Globalization in Retreat

Author(s): Walden Bello

Source: New Labor Forum, Vol. 16, No. 3/4 (Fall, 2007), pp. 109-115
Published by: Joseph S. Murphy Institute, City University of New York
Stable URL: http://www.jstor.org/stable/40342719 .
Accessed: 06/11/2014 14:44
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp

.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.

Joseph S. Murphy Institute, City University of New York is collaborating with JSTOR to digitize, preserve and
extend access to New Labor Forum.

http://www.jstor.org

This content downloaded from 186.4.24.4 on Thu, 6 Nov 2014 14:44:09 PM

All use subject to JSTOR Terms and Conditions

ByWalden Bello

GLOBALIZATION
IN RETREAT
It is assumed that globalization

is irreversible. Yet, as we shall show below,

undonebytheeconomicconis in crisis.Indeed,itis in retreat,

globalization
markets
haveproduced.
Rather
thatunregulated
andsocialresistance
tradictions
wasinfactan effort
thanbeinga new,higher
globalization
stageofcapitalism,
andoveraccumulation
toescapethecrisesofoverproduction
capital
bycorporate
thathad stalkedit since the mid-seventies.
Faced with a process of global economic
thetask
intotrouble,
thatisrunning
integration

as KenichiOhmaeandRobertReichcelebrated
the emergenceof the so-called borderless
autonoworld.Theprocessbywhichrelatively

cratic"directionbutto cooperatein creating

a trulyinternationaleconomyof dynamic
nationaleconomiesmarkedby progressive
social relationsand ecologicallysensitive

Andthepeoplewhoopposed
as "irreversible."
dismissedas
globalizationweredisdainfully

forcesis notto save

oflaborand progressive
itin a "socialdemobysteering
globalization

policies.
WhenitfirstbecamepartoftheEnglish
was
intheearly1990s,globalization
vocabulary
Fifteen
supposedto be thewaveofthefuture.
such
thinkers
ofglobalist
yearsago,thewritings

becomefunctionally
mousnationaleconomies
wastouted
intooneglobaleconomy
integrated

oftheLudditeswho
moderndayincarnations
RevotheIndustrial
machines
during
destroyed
lution.
Fifteen
shops
yearslater,despiterunaway
whatpassesforan internaand outsourcing,
ofnational
remains
a collection
tionaleconomy

economies.Theseeconomiesareinterdepen-

An extended version of this article, titled "The Capitalist Conjuncture: Overaccumulation, Financial Crises, and
the RetreatfromGlobalization,"appeared in ThirdWorldQuarterly,Vol. 27, No. 8, 2006.

NewLaborForum16(3-4): 109-115,Fall2007
CUNY
Joseph
S. Murphy
Institute,
Copyright
ISSN: 1095-7960/07
print
DOI:10.1080/10957960701636729

This content downloaded from 186.4.24.4 on Thu, 6 Nov 2014 14:44:09 PM

All use subject to JSTOR Terms and Conditions

dentnodoubt,butdomestic
factors
stilllargely
determine
theirdynamics.
infact,hasreacheditshigh
Globalization,
watermarkandis receding.

BRIGHT PREDICTIONS,
DISMAL OUTCOMES
GLOBALIZATION'SHEYDAY,WE WERETOLD

thatstatepoliciesno longermattered
and

thatcorporations
wouldsoon dwarfstates.In
statesstilldo matter.
TheEuropeanUnion,
fact,
theU.S.government,
andtheChinesestateare
economicactorstodaythantheywere
stronger
a decade ago. In China, for instance,
transnational
(TNCs) marchto
corporations
thetuneofthestaterather
thantheotherway
around.
with
statepoliciesthatinterfere
Moreover,
themarket
inordertobuildupindustrial
structuresor protectemployment
stillmakea difference.
Indeed,overthelasttenyears,inter-

ventionist
policieshavespelledthe
government
difference
between
andunderdedevelopment
velopment,prosperityand poverty.
ofcapitalcontrols
Malaysia's
imposition
the
Asian
financial
crisisin 1997during
98 preventedit fromunravelinglike
ThailandorIndonesia.Strict
capitalcontrolsalso insulatedChinafromtheeconomiccollapseengulfing
itsneighbors.
Fifteenyearsago,we weretoldto
ofa transnational
expecttheemergence
capitalistelitethatwould managethe
worldeconomy.Indeed,globalization
became the "grandstrategy"of the

tionleadingthewayto thenew,benignworld
order.Today,
thisprojectliesinshambles.
DurNew Labor Forum

one another,
seekingto beggarone another's
economies.
The G8 was supposedto becomeone of
inthe
ofglobalgovernance
thekeyinstitutions
Thiswas,in fact,one of
era of globalization.
thekeyobjectives
oftheClinton-Blair
project
theG8 is a
in thelate1990s.Today,however,
than
hollowshell,markedlessbycooperation

capitalist
powamongthedominant
byrivalries
ers.It continuesto meetout ofhabit,butits
original goal of serving as a forumfor
is moreand
elitecoordination
transnational
moredistant.
A decadeago,theWorldTradeOrganization(WTO) wasborn,joiningtheWorldBank
Fund(IMF) as
andtheInternational
Monetary
ecothepillarsofthesystemofinternational
in theeraofglobalization.
nomicgovernance
Witha triumphant
air,officialsof thethree

Statesstillmatter.The
EuropeanUnion,the
U.S.government,
and the
Chinesestatearestronger
economicactorstoday
thantheywerea
decadeago.

Clintonadministration,
which envisionedthe U.S. elitebeingtheprimusinter
pares- firstamongequals- ofa globalcoali-

110*

ingthereignofGeorgeW.Bush,thenationalthetransnational
istfactionhasoverwhelmed
factionoftheeconomicelite.Nationalism-inwith
flectedstatesarenowcompeting
sharply

inSingapore
organizations
meeting
duringthe
firstministerialgatheringof the WTO in
December1996sawtheremaining
taskof"global governance"
as theachievement
of"coher-

W. Bello

This content downloaded from 186.4.24.4 on Thu, 6 Nov 2014 14:44:09 PM

All use subject to JSTOR Terms and Conditions

oftheneoliberal
ence,"thatis,thecoordination
inordertoenpoliciesofthethreeinstitutions

mostacuteat theWTO. Last July,

theDoha
Roundofglobalnegotiations
formoretrade

technocratic
ofthe
surethesmooth,
integration

liberalization
unraveledabruptly
whentalks
the
so-called
of
Six
broke
down
among
Group

globaleconomy.
theinButnowSebastianMallaby,
commentator
fluential
pro-globalization
ofthe Washington
Post,complainsthat
aidisless
hasstalled,
"tradeliberalization
thanitshouldbe,andthenext
coherent
willbe managed
financial
conflagration
In fact,thesituabyan injuredfireman."
TheIMF
he
describes.
tionisworsethan
defunct.
is practically
Knowinghowthe
Fund precipitatedand worsenedthe

Advanceddeveloping
countries
arerefusing
to
borrow
fromtheIMF or
arepayingaheadof
withsome
schedule,
theirintention
declaring
nevertoborrow
again.

Asianfinancial
crisis,moreandmoreof
theadvanceddevelopingcountriesare
toborrowfromitorarepaying
refusing
their
aheadofschedule,withsomedeclaring

intention
nevertoborrowagain.Theseinclude
Thailand,Indonesia,Brazil,and Argentina.
SincetheFundsbudgetgreatly
dependsondebt
thisboyfrom
thesebigborrowers,
repayments
describes
intowhatoneexpert
cottistranslating
as "ahugesqueezeonthebudgetoftheorganization."
TheWorldBankmayseemtobe inbetter
healththantheFund.Buthavingbeencentral
tothedebacleofstructural
policies
adjustment
thatleftmost developingand transitional
themin greater
economiesthatimplemented
and in a state
withgreater
inequality,
poverty,
a crisis
theBankis alsosuffering
ofstagnation,
worsened
be
can
This only
oflegitimacy.
bythe

ofan official
recentfinding
expert
high-level
economist
IMF
chief
former
headed
by
panel
thattheBankhasbeensystemKenneth
Rogoff
itsdatatoadvanceitspromanipulating
atically
globalization position and conceal
adverseeffects.
globalizations
isperhaps
Butthecrisisofmultilateralism

overtheU.S.refusal
to budgeon
in acrimony
The
its enormoussubsidiesforagriculture.
the
WTO
has
roundis practically
dead,and
been badly wounded. The pro-freetrade
oncecomeconomist
FredBergsten
American
and theWTO to a
paredtradeliberalization
when
theyarenotmovbicycle:theycollapse

The collapseofan organization

ingforward.
oncedescribed
thatoneofitsdirector
generals
as the"jewelin thecrownofmultilateralism"
maybe nearerthanitseems.

WHY GLOBALIZATION STALLED

DID GLOBALIZATIONRUN AGROUND? FlRST

wasoverofall,thecaseforglobalization
and salesof
sold.The bulkoftheproduction
to takeplacewithinthe
mostTNCs continues
or regionoforigin.Thereareonlya
country
whoseprooftruly
handful
globalcorporations
duction and sales are dispersedrelatively
equallyacrossregions.
Second,ratherthanforgea common,coresponsetotheglobalcrisesofoveroperative

Globalization in Retreat

New Labor Forum 1 1 1

This content downloaded from 186.4.24.4 on Thu, 6 Nov 2014 14:44:09 PM

All use subject to JSTOR Terms and Conditions

production,stagnation,and environmental
eliteshavecompeted
ruin,nationalcapitalist
witheach otherto shifttheburdenofadjustment.The Bushadministration,
forinstance,
has pusheda weak-dollar
policyto promote

ministration
seemstobe freetradefortherest
fortheUnited
oftheworldandprotectionism
States.
Fourth,therehas been too muchdissoand
ofglobalization
nancebetween
thepromise
freetrade and the actual resultsof

Thecaseforglobalization
wasoversold.
Thebulk
andsalesof
ofproduction
mostTNCscontinues
to
takeplacewithinthe
orregion
country
oforigin.
U.S.economicrecovery
and growth
attheexpenseofEuropeandJapan.Ithasalso refused
to signtheKyotoProtocolin orderto push
Europeand Japanto absorbmostofthecosts
ofglobalenvironmental
andthus
adjustment,
makeU.S. industry
morecomcomparatively

The G8 mayevincetheimageofcopetitive.
intheirannualmeetings,
butthereoperation
is
that
of
and riality
increasing
competition
valry.Whilecooperationmaybe therational

choicefromthepointofviewofthe
strategic
nationalcapitalist
inglobalcapitalist
system,
terestsare mainlyconcernedwithnotlosing
outto theirrivalsin theshortterm.
A thirdfactorhas been thecorrosive
effectofthedoublestandards
brazenly
displayed
the
the
United
States.
by
hegemonicpower,
Whilethe Clintonadministration
did tryto
movetheUnitedStatestowardfreetrade,the
Bush administrationhas hypocritically

freetradewhilepracticing
preached
protectionism.Indeed,thetradepolicyoftheBushad-

112

New Labor Forum

neoliberalpolicies,whichhave been
andstagnation.
morepoverty,
inequality,
One oftheveryfewplaceswherepovoverthelastfifteen
years
ertydiminished
is China.Butinterventionist
statepolicies thatmanagedmarketforces,not
wereresponsible
neoliberal
prescriptions,
forlifting120 millionChineseout of
poverty.Moreover,the advocates of
havehadto
capitalcontrols
eliminating

facetheactualcollapseoftheeconomies
thattookthispolicyto heart.The globalizationof financeproceededmuchfaster
thantheglobalizationof production.But it

provedtobe thecutting
edgenotofprosperity
butofchaos.TheAsianfinancial
crisisandthe
which
collapseoftheeconomyofArgentina,
had been amongthemostdoctrinaire
practitionersofcapitalaccountliberalization,
were
twodecisivemoments
inreality's
revolt
against
theory.
Anotherfactorunraveling
theglobalist
projectderivesfromitsobsessionwitheconomicgrowth.
isthe
Indeed,unending
growth
of
themainspring
of
centerpiece globalization,
itslegitimacy.
Whilea recentWorldBankre- amazingly
- to extolrapid
portcontinues

growthas the keyto expandingthe global

middleclass,globalwarming,
peak oil, and
otherenvironmental
eventsaremakingitclear
topeoplethattheratesandpatterns
ofgrowth
thatcomewithglobalization
area surefire
preforan ecologicalArmageddon.
scription
Thefinalfactor,
nottobe underestimated,

W. Bello

This content downloaded from 186.4.24.4 on Thu, 6 Nov 2014 14:44:09 PM

All use subject to JSTOR Terms and Conditions

has been popularresistance

to globalization.
The battlesofSeattlein 1999,Praguein 2000,

arenolongerthateasyfor
However,
things
thecorporations
and tradingpowersand the

andGenoain2001;themassiveglobalantiwar
marchon February15,2003,whentheantimovement
morphedinto
globalization
thecoltheglobalantiwarmovement;
in
meeting
lapseoftheWTO ministerial
Cancunin 2003and itsnearcollapsein

Doctrinaire
neoliberals
arebeing
corporations.
easedoutofkeypositions,
givingwaytoprag-

Hong Kong in 2005; the Frenchand

oftheneoliberal,
Dutchpeoples'rejection
EuropeanConstitution
pro-globalization
in2005- thesewereallcritical
junctures
thathas
ina decade-long
globalstruggle
rolledbackthe neoliberalproject.But
the
weremerely
events
thesehigh-profile
ofthouthesummation
tipoftheiceberg,

Interventionist
state
policiesthatmanaged
market
not
forces,
neoliberal
prescriptions,
wereresponsible
forlifting
120 millionChineseout
ofpoverty.

sandsofanti-neoliberal,
anti-globalizain thousandsof communities
tion struggles
the worldinvolvingmillionsof
throughout

students,
workers,
people,
indigenous
peasants,
ofthemiddleclass.Organized
andmanysectors
NorthandtheSouth,played
in
the
both
labor,
roleinthisglobalresistance.
a notinsignificant

DOWN BUT NOT OUT

CORPORATE-DRIVEN GLOBALIZATION

maybe down,itis notout.Thoughdisneoliberal

credited,manypro-globalization

policiesremainin place in manyeconomies,

forlackofcrediblealternative
policiesin the
Withthingsnotmovingat
eyesoftechnocrats.
theWTO, thebigtradingpowersareempha(FTAs)and ecosizingfreetradeagreements
nomicpartnership
(EPAs)withdeagreements
are in
velopingcountries.These agreements

thanthemultilatmanywaysmoredangerous
sincetheyoften
WTO
atthe
eralnegotiations
intermsofmarket
concessions
requiregreater

ofintellectual
enforcement
accessand tighter
rights.
property

neoliberal
whooften
subvert
matictechnocrats
policiesinpracticeowingtopopularpressure.
Whenitcomesto FTAs,theglobalsouth

isbecomingawareofthedangersandisbeginningto resist.Key SouthAmericangovernmentsunderpressurefromtheircitizenries

derailed the Free Trade of the Americas
(FTAA)- thegrandplan of GeorgeW. Bush
- duringtheMar
fortheWestern
hemisphere)
2005.
in November
del Plataconference
Also,one ofthereasonsmanypeoplere-

in
sistedPrimeMinisterThaksinShinawatra
themonthsbeforetherecentcoupinThailand

washisrushtoconcludea freetradeagreement
withtheUnitedStates.Indeed,on January
8,
storm
the
tried
to
some
10,000protesters
2006,
in
building ChiangMai,Thailand,whereU.S.
The govwerenegotiating.
and Thai officials
hasputthe
thatsucceededThaksin's
ernment
seekand
movements
FTA
on
U.S.-Thai
hold,
havebeeninspired
ingtostopFTAselsewhere

bythesuccessoftheThaiefforts.
fromneoliberalglobalization
The retreat

Globalization in Retreat

New Labor Forum 1 1 3

This content downloaded from 186.4.24.4 on Thu, 6 Nov 2014 14:44:09 PM

All use subject to JSTOR Terms and Conditions

is mostmarkedin LatinAmerica.Long exploitedbyforeign

energygiants,Bolivia,underPresident
EvoMorales,hasnationalized
its
NestorKirchner
ofArgenenergyresources.

tinagaveanexampleofhowdeveloping
councanfacedownfinance
trygovernments
when
he
forced
northern
bondcapital
holdersto acceptonly25 centsofevery
dollar Argentinaowed them. Hugo
Chavezhaslaunchedan ambitious
plan
forregionalintegration,
theBolivarianAlternativeforthe Americas(ALBA), based on
insteadoffree
genuineeconomiccooperation
trade,withlittleor no participation
bynorthernTNCs,anddrivenbywhatChavezhimself
describesas a "logicbeyondcapitalism."

ityintheearly1990sbythecollapseoftheceninEastern
socialist
tralized
Europeand
regimes
Russia.
Itusedto be simplyassumedthatglobaland thatthosewho
izationwas "irreversible,"
questioned its inexorablecharacterwere

is a spent
Globalization
force.

GLOBALIZATION IN
PERSPECTIVE
today's vantage point, globalization

appearsto havebeen not a new,higher

ofcapitalism
buta
phasein thedevelopment
structural
crisisof
responseto theunderlying
thissystem
ofproduction.
Fifteen
yearssince
itwastrumpeted
as thewaveofthefuture,
globalizationseemstohavebeenlessa "bravenew
adventure
thana desphase"ofthecapitalist
perateeffort
byglobalcapitaltoescapethestagnationanddisequilibria
theglobal
overtaking

economyin the 1970sand 1980s.It was the

corporate
responsetothecrisisofprofitability
thatstemmedfromthecrisisofoverproductionand overaccumulation
thatfollowedthe
boom
that
ended
inthelatesevlongpost-war
enties.A keypartof thethatresponsewas a
fundamental
thatended that
restructuring
classcompromise
intheWest,a propost-war
cessthatrolledbackstateinterventionist
policiesandthehard-won
of
labor.
However,
rights
wasdeflected
fromthisrealpeoplesattention
114-

New Labor Forum

romantics.
however,
preToday,
woolly-headed
thathave
ciselybecauseofthecontradictions
been spawnedby itsunderlying
dynamicof
overaccumulation,
capitalist
many,likeNobel
laureateJoseph
aresayingthatglobalStiglitz,
izationis in dangerofbeingreversed.
Thisis,
nota goodthingformanyin liberal
however,
and progressive
circles,whofeelthatthetask
at hand is to "humanize"globalization.
Like
can be
Stiglitz,
theybelievethatglobalization
madeto workforhumanity
and thatit must
be savedfromtheneoliberals
whohavepromotedit.
It is,however,
too late.Globalization
is a
reacspentforcethathas evokedtremendous
tionsthatcontinue
togrowinstrength.
Todays
economic
and
conflicts
multiplying
political
ifanything,
theperiodfollowing
the
resemble,
endofwhathistorians
refer
toas thefirst
eraof
whichextended
from1815tothe
globalization,
of
World
War
I
in
1914.
The urgent
eruption
taskis nottoengagein thefutiletaskofsteerina "social
ingcorporate-driven
globalization
democratic"
direction
theWTO
byreforming
andIMF,andpromoting
socialre"corporate
buttomanageitsretreat
so thatit
sponsibility,"
doesnotbringaboutthesamechaosandrunthatmarkeditsdemisein that
awayconflicts
earlierera.

W. Bello

This content downloaded from 186.4.24.4 on Thu, 6 Nov 2014 14:44:09 PM

All use subject to JSTOR Terms and Conditions

The roleoforganizedlaborin theNorth

but
is notto promotea benignglobalization
in the
to workwithotherforces,
particularly
South,to transcend
it,thatis,to createa truly
orderof independent
equitableinternational
nationalsocietieswheredomesticand local
economieswill be revivedalong withthe
of class relationsand the
transformation
achievementof a healthybalance between
The great
and theenvironment.
community

KarlPolanyitalkedabout
Hungarianthinker
capitalismbeinga processof disembedding
fromitssocialmatrix,
themarket
andeventually makingit the forcethatdrivessociety.
Globalization
has beentheclimacticpointin
thisprocessofdisembedding
themarket.
Our
taskis to re-embedthemarketin society,
to
disciplineand subordinateit to the overarchinggoals of justice,equality,and solidarity.

Globalization in Retreat

New Labor Forum 1 1 5

This content downloaded from 186.4.24.4 on Thu, 6 Nov 2014 14:44:09 PM

All use subject to JSTOR Terms and Conditions