost its role as an instrument of development. Instead of becoming more effective, the state in Africa has become the main obstacle to development. The relations between the state and the peasantry are thus characterized by mutual suspicion and distrust. The peasants have realized their powerless situation and have drawn conclusions: it is better to avoid the state altogether and withdraw within their local communities on a subsistence basis and by engaging in collective action to find alternative strategies of survival. Small farmers now market their produce through their own channels, disregarding political boundaries and marketing boards (Cheru 1989; M a c G a f f e e 1983). Having been victims of state-sponsored development, they attempt to bypass formal agencies and link up with different kinds of N G O s at the local level. In many communities, the emphasis has shifted from export crops to food crops for local consumption. In Kenya, for example, farmers have almost totally abandoned coffee production, and tea and sugar growers have on occasion neglected their crops to demonstrate their anger at the perceived hostility of the official buyers toward them (Kimenyi 1993). In Nyeri, Central Province, about eight hundred members of the troubled Mathira Coffee Farmers' Society joined a

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1993 boycott by farmers f r o m eleven other factories in delivering their coffee to the Kenya Planter's Cooperative Union demanding the society be dissolved (Daily Nation 1993). The farmers' behavior is quite rational, considering the failure of the parastatal to make payments as scheduled and the large percentage that it consumes directly. Yet the response of opposition politicians to the structural causes of the agrarian crisis in Kenya has been quite disappointing. Grassroots

Ecology

Movements

The postindependence development experience not only has widened inequalities but has undermined the resource base that sustains life. The emphasis on export-led strategy, ranging from cattle ranching to timber exporting, has intensified the competition for essential resources. Peasants and pastoralists are dislocated by more powerful social coalitions to marginal lands to make way for export plantations. Rivers and water sources that have long sustained pastoralists and small farmers are rerouted considerable distances to serve agribusiness, leaving local people to fend for themselves. In a struggle for survival, ecology movements, peasant groups, and women's organizations in Africa are at a political crossroads and are challenging structures that have long kept them marginalized (During 1989). A case in point is Wangari Maathai and the Green Belt movement, which assist Kenyan women to plant trees in their homesteads. President Daniel arap Moi was shocked to discover the muscle of the Green Belt movement when foreign funding committed for the construction of a skyscraper in a popular Nairobi park was withdrawn after protest led by Maathai. The overall consensus among popular organizations and environmental groups is that the process of poverty alleviation must go hand in hand with instituting farreaching political changes (Korten 1990). Even the World Bank, which for so long has tried to separate economics from politics, now advocates democracy and the merits of popular participation in the development process. Ecology movements now think locally and act globally, for they see the usefulness of international support and publicity for their local struggles (McCormick 1989). In addition, social movements have become sophisticated in that they try to understand the interrelatedness of issues previously handled as if they were separate, and they build coalitions around these issues. They now undertake multifaceted concerns, such as the relationships between debt and the environment, trade and sustainable development, and democracy and sustainable development. The Human Rights

Movement

Given the predominance of military governments in many parts of Africa, the human rights movement remained underdeveloped until very recently. In

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f a c t , m u c h of t h e h u m a n r i g h t s w o r k r e g a r d i n g p o l i t i c a l p r i s o n e r s

and

r e f u g e e s h a s b e e n c o n d u c t e d by n o r t h e r n N G O s a n d c h u r c h g r o u p s . S i n c e 19B9, h o w e v e r , w e h a v e w i t n e s s e d a p r o l i f e r a t i o n of local h u m a n r i g h t s g r o u p s w i t h a m u c h e x p a n d e d a g e n d a f a r b e y o n d t h e t r a d i t i o n a l f o c u s on p o l i t i c a l p r i s o n e r s . W h i l e s o m e g r o u p s f o c u s o n s h e l t e r o r d e v e l o p m e n t as a h u m a n r i g h t , o t h e r s d e a l p r i m a r i l y w i t h t h e r i g h t s of i n t e r n a l l y d i s p l a c e d p e r s o n s , street c h i l d r e n , d i s p l a c e d p a s t o r a l c o m m u n i t i e s that h a v e lost t h e i r e n t i t l e m e n t , a n d e t h n i c a n d r e l i g i o u s m i n o r i t i e s . In c l o s e c o l l a b o r a t i o n w i t h Northern N G O s and h u m a n rights organizations, African h u m a n rights organ i z a t i o n s h a v e b e e n a b l e to b r i n g to i n t e r n a t i o n a l f o r u m s t h e c o m p l i c i t y of n a t i o n a l g o v e r n m e n t s a n d d o n o r a g e n c i e s w h o s u p p o r t d e v e l o p m e n t strategies that often conflict with p e o p l e s ' rights for d e v e l o p m e n t and self-management. T h i s brief r e v i e w of s o c i a l m o v e m e n t s c o n f i r m s that o r d i n a r y p e o p l e d o n o t a l l o w their f r u s t r a t i o n w i t h s t a t e p o l i c i e s a n d p r o g r a m s to g e t in t h e w a y o f b e t t e r i n g t h e m s e l v e s a n d m a i n t a i n i n g t h e i r s e l f - r e l i a n c e . In t h e p r o c e s s , such g r o u p s h a v e b e c o m e politically c o n s c i o u s and are e d u c a t i n g

them-

s e l v e s in o r g a n i z a t i o n a l d y n a m i c s a n d s e l f - g o v e r n m e n t at t h e l o c a l l e v e l . In s h o r t , s o c i a l m o v e m e n t s a r e r e d e f i n i n g i s s u e s in t e r m s that a d d r e s s m o r e f u n d a m e n t a l q u e s t i o n s of r e s o u r c e d i s t r i b u t i o n a n d a c c e s s a n d

political

r i g h t s a n d p r o c e s s e s . In d e m o c r a t i c p a r l a n c e , this is s e l f - g o v e r n m e n t . N e w social m o v e m e n t s m u s t c o m e to t e r m s w i t h t h e f a c t that r e v o l u t i o n is n o l o n g e r an o p t i o n . E v e n the m o s t r a d i c a l g r o u p s h a v e to a c c e p t this if t h e y a r e to play a c r u c i a l r o l e in b r i n g i n g c h a n g e in A f r i c a . F o r e x a m p l e , a f t e r m a n y y e a r s of w a r a n d d e s t r u c t i o n , E t h i o p i a n s a n d M o z a m b i c a n s a r e n o t p r e p a r e d to d i e f o r e m p t y s o c i a l i s t i d e a l s . T h e o n l y r e a l i s t i c o p t i o n f o r reducing corruption, making political systems more responsive, and bettering t h e lot of t h e p o o r is to d e m o c r a t i z e b o t h d e m o c r a c y a n d c a p i t a l i s m .

Dilemma of Agenda Mix A comprehensive development alternative cannot go far enough without a b a s i c c h a n g e in p o l i t i c a l s t r u c t u r e s . U n t i l t h i s h a p p e n s t h e p o p u l a r s e c t o r c a n o n l y p r e s s u r e g o v e r n m e n t f o r s o m e p o l i c y c h a n g e s a n d a c c u m u l a t e little v i c t o r i e s h e r e a n d t h e r e . T h i s i m p l i e s that t h e p o p u l a r s e c t o r m u s t h a v e a n o t h e r p o l i t i c a l a g e n d a o v e r a n d a b o v e its m a i n b u s i n e s s of d i s e m p o w e r i n g c e n t r a l i z e d s t r u c t u r e s . In o t h e r w o r d s , it h a s to c o m e u p w i t h a s t a t e a g e n d a of its o w n . T h i s s u g g e s t s e n t e r i n g the t e r r a i n of t h e n a t i o n - s t a t e — n a t i o n a l politics. H e r e lies p r e c i s e l y t h e d i l e m m a of n o n g o v e r n m e n t a l a n d p e o p l e ' s o r g a n i z a t i o n s . B y n a t u r e t h e i r m a i n c o n c e r n is s o c i a l p o l i t i c s — i n o t h e r w o r d s , s e l f - g o v e r n a n c e w h o s e s u c c e s s is m e a s u r e d m a i n l y in t e r m s of t h e c i r c l e s o r p o l e s of p o p u l a r p o w e r that t h e y c r e a t e at t h e b a s e . In this c o n t e x t , s t a t e p o l -

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itics is of a different w o r l d . And yet civil society has to grapple with the u n a v o i d a b l e a g e n d a mix. It will have to find the appropriate combination of strategies to effectively h a n d l e the contradictory trajectories of state politics, which is integrative or centralizing, and social politics, which is horizontal or c e n t r i f u g a l . In their e f f o r t s to c o p e with the d i l e m m a , N G O s and p e o p l e ' s organizations (POs) face p r o b l e m s that tend to c o n f u s e their identity and u n d e r m i n e their core values, such as a u t o n o m y , p l u r a l i s m , diversity, volunteerism, and closeness to the grassroots, b o t t o m - u p perspective. O n e p r o b l e m is state substitution. S o m e N G O s and popular organizations set up layers of bureaucratic structures and end up behaving like state institutions. T h e n s o m e self- a p p o i n t e d leaders represent the loosely defined entity called N G O / P O c o m m u n i t y (like politicians), and bureaucrats lay claim to jurisdiction over citizens and territories. A related p r o b l e m is parallelism. In their frustration with state policies, N G O s tend to d o things on their own as though g o v e r n m e n t does not exist. Because they have set up substitute structures, they think they could m a k e an impact on the overall situation in spite of the g o v e r n m e n t . O n e cannot equate the spread of N G O s with d e m o c r a c y . In s o m e cases, N G O s are spreading clientelism, thus u n d e r m i n i n g the collective action. T h e s e tensions have to be w o r k e d out. O u r vision should not distract us f r o m what is and what exists. Should civil society always be in c o n f r o n t a t i o n with the state? Or should civil society be viewed as one stage in the d e v e l o p m e n t of c o m m u n i t y on the way to b e c o m i n g a state? Or should it be viewed in terms of the relationship of the state to people —as an interface between people and the state? Back to the Drawing

Board

Contrary to the Eurocentric view arguing that A f r i c a n s are strangers to d e m o c r a c y , d e m o c r a t i c ethos and practices are ingrained in Africa at subnational levels, the locales that mean most for individual A f r i c a n s . Since the colonial era and the advent of the nation-state, h o w e v e r . A f r i c a n s have been deprived of d e m o c r a t i c i n v o l v e m e n t . F e a r and mistrust of central authorities have been w i d e s p r e a d , and this has m a d e it difficult to sustain democratic values and c o m m i t m e n t . C o m p o u n d i n g the p r o b l e m has been d e c a d e s of e c o n o m i c decline and resource c o m p e t i t i o n , which have p r o d u c e d zero-sum mentalities and a t e n d e n c y to resort to ethnic nationalism to get ahead in the competition for scarce r e s o u r c e s . B e c a u s e of these r e a s o n s , until recently p e o p l e have been passive recipients of policies. W h a t is billed as A f r i c a ' s second liberation has little c h a n c e of success if it cannot revive A f r i c a n s ' e c o n o m i c f o r t u n e s . T h e g r o w i n g d e m a n d for democratization is a response to declining living standards in the face of w i d e s p r e a d c o r r u p t i o n and m i s m a n a g e m e n t by the political elites. T h e r e f o r e , people d o not just want multiparty d e m o c r a c y — they want f u n -

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damental economic changes as well. Therefore, the way out of the current political impasse lies with ordinary people reacquiring power control of their natural and human resources and strengthening their capacities to define development in their own terms. This fundamental process can be achieved only on the basis of people's participation in organization and decisionmaking at all levels. Only when African farmers have a political voice will their needs be properly addressed by governments. Recognizing Peasants' Knowledge. One of the biggest obstacles in forging institutional ties between urban-based movements and rural people is a serious communication gap. Although most urban Africans keep their family ties to the rural areas from which they originate, communication is onesided and minimal. The authorities regard peasants as backward and ignorant. The new urban democrats, polished in pro-peasant rhetoric, behave much the same way as the authorities in power. They take their Western educational credentials as a license to decide what is good for peasants; what the peasants know and what they might need is no concern to them. Without mobilizing peasant support and active cooperation, the democratization and development projects will hardly succeed. But if peasants are supposed to engage their initiatives and enthusiasm, they must have reason to be convinced that they will be in control of their situation themselves, that their knowledge and initiatives matter, and that they will not once again be at the mercy of other groups' greed. Acknowledging That Nothing Grows from the Top Down. The only way to ensure democracy in Africa is to allow rural people to build on the indigenous. According to Ake, this refers to whatever the people consider important in their lives, whatever they regard as an authentic expression of themselves (Ake 1988: 19-23). For the peasant, the conditions for democratic participation are very much present at the community level. This will help determine the form and content of the development strategy and social institutions that are important in people's lives. People at all levels must be given the right to establish and manage their own cooperatives and organizations of women, youth, workers, and consumers. These local-level organizations must be given greater control over the allocation of resources, the disbursement of funds intended to benefit them, and the appointment and control of officials meant to serve them. Strong popular organizations enable different sectors of the society to assert and fight for their particular social rights. These local organizations must also find ways to mobilize their constituencies for the purpose of gaining influence on the national level, opening channels of communication and representation of peasant interests up to the top level. Making the First Step Toward Liberation. We cannot talk about participation in a vacuum. Participation requires grassroots education to create far more active and competent citizens. Only by enlarging visions and raising

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c o n s c i o u s n e s s c a n p e a s a n t s u n d e r m i n e t h e v i c i o u s c i r c l e of m a s s e x c l u s i o n a n d m a r g i n a l i z a t i o n . W h i l e p e a s a n t s , by and l a r g e , a r e a w a r e of t h e i r s i t u a t i o n at t h e l o c a l l e v e l , they h a v e n e i t h e r t h e c a p a c i t y n o r t h e r e s o u r c e s r e q u i r e d to i n f l u e n c e e v e n t s in t h e w o r l d b e y o n d t h e i r v i l l a g e s . H e i g h t e n e d c o n s c i o u s n e s s m a k e s p e a s a n t s a w a r e of t h e r a n g e of v a l u e c h o i c e s o p e n to t h e m a n d t h e i r s o c i a l a n d p o l i t i c a l i m p l i c a t i o n s . T h i s is of c o u r s e a c u m b e r s o m e , s l o w , a n d t i m e - c o n s u m i n g j o b . It is n o t as e a s y as p o l i t i c a l s p e e c h m a k i n g . A s H o l l n s t e i n e r o b s e r v e d in t h e P h i l i p p i n e s , it t a k e s a l o n g t i m e f o r p e a s a n t s l i v i n g o n t h e m a r g i n to m o v e f r o m s i m p l e , c o n c r e t e , a n d s h o r t - t e r m p e r s o n a l i s s u e s to m o r e c o m p l e x , a b s t r a c t , l o n g - t e r m , a n d s y s t e m i c i s s u e s (Hollnsteiner 1979). Building

Capacity

in Peasant

Institutions.

It is n o u s e t a l k i n g a b o u t p e a s -

a n t p a r t i c i p a t i o n if t h e b a s i c e l e m e n t s r e q u i r e d f o r t h e i n s t r u m e n t a l i z a t i o n of p a r t i c i p a t i o n a r e n o t p r e s e n t at t h e v i l l a g e l e v e l . C a p a c i t y b u i l d i n g e n t a i l s leadership training for both m e n and w o m e n , establishing locally research capacity, disseminating information, networking, and

based

lobbying.

Institution building would also involve improving communication

flows

b e t w e e n c o m m u n i t i e s a n d d i f f e r e n t sets of r u r a l i n s t i t u t i o n s , t h u s h e l p i n g peasants become catalysts for change. Democracy cannot work without a h i g h l e v e l of i n f o r m a t i o n a n d k n o w l e d g e . T h i s is a c r u c i a l a r e a o f t e n f o r gotten when one talks about mobilizing peasants and involving grassroots organizations. Establishing

the Rule of Law.

B e c a u s e p o l i c y n e e d s to b e f o r m u l a t e d into

l e g a l n o r m s a n d r e q u i r e s t h e c r e a t i o n of s t r u c t u r e s a n d t h e d e f i n i t i o n of r e l a t i o n s , t h e l a w h a s a v e r y e s s e n t i a l a n d a c t i v e r o l e in r e n e w i n g a n d r e s t o r i n g d e m o c r a c y . H o w e v e r , d e c l a r i n g a l a w is o n e t h i n g ; living the l a w is a n o t h e r . T h i r t y y e a r s of e x p e r i e n c e in A f r i c a h a v e s h o w n that p u b l i c o f f i c i a l s u s u a l ly c i r c u m v e n t o r v i o l a t e t h e l a w w h e n it is not e x p e d i e n t f o r t h e m . F o r d e m o c r a c y to t a k e r o o t in A f r i c a , o r d i n a r y c i t i z e n s m u s t b e p e r s u a d e d that t h e g o v e r n m e n t s i n c e r e l y b e l i e v e s in, a n d is w i l l i n g to u s e its e x e c u t i v e p o w e r s a n d p r e r o g a t i v e s to e n s u r e t h e r u l e of law, e q u a l i t y b e f o r e t h e law, a n d d u e p r o c e s s of law. T h e j u d i c i a r y h a s b e e n t h e w e a k e s t in A f r i c a . O n e w a y to e n s u r e d e m o c r a c y is to m a k e t h e j u d i c i a r y a n e f f e c t i v e i n s t i t u t i o n a n d a t r u e g u a r d i a n of c i v i l l i b e r t i e s a n d o t h e r r i g h t s of t h e p r i v a t e s e c t o r . B u t p r o m u l g a t i n g l a w s is n o t e n o u g h . W e n e e d to m a k e s u r e that p e a s a n t s a c q u i r e t h e m i n i m u m l e v e l of l e g a l c o m p e t e n c y . P e a s a n t s m u s t k n o w t h e i r r i g h t s a n d u n d e r s t a n d w h a t t h e l a w a c t u a l l y m e a n s to t h e m , b o t h i n d i v i d u a l l y a n d c o l l e c t i v e l y . In this w a y , t h e l i v e s a n d p r o p e r t y of i n d i v i d u a l s d o n o t rest in t h e h a n d s of p u b l i c o f f i c i a l s . V i c t i m s s h o u l d h a v e r e c o u r s e to t h e law. Promoting

Pro-Peasant

Economic

Policy.

S i n c e s u b s i s t e n c e a g r i c u l t u r e is

t h e m a i n s t a y of m a n y A f r i c a n c o u n t r i e s , t h e state m u s t d e v e l o p a s u p p o r t i v e e n v i r o n m e n t f o r e c o n o m i c g r o w t h to s t i m u l a t e a g r i c u l t u r a l p r o d u c t i o n . T h e

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biggest challenge in Africa has always been how to make the public sector more responsive to the needs of small farmers w h o need government support in the area of credit, inputs, markets, and fair prices to succeed. Besides advocating radical changes in the above mentioned policy areas, the contentious issues of land ownership and tenure have to be addressed head on. Although agrarian reform has become a dirty term in international circles (because it smacks of leftism or revolution), real democracy cannot be established without fundamental land redistribution and a reorientation of agricultural policy in Africa. Opposition leaders cannot afford to hold back their punches on the land issue if they ever hope to attract significant support from rural people. Instilling the Virtues of Self-reliance. The greatest assurance for peasants' security in Africa would be for political leaders to emphasize the kinds of economic relations that involve self-reliance rather than charity. According to Galtung, self-reliance implies selective resistance and the use of local resources effectively. By necessity, self-reliance demands mass participation (Galtung et al. 1980). Through participation, peasants become aware of the range of options open to them and of their own capacity to transform their communities. Therefore, self-reliance reinforces the democratic ethos at the subnational level, the level that means most to peasants. In contrast, I M F stabilization programs reinforce dependence and undermine the drive for mass participation by rewarding one group and penalizing others. Recognizing the Role of Women. In Africa, women make up the majority of the rural poor. They produce the bulk of food and constitute 6 0 - 8 0 percent of the agricultural work force. Yet their contribution to the household as well as to the society is rarely recognized. Women are the first to be victims of famine, debt, and regional conflicts. Despite the weight of the crisis that is shouldered by w o m e n , they play only a minimal role in decisionmaking in national and local politics. For democracy to succeed, there must be a firm commitment to full constitutional guarantee of women to ascertain the rights of access to land and control of resources and opportunities for leadership training. This could lead to cessation of w o m e n ' s abuse, manipulation, and anonymity. Promoting Transnational Civil Society. Democratization and social reform in the Third World is contingent upon the degree of internal change in the core countries. It is essential to link grassroots groups and N G O s generally (as well as local governments) across national borders and to address common concerns through joint action (Falk 1992a; Ekins 1992). Experience from the antiapartheid movement to the U N C E D process has proven that this is not only possible but indispensable. Despite the ascendance of rightwing forces in the United States and Western Europe in the 1980s, Third World solidarity movements flourished and even scored some victories

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against great odds. These social movements are credited for helping to end apartheid and for raising awareness of the links between ecology and development, culminating in the Earth Summit. In the present world order, where corporate power and the state depress the welfare of ordinary people, solidarity movements based in churches and environmental N G O s offer real hope for the great mass of people. Peasants constitute the single dominant social group in Africa. Yet they are the least represented and the most oppressed group. For democracy to take root in Africa, strong and independent peasant groups must be encouraged to check the excesses of state power. Until opposition leaders and urban elites respect the knowledge of peasants and acknowledge the fact that nothing grows from the top down, their efforts at building a democratic society will be an exercise in futility. Participation of peasants cannot simply be ordered from above. It has to be demanded and carried out from below. This is the cardinal rule of democracy. As it stands, opposition leaders have put the cart before the horse. It is not too late to set things right.

CONCLUSION The fundamental political conflict in the coming decades will be between the forces of globalization and the various forms of locally based social movements in both the North and the South seeking to redefine a just, democratic, and sustainable new world order. It is therefore important to identify potential agents of transformation in diverse contexts and to build a durable transnational civil society movement to check the excesses of the forces of globalization. In the African context, however, more hard work is required for social movements to be able to develop a formidable counterproject. Organizing around daily subsistence increasingly consumes too much of people's energy and meager resources, thus making the task of developing a counterproject exceptionally difficult and slow.

June Nash Christine Kovic

8

The Reconstitution of Hegemony: The Free Trade Act and the Transformation of Rural Mexico

G l o b a l integration has o f t e n been a c h i e v e d at the cost of u n d e r m i n i n g d e m o cratic institutions within n e w l y i n d u s t r i a l i z i n g c o u n t r i e s . A f a v o r a b l e clim a t e f o r i n v e s t m e n t in the 1970s and 1980s m e a n t the a s s u r a n c e of low labor costs a c h i e v e d by r e p r e s s i v e g o v e r n m e n t s p r o h i b i t i n g trade u n i o n s and o t h e r m a s s o r g a n i z a t i o n s that a d d r e s s e d t h e issues of the new labor f o r c e . M i t t e l m a n ( C h a p t e r 1) has p o i n t e d to the limits of this kind of international c o m p e t i t i o n as the d e m a n d s f o r d e m o c r a t i c institutions h a v e g r o w n in n e w areas of d e v e l o p m e n t . U n d e r s t a n d i n g h o w c o n s e n s u s is g a i n e d in the c o n text of g l o b a l integration of the society a n d polity requires an a w a r e n e s s of local political p r o c e s s e s . In this c h a p t e r w e will c o n s i d e r the a t t e m p t by M e x i c a n president C a r l o s S a l i n a s de Gortari to r e c o n s t i t u t e h e g e m o n i c a c c o r d in the neoliberal r e s t r u c t u r i n g of the e c o n o m y b r o u g h t a b o u t by global trade and f i n a n c i a l integration and the w a y this w a s c h a l l e n g e d by the Z a p a t i s t a National Liberation A r m y uprising on N e w Y e a r ' s E v e 1994. A l t h o u g h J o s é L ó p e z Portillo and M i g u e l de la M a d r i d had r e l a x e d m a n y of the restrictive trade p r o v i s i o n s and nationalistic i n v e s t m e n t priorities, S a l i n a s m a d e m o r e dramatic c h a n g e s than any of his p r e d e c e s s o r s in u n d e r c u t t i n g the old basis f o r h e g e m o n y with c a m p e s i n o s (rural c u l t i v a t o r s ) and national e n t r e p r e n e u r s . His g o v e r n m e n t p u r s u e d p o l i c i e s of industry p r i v a t i z a t i o n that alienated sectors of o r g a n i z e d labor, a r e f o r m of the A g r a r i a n R e f o r m L a w that e n d e d the paternalistic r e l a t i o n s h i p with c a m p e s i n o s , a n d e l i m i n a t i o n of h e a v y import duties that t h r e a t e n e d national industries. In the m a s s i v e redistribution of i n c o m e that o c c u r r e d d u r i n g his p r e s i d e n c y , he r e d u c e d the political and econ o m i c b a s e of the m i d d l e c l a s s , and as its c o n s u m p t i o n and political p o w e r w a s r e d u c e d he vigorously p r o m o t e d e x p o r t - o r i e n t e d p r o d u c t i o n in the world m a r k e t . T h e s e c h a l l e n g e s to the traditional b a s i s of h e g e m o n i c a c c o r d m a i n tained by the ruling Institutional R e v o l u t i o n a r y Party ( P R I ) d u r i n g the first

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four years of Salinas's presidency were opposed by campesinos in peaceful demonstrations that were met by increasingly repressive military force, especially in the southernmost state of Chiapas. Protest came to a head with the Zapatista New year's uprising, on the very day that the Free Trade Act (known as the North American Free Trade Agreement [NAFTA] in the United States) was to go into effect. The Democratic National Convention called by the Zapatistas in August 1994 was a tentative step in charting an alternative course for entering global economic exchange. The Zapatista uprising contradicted the image of modernity and democracy that Salinas had tried to forge in his commitment to international exchange and an export-oriented economy. This commitment followed upon a decade during which the country restructured its economy toward the export-oriented, privatized goals imposed by the International Monetary Fund (IMF) in 1982 as conditions for incorporation in the global economy. The restructuring of the Mexican economy in response to global integration reversed the postrevolutionary course of development that emphasized communal landholdings maintaining a semisubsistence economy in the rural areas and syndicalist organizations of urban workers and professionals. In contrast to U.S. democracy, whereby each person is the unit of individual rights and duties, Mexico incorporated campesinos, urban proletariats, commercial agents, and professionals through member organizations that were responsible for delivering the vote to the PRI. Founded in 1929, years after the revolutionary goals were crystallized in the constitution, the PRI reveals the paradoxical basis for power relations in an institutional nexus that asserts the memory of violent upheaval of a social structure. Contradictions were resolved through compromises with and co-optation of the leadership of the Confederation of Mexican Workers ( C T M ) , the National Confederation of C a m p e s i n o s ( C N C ) , the National Confederation of Popular Organizations (CNOP), and many other organizations that brought their constituents into line. Indigenous villages became part of this corporatist structure through their caciques (native leaders co-opted within government spending programs), who delivered the vote to the PRI. Through these organizations, paternalistic relationships developed with state bureaucracies that were co-optive and opportunistic in practice. The corporatist structure began to crumble in the debt crisis of the 1980s when the adjustment policies launched by the I M F in 1982 forced austerity measures. The decreased services to the most vulnerable — w o m e n , children, and the aged —along with wage and price freezes, which reduced spending power and inflation from 200 percent in 1987 to about 20 percent in 1988 (Beneria 1989), polarized the sectors that made up the PRI constituency. Cuahtemoc Cárdenas (the son of Lázaro Cárdenas, who had fathered the institutional f r a m e w o r k for realizing the goals of the revolution during his term of office f r o m 1934 to 1940) demonstrated the fragmenta-

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tion of hegemonic control by the PRI with the strength of his Democratic Revolutionary Party (PRD) in the 1988 elections. Many read this as a rejection of neoliberal policies that had shifted the burden of the debt to the lower-income sectors in the rural and urban economy as the government increasingly withdrew from its responsibilities toward those very sectors. In the political crisis caused by charges of electoral fraud and the assassination of PRD members following Salinas's election in 1988, Salinas attempted to integrate Mexico into the global economy by promoting private enterprise in both the agricultural and industrial sectors. In the fourth year of his six-year term, he unleashed his strongest attack on the corporatist structure of the state with Article 27, Reform of the Agrarian Reform Law. This reform allowed privatization of collectively held ejido lands that were the key to agrarian policies of the postrevolutionary government. It opened the door for private sales of land, particularly that of the colonizers who were already indebted by breakdowns in the marketing of cash crops. The minimal assistance in the form of marketing and credit given to rural smallholders lured into cultivation of coffee and fruit was abruptly withdrawn after 1992, leaving many with rotting harvests and debts that made it impossible to undertake renewed cultivation. This rejection of the old politics of paternalism and co-optation combined with the failure to address the rising problems of commercial cultivation contributed to the discontent in the Chiapas rural population. On New Year's Eve 1994 the eight hundred men and women who joined the rebels forcibly entered the municipal headquarters of San Cristobal de Las Casas, Ocosingo, Las Margaritas, and Altamirano. The leaders specifically attacked the Free Trade Act for its failure to take the needs of indigenous people into account. They called for a democratic process to ensure free elections and greater participation of small-plot farmers and agricultural laborers who were left out of the development process in Chiapas. In the process of negotiating with the populist former mayor of Mexico City, Manuel Camacho, the Zapatistas extended their support among Lacandón jungle colonizers who had long-pending land claims and bore deep-seated resentment for the failure of the government to address their demands. Their call for reform echoed in some traditional highland towns as the indigenous people threw out the corrupt PRI officials in Zinacantan, threatened the autocratic rule of caciques in San Juan Chamula, and prompted the takeover of the Teopisca town hall by poor campesinos. These supporters' long-standing land claims were ignored, for the government favored large-scale capitalist enterprises that were taking advantage of the oil, hydroelectric, and lumber resources in Chiapas. Protests against the large cattle owners who took over land cleared by colonizers were consistently met by military repression, with arbitrary arrests, torture, and killing attested by the Fray Bartolomé de las Casas Human Rights Center denied by the PRI government. Unlike in armed guer-

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rilla m o v e m e n t s of the past, the Zapatistas m a d e it clear that they were trying not to seize p o w e r by f o r c e but to open the political arena for marginalized people. In this chapter we will analyze Salinas's attempt to restructure hegem o n i c control in the context of integrating M e x i c o ' s e c o n o m y in world market and financial structures while destroying the corporate base of the old order during 1993. We will describe the process in which the Salinas gove r n m e n t tried to retain cultural identification with the revolutionary tradition of the early d e c a d e s of this century while p r o m o t i n g new links b e t w e e n regional p o w e r blocs and the center of p o w e r in M e x i c o City. The Zapatista National Liberation A r m y rudely shattered Salinas's attempt to forge "a shared sense of reality," which is central to h e g e m o n i c order a m o n g disparate interests ( G r a m s c i 1973). T h e break between the new international order and the paternalistic political structure challenged the moral e c o n o m y of the c o m m u n a l indigenous population and the rising militancy of the uprooted peasants w h o s e d e m a n d s were consistently ignored. B e c a u s e of the p r e d o m i n a n t l y indigenous ethnic identification of highland C h i a p a s c o m m u n i t i e s , h e g e m o n i c control requires m a n a g e m e n t of corporate politics a m o n g local elites and state as well as national g o v e r n m e n t s (Lomnitz 1992: 27 et seq.). T h e massive dislocations of semisubsistence f a r m e r s in southeastern M e x i c o during the 1960s and 1970s resulted in m a j o r changes in land use and labor mobilization that upset this control (Collier, M o u n t j o y , and Nigh 1994). Yet state officials in C h i a p a s limited themselves to forging a new social contract between modernizing sectors of the e c o n o m y and the elites of corporate indigenous c o m m u n i t i e s . But the masses of impoverished c a m p e s i n o s as well as expelled indigenes forced to migrate to the city have been left outside the co-optive programs of the gove r n m e n t . We will describe the e m e r g e n t agrarian p o w e r bloc in C h i a p a s wherein the old conflict between indigenes and ladinos ( n o n i n d i g e n o u s bearers of European culture) is being replaced by a class-divided indigenous bloc, with elites supporting the PRI and the disinherited turning to the P R D or the Zapatista National Liberation Army.

FORGING A NEW AGRARIAN POWER BLOC Salinas responded to the crisis of legitimacy in his party after charges of f r a u d in his 1988 election with adroit m a n a g e m e n t of the contesting f o r c e s . In the events leading up to and f o l l o w i n g the passage of the R e f o r m of the Agrarian R e f o r m Law, we can decipher his strategy of neutralizing a c a m p e s i n o bloc that b e c a m e increasingly o p p o s e d to the privatization and commercialization policies contingent on the o p e n i n g up of opportunities by global capitalist investment. To o v e r c o m e the opposition of vested interests in the old paternalism

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and to engage vital new sectors of the agrarian e c o n o m y , President Salinas initiated two m a j o r stratagems f r o m 1991, w h e n the p r o p o s e d changes to the A g r a r i a n R e f o r m L a w were a n n o u n c e d , to 1992, w h e n it was i m p l e m e n t e d . T h e first involved the ideological e n g a g e m e n t of diverse interests threatened by the new phase of capitalist a c c u m u l a t i o n . T h e second involved the restructuring of agencies dealing with agrarian conflict and welfare prog r a m s ; it required a shoring up of p a t r o n a g e through c o m b i n e d public and private initiatives. C o n c o m i t a n t with these goals, the Salinas administration targeted areas of opposition to the dissolution of state paternalism that had operated within corporatist p o w e r blocs. It c h a n n e l e d conflict cases into the new Agrarian Solicitors O f f i c e and d e p l o y e d w e l f a r e f u n d s in the new Solidarity p r o g r a m , P R O N A S O L , to co-opt leaders that objected to the c h a n g e s . These stratagems will be described as we observed t h e m played out in the spring and s u m m e r of 1993. The Rhetoric

of Reform

Without

Privatization

T h e linkage with the revolutionary victories of the early decades of the nineteenth century is maintained as the g o v e r n m e n t mounts its c a m p a i g n against corrupt paternalistic policies identified with the old order, using the rhetoric of popular organizations. In the f o r e w o r d to the " N e w Agrarian L e g i s l a t i o n " (1992), the brochure put together by Solidarity, c h a n g e s in Article 27 of the constitution allowing the private sale and d e v e l o p m e n t of agrarian lands are presented as a r e f o r m of the Agrarian R e f o r m Law: Under the principle of bringing greater liberty and justice to the Mexican countryside, the reform to Article 27 of the Constitution and the expedition of the Agrarian Law represents a change of great importance to overcome the low growth that the rural sector has had for 25 years in comparison with the rest of the economy. The recuperation of agriculture and the increase of the welfare of the campesino are a basic condition to modernize the region begun by the government of President Carlos Salinas de Gortari.

Clearly there was a need for r e f o r m in the Agrarian R e f o r m L a w corresponding to the changed conditions in the half-century since it went into e f f e c t . From the early d e c a d e s of land redistribution in the 1930s, cattle interests in the north were excluded by Pres. L á z a r o C á r d e n a s , and large l a n d o w n e r s were able to e v a d e expropriation in the south. In the first place, since there are n o national lands available for redistribution, the needs of the g r o w i n g agrarian smallholder population could not be met within the context of the old Agrarian R e f o r m L a w s without c o n f r o n t i n g the agroindustrial interests that were built up during the past f o u r administrations. T h e 3.5 million solicitations for land p e n d i n g , 7.6 million hectares in litigation, and two hundred resolutions r e s p o n d i n g to d e m a n d s in l i m b o revealed the depth of the q u a g m i r e in 1991. F i f t e e n million c a m p e s i n o s received less than the

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minimal salary of 15 new pesos (about U.S. $5) a day, and only five million received the minimum. The solution of the Echeverría and Madrid administrations to send colonizers into the jungle areas has been countered by ecological concerns for the global impact of deforestation. Moreover, the existing bureaucracy of the Secretariat of the Agrarian Reform perpetuated the triple threat of caciquismo, arbitrary rule of the indigenous and mestizo intermediaries who justified acts of political repression and theft in the name of tradition and local autonomy. A social division of work corresponding to the social ownership of property that might have permitted technological advances in the ejido lands was rarely implemented by agencies that proliferated in the various administrations. Many of the small producers were forced to out-migrate because of the stagnation in the ejido sector and government policies controlling the price of subsistence crops while favoring global and national agroindustrial interests with large-scale development. Mexico has become dependent on food imports, with 30 percent of the basic food crop, corn, being imported in 1991. Campesinos complained that they were "corralled like sheep" between the limitations of the old corporatist interests and the threat of expropriations by the new capitalized sector. Rural migrants to the cities were nearly excluded from the process of adjustment required by the new conditions of land tenure and cultivation. The rhetoric of reform of the land reform act masks the new relations of production while suppressing the opposition of disinherited power blocs. This has involved a realignment of the rural sector under reconstituted organizations claiming to represent the diverse elements in the countryside confronted with the privatization of the communal landholdings. The National Confederation of Campesinos, which had constituted the major voice of rural interests within the PRI, tried to mobilize support for the new law under the slogan of modernization without loss of the ejido, but it could no longer pretend to represent the campesinos who rejected their conformity to PRI policies that had resulted in the decapitalization of the rural sector throughout the 1970s and 1980s. As a result, there was a proliferation of new organizational structures that set about to construct consensus. The National Confederation of Small Propertyholders provided a voice for groups that sought title to land as independent owners. The Permanent Agrarian Congress (CAP) called for greater flexibility and modification of the agrarian law to permit free association between campesinos and private investors. Opposed to these centrist interests modifying the act to make it more acceptable were new populist interests demanding representation in the negotiations. These included the Mexican Commission of 500 Years of Indian and Popular Resistance, the Democratic Campesino Union, the Independent Center of Agricultural Workers and Campesinos, and the Union of Ejido Unions and Campesino Solidarity Groups of Chiapas (UU) (La Jornada, 12 April 1991). The leader of the U U , Margarito Montes Parra, called for a new offensive to restructure the statist corporatist ideology elim-

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inating the bureaucracies of Banrural, the Secretariat of the Agrarian R e f o r m ( S R A ) , and the Secretariat of Agriculture and Hydraulic R e s o u r c e s ( S A R H ) , w h o s e powers would be transferred to the ejidatarios, giving them control over the transfers of land (La Jornada, 15 O c t o b e r 1991). H e called for " m o d e r n i z a t i o n without privatization," which increasingly b e c a m e the rhetoric of the official party. In C h i a p a s the g r o w i n g dissent in the 1970s and 1980s was channeled in the U U and in the Organization of C a m p e s i n o s E m i l i a n o Z a p a t a ( O C E Z ) , which has been the f o c u s of discontent in Venustiano Carranza since 1975 w h e n a peasant leader was assassinated. T h e y protested the failure to c o m pensate c a m p e s i n o s w h o were forcibly r e m o v e d f r o m their lands to m a k e way for the A n g o s t u r a hydroelectric d a m in the t o w n s h i p . In 1992 they staged a h u n g e r strike to gain the release of m e m b e r s of their organization w h o were jailed because of the protest o v e r unsettled land claims. T h e discourse that e m a n a t e d f r o m the c a m p e s i n o organizations established in the 1970s and 1980s b e c a m e a testing ground for f r a m i n g the law in its final f o r m . T h e f r a m e r s of the law were thus able to assess the support or rejection f o r crucial clauses. They d i s c o v e r e d the potential for opposition and neutralized it by addressing specific c o n c e r n s . C o n c o m i t a n t with these goals, the Salinas administration targeted areas of opposition that surfaced in the elections deploying solidarity f u n d s to co-opt leaders. But what was left out of account in both corporatist and opposition groups —the colonizers of the C h i a p a s and O a x a c a rainforest — b e c a m e the leaders in the new m o b i l i z a t i o n s f o l l o w i n g the J a n u a r y 1st u p r i s i n g . H o w e v e r , Salinas repressed or ignored the rising d e m a n d s for land titles of dissident groups in the colonizing territories. Because of the g e o g r a p h i c isolation, c a m p e s i n o s of this region were considered negligible o p p o n e n t s and hence were not accorded f u n d s to deliver votes to the P R I . T h u s President Salinas appeared to have won a d e g r e e of consensus unmatched by his predecessors by introducing m o d i f i c a t i o n s of the law in accord with criticisms voiced by the c a m p e s i n o organizations. T h e key points were the following: the elevation to a constitutional rank of the ejido and c o m m u n i t y ; the recognition of greater f r e e d o m and a u t o n o m y of the c a m p e s i n o s in regulating the sale and p u r c h a s e of plots; the initiation of a new level of organization for production in c o m m e r c i a l associations; the creation of agrarian tribunals in the A g r a r i a n Solicitors O f f i c e ; the attack on political f a v o r i t i s m and control ( G u s t a v o G o r d i l l o , La Jornada, 21 N o v e m b e r 1991); the declaration of the latifundia as illegal and the reduction in the time allowed for breaking up these holdings; and the establishment of limits to o w n e r s h i p of land of the societies and the curbs on foreign acquisition of land. But falling outside of the organizations that constituted the h e g e m o n i c core were regional organizations of militant o p p o n e n t s mobilized in the O C E Z , the Rural Association of Collective Interest of the General U n i o n ( A R I C ) , and the U U . By far the greatest discontent has been

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registered in the colonizing areas of the Lacandon jungle. The government's failure to give title to lands farmed for over twenty years by colonizers, along with the dislocation of thousands of colonizers in the Montes Azul reserve, has been the core issue in the uprising. The apparent success in the first year of restructuring of the agrarian sector was due to an adroit management of opposed interests from 1991 to 1992, combined with repression of dissidence. The official government document addresses the issues raised by rural constituents during the proposal and passage of the bill, and this is distributed free of charge throughout the country. To maximize stability during the transition, the document reiterates the continuity with the past: no one is required to change their present situation, and the decisions are made by the commissions and the advisory groups that dealt with ejido affairs in individual cases. These bodies, along with the Agrarian Reform offices in capital cities, are to be kept intact at least during the transition period. In response to the protests of the Tarahumara, Tepehuanos, Yaqui, Mayos, and indigenous groups of Chiapas, the new Article 27 assures them that the cultural integrity of their communities will continue to be recognized as the law distinguishes rulings regarding their "language, cultures, practices, custom, resources, and specific forms of social organization" from those applying to "agrarian communities." Accordingly, the new law passed in February 1992 "simply cancels the paternalistic guardianship of the state over ejidos and communities giving them an opportunity to make their own decisions in greater liberty through their own assemblies" according to the Solidarity pamphlet. The document reasserts the responsibility of the state to community development of the agrarian sector, a point that was much disputed in the discussion over the vote in the congress. It even asserts that the law rectifies the male bias in the previous agrarian regulations by guaranteeing women equality with men in gaining title to land. The overwhelming vote of 50 to 1 in favor of the legislation in the senate was a tribute not only to the continued monopoly of the PRI in the senate but also to the astute management of consensus in the governing sector. On 6 December 1991 CNC campesinos were bused to the capital to demonstrate their approval in classic PRI style, but what carried the day was a consolidation of support by campesinos disenchanted with the old bureaucracy and seeking stability within a market economy in which they were enmeshed. Dissent in Chiapas at the local level was managed by military force, with arrests, torture, and violence committed against campesinos. Visible signs of the growing repression included the increase in military installations throughout the country, particularly the buildup of the military regiment in Rancho Nuevo (just outside of San Cristobal de Las Casas), and the deployment of troops within indigenous communities, notably Tenejapa, a town that registered a high vote against the PRI and where there was strong

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protest because of the debacle to government-promoted coffee cultivation. The violence came to a head in 1993 when the army in Chiapas was charged with the arbitrary arrest, torture, and abuse of thirteen Tzotzil indigenes in the communities of San Isidro el Ocotal and Mitziton following the disappearance of two army officers (Minnesota Lawyers Advocate 1993; Center for Human Rights Fray Bartolome de Las Casas 1993). New Administrative

Agencies

The second stratagem, echoing the very corporatist policies that President Salinas attacked in rhetoric, was to institute a series of new agencies that have usurped the role of preexisting entities. Conflict denied in rhetoric but admitted in institutional practice bypassed the old SRA office into the new Agrarian Solicitors Office. Fortifying the rhetoric of national unity, the administration created the overarching institution called the National Solidarity Program, P R O N A S O L , in 1990, with member agencies that allocate funds for programs solicited by local governments and coordinate the resources made available. The principal unifying theme is that of solidarity between rural and urban sectors and in Chiapas between indigenous and ladino populations. The Agrarian Solicitors Office. With its decentralized offices throughout the country, the Agrarian Solicitors Office has become the chief agency adjudicating conflicts that might arise in the transformation from public to private ownership. The first director of this new agency, Arturo Warman, has in the past defended the ejido in his anthropological polemics against those like Roger Bartra who had for more than twenty years proposed the modernization of the rural sector with the disentailment of ejido property. Yet in the disentailment of communal property from a collective base, the Agrarian Solicitors Office hopes to regenerate the collective organization of rural campesinos in economic development projects for the countryside. The first annual report of the office (1993) points to the number of requests stemming from the communal ejido commissions, 94 percent of their total caseload, as an index to the increased revitalization of the ejido. Certainly the changes in law regulating communal holdings heightened the awareness of the threat to community control leading to a dialogue that has reinforced the defenses of local commissions. When we interviewed members of the Amatenango del Valle ejido commission, they asserted that no one would sell his share to outsiders, and their record of homicide and expulsions of "nontraditional" members (Nash 1994) is fair warning to anyone who fails to heed their claims. It is not the "corporate" communities that will experience an erosion of their lands so much as the colonizers in the Lacandon and Oaxaca forests who arrive indebted before their first harvests and are more vulnerable to forced sales made possible by the new law. Land tenure is particularly precarious in the

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jungle region, where colonizers searching for lands compete with commercial, oil, lumber, and cattle interests. Hundreds of campesinos in this region have been forcibly displaced f r o m their lands by state and local police, in several recent cases with the use of violence, illegal arrests, and intimidation. Lacking political representation, they were left out of the process of accommodation to the new law, and it is more than likely that many of them have joined the armed opposition. The processing of claims under the new agrarian law has undergone a thorough renovation, including the establishment of new headquarters. The office of the Secretariat of the Agrarian Reform occupied an old building on the outskirts of San Cristobal de Las Casas. When we visited the agency, twenty or more Indians from Zinacantan and Chamula lounged around the dry fountain in the weed-covered patio. Inside the crumbling stucco walls an expansive ladino presided at a desk laden with files and surrounded by another group of Indians from Oxchuc and Huistan. A young woman in stiletto-heeled shoes tripped over the rough tile floor as she brought lengthy legal documents with many signatures and some thumb prints to the director. When we explained that we were studying the impact of the new Agrarian Reform Law on indigenous villages, she gave us the official document, "The New Agrarian Legislation," and referred us to the office of the Agrarian Solicitors. Other sources confirmed that this was the key office mediating disputes that rose in the new law. We found the Agrarian Solicitors Office in a newly renovated building near the center of the city. Rosebushes lined the brick walk to the bright interior of the two-story building. We were ushered into the office of a young lawyer, who was settled uneasily at the polished, uncluttered desk. The office had no file cases, and there were no Indians. In response to questions about the background of the new law and why it was needed, the young lawyer had no response, not even the usual bureaucratic evasions. He referred one of our questions to another clerk, who also lacked an answer. Finally he stated, "You see, we are all young here and we do not know anything about the past." This was the beginning of our initiation into the changes transforming Mexican agrarian legislation. We eventually were led to an ejido colony high in the western hills of the township of Villa La Rosas and to old, established communities that were part of the colonial reducción, or concentrated settlements that won back communal lands alienated during the Porfiriato after the implementation of the Agrarian Reform Law in the 1930s. The new law regarding corporate landholdings leaves the decisionmaking regarding the sale or contracting of lands with private enterprises up to the ejido commissions within the community. It is already clear, one year after the passage of the New Agrarian Law, that established communities in which the communal tradition is well founded and where the inhabitants have greater resources will not be likely to yield land to outsiders. In contrast, the

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c o l o n i e s of new settlers, o f t e n p u s h e d out of their h o m e s and i n d e b t e d in their a t t e m p t s to c l e a r and s o w their n e w l a n d s , h a v e already b e e n f o r c e d to sell their ejido lots. We a c c o m p a n i e d the l a w y e r f r o m the A g r a r i a n S o l i c i t o r ' s o f f i c e on his trip to settle a d i s p u t e in San M a t e o , an ejido of three h u n d r e d inhabitants c a r v e d out of r o c k y m o u n t a i n land in Villa L a R o s a s . A f t e r w a i t i n g in vain f o r o u r g u i d e , w e c l i m b e d three h o u r s up a path t h r o u g h the s e c o n d a r y g r o w t h of s c r u b o a k and p i n e trees, f r e q u e n t l y losing o u r w a y in a m y r i a d of trails. U p o n o u r a r r i v a l , o v e r t w e n t y m e n , w h o had b e e n l o u n g i n g a r o u n d the b a s k e t b a l l c o u r t , g a t h e r e d in the s c h o o l h o u s e to h e a r w h a t the l a w y e r had to say. T h e s c h o o l h o u s e , a clinic, and the b a s k e t b a l l c o u r t w e r e all c o n s t r u c t e d by the Integral F a m i l y D e v e l o p m e n t a g e n c y ( D I F ) , w h o s e l o g o w a s p r o m i nently d i s p l a y e d o n all the p u b l i c b u i l d i n g s a l o n g with that of Solidarity. F a m i l y , rather than c o m m u n i t y p e r s o n i f i e d in the ejido in the d e c a d e s since the r e v o l u t i o n , is t h e m i n i m a l unit of social c o h e s i o n cultivated by the state in the late t w e n t i e t h c e n t u r y . T h e l a w y e r w a i t e d f o r a h a l f - h o u r or m o r e f o r the a p p e a r a n c e of the ejido m e m b e r w h o w a s at the c e n t e r of the c o n f l i c t that had led to the r e q u e s t f o r intervention by the A g r a r i a n Solicitors O f f i c e . T h i s m a n w a n t e d to f a r m his share of the land s e p a r a t e l y f r o m the other ejido s h a r e h o l d e r s . W h e n he f a i l e d to a p p e a r , the l a w y e r e x p l a i n e d the structural c h a n g e s in g o v e r n m e n t a g e n c i e s related to a g r i c u l t u r e and the services that his a g e n c y o f f e r e d . U s i n g c h a r t s and a b u r e a u c r a t i c l a n g u a g e that the m e n , most of w h o m could not read or write, c o u l d hardly c o m p r e h e n d , he d e s c r i b e d the o b j e c t i v e s of the A g r a r i a n Solicitors O f f i c e to " p r o m o t e agrarian j u s t i c e and g u a r a n t e e the legal security of the l a n d , " e x p l a i n i n g that the a g e n c y w o u l d d e f e n d the interests of the ejido o w n e r s , c o m m u n i t i e s , and o t h e r g r o u p s . He also went t h r o u g h a list of the b e n e f i t s of the N e w A g r a r i a n L e g i s l a t i o n , w h i c h e m p h a sized s e l f - d e t e r m i n a t i o n of the c o m m u n i t i e s and the r e g u l a t i o n of land tenancy. T h e m e n listened intently, and later, t w o of the ejido m e m b e r s a s k e d q u e s t i o n s a b o u t h o w the new l a w s w o u l d a f f e c t their village. T h e only w o m a n w e saw in the s c h o o l h o u s e or a m o n g those w h o p e e r e d t h r o u g h the w i n d o w s arrived a f t e r the d i s c u s s i o n w a s over, b e a r i n g plates of s c r a m b l e d e g g s and c o l d tortillas f o r o u r g r o u p . In m a n y w a y s , the visit by the l a w y e r d e m o n s t r a t e d the c u n n i n g strateg y with w h i c h t h e S a l i n a s a d m i n i s t r a t i o n is i m p l e m e n t i n g the n e w " r e f o r m s . " A l t h o u g h the c o n f l i c t that had led to the r e q u e s t f o r the intervention of the solicitor w a s tabled b e c a u s e the d e f e n d a n t did not a p p e a r , and the l a w y e r ' s p r e s e n t a t i o n w a s limited to b u r e a u c r a t i c j a r g o n , the p e o p l e s e e m e d to a p p r e c i a t e that a g o v e r n m e n t agent had taken the t i m e to visit such a r e m o t e area. T h e l a w y e r had b e e n in the village earlier in the m o n t h and w h i l e we w e r e t h e r e m a d e an a p p o i n t m e n t to g o b a c k within t w o w e e k s . L i k e Solidarity, t h e A g r a r i a n Solicitors O f f i c e c r e a t e s a visible g o v e r n m e n t

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p r e s e n c e in rural c o m m u n i t i e s . T h i s n e w a g e n c y stresses contact with the p e o p l e in their o w n e n v i r o n m e n t , r e j e c t i n g the i n - o f f i c e s e t t l e m e n t s by local o f f i c i a l s apart f r o m c o m m u n i t y scrutiny that c h a r a c t e r i z e d the old b u r e a u c r a c i e s . T h e i r training p r o g r a m s f o r y o u n g rural w o r k e r s w h o will then e x t e n d k n o w l e d g e of the law to o t h e r c a m p e s i n o s will b r o a d e n the b a s e f o r g o v e r n m e n t i n t e r v e n t i o n in the agricultural sector ( P r o c u r a d u r í a A g r a r i a 1993: 3 1 ) . T h e i r explicit c o n c e r n f o r the s e c t o r s d i s p r i v i l e g e d u n d e r the old paternalistic s y s t e m — w o m e n , y o u t h s , w a g e w o r k e r s , and urban m i g r a n t s — c o u l d c h a n g e the c h a r a c t e r of the populist s u p p o r t if the p r o j e c t e d g o a l s of the A g r a r i a n Solicitors O f f i c e are realized ( P r o c u r a d u r í a A g r a r i a 1993: 8, 13). T h e s e i n c l u d e g r o w t h and d e v e l o p m e n t of the small l a n d h o l d e r s a d d r e s s i n g the d e c a p i t a l i z a t i o n and g r o w i n g i m p o v e r i s h m e n t of this sector. But this t r a n s f o r m a t i o n d e p e n d s on d e m o c r a t i c participation of the rural s m a l l h o l d e r s , as the Z a p a t i s t a National L i b e r a t i o n A r m y c o n t e n d s . G i v e n the limits on available national l a n d s , it is q u e s t i o n a b l e w h e t h e r the g o v e r n m e n t can sustain its p r o m i s e s to the g r o u p s most a f f e c t e d by the r e f o r m s to the a g r a r i a n law. A n t i c i p a t i n g the e x p u l s i o n of m o r e than t w o million c a m p e s i n o s f r o m c o m m u n a l lands and the g r o w i n g p o l a r i z a t i o n of w e a l t h , o p p o s i t i o n to the n e w policies has persisted within the P R D , the Socialist Party of M e x i c o , and i n d e p e n d e n t c a m p e s i n o o r g a n i z a t i o n s , i n c l u d i n g the N a t i o n a l M o v e m e n t of R e s i s t a n c e and C a m p e s i n o S t r u g g l e ; the I n d e p e n d e n t C e n t e r of A g r i c u l t u r a l and C a m p e s i n o W o r k e r s ; the G e n e r a l U n i o n of W o r k e r s , C a m p e s i n o s and P o p u l a r Interests; and the U U . T h e y h a v e c o n t i n u e d to reject the S a l i n a s p r o p o s a l on the basis that the capitalization of the c o u n t r y s i d e is indeed linked to privatization. National Solidarity Program. To d i f f u s e the c o n t i n u i n g o p p o s i t i o n to the p r o p o s e d c h a n g e s , P r e s i d e n t Salinas r e i n f o r c e d the redistributive policies of the state u n d e r the n e w p r o g r a m of Solidarity ( P R O N A S O L ) . Solidarity prog r a m s have e x c e l l e d past e f f o r t s in a d d r e s s i n g local needs in short o r d e r w h i l e g i v i n g less p o w e r to local cacicazgos. B y p a s s i n g the institutions of the state, w h o s e c o r r u p t i o n w a s w e l l - k n o w n , they deliver direct r e m e d i e s on d e m a n d of local o f f i c i a l s w h o s u p e r v i s e the p r o d u c t i o n and control f i n a n c ing along with national a g e n t s . A s C h r i s t o p h e r Wood p o i n t e d out ( T h e Economist, 13 F e b r u a r y 1993: 14), the p e r s o n a l i t y of the p r e s i d e n t w a s salient in the attention P r e s i d e n t S a l i n a s g a v e to petitions f r o m local o f f i c i a l s , r e c e i v i n g each o n e p e r s o n a l l y and a p p e a r i n g in the village w h e n the p r o j e c t w a s d e l i v e r e d , thus b e s t o w i n g credit on himself rather than the P R I as a party. S a l i n a s w r o t e his doctoral thesis on the correlation b e t w e e n p u b lic s p e n d i n g and political support f o r the s y s t e m and c o n c l u d e d that there w a s n o n e ( W o o d 1993: 12). Yet in his policies he updated the old c o - o p t i v e political s y s t e m in a s t r e a m l i n e d b u r e a u c r a c y that carried out p r o j e c t s f o r merly d i s p e r s e d in the National Indian Institute (INI), o r g a n i z e d in 1951 to hasten the i n c o r p o r a t i o n of the i n d i g e n o u s p o p u l a t i o n in the n a t i o n , and the

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S A R H , o r g a n i z e d t o p r o m o t e t h e a g r i c u l t u r a l s e c t o r . A l r e a d y w e a k e n e d by c h a r g e s of m i s a p p r o p r i a t i o n of f u n d s a n d loss of k e y p r o g r a m s to t h e D I F , I N I w a s r e d u c e d t o a s h a m b l e s of a g e n c i e s t h a t l a c k e d c o o r d i n a t i o n a n d f u n d i n g , while S A R H competed with several parallel development agencies. B o t h h a d b e e n r e d u c e d in b u d g e t a n d p e r s o n n e l t h r o u g h o u t t h e 1 9 7 0 s a n d 1 9 8 0 s as n e w a g e n c i e s r e l i e v e d t h e m of s t r a t e g i c p r o j e c t s . T h e new agencies operate differently f r o m their predecessors. T h e princ i p a l a g e n c y d i s b u r s i n g n a t i o n a l a n d i n t e r n a t i o n a l f u n d s f r o m 1 9 7 2 to 1 9 8 2 was

the

Program

for the

Economic

and

Social

Development

of

the

H i g h l a n d s of C h i a p a s ( P R O D E S C H ) . C h a r g e d w i t h i m p r o v e m e n t s in e d u cation, health, agriculture, communication, electrification, and community o r g a n i z a t i o n , m o s t of its f u n d s a c t u a l l y w e n t i n t o c o n s t r u c t i n g 2 , 0 0 0 k i l o m e t e r s of r o a d s . O f t e n t h e s e w e r e built u s i n g t h e f r e e l a b o r of I n d i a n s w h i l e their leaders appropriated the f u n d s for t h e m s e l v e s (Deverre 1978). This e n c o u r a g e d t h e d e v e l o p m e n t of an i n d i g e n o u s b o u r g e o i s i e of t r u c k o w n e r s o w n e d i n d i v i d u a l l y o r o r g a n i z e d in t r a n s p o r t c o o p e r a t i v e s . S o m e of t h e s e l e a d e r s a c q u i r e d m o n o p o l i e s of t h e s a l e of C o c a C o l a a n d P e p s i C o l a , w h i c h w e r e quickly incorporated into official c e r e m o n i e s replacing the locally distilled " p o s h , " o r c a n e l i q u o r . C a c i q u e s a l s o a p p r o p r i a t e d t h e f r u i t t r e e s , c h i c k e n s , a n d f i s h s t o c k that P R O D E S C H d o n a t e d t o t h e h i g h l a n d c o m m u n i t i e s . T h e a g e n c y d i s c r e d i t e d g o v e r n m e n t a n d p a r t y p o l i c i e s , as w e l l as t h e officials charged with carrying them out. In c o n t r a s t w i t h t h e s e o l d a g e n c i e s , r e f u t e d f o r p r o m o t i n g f a v o r i t i s m a n d c o - o p t a t i o n of local l e a d e r s , S o l i d a r i t y e x e m p l i f i e d t h e

streamlined

a p p r o a c h of the S a l i n a s a d m i n i s t r a t i o n . U n l i k e e a r l i e r p r o j e c t s u n d e r I N I , which

were

directed

exclusively

toward

the

indigenous

population,

S o l i d a r i t y is set u p to a s s i s t all c a m p e s i n o s , a s w e l l as t h o s e l i v i n g in m a r g i n a l i z e d s e c t o r s of u r b a n a r e a s . T h e y o u n g d i r e c t o r w i t h w h o m w e s p o k e in T u x t l a G u t i e r r e z e m p h a s i z e d that t h e i r a p p r o a c h d i f f e r s f r o m e a r l i e r p r o g r a m s in o v e r c o m i n g t h e p a t e r n a l i s m that c h a r a c t e r i z e d p a s t r e l a t i o n s w i t h g o v e r n m e n t a g e n c i e s . U n d e r S o l i d a r i t y , a c o m m u n i t y is a b l e to s e l e c t t h e p r o j e c t that will s e r v e its n e e d s . A l s o d i f f e r e n t f r o m e a r l i e r p r o g r a m s is t h e h i g h l y p u b l i c m a n n e r in w h i c h S o l i d a r i t y o p e r a t e s , g i v i n g t h e P R I t h e g r e a t est v i s i b i l i t y f o r s p e n d i n g m o n e y in c o m m u n i t i e s . S o l i d a r i t y f u n d s p r o j e c t s s u c h as t h e c o n s t r u c t i o n a n d r e h a b i l i t a t i o n of m i l l s , r o a d s , b r i d g e s , i r r i g a t i o n projects, potable water, population control projects, health centers, s c h o o l c l a s s r o o m s . C o m m u n i t i e s that d e s i r e f u n d s f r o m S o l i d a r i t y

and must

f o r m an a s s e m b l y that s e l e c t s t h e p r o j e c t . O n c e t h e r e q u e s t is s i g n e d by t h e municipal

president,

it w i l l

be

sent

to the

Planning

Committee

for

D e v e l o p m e n t ( C O P L A D E R ) for approval. A very c o m p e t e n t and knowledgeable

agent

of C O P L A D E R

whom

we

interviewed

explained

that

S o l i d a r i t y h a s b e e n m o r e s u c c e s s f u l in c a r r y i n g o u t p u b l i c w o r k s t h a n in t h e p a s t , s i n c e p r o j e c t s a r e c o m p l e t e d q u i c k l y . In f a c t , a c c o r d i n g to its r e g u l a t i o n s , S o l i d a r i t y will o n l y f u n d p r o j e c t s that c a n b e c o m p l e t e d w i t h i n a y e a r .

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Agents processed requests f r o m communities directly, assessing the proposals in a short period of time and cutting through the bureaucratic red tape that caused delays and misappropriation of funds from the national, state, and local administrators. Further, the maximum cost per project was 100 million pesos (roughly U.S. $33,000). The Solidarity projects were visible public works that benefited many members of the community. Completed projects bore a sign announcing the project with the president's and governor's names, the number of people the project would benefit, and a Mexican flag. Hence, the school buildings, health clinics, municipal installations, and basketball courts served as monuments to the national concern for remote areas of the nation. Even though the programs were often funded by international agencies such as the World Bank, Solidarity had effectively drawn them into a redistributive network that garnered support for the PRI. Solidarity promoted itself as making a break from the overly bureaucratic and corrupt institutions of the past. The literature on Solidarity described its programs as honest, efficient, and clear, emphasizing that they strengthen the government's responsibility to society and promote community participation in all stages of the project. To overcome the corruption characteristic of government spending by previous administrations, Solidarity contained three dependencies, which have tightened up control over the disbursement of funds: the Federal Secretariat of General Control, the Secretariat of Programming and Budget, and the State Board of Inspection. The irony is that while Solidarity supposedly represented a break from the corrupt bureaucracies of the past, the National Solidarity Program itself was yet another bureaucracy. Solidarity has been effectively used by the PRI in numerous cases to diffuse conflict. First, communities that are supportive of the PRI at the onset are the most likely to reap the benefits of Solidarity. Although an employee of C O P L A D E R informed us that Solidarity will assist all pueblos whether they are supporters of the PRI, PAN, or PRD, the fact that the municipal president has to approve the plan can cause problems since these officials are in most cases PRI incumbents. We were informed of a case of a barrio of San Cristobal de Las Casas making a request for potable water from Solidarity that was never filled because the municipal president did not complete the proper papers. The municipal president was from the PRI and the barrio was PAN-dominated; this failure in communication demonstrates the control that the PRI held over who would benefit from Solidarity funds. Redistribution of public funds in areas undergoing rapid development or posing conflict continues to be a key element in the hegemonic control exercised by the government through the PRI and the constituent agencies. In October 1991, Solidarity gave 400 million pesos to Venustiano Carranza to pay for crops that were lost because of drought. It is more than coincidence that this township has been an area of unrest over landholdings for centuries. Lands that were promised to Indians in 1767 were still in dispute

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in 1991, and the smallholders pushed out of the lands flooded by the hydroelectric dam in Socoltenango have not been compensated (Guzman 1977; Nash and Sullivan 1992). These dispersals were sometimes highlighted by the appearance of the governor or president as the PRI mended its fences in preparation for the 1994 elections. Punctuating the conflictual as well as high growth potential of the southern frontier, President Salinas made two trips to Chiapas in the spring of 1993, the first to Oxchuc and Ocosingo and the second to Tuxtla Gutierrez in April. In Oxchuc, a Tzeltal-speaking township in the highlands, every detail of the visit was well orchestrated, f r o m the arrival of the helicopter 15 minutes before the ceremony to the flag raising drill. Thousands of Indians from nearby villages had been bused in at government expense to watch the ceremony, announced as the abandaramiento (salute to the flag). In his speech, the president announced that Solidarity was giving 1 billion pesos for the economic and social development of the area, emphasizing specific projects such as providing potable water to overcome pressing health problems. During the speech, a group of Indians calling themselves Abuxu (the Ants) who had marched on foot were detained outside Oxchuc. The marchers protested that none of the Solidarity funds were going to the northern part of Chiapas, claiming that over 50 percent of the Indians living in the northern part of the state had "never seen the famous resources of the National Program of Solidarity so celebrated by the authorities" (Lievano 1993). Because they were not allowed to enter, Salinas's visit went smoothly, with no visible dissent. 1 Later in the day, Salinas lunched at the Lion's Club in Ocosingo, the ladino-dominated center of a township that includes Tzeltal villages, where he announced that funds were to be given to develop tourism on this main route to Palenque. His visit later that week to the Lacandon jungle, where colonists had been protesting both the lack of government services and the corruption of forestry agents (Nash and Sullivan 1992) for years prior to the uprising on New Year's Eve, was a further demonstration of his attention to potential areas of dissension. Shortly after the visit, the state governor announced the allocation of 3,800 new pesos (approximately U.S. $1,200) for the paving of the highway to Palenque and 800,000 new pesos (about $266,000) for potable water in Pakal Na, a jungle colony {El Tiempo, 4 May 1993). Given that this is where the uprising occurred, Salinas's visit was indicative of the PRI's awareness of conflict and a desire to co-opt leaders, but clearly it was a question of too little, too late to stem the tide of rebellion. While some projects (such as potable water) are essential to the people living in the villages, others (such as the construction of elegant municipal buildings) demonstrate that the bureaucrats are often divorced from the needs of the people. The window-dressing projects failed to address the rising demands for land titles and cash crop assistance among dissident groups

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in the colonized territories of the L a c a n d ó n j u n g l e . T h e infrastructural i m p r o v e m e n t s in road building and establishing p o w e r lines served the agroindustrial d e v e l o p m e n t sector, while most local c o m m u n i t i e s in the colonizing area were left without electricity or subsidies to assist t h e m in marketing their cash c r o p s .

DISSENT, HUMAN RIGHTS VIOLATION, AND HEGEMONY As Mittelman points out (Chapter 1), there is increasing international pressure for d e m o c r a c y . T h e Zapatista National Liberation Army put this at the head of its a g e n d a to the team negotiating the peace agreement in M a r c h 1994, and it has been consistent in asserting that it wants participation in certain decisions but has no desire to take o v e r power. Since the outbreak of the rebellion, the M e x i c a n g o v e r n m e n t has been crafty in its approach to the negotiation table, h o p i n g to d i f f u s e the impact of the uprising, which was broadcast throughout the world. This increased visibility of Mexican politics is itself d u e in large part to the p a s s a g e of N A F T A and the globalization process in which the political protest is e n m e s h e d . In the highlands of C h i a p a s , as well as in other parts of M e x i c o , the national g o v e r n m e n t o f t e n lets the local caciques p e r f o r m the dirty work of controlling or eliminating dissenters. T h e s e are the very people co-opted within the h e g e m o n i c core. Perhaps the most evident e x a m p l e of this is the expulsion of over twenty thousands Indians f r o m their villages during the past d e c a d e (Nash and Sullivan 1992; Sullivan 1992; Tickell 1991). T h e Periferico, a g r o u p of n e i g h b o r h o o d s on the outskirts of San Cristobal de Las C a s a s , is inhabited by thousands of Indians w h o have been expelled f r o m n e i g h b o r i n g v i l l a g e s , including C h a m u l a , M i t o n t i c . Z i n a c a n t a n , and O x c h u c . T h e P e r i f e r i c o is dotted with c h u r c h e s , including t h o s e of Presbyterian E v a n g e l i c a l s , P e n t e c o s t a l s , Seventh Day A d v e n t i s t s , and J e h o v a h ' s Witnesses. On S u n d a y s the area is filled with the sounds of serm o n s and singing f r o m the church loudspeakers. Shortly after the uprising, g o v e r n m e n t troops b o m b e d one of the n e i g h b o r h o o d s in the area called "El Cerrito." Local caciques j u s t i f i e d the expulsions on the basis of preserving the integrity of traditions by eliminating Protestants. However, as the Fray B a r t o l o m é de Las C a s a s Center for H u m a n Rights points out, the expulsions have as much to d o with money and politics as with religion. For e x a m p l e , in C h a m u l a in 1973, a candidate of the PAN won the local election. In N o v e m b e r of the next year, a PRI c a n d i d a t e , Augustin López H e r n a n d e z , was involved in expelling over t w o thousand people f r o m the village under the pretext that a g r o u p of evangelicals, w h o were also PAN supporters, wanted to burn d o w n the C h a m u l a n c h u r c h . In the following years, similar incidents f o l l o w e d in other villages. W h i l e the pretext for the e x p u l s i o n s is

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almost always religion, those f o r c e d to leave c o m m o n l y belong to the PAN or P R D . In M a r c h 1993, 150 m e m b e r s of the PRI detained a g r o u p of evangelicals belonging to the P R D in the town of Teopisca. T h e San Cristobal n e w s p a p e r El Tiempo, noted f o r its work in e x p o s i n g abuses of h u m a n rights, pointed out that villages could tolerate evangelicals but not P R D members. Expelling p e o p l e for religious reasons is unconstitutional; those w h o are expelled lose their land and thus their only m e a n s of livelihood. In San Cristobal de Las C a s a s and other areas, the expelled survive h o w e v e r they can, selling artisan products in the streets and market and w o r k i n g in construction or transportation. In spite of the illegality of the e x p u l s i o n s , the M e x i c a n g o v e r n m e n t has yet to take significant action against the caciques w h o are responsible or to facilitate the return of the e x p e l l e d . L o p e z M o r e n o , the interim g o v e r n o r of C h i a p a s f o l l o w i n g the uprising until the inauguration, heard the c o m p l a i n t s of a g r o u p of 584 C h a m u l a n s expelled in O c t o b e r 1993 for the first time, but he did not provide the security f o r c e s many felt were necessary w h e n the expelled returned to their h o m e s in A u g u s t . T h r e e were later killed by villagers. T h e failure to take action in the courts against the o f f e n d e r s is not surprising given that m a n y of the expelled belong to the t w o d o m i n a n t opposition parties, the PAN or the P R D . The fact that the expulsions are cloaked in an appeal to tradition m a k e s t h e m appear less opportunistic. S o m e anthropologists accept these c l a i m s , asserting that the expelled are a threat to Indian c o m m u n i t i e s because the Protestants d o not contribute to or participate in the festivals so important to c o m m u n i t y solidarity. Yet it is clear that conflicts over the allocation of ejido plots and rights to c o m m u n a l resources expressed in opposition to political leaders result in internal f o r m s of oppression c o m p a r a b l e to those experienced under colonial d o m i n a t i o n . This o p p o s i t i o n , rising f r o m the g r o w i n g class differentiation within c o m m u n i t i e s , lies behind the expulsions. W o m e n ' s access to land has a l w a y s been mediated through c o m m u n a l and familial patriarchal structures that have marginalized those w h o d o not have h u s b a n d s or g r o w n sons. T h e i r exploitation within their own c o m m u nities is rarely given e x p r e s s i o n , b o u n d as they are to loyalty in these most intimate n e t w o r k s (Toleda Tello 1985). W o m e n constitute the majority of the expelled, reflecting their p r e d o m i n a n c e a m o n g the ranks of Protestants. The conflict between the expelled indigenes and the c o m m u n i t i e s of origin remains at explosive levels. T h e caciques of San Juan C h a m u l a forced all household h e a d s to join a d e m o n s t r a t i o n in San Cristobal against the C R I A C H mobilization calling for recognition of the h u m a n rights of the expelled in 1992. T h e r e was stone-throwing by the ten thousand C h a m u l a n s , and the exiled populations experienced m a n y w o u n d e d . With the current buildup in arms in the area, the settlers have n o w procured w e a p o n s . R u m o r s to this e f f e c t w e r e c o n f i r m e d in July 1994 w h e n e x p e l l e d Protestants living in the o f f i c e s of A s u n t o s Indigenes fired at C h a m u l a tra-

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ditionals who approached the premises with an Uzi automatic rifle, killing two. Local caciques will likely play a role in the privatization of the ejido lands. Just as in the case of the expulsions, this will place the burden of the negative effects of privatization on caciques rather than the national government. While the Reform of the Agrarian Reform is cloaked in the language of giving more autonomy and self-determination to the Indians by allowing them to make the decision to sell ejido land, it may actually give more power to the caciques in some areas since it eschews a central authority. At a conference on human rights in the state of Oaxaca in 1992, indigenous organizers expressed concern that caciques could pressure the poorest members of communities to sell their land to local leaders since they would not have recourse to a higher authority. Further, many have tied the privatization of the ejido with the passage of NAFTA, noting that the combination will allow the development of both domestic and foreign enterprises, such as petroleum exploration, on what had been communal land (De Villar 1991). If the powerful caciques are bought off, they will be able to pressure members to sell ejido land to outsiders. Again, the Mexican government will leave with its hands seemingly clean. The attack by the Zapatista National Liberation Army exposed the limited hegemonic maneuver to Mexicans and to an international public that raised questions about the human rights record of the government and the legitimacy of its rule. Those who were left out of Salinas's reforms —poor farmers and especially indigenous colonizers of the jungle region —were most active in the uprising. Much attention has been focused on the central role taken by women in the movement. Two women were present among the group of Zapatistas for negotiations with the Mexican government in February 1994 in San Cristobal. Women also played an important although less visible role in the armed movement. According to a female infantry major in the E Z L N , approximately 30 percent of the Zapatista combatants are women who have renounced forming a family to take part in the armed struggles. When the Zapatistas broke into the jail near San Cristobal to set free the prisoners, it was women who entered to open the doors (La Jornada, 7 March 1994.) Among the thirty-four points of the Zapatistas' "Commitments for Peace" are several specifically dedicated to the concerns of women. These include the demand for childbirth and gynecological care; public programs ensuring sufficient food for their children; child care centers; the development of projects for farming, baking, and crafting; technical training schools for women; and improved transportation for bringing products to markets. The nature of the demands reveal how women have been affected by the economic crisis of the 1980s and the neoliberal reforms that followed. Although some Solidarity programs are specifically directed to assist women and children, their real concerns were never addressed —most of the

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money has been allocated to the construction of town halls or the purchase of trucks, which do not help women in their daily responsibility for feeding their families. With rising population in rural areas, lack of fertile land, limited credit, and high interest rates, indigenous women have turned to artisan production to assist in meeting their family's basic needs (Nash 1993; Eber and Rosenbaum 1993). The Zapatistas have demanded artisan workshops for women, with machinery and primary materials; markets for the sale of artisan products at fair prices; and transport for taking the products to markets. Although land is a central issue in the Zapatista demands in the "Commitments for Peace," the women do not demand the right to possess land. One woman notes that the problem of land involves everyone; therefore they do not demand the right for widows or single women to inherit land {La Jornada, 7 March 1994). The participation of women in the uprising is symptomatic of the crisis they face in ensuring survival. The Zapatista uprising exposed the limitations of Salinas's hegemonic strategies to Mexicans and an international public. The repressive control over campesino organizations and the failure to address the need for land and social programs finally exceeded the power of co-opted indigenous leaders to contain. Negotiations between the government representative and the subcommandant were broken off in March 1994. There have been important concessions, however, such as the rejection of former Chiapas governor Gonzalez Garrido, who had left office to serve as minister of government in Mexico City, and his replacement, Elmar Setzer, who had served as interim governor. There have also been restrictions on election expenditures to ensure fair elections. The August elections did not resolve the issue of whether the ruling party is capable of extending its hegemonic control to include the people marginalized by the liberal economic policies. The Zapatistas rejected the legitimacy of the elections, and A m a d o Avendano, the candidate of Civil Society, supported by the P R D , has vowed to run a parallel government outside the governing palace. Whether the ruling party is capable of maintaining hegemonic control given the still active insurrection by the people marginalized in the liberal economic policies is the issue clouding the presidency of Ernesto Zedillo. Mexican indigenous people, especially at the southern frontier, have initiated a wide-ranging reform policy that is transforming the political culture of the country.

CONCLUSION The Mexican state is the product of revolution, and much of its authority rests on its fulfillment of social and economic obligations. Thus careful management has been required to implement neoliberal reforms promoting Mexico's entry into global markets while cutting social programs and

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i n c r e a s i n g privatization of land and industry. P r e s i d e n t S a l i n a s b y p a s s e d the c o r r u p t b u r e a u c r a c y of PRI w h i l e m a i n t a i n i n g the p r i n c i p l e s of c o - o p t a t i o n inherent in p u b l i c s p e n d i n g . His particular skill w a s the adroit m a n a g e m e n t of limited f u n d i n g of locally d e s i r e d p r o j e c t s , o f t e n p a c k a g i n g internationally f u n d e d p r o j e c t s with n a t i o n a l p r o g r a m s and tying t h e m to local initiatives that s t r e n g t h e n e d his p r e s i d e n c y . But the l i m i t a t i o n s of his g o v e r n m e n t in restricting the c o - o p t a t i o n to f a v o r e d s e g m e n t s of b o t h i n d i g e n o u s and the l a d i n o p o p u l a t i o n s left out m a n y p e o p l e w h o w e r e neither part of the c o r p o rate c o m m u n i t i e s nor had f o u n d r e p r e s e n t a t i o n in the n e w urban b a r r i o s to w h i c h they w e r e f o r c e d to m i g r a t e . W o m e n , w h o r e p r e s e n t one-third of the Z a p a t i s t a N a t i o n a l L i b e r a t i o n A r m y , are i m p o r t a n t in the m o b i l i z a t i o n of the p o p u l a t i o n s left out of these c e n t e r s of p o w e r (the urban p o o r and the colonizers in the L a c a n d o n and O a x a c a j u n g l e territory). W h e t h e r they participate directly in the u p r i s i n g or n o t , t h e s e o p p o n e n t s n o w h a v e a voice in the Z a p a t i s t a national m o b i l i z a t i o n of civil society. W h i l e s o m e i n d i g e n o u s sectors of the c o u n t r y are s e e k i n g entry into m a i n s t r e a m political c h a n n e l s , o t h e r s are a p p e a l i n g directly to international g r o u p s to regain a c o l l e c t i v e b a s e that will a l l o w their distinctive c u l t u r e s a n d p r o d u c t i v e s y s t e m s to s u r v i v e . T h o s e w h o h a v e internalized the struggle f o r land within the p a r a m e t e r s of p o p u l i s t c o - o p t i v e f o r m s have gained entry to the new t e c h n o c r a t i c state at the e x p e n s e of their o w n solidarity as a g r o u p . As the " p o l i t i c s of c l a s s " s u p e r s e d e s the "politics of r a n k " (Collier 1994) in i n d i g e n o u s c o m m u n i t i e s , d i f f e r e n c e s in wealth are f l a u n t e d rather than c o n c e a l e d or r e d i s t r i b u t e d in c e r e m o n i a l e x p e n d i t u r e s . T h e n e w politics of the state e n d o r s e s the c o m p e t i t i v e d i s t i n c t i o n s that w e r e m a s k e d in traditional c o m m u n i t i e s in past d e c a d e s . At the local level the new b r o k e r s of s t a t e - f u n d e d p r o j e c t s and credit facilities h a v e already e m e r g e d as the A g r a r i a n Solicitor and S o l i d a r i t y a g e n t s e x t e n d their activities into w h a t w e r e called " r e f u g e r e g i o n s . " In c o n t r a s t with the tactics of the past d e c a d e , b u y i n g the loyalty of local o f f i c i a l s with s t a t e - f u n d e d p r o j e c t s will no longer be feasible with the n e w austerity i m p o s e d by limited state and federal f u n d ing. I n s t e a d , the n e w h e g e m o n i c alliances will d r a w u p o n e n t r e p r e n e u r i a l activities c o m b i n i n g c o m m u n i t y and p r i v a t e initiatives to f u r t h e r private and individual g a i n s . E v e n with this m a j o r r e o r i e n t a t i o n in state and local relat i o n s , c o m m u n i t y service and the s u p p o r t of traditions will p r o b a b l y still validate l e a d e r s h i p — a n d the r e d i s t r i b u t i o n of p u b l i c r e s o u r c e s —at the local level. T h e l i n k a g e s n o w b e i n g f o r g e d with the private sector h a v e already g e n e r a t e d the n e w rhetoric of d e m o c r a c y , p r o g r e s s , and m o d e r n i z a t i o n at the national level. M e x i c o ' s a t t e m p t to m o v e f r o m outright s u p p r e s s i o n of protest to a r e c o n s t r u c t i o n of h e g e m o n i c c o n t r o l is n o w in j e o p a r d y . T h e political f u t u r e of the PRI itself is q u e s t i o n e d , as P r e s i d e n t Z e d i l l a a t t e m p t s to rally supp o r t e r s in a c o u n t r y d e m o r a l i z e d by a s s a s s i n a t i o n s and c h a r g e s of electoral f r a u d . W h a t e v e r internal r e s t r u c t u r i n g o c c u r s , it is clear that the g o v e r n m e n t

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can no longer ignore the cry for democracy among people who have been ignored too long. The Zapatistas demand to be heard and are asking for not just government assistance but structural change: "We are not asking for charity or handouts, we are asking for the right to live with human dignity, with equality and justice as did our parents and g r a n d p a r e n t s " (Commitments for Peace, 1 March 1994; La Jornada, 3 March 1994). The Chiapas rebellion may yet break the hegemonic control of the PRI. As the shots fired resound in a growing reaction against control exercised by international banks and transnational corporations, the uprising may succeed in igniting the drive for democracy in the new world order. The very process of globalization against which those in Chiapas are protesting provides greater visibility for their protest.

NOTE 1. Wood (1993) cites cases where Solidarity f u n d s "tend to be spent where the PRI feels most threatened electorally." in M i c h o a c a n , where $135 million w a s spent in recognition of the strong presence of the P R D .

Mustapha Kamal Pasha Ahmed I. Samatar

The Resurgence of Islam

The global economy perspective sees the Third World as a residual, marginal factor, a non-entity. —Robert Cox (1993: 286) When men [and women] fail to see reason in human institutions, and much more if they set it opposed, they take refuge in the inscrutable counsels hidden in the abyss of divine providence. — Giambattista Vico (1744: 347)

After the failure of all other ideologies of the region, people want to be ruled by Islam. —Ibrahim Massoud

a

Muslim

(1992)

T h e insertion of a n e w I s l a m i c c o n s c i o u s n e s s into the daily political life of m a n y M u s l i m societies is i n c r e a s i n g l y b e c o m i n g an i n c o n t e s t a b l e f a c t . In c o u n t r i e s like Iran, S u d a n , and A f g h a n i s t a n , state p o w e r has been c a p t u r e d by I s l a m i c m o v e m e n t s . F o r o t h e r s , such as A l g e r i a , E g y p t , T u n i s i a , and T u r k e y , t h e r e is d e a d l y intensity with high stakes as n u m e r o u s civil associations d e f i n e t h e m s e l v e s as I s l a m i c a n d , as a result, violently c h a l l e n g e the l e g i t i m a c y of political authority. E v e n in less c o n t e s t e d c o u n t r i e s (e.g., Morocco, Pakistan, Indonesia), Islamic consciousness assumes a more p r o m i n e n t p l a c e in the articulation and m a k i n g of political life. I s l a m ' s cultural e x p r e s s i o n a n d the p r e s e n c e of M u s l i m i m m i g r a n t s in several Western c o u n t r i e s h i g h l i g h t the i n f l u e n c e of Islam b e y o n d its e s t a b l i s h e d p h y s i c a l b o u n d a r i e s . It is n o w o n d e r that the a p p e a r a n c e of an I s l a m i c w a k e f u l n e s s and m o v e m e n t s b e a r i n g the i d i o m of piety present a d i s c o n c e r t i n g c h a l l e n g e to the b r o a d a n d universalist m i s s i o n of m o d e r n i t y and g l o b a l i z a t i o n . I s l a m i c r e s u r g e n c e s u g g e s t s d e e p f i s s u r e s in the g l o b a l i z a t i o n p r o c e s s . 1 H o w can I s l a m , with its s t a m p of a s s u m e d particularity, be r e c o n c i l e d with an e m e r g i n g w o r l d c u l t u r e ? W h a t are the internal c o n n e c t i o n s b e t w e e n the t w o p r o c e s s e s ? Is the I s l a m i c a w a k e n i n g a c o u n t e r v a i l i n g t e n d e n c y in the transition t o w a r d a g l o b a l s o c i e t y ? O r d o e s I s l a m o f f e r an a l t e r n a t i v e p a t h to m o d e r n i t y , u n h o o k e d f r o m its p r e s u m e d c e n t e r in the W e s t ? T h i s c h a p t e r e x p l o r e s these q u e s t i o n s by f o c u s i n g on the r e l a t i o n s h i p b e t w e e n

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g l o b a l i z a t i o n a n d t h e r i s e of n e w s o c i a l m o v e m e n t s b e a r i n g t h e p a r l a n c e o f Islam. E s c h e w i n g a strictly descriptive historical a c c o u n t , w e seek a n e w a n g l e h e r e . F i r s t , w e s i t u a t e " g l o b a l i t y , " as a f e a t u r e of m o d e r n i t y , in a m o r e i n t e r a c t i v e f r a m e w o r k — a s t h e p r o d u c t of a l o n g h i s t o r i c a l e x c h a n g e b e t w e e n d i f ferent cultures, including e l e m e n t s that draw their inspiration f r o m the I s l a m i c c i v i l i z a t i o n . 2 S e c o n d , w e t r e a t I s l a m i c p i e t y as an i n t e g r a l p a r t of a n a l t e r n a t i v e v i s i o n of m o d e r n i t y . G i v e n t h e p r o b l e m a t i c a n d t h e c l u s t e r of q u e s t i o n s , w e s u g g e s t as a b a s i c a n d w o r k i n g t h e s i s t h a t t h e rise of I s l a m in its m y r i a d f o r m s is a r e s p o n s e t o a d o u b l e a l i e n a t i o n . T h e first is a f e e l i n g of b e i n g s u b j e c t e d t o t h e l o g i c of t h e m o d e r n w o r l d s y s t e m b u t n o t b e i n g of m o d e r n i t y . In o t h e r w o r d s , m a n y M u s l i m s s e e t h e m s e l v e s as o b j e c t s r a t h e r t h a n a c t i v e s u b j e c t s in t h e c o n s t i t u t i o n a n d a p p r o p r i a t i o n of m o d e r n i s m . T h e s e c o n d a l i e n a t i o n is l o c a t e d in t h e d o m e s t i c c o n t e x t w h e r e b o t h civil a s s o c i a t i o n s a n d t h e s t a t e a r e in s o m e f o r m of d e c o m p o s i t i o n . C o n f r o n t e d by i n e x orable material deprivations, repressive and inept politics, and d e m e a n i n g c u l t u r a l d i s l o c a t i o n , m a n y in t h e M u s l i m w o r l d f e e l c o m p e l l e d to t a k e a s t a n d — i n c l u d i n g p a r t i c i p a t i o n in d r a s t i c r e t h i n k i n g a n d d r a m a t i c a c t s . In o u r e s t i m a t i o n , t h e p h e n o m e n o n of g l o b a l i z a t i o n c l o s e l y ties t h e s e t w o s o u r c e s of a c u t e e s t r a n g e m e n t w h i l e b e s t o w i n g o n t h e s i t u a t i o n a s e n s e of u n c o m mon transparency and immediacy. Globalization underscores change, perh a p s of a r e v o l u t i o n a r y k i n d , in t h e t e x t u r e a n d m o d a l i t i e s of i n t e r n a t i o n a l reality. T o e x p l o r e t h e s e p o i n t s m o r e e a r n e s t l y , o u r d i s c u s s i o n is d i v i d e d i n t o t h r e e s e c t i o n s . T h e f i r s t e x p l o r e s g l o b a l i z a t i o n a n d its m o s t c u r r e n t i n t e r f a c e w i t h I s l a m a n d its r e s u r g e n c e . 3 T h e p u r p o s e h e r e is t o e s c a p e f r o m s o m e of t h e l i m i t a t i o n s of e x i s t i n g n o t i o n s of g l o b a l i z a t i o n by b r i n g i n g in a c u l t u r a l d i m e n s i o n e m b e d d e d in t h e i d e a of c i v i l i z a t i o n a l d i a l o g u e , n o t a b l e b e t w e e n I s l a m a n d t h e W e s t . T h i s p e r m i t s us to h i s t o r i c i z e g l o b a l i z a t i o n but a l s o to treat it as a p r o c e s s of m o r e u n i v e r s a l i s t i c p r o p o r t i o n s . T h e s e c o n d s e c t i o n t a k e s on t h e r e l a t i o n b e t w e e n g l o b a l i z a t i o n a n d s o m e of the p r i n c i p a l n e w s o c i a l m o v e m e n t s in m a n y p a r t s of t h e I s l a m i c w o r l d . A n u n d e r l y i n g t h e m e in this s e c t i o n is an a p p r e c i a t i o n of I s l a m i c p i e t y as m o r e than s i m p l y a r e a c t i o n to ( W e s t e r n ) m o d e r n i t y . T h e t h i r d s e c t i o n b u i l d s u p o n this t h e m e a n d i n t r o d u c e s t h e l i n e a m e n t s of a n a l t e r n a t i v e ( I s l a m i c ) n o t i o n of i n t e r n a t i o n a l life. T h e m o t i v a t i o n f o r u n d e r t a k i n g t h i s a s s i g n m e n t is b a s e d o n t w o intell e c t u a l c o n c e r n s . F i r s t , t h e v a s t m a j o r i t y of c o n v e n t i o n a l w r i t e r s in i n t e r n a t i o n a l p o l i t i c a l e c o n o m y , as w e l l as t h e p r a c t i t i o n e r s of the c r a f t , h a v e v e r y little, if a n y , u n d e r s t a n d i n g of I s l a m — a n d p a r t i c u l a r l y this m o m e n t . T h o s e w h o g i v e a n y a t t e n t i o n u s u a l l y r e l e g a t e a n y t h i n g that s m a c k s of I s l a m i c t h i n k i n g o r a c t i v i s m as f u n d a m e n t a l i s t . S e c o n d , w h i l e s o m e c r i t i c a l t h i n k e r s m a k e r e f e r e n c e s h e r e a n d t h e r e t h a t d o n o t d i s m i s s all d i s t e m p e r s as u n t h i n k ing r e l i g i o s i t y , t h e y t o o r a r e l y m a k e a n y m e n t i o n o f , let a l o n e o f f e r a d i s s e r -

Resurgence

of ¡slam

189

tation on, Islam's real or potential contribution to much needed intersubjectivity and suprasubjectivity —both necessary for counterhegemonic efforts as well as the construction of a different world order. (Here, Cox's exemplary article on Ibn Khaldun's ideas is the exception.) 4

GLOBALIZATION AND ISLAM Notions of globality find currency in extant accounts on world culture and global civil society (Robertson 1992). A common theme in these accounts is the emergence of a global consciousness, superimposed on a compression of t i m e - s p a c e processes of global political economy. Elements that are often seen as part of a new architecture of global politics include newer forms of transnational economic organization and interaction, global networking made feasible by a technological and communications revolution, and the rise of global nonstate institutions with a whole set of political and cultural agendas. Many scholars tend to see globalization either as a variant on Westernization or as a moment of late/postcapitalism. Recent pronouncements of the end of history (Fukuyama 1992), the movement toward convergence (Pye 1990), and the triumph of liberal values, though with imminent opposition from civilizations organized on different principles (Huntington 1993), stress the Westernizing character of globalization. Others speak of the heralding of a global civil society, made possible by new technological advances in cybernetics and information networks (Frederic 1992) and the expansion of a realm of global public space (Falk 1992b). 5 Those of a critical persuasion tie globalization to world capitalism, as a materialist product of its dictates and compulsions (Cox 1993) (notably, the dialectic of capital and labor on a global scale [Mittelman, Chapter 1]) or as its cultural logic (Jameson 1991). Cox sees two main aspects of globalization: (1) global organization of production and (2) global finance (Cox 1993). The first entails the rise of complex transnational networks of production, which secure profitability through the most advantageous labor procurement, combining dimensions of political security and predictability. Global finance, according to Cox, is "a very largely unregulated system of transactions in money, credit, and equities" (Cox 1993: 260). He notices two major consequences of globalization: the "internationalization of the state" and the "restructuring of national societies and the emergence of a global social structure." Internationalization of the state means that states become "transmission belts" from the global to the national economies; they are "instruments for adjusting national economic activities to the exigencies of the global economy." 6 The latter connotes the arrival of a post-Fordist, decentralized system of flexible production.

190

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Kamal Pasha & Ahmed 1. Samatar

In a d d i t i o n to t h e s p a t i a l r e o r g a n i z a t i o n

of p r o d u c t i o n

and

global

f i n a n c e , M i t t e l m a n i n c l u d e s t h e h o m o g e n i z i n g of c o n s u m e r g o o d s a c r o s s b o u n d a r i e s , m a s s i v e inter- a n d i n t r a c o u n t r y t r a n s f e r s of p o p u l a t i o n , a n d a q u e s t f o r d e m o c r a c y a m o n g t h e m u l t i p l e m a n i f e s t a t i o n s of g l o b a l i z a t i o n ( M i t t e l m a n , C h a p t e r 1). C e n t r a l , h o w e v e r , t o his a n a l y s i s of g l o b a l i z a t i o n is t h e n o t i o n of a n e w " g l o b a l d i v i s i o n of l a b o r , " t h e d i s p e r s i o n of e c o n o m i c and political power, growing polarization between and among nations, and m a r g i n a l i z a t i o n of v a s t s e c t o r s of t h e h u m a n p o p u l a t i o n . F a l k ' s d i s t i n c t i o n b e t w e e n t w o t y p e s of g l o b a l i z a t i o n a l l o w s u s a u s e f u l f r a m e w o r k t o i d e n t i f y t h e a g g r e s s i v e a n d r e a c t i v e d i m e n s i o n s of g l o b a l i z a t i o n , b o t h i n t e r a c t i n g w i t h o n e a n o t h e r as t h e y c o n d i t i o n t h e life s i t u a t i o n s of i n d i v i d u a l s a n d c o l l e c t i v i t i e s . T h e f i r s t t y p e , g l o b a l i z a t i o n - f r o m - a b o v e , r e f l e c t s " t h e c o l l a b o r a t i o n b e t w e e n l e a d i n g s t a t e s a n d t h e m a i n a g e n t s of c a p i t a l f o r m a t i o n " ( F a l k 1 9 9 2 b ) . T h e k e y f e a t u r e of this t y p e of g l o b a l i z a t i o n is a r e l e n t l e s s d r i v e f o r a c c u m u l a t i o n u n d e r g i r d e d by a c o n s u m e r i s t e t h o s ; its c h i e f a c t o r s a r e t r a n s n a t i o n a l c a p i t a l a n d ( t r a n s n a t i o n a l ) p o l i t i c a l e l i t e s . C o m b i n e d , t h e y c r e a t e a p o w e r f u l m o m e n t u m that l e a v e s b e h i n d a h i g h d e g r e e of s e e m i n g l y f u n c t i o n a l i n t e g r a t i o n a n d , at f a c e v a l u e , h o m o g e n i z i n g h a b i t s that m a k e all o t h e r c u l t u r e s s u b m i t t o t h e p e r v a s i v e n e s s of t h e W e s t ' s p e r c e p t i o n of t h e w o r l d a n d its c o n c e p t i o n of lived r e a l i t y . B y c o n t r a s t , g l o b a l i z a t i o n - f r o m - b e l o w i n d i c t s t h e d y s f u n c t i o n a l and d e g e n e r a t i v e c o n s e q u e n c e s of t h e p h e n o m e n o n by p o i n t i n g to a c o r r o s i o n of a u t o n o m y , i n d i v i d u a l a n d g r o u p e f f i c a c y , a w e a k e n i n g of t h e local b a s e s of m a t e r i a l s u s t e n a n c e , a n d t h e d i m i n u t i o n of e c o l o g i c a l v a l u e s a n d b r e a k d o w n of c u l tural f o u n d a t i o n s . 7 All of t h i s , in F a l k ' s t h i n k i n g , is a s s o c i a t e d w i t h t h e d e t e r r i t o r i a l i z a t i o n of p o l i t i c s , e c o n o m i e s , a n d c u l t u r e a n d the p r e p o n d e r a n c e of t i m e o v e r s p a c e . In r e s p o n s e , g l o b a l i z a t i o n - f r o m - b e l o w f o r e g r o u n d s a n d s t r e s s e s t h e rise of a g l o b a l c i v i c a l e r t n e s s c o n c e r n i n g e c o l o g y , liberty, and

human

Western

rights —perspectives, according

societies but whose

to F a l k , that o r i g i n a t e d

institutionalization

and practices are

in

now

acquiring a transnational appeal. A t t h e c e n t e r of g l o b a l i z a t i o n , t h e a r g u m e n t g o e s , is a n e w g l o b a l p o l i t ical e c o n o m y . T h e p r i n c i p l e s t h a t u n d e r g i r d this s p a t i a l a r r a n g e m e n t a p p e a r m o r e u n i f o r m : m a r k e t r a t i o n a l i t y a n d t h e d r i v e f o r p r o f i t , r e l i a n c e on s e c ondary

a s s o c i a t i o n s as v e h i c l e s

for self-expression and

self-realization

r a t h e r t h a n p r i m a r y ties (of e i t h e r k i n s h i p o r c o m m u n i t y ) , a n d a c o n v e r g e n c e o f l i f e s t y l e s . F i n a l l y , t h e l a t e n e s s of c a p i t a l i s m a n d its c u l t u r a l l o g i c c a n a l s o b e s e e n as a m o m e n t of g l o b a l i z a t i o n : t h e c o n q u e s t of c u l t u r e s by c a p i t a l i s m , a p r o c e s s m o s t p a l p a b l e in its r e c o n s t i t u t i o n of i d e n t i t i e s ( J a m e s o n

1991).

Flexible accumulation, a postindustrial and disorganized capitalism, correl a t e s w i t h n e w e r c u l t u r a l f o r m s , i n c l u d i n g t h e i n c i d e n c e of y u p p i e c u l t u r e , postmodernism,

and

the

spectacle

society

(David

Harvey

1989;

S w y n g e d o u w 1 9 8 6 ) . A l t h o u g h g l o b a l i z a t i o n p r o c e s s e s of c a p i t a l / l a b o r r e o r -

Resurgence

of Islam

191

g a n i z a t i o n m a y l u r k in t h e b a c k g r o u n d , t h e e x p e r i e n c e of d e c e n t r a l i z a t i o n (of i n d i v i d u a l s a n d g r o u p s ) d e f i n e s this c o n d i t i o n . W h i l e e l e m e n t s of W e s t e r n i z a t i o n a n d c a p i t a l i s m a r e b o t h i m p o r t a n t to g l o b a l i t y , t h e n o t i o n c r i t i c a l to o u r p r e s e n t a n a l y s i s is a n a p p r e c i a t i o n of g l o b a l i t y as t h e p r o d u c t of an i n t e r c i v i l i z a t i o n a l e n c o u n t e r a n d d i a l o g u e . W i t h i n this l a r g e r c o m p a s s , w e s e e I s l a m i c p i e t y n o t s i m p l y as a n t i m o d e r n i s t , t h o u g h it m a y y i e l d a n t i m o d e r n i s t s i g n s , b u t as a n a l t e r n a t i v e c o n s t r u c t i o n of m o d e r n i t y , c o g n i z a n t of n o n m a t e r i a l i s t d i m e n s i o n s of p r o g r e s s a n d t h e i r p l a c e in a n e t h i c a l ( I s l a m i c ) s o c i a l f o r m a t i o n . N o d o u b t , an e m p h a sis o n t h e r e c e n t r e o r g a n i z a t i o n of t i m e - s p a c e v i a c h a n g e s in t r a n s n a t i o n a l p r o d u c t i o n a n d e x c h a n g e is q u i t e i n t e g r a l to a n y n o t i o n of g l o b a l i z a t i o n . H o w e v e r , f r o m an I s l a m i c ( c u l t u r a l ) p e r s p e c t i v e , t h e p h e n o m e n o n is t o b e s e e n c o m p r e h e n s i v e l y in h i s t o r i c a l t e r m s . T h i s p r e s u p p o s e s a l o n g e r v i e w of civilizational exchange. F o r t h e m a n y w h o a r e h e r a l d i n g t h e t w i l i g h t of s o v e r e i g n t y w h i l e c e l e b r a t i n g t h e m a k i n g s of a s h a r e d u n i v e r s a l c u l t u r e , g l o b a l i t y u n d e r s c o r e s , in e s s e n c e , t h e r e a l i z a t i o n of e n l i g h t e n m e n t ' s g r e a t p r o m i s e s : t h e t r i u m p h of r e a s o n o v e r n a t u r a l d e t e r m i n a t i o n , t h e a s c e n d a n c y of W e s t e r n

liberalism

over totalitarianism, the w o r l d w i d e d e m o c r a t i c revolution, and the passing of t r a d i t i o n a n d h i s t o r y ' s p r o g r e s s i v e m a r c h t o w a r d m o d e r n i t y . All that r e m a i n s , t h e m e s s a g e r e a d s , a r e t h e a t a v i s t i c r e s i d u e s of a d e c a y i n g o r d e r , t h e last g a s p s of an o l d w o r l d , t h e l i m p p r o t e s t a t i o n s of p a r t i c u l a r i s t i c c u l t u r e s u n w i l l i n g a n d u n a b l e to c o n t e s t t h e f l o w e r i n g of u n i v e r s a l i s m . T h e o n w a r d m a r c h t o w a r d t h i s c i v i l i z a t i o n is i r r e s i s t i b l e , a h i s t o r i c a l n e c e s s i t y n o w h a v i n g a c q u i r e d t h e c h a r a c t e r of an o b j e c t i v e law. Yet, o n t h e e v e of a n e w m i l l e n n i u m , n o n - W e s t e r n f r a m e s of c o n s c i o u s n e s s a n d h a b i t s of b e i n g s e e m e v e r s o p e r s i s t e n t , e v e n m o r e d u r a b l e , i m p e r v i o u s t o t h e t o t a l i z i n g i m p r i n t of W e s t e r n c u l t u r a l h e g e m o n y . T r i u m p h a l i s m , r e g i s t e r e d as e i t h e r t h e e n d of h i s t o r y ( F u k u y a m a ) o r t h e rise of a u n i v e r s a l c i v i l i z a t i o n ( N a i p a u l ) , f a c e s t h e d i s t r e s s of a w o r l d r i d d e n w i t h g r o w i n g c o n t r a d i c t i o n s , s o m e t i m e s d i s m i s s e d as a c l a s h of c i v i l i z a t i o n s b e t w e e n u n i v e r sal W e s t e r n v a l u e s a n d T h i r d W o r l d p a r t i c u l a r i s m ( H u n t i n g t o n ) b u t o f t e n as t h e d e a d w e i g h t of t r a d i t i o n to b e s o o n s w e p t a w a y b y t h e f o r w a r d m a r c h of g l o b a l i z a t i o n . F r o m this t o p - d o w n p e r s p e c t i v e , I s l a m a p p e a r s as o n e of t h e last g r e a t c h a l l e n g e s to t h e s w e e p i n g m o m e n t u m of l i b e r a l i s m , as e i t h e r a c u l t u r a l l o g i c s t a n d i n g o u t s i d e t h e g e n e r a l f l o w of h i s t o r i c a l e v o l u t i o n o r a c i v i l i z a t i o n d r a g g i n g its f e e t . E c h o i n g f o r m e r m o d e r n i z a t i o n t h e m e s , t o p d o w n g l o b a l i z a t i o n , w i t h t h e W e s t s e r v i n g as t h e r e f e r e n c e p o i n t , v i e w s Islam

within

the

familiar

matrix

of

tradition-modernity,

with

Islam's

a s s u m e d r e s i s t a n c e s to r a t i o n a l i t y a n d p r o g r e s s . In t h i s m o d e , I s l a m i c s o c i a l m o v e m e n t s r e p r e s e n t a r e t r e a t o r r e t u r n to p r i m o r d i a l i s m , w i t h o b s c u r a n t i s m a n d s o c i e t a l r e g r e s s i o n as t h e n e c e s s a r y c o r r e l a t e s of this l o g i c . F r o m t h i s a n g l e , t h e r e v e r s i o n to t h e i d i o m of p i e t y is a r e a c t i v e s e n t i m e n t w i t h h a r d -

192

Mustapha Kamal Pashci & Ahmed I. Samatar

ly a n y p r o s p e c t f o r an a l t e r n a t i v e v i s i o n of m o d e r n i t y a n d t h e e s t a b l i s h i n g of a different world order. Yet g l o b a l i t y y i e l d s a n t i n o m i e s , a c t u a l i z i n g t h e s e l f - c o n s c i o u s n e s s of n o n - o r c o u n t e r h e g e m o n i c s o c i a l m o v e m e n t s . O f t e n , t h e b o u n d a r i e s of t h e s e m o v e m e n t s b e c o m e m o r e r e c o g n i z a b l e as g l o b a l i z a t i o n p r o c e s s e s s e e k to d e p r i v e o r d e n y t h e s e m o v e m e n t s t h e i r r a i s o n d ' ê t r e . In a p p e a r a n c e , t h e I s l a m i c r e s u r g e n c e is a r e v e r s e m o v e m e n t a g a i n s t t h e h e g e m o n i z i n g

pro-

c l i v i t i e s of W e s t - c e n t e r e d g l o b a l i t y , r e s i s t i n g a u n i v e r s a l i s m d e f i n e d in t h e h i s t o r i c a l s p e c i f i c i t y of E u r o c e n t r i s m ( A m i n 1 9 8 9 ) . B u t this is o n l y p a r t of t h e story. I s l a m i c piety h a s b e e n a n d is a p u r v e y o r of an a l t e r n a t i v e i m a g e of m o d e r n i t y , a p o i n t o b s c u r e d b o t h in o r i e n t a l i s t r e n d e r i n g s of I s l a m ( S a i d 1 9 7 8 ) a n d in f u n d a m e n t a l i s t d i s c o u r s e . A k e y s u p p o s i t i o n in r e a l i z i n g this o t h e r v i s i o n is t h e d y n a m i c n o t i o n of s e e i n g I s l a m as an i n t e g r a l c o c o n s t r u c t i o n of g l o b a l i t y . B y i n t r o d u c i n g this v i e w of I s l a m into an a n a l y s i s of t h e e p o c h a n d an e m e r g i n g g l o b a l c u l t u r e , t h e c o n s t r i c t i o n s of E u r o c e n t r i s m c a n b e r e c o g n i z e d a n d t r a n s c e n d e d . S i l e n c e d in the c u r r e n t d i s c o u r s e o n g l o b a l i z a t i o n a r e t h e l i n e a g e s of a p r o c e s s of c o c o n s t r u c t i o n .

Monotonie

s o u n d s of t o p - d o w n g l o b a l i t y e n t e r t a i n t h e c h a r i t a b l e v i e w that n o n - W e s t e r n f o r m s of s o c i a l c o n s c i o u s n e s s a r e b e s t s e e n as l o c a l i s m or a r e c y c l i n g of autochthonous sensibilities. To m o v e b e y o n d t h e g l o b a l i s m - l o c a l i s m d u a l i s m , t h e initial s t e p is to p r o b l e m a t i z e g l o b a l i t y in m o r e h i s t o r i c a l t e r m s . R e c o g n i z i n g t h e m a k i n g of g l o b a l i t y in i n t e r c i v i l i z a t i o n a l d i a l o g u e f u r n i s h e s t h e p o s s i b i l i t y of s e e i n g I s l a m i c c o n s c i o u s n e s s as s o m e t h i n g q u i t e a p a r t f r o m a sign of local o r p a r o c h i a l s e n t i m e n t s . E x t a n t d e s c r i p t i o n s of g l o b a l i z a t i o n o f t e n s i t u a t e its d e t e r m i n a n t s in t h e life a n d t i m e s of c a p i t a l i s m a n d rise to t h e s t a t u s of a g l o b a l L e v i a t h a n . O n this v i e w , t h e r e is a p e n c h a n t f o r w h a t H o d g s o n c a l l s (in a n o t h e r c o n t e x t ) " p r e s e n t i s t " r e a d i n g s of m o d e r n i t y ( H o d g s o n

1993).

S u p p l a n t i n g t h e idea of g l o b a l i z a t i o n as t h e p r o g e n y of a b u d d i n g w o r l d m a r k e t e c o n o m y ( W a l l e r s t e i n 1 9 7 4 ) , an e m p h a s i s on i n t e r c i v i l i z a t i o n a l d i a l o g u e a n d s t r u g g l e s , s p r e a d o v e r s e v e r a l c e n t u r i e s , l e n d s an a l t e r n a t i v e l e n s to o u r u n d e r s t a n d i n g of t h e p r o c e s s . A s s u c h , g l o b a l i t y d o e s n o t e m a n a t e f r o m t h e N o r t h a n d w o r k its w a y t o w a r d t h e S o u t h b u t , g i v e n its e a r l y r o o t s in

cultural,

commercial,

and

political

exchange,

especially

between

Christendom and Islam, acquires a more horizontal dimension. T h e interact i v e n a t u r e of g l o b a l i z a t i o n v i t i a t e s t h e v i e w that s e e s it v e r t i c a l l y . Phases

of

Globalization

F o r M u s l i m s , t h e first p h a s e of g l o b a l i z a t i o n h a s its r o o t s in t h e e a r l y encounter between Christendom and Islam, when opposing principles for o r g a n i z i n g s o c i a l life a n d c o s m o l o g i e s to s i t u a t e that life w i t h i n a l a r g e r ( s p i r i t u a l ) t o t a l i t y b e c o m e r e c o g n i z a b l e . In t h i s e x c h a n g e , m u t u a l m i s g i v i n g

Resurgence

of Islam

193

r i v a l e d m u t u a l a p p r e c i a t i o n ; t h e l i n e s that d i v i d e d t h e t w o c o m m u n i t i e s of c o n s c i e n c e a n d f a i t h a l s o p r o v i d e d t h e b a s i s f o r an i n t e r c i v i l i z a t i o n a l d i a logue. C o m m e r c e and trade intermixed with scientific and cultural borrowi n g . F o r m o r e t h a n f i v e c e n t u r i e s I s l a m p l a y e d t h e t u t o r to b o t h e a s t e r n a n d w e s t e r n C h r i s t e n d o m ( H o d g s o n ) . T h e h i g h e s t a c h i e v e m e n t s of I s l a m , s e e n b y m a n y as " t h e m o s t b r i l l i a n t c i v i l i z a t i o n in t h e O l d W o r l d , " ( B r a u d e l 1 9 9 4 : 7 3 ) w e r e w i t n e s s e d in t h e i n c r e d i b l e a g e b e t w e e n t h e e i g h t h a n d t w e l f t h c e n t u r i e s . It w a s a t i m e of s c i e n t i f i c , p h i l o s o p h i c a l , literary, a n d e c o n o m i c f l o u r i s h i n g . D i s t i n c t i v e is t h e o f t e n o v e r l o o k e d b u t s u c c e s s f u l c o n j o i n i n g of I s l a m i c f a i t h a n d p i e t y w i t h a r e l e n t l e s s p u r s u i t of Falsafa—a

b r a n d of

I s l a m i c h u m a n i s m that w a s d e d i c a t e d to t h e r e t r i e v a l of c l a s s i c a l p h i l o s o p h y . In this p e r i o d of h i g h a n d h y b r i d c u l t u r e , s o m e of the g r e a t e s t t h i n k e r s of t h e I s l a m i c w o r l d a p p e a r e d — m e n like A l - K i n d i , A l - F a r a b i , I b n - S i n a , a n d I b n R u s h d . T h e i r w o r k s b e c a m e critical f o r t h e r e v i v a l a n d d e v e l o p m e n t

of

E u r o p e a n i n t e l l e c t u a l r e n a i s s a n c e . T h e h i g h p o i n t of t h i s i n t e r c i v i l i z a t i o n a l e x c h a n g e w a s in M u s l i m S p a i n , w h i c h f u r n i s h e d E u r o p e w i t h t h e c u l t u r a l r e s o u r c e s to e s c a p e t h e s e e m i n g l y u n e n d i n g h o r r o r of t h e D a r k A g e s ( D a v i d Harvey

1 9 9 0 ) . I r o n i c a l l y , t h i s d e b t w a s p a i d by t h e I n q u i s i t i o n

in t h e

R e c o n q u i s t a t h r o u g h f o r c e d e x p u l s i o n of ( b o t h J e w s a n d ) M u s l i m s f r o m S p a i n t o w a r d t h e e n d of t h e f i f t e e n t h c e n t u r y . 8 T h e g r e a t i n t e r c i v i l i z a t i o n a l d i a l o g u e is r e g u l a r l y p u n c t u a t e d by h o l y a n d n o t - s o - h o l y w a r s , a c o n f r o n t a t i o n of c u l t u r e s , a s h i f t i n g of t e r r i t o r i a l f r o n t i e r s d i v i d i n g the t w o c i v i l i z a t i o n s , a n d t h e c r y s t a l l i z a t i o n of a s e n s e of d i f f e r e n c e a n d u n i q u e n e s s . C l a i m s o v e r the s p i r i t u a l b o d y lend t h e t e r r i t o r i al c o n f l i c t s an i n t e n s i t y r e a d i l y s e r v i c e a b l e in d e m o n i z i n g t h e O t h e r . Yet it t o o k a later h i s t o r i c a l e n c o u n t e r to r e d u c e I s l a m i c c i v i l i z a t i o n to c u l t u r a l s u b o r d i n a t i o n a n d its c h a r a c t e r i z a t i o n as an u n c h a n g i n g r e p o s i t o r y of incivility, b a r b a r i s m , d e c a d e n c e , and traditionalism (Said

1 9 7 8 ) . D u r i n g this

p h a s e , t h e d i s t i n c t i v e f e a t u r e of this d i a l o g u e r e m a i n s , if g r u d g i n g l y , t h e p r i n c i p l e o f p e a c e f u l c o e x i s t e n c e . V i o l a t i o n s of that p r i n c i p l e m u s t b e p e r c e i v e d in c o n j u n c t i o n w i t h t h e W e s t ' s a c c e p t a n c e of M u s l i m c o n t r i b u t i o n s to W e s t e r n p h i l o s o p h y , m a t h e m a t i c s , g e o g r a p h y , a n d the h u m a n a n d p h y s i c a l s c i e n c e s ( W a t t ) . O n l y t h e p o l i t i c a l d e c a y a n d d e c l i n e of I s l a m i c c i v i l i z a t i o n u s h e r s in a s t i n g i n e s s in m u t u a l r e c o g n i t i o n a n d r e s p e c t . C o l o n i a l i s m , in its W e s t e r n a n d E a s t e r n v a r i a n t s , p r o v i d e s t h e s e t t i n g f o r t h e s e c o n d m a j o r h i s t o r i c a l e n c o u n t e r . D u r i n g this p e r i o d , I s l a m i c s o c i e t i e s c a m e u n d e r s e v e r e s t r a i n a n d e x p e r i e n c e d a d e e p s e n s e of

internal

w e a k n e s s , f r u s t r a t i o n , a n d a l i e n a t i o n . S e l f - d o u b t s u p e r s e d e d an u n s h a k a b l e f a i t h in t h e i n t r i n s i c s u p e r i o r i t y of I s l a m . W e s t e r n t e c h n o l o g y a n d i d e o l o g y u n d e r m i n e d M u s l i m s e l f - c o n f i d e n c e . S u b j e c t i o n of v a s t a r e a s of M u s l i m e m p i r e s , e i t h e r t h r o u g h d i r e c t E u r o p e a n c o n t r o l or t h r o u g h n o m i c a r r a n g e m e n t s h u m i l i a t e d a n d p a r c e l e d t h e ummah

politico-eco-

(i.e., c o m m u n i t y of

t h e f a i t h f u l ) . N e w e r f o r m s of i d e n t i f i c a t i o n , m a i n l y t h r o u g h i d e a s o f n a t i o n -

194

Mustapha Kamal Pasha