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The Global Delusion

Versions of liberal democracy have spread into parts of the former Soviet bloc, but in Iraq democracy is producing a type of elective theocracy not unlike that which exists in Iran. China has abandoned central economic planning for a type of state capitalism closely linked with nationalism. Some countries are moving toward market reform and others in the opposite direction. Europe has opted for a combination of social democracy with a neoliberal economic system, while under the Bush administration the United States has tilted toward a mix of protectionism, an unsustainable federal deficit, and crony capitalism.

Though the world’s diverse societies are continuously interacting, the process is producing a variety of hybrid regimes rather than convergence on a single model. Yet a belief that a universally accepted type of society is emerging continues to shape the way social scientists and public commentators think about the contemporary condition, and it is taken for granted that industrialization enables something like the way of life of rich countries to be reproduced everywhere.

The assumption of convergence is evident in theories of globalization. In The Borderless World (1990), the influential management theorist Kenichi Ohmae declared:

[The global economy] is becoming so powerful that it has swallowed most consumers and corporations, made traditional national borders almost disappear, and pushed bureaucrats, politicians, and the military toward the status of declining industries.1

Ohmae’s work embodies what may be called the business-utopian model of globalization, but the idea that national systems of government are becoming marginal is shared by theorists of cosmopolitan governance who believe that powerful new supranational institutions are emerging—a view that is no less unreal. Similarly anticapitalist movements are based on the premise that the divergent patterns of development of the past have been replaced by a new, repressive global system. Supporters of globalization and many of its critics assume that it creates similar conditions wherever it spreads. Whether they welcome the prospect or resist it, both accept that global market forces are forcing societies onto the same path of development.

In Globalization and Its Enemies, Daniel Cohen, a professor of economics at the École Normale Supérieure in Paris, provides a refreshing antidote to some of the most misleading features of this consensus. His starting point is the seemingly paradoxical claim that for most people in the world it is not a reality but a mirage. As Cohen sees it, the ongoing wave of globalization—the third in a series that began in the sixteenth century with the conquistadors and continued in the nineteenth with British imperial free trade—occurs largely in a realm of virtual reality and leaves much of everyday life untouched. Nineteenth-century globalization involved large-scale movements of population to new lands, while the present phase involves mainly commodities and images.

Today’s globalization,” he notes, “is ‘immobile.’” Goods are produced and marketed on a planetary scale but those who live in rich countries encounter other societies chiefly through television and exotic vacations. There are politically controversial migrations of poor people from the Middle East and Africa to Europe and from Mexico to the United States, but immigrants still make up only around 3 percent of the world’s population today, whereas in 1913 it was about 10 percent. Again, trade has expanded greatly in the past thirty years but a great deal of it occurs between rich countries. The fifteen longstanding members of the European Union make up around 40 percent of global commerce, but two thirds of their imports and exports are traded within Europe itself. As Cohen puts it, “in wealthy countries globalization is largely imaginary.”

The belief that financial globalization is promoting economic development in poor countries is also delusive. Global financial markets have few incentives to equip poor countries to be globally productive. It may be profitable to computerize a grocery store in New York, but in Lagos customers are too poor to pay the prices required by such investment. The result is that technology is very unevenly diffused, and the poor stay poor.

However, the reason is not that rich countries are victimizing poor countries. The poverty of developing countries is often blamed on unfair terms of trade, and there can be little doubt that protectionist practices in agriculture both within the EU and in the US, for example, have hindered poor countries; but Cohen argues that on the whole trade is not as unequal as has been widely thought. The basic reason that poor countries stay poor is that they have little that rich countries want or need.

To understand today’s globalization,” he observes dryly, “requires that one renounce the idea that the poor are stunted or exploited by globalization.” The poor of the world are not so much exploited as neglected and forgotten. At the same time the press and television are drenching them with images of the riches they lack. For the poor, globalization is not an accomplished fact but a condition that remains to be achieved. The irony of the current phase of globalization is that it universalizes the demand for a better life without providing the means to satisfy it.

Globalization and Its Enemies is one of the most original and incisive inquiries into the subject I have seen. No one who reads and understands it can come away believing that the current phase of this complex and uneven process is leading to the peaceful universal market of business utopians, or accept the simple narrative of anti-capitalist movements in which underdevelopment is a consequence of the wealth of advanced countries. There is more wisdom in Cohen’s short book than in dozens of weightier tomes; but there are some disconcerting lacunae in the analysis.

Cohen is far more conscious of the material environment in which industrial production takes place than most other economists. Globalization and Its Enemies has some fascinating discussions of the geographical and climatic conditions favoring or retarding economic development and the continuing importance of population growth. For example, Cohen notes the worsening relationship between fast-growing human numbers and available arable land. In 1913 Egypt had only 13 million inhabitants, today it has 70 million, and in 2025 it is expected to have over 100 million; but only 4 percent of Egypt’s land is arable.

It is all the more surprising, then, that Cohen gives very little attention to globalization’s environmental limits. In a number of asides he acknowledges that the current phase may be endangering the planet’s ecological equilibrium. “One cannot continue for long,” he observes, “leaving to private regulation the question of global warming, the opening of the ozone layer, or the disappearance of species.” Yet Cohen seems not to see clearly that ecological instability is an integral part of the vast economic change that is currently underway. As an example, China is undergoing the largest and quickest industrialization in history. At the same time it is suffering unprecedented levels of pollution. Environmental crisis and the present phase of globalization are different sides of the same process.

Cohen argues that the present phase of the world economy involves a shift from an industrial to a post-industrial economy: while around 80 percent of global trade is in industrial and agricultural products, industry and agriculture account for only around 20 percent of employment in rich countries with the service sector providing about 80 percent. For developing countries, however, the current wave is simply another phase in the worldwide process of industrialization that began some centuries ago. The disturbance in the planetary environment we are currently witnessing is a by-product of this process, whether in rich countries or poor.

There can no longer be any reasonable doubt that the global warming the world is experiencing today is a side effect of fossil fuel use. The extraction and consumption of hydrocarbons has been integral to industrialization and remains so; but it is also the chief human cause of planetary overheating. A clear correlation exists between industrialization over the past 150 years and rising greenhouse gases. There is some uncertainty in estimates of when climate change will begin to disrupt the industrial civilization that has spread, in different forms, throughout much of the world; but observation of rapid melting in the Antarctic ice cap and the worsening prognosis of the Intergovernmental Panel on Climate Change suggest that a major climate shift is underway that could have a severe impact on the way we live. It is easy to dismiss projections of looming environmental disaster as apocalyptic doom-mongering, and carry on with business as usual. Mounting evidence, however, suggests a growing possibility of an abrupt climate change in which rising sea levels will flood many of the world’s coastal cities and damage large areas of arable land. In such conditions there would be serious conflicts over dwindling resources of food, water, and energy supplies together with large-scale population movements as millions flee areas that are no longer humanly habitable.

Until very recently these have been worst-case scenarios. When an analysis of the consequences of abrupt climate change commissioned by the Pentagon and completed in October 2003 was leaked to the British press in February 2004, it was criticized as being based on unreasonably pessimistic assumptions about the scale of the climatic shift that is underway.2 The report suggested that impending climate change threatens to reduce the planet’s capacity to sustain its present human population and trigger acute resource wars, and recommended that the challenge this presents be treated as a matter of US national security. Both the analysis and the recommendation were shelved by the Bush administration. However, only a few years later accumulating scientific research leaves predictions of large-scale disruption of economic activity and intensifying geopolitical conflict of the kind the Pentagon report envisaged looking increasingly realistic.3

The global warming we are experiencing today is a byproduct of globalization, and so is rivalry among states for control of natural resources. Advancing industrialization means increasing emissions from power plants and automobiles; it also means increased competition for the fossil fuels that make industrialization possible. Cohen writes that until World War I industrial countries themselves produced most of the raw materials they needed, and until the 1930s they were more or less self-sufficient in energy. “It was only due to the role played by Middle East petroleum after World War Two,” he writes, “that the scheme was reversed.” It is a decisive caveat. The Gulf War of 1990–1991 demonstrated unequivocally the continuing pivotal role of Middle Eastern petroleum in the global economy. Despite moves in some countries to develop a broader mix of energy supplies, industrial societies everywhere are dependent on depleting reserves of oil and natural gas.

Moreover, demand is inexorably increasing as globalization advances in China, India, and elsewhere. States are competing for dwindling resources, with the result that classical geopolitics is once again central in international relations. In the nineteenth and twentieth centuries, social theorists and economists believed that industrialization made possible a new global system in which scarcity in the basic requirements of life would no longer exist. Instead worldwide industrialization is reproducing the resource conflicts of the past on a larger scale.

  1. 1

    The Borderless World: Power and Strategy in the Interlinked Economy (HarperBusiness, 1990), p. xi.

  2. 2

    An account of the contents of the report appeared in The Observer, London, February 22, 2004. The report, “An Abrupt Climate Change Scenario and Its Implications for United States National Security,” by Peter Schwartz and Doug Randall, is widely available on the Internet.

  3. 3

    See Jonathan T. Overpeck and Bette L. Otto-Bliesner et al., “Paleo-climatic Evidence for Future Ice-Sheet Stability and Rapid Sea-Level Rise,” Science, Vol. 311, No. 5768 (March 24, 2006), pp. 1747–1750. The authors summarize their findings by stating: “Recent scientific research suggests polar warming by the year 2100 may reach levels similar to those of 130,000 to 127,000 years ago that were associated with sea levels several meters above modern levels.” Using a computer model, the authors found that climate change is likely to make the world between 3 and 5 degrees centigrade warmer later this century. Professor Overpeck, director of the Institute for the Study of Planet Earth at the University of Arizona, has stated that with a one-meter rise in sea level, the Maldives would disappear, most of Bangladesh would be uninhabitable, and cities such as New Orleans would be “out of business.” The Guardian, March 25, 2006.

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