The end of the world as we know it?
Saturday July 23, 2005
The end of the world as we know it?
The Collapse of Globalism
by John Ralston Saul
(See Amazon link at left)
There have been countless books describing the rise of globalisation, but its decline, though hardly new, is much less familiar territory. This is the nub of John Ralston Saul's book. He dates the rise of globalisation from 1971 and argues that its central tenet is that "civilisation should be seen through economics, and economics alone". He depicts the rise of the ideology of free trade from the mid-19th century as a similarly mono-dimensional and economically fundamentalist phenomenon. There is much to commend his exposition of globalisation, or rather the ideology of globalisation, which he terms "globalism": it is informative, engaging and, above all, bitingly critical.
Saul sees the heyday of globalisation as the mid-90s. By this time, tariffs had fallen considerably, hundreds of trade agreements were in place, tax rates for the wealthy had fallen, global markets reigned supreme, and privatisation and deregulation were sweeping the world. Even the old communist citadel had succumbed. The year 1995, which Saul regards as the high point of globalisation, saw the establishment of the WTO, the body that would preside over the new global economic order. Yet, within five short years, the movement had begun to falter. The Asian financial crisis of 1997-98 underlined the inherent instability of the new system. To the consternation and fury of the international financial community, Malaysia imposed capital controls and was proved right in the process. In 1999, the WTO conference at Seattle was the occasion of huge demonstrations against globalisation. And a year earlier, the talks on the Multilateral Agreement on Investment (MAI) had fallen apart.
It is worth reminding ourselves what was at issue with the MAI. The key paragraph guaranteed that foreign investors would receive "treatment no less favourable than the treatment [a country] accords its own investors and their investments with respect to the establishment, acquisition, use, enjoyment and sale or other disposition of investments". This was globalisation with a swagger, an extraordinary example of neo-colonialism (as it - correctly - used to be called) in action: it also proved to be a case of hubristic imperial overreach. The developing world successfully resisted the proposal and it died a death.
Since then, the WTO process has been paralysed, the developing world has found new voice and confidence, personified by the ad hoc alliance between China, India, Brazil and South Africa. Meanwhile the conflict between Brazil and South Africa and the western drug companies - with their absurdly high prices and their insistence on intellectual property rights (which Saul quite rightly describes as an outrageous form of coupon-clipping) - has brought what were previously seen as rather esoteric issues to the attention of an increasingly outraged global public.
Saul believes globalisation is now in retreat. He is probably right. He likens the present era - or interregnum - to that of the 70s when the old Keynesian system was in growing disarray but the neo-liberal era that was to replace it was neither strong enough nor coherent enough to supplant it. As a consequence, he believes we are now living in something of a vacuum. He underestimates, however, just how much of the old system remains in place and the extent to which neo-liberal logic remains dominant.
Saul strangely fails to consider what might happen to the present global system. He rightly argues that it is presently characterised by stasis. But could it actually go into reverse, as happened to the last great era of globalisation between 1870 and 1914? The key is almost certainly the United States, which has been the prime architect of the present system. It is by no means impossible that at some point it might decide that globalisation is no longer sufficiently in its interests and, at the same time, too much in the interests of others, notably East Asia, which in this case is shorthand for China. We have already witnessed a markedly nationalistic turn in American foreign policy, and in principle there is no reason why this should not find expression in economic policy also. One of the weaknesses of the book, in fact, is the absence of any real discussion of the neo-conservative shift in US politics.
Nor does Saul give anything like sufficient importance to the rise of India and China. It is not that he is guilty - like so many western writers - of failing to give due consideration to the developing world; he understands the central significance of their emergence as independent countries, the importance of the nation-state, the pervasive legacy of colonialism, and the imperial ambitions of the developed world. But in looking to the future, one gets no sense of how the world is being - and will be - reshaped by the rise of China and India, what this might mean for the global order, and what its repercussions might be for western polities.
This is an eminently readable book. The brunt of his argument is surely right and the fact that the material is relatively familiar is no bad thing: after years of being forced to read text after text, speech after speech, article after article from the same neo-liberal globalisation hymn sheet, it is a breath of fresh air to read the unauthorised version. But as he turns his attention to the future, the book becomes shapeless and inchoate. Perhaps the reason is that this is essentially a work of commentary, albeit insightful, informative and entertaining. Saul may be broadly right about the last quarter-century, but it feels as if he is stumbling around in the dark when it comes to the next.
· Martin Jacques is a visiting professor at the International Centre for Chinese Studies, Aichi University, Japan.