Understanding International Political Economy, with readings for the fatigued 9781685857974

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UNDERSTANDING INTERNATIONAL POLITICAL ECONOMY with readings for the fatigued

UNDERSTANDING INTERNATIONAL POLITICAL ECONOMY with readings for the fatigued

Ralph Pettman

L Y N IN E RI

ENNER.

PUBLISHERS

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

Grateful a c k n o w l e d g m e n t o f p r e v i o u s l y p u b l i s h e d material is m a d e for D a v i d B e n s u s a n - B u t t , " L e a r n i n g E c o n o m i c s 1976," in H e i n z Arndt (ed.) Our Economic Miscclluny

Knowledge:

A

Sccplical

(Australian National University Press, C a n b e r r a , 1980), pp. 6 5 - 7 6 . Frédéric Bastiat, Economic

Sophisms,

translated by P. J. Stirling (T. Fisher U n w i n Ltd, L o n d o n , 1909), C h a p t e r 7. David Lodge, " M y First J o b , " w h i c h first a p p e a r e d in London

Review

of Books,

v. 2 no. 17, 4 - 1 7 S e p t e m b e r 1980, pp. 2 3 - 2 4 , reprinted by p e r m i s s i o n of Curtis

B r o w n on behalf of D a v i d L o d g e , c o p y r i g h t © D a v i d L o d g e 1980. S t e p h e n H y m e r , " R o b i n s o n C r u s o e and the Secret of Primitive A c c u m u l a t i o n , " in Monthly

Review,

v. 23 no. 4, 1971, pp. 1 1 - 3 6 , c o p y r i g h t © 1971 by M o n t h l y R e v i e w

Inc., reprinted by permission of M o n t h l y R e v i e w F o u n d a t i o n . C y n t h i a E n l o e , " W o m e n in B a n a n a R e p u b l i c s , " in C y n t h i a Enloe, Bananas,

Beaches,

and Bases:

Making

Feminist

Sense

of International

Politics

( U n i v e r s i t y of

C a l i f o r n i a Press, Berkeley, 1990), copyright © C y n t h i a Enloe 1989. A n t h o n y S a m p s o n , " T h e B a r b e c u e , " in A n t h o n y S a m p s o n , The Sovereign

State:

The Secret

History

of ITT ( H o d d e r and S t o u g h t o n , L o n d o n , 1973), pp. 1 5 - 2 1 , reprint-

ed by p e r m i s s i o n of T h e Peters, Fraser and D u n l o p G r o u p Ltd and of H o d d e r H e a d l i n e P L C . C h e r y l Payer, " T h e L a w y e r ' s Typist: Variations on a T h e m e by Paul S a m u e l s o n , " in Monthly

Review,

v. 25 no. 10, p p . 44—48, c o p y r i g h t ©

1974 by Monthly Review Inc., reprinted by permission of M o n t h l y R e v i e w F o u n d a t i o n . R. A. R a d f o r d , " T h e E c o n o m i c O r g a n i z a t i o n of a P.O.W. C a m p , " in Economica,

New Series,

v. 12 no. 48, N o v e m b e r 1945, pp. 1 8 9 - 2 0 1 . M. Atlerbury,

" D e p r e s s i o n Hits Robinson C r u s o e ' s Island," in Joyce K o r n b l u h (ed.) Rebel

Voices: An 1WW Anthology

( U n i v e r s i t y of

M i c h i g a n Press, A n n Arbor, 1964), reprinted by p e r m i s s i o n of C h a r l e s Kerr Co., C h i c a g o , IL. J o n a t h a n S w i f t , " A M o d e s t Proposal for Preventing the C h i l d r e n of Ireland f r o m B e i n g a B u r d e n to Their Parents and T h e i r C o u n t r y , " in J o n a t h a n S w i f t , Satires

and Personal

Writings

(1729), edited by W. A. E d d y ( O x f o r d University Press, O x f o r d , 1932).

Pura Velasco, "I A m a G l o b a l C o m m o d i t y : W o m e n D o m e s t i c Workers, E c o n o m i c Restructuring and International Solidarity," in C i n d y D u f f y and Craig B e n j a m i n (eds.) The World Transformed: of Free Trade and Structural

Adjustment

Gender,

Work and Solidarity

in the Era

( R h i Z o n e , P.O. Box 4 9 2 7 , Station E., O t t a w a , Ontario, C a n a d a K 1 S 5J1,

1995). E. F. S c h u m a c h e r , " B u d d h i s t E c o n o m i c s , " in H e r m a n E. Daly (ed.) Toward a Steady-State

Economy

(W. H.

F r e e m a n and Co., San Fransisco, 1973), reprinted by p e r m i s s i o n of Vreni S c h u m a c h e r . H i n m a t o o Yalkikt, C h i e f J o s e p h of the N e z Percé, " S u r r e n d e r S p e e c h " (1877), in T. M c L u h a n , Touch the Earth: A Self-Portrait Existence

( O u t e r b r i d g e and D i e n s t f r e y , N e w York, 1971), p. 20. " A r t h u r and D e n n i s , " in Monty

Python

Grail ( E y r e M e t h u e n , L o n d o n , 1974), pp. 1 0 - 1 2 , reprinted by p e r m i s s i o n of P y t h o n P r o d u c t i o n s Ltd. P u b l i s h e d in t h e U n i t e d S t a t e s o f A m e r i c a in 1 9 9 6 b y L y n n e R i e n n e r Publishers, Inc. 1800 30th Street, Boulder, C o l o r a d o a n d in the U n i t e d K i n g d o m

by

Lynne Rienner Publishers,

Inc.

80301

3 Henrietta Street, C o v e n t G a r d e n , L o n d o n W C 2 H

8LU

© 1 9 9 6 by L y n n e R i e n n e r Publishers, Inc. All rights r e s e r v e d Library of Congress Cataloging-in-Publication Pettman,

Data

Ralph.

Understanding international political e c o n o m y : with readings for the fatigued / R a l p h p.

Pettman.

cm.

Includes bibliographical references and

index.

I S B N 1 - 5 5 5 8 7 - 6 6 6 - 8 (alk. paper) I S B N 1 - 5 5 5 8 7 - 6 7 7 - 3 (pbk. : alk. paper) 1. I n t e r n a t i o n a l e c o n o m i c r e l a t i o n s . International.

I. T i t l e .

HF1359.P486

1996

2. C o m p e t i t i o n ,

337—dc20

96-1321 CIP

B r i t i s h C a t a l o g u i n g in P u b l i c a t i o n

Data

A C a t a l o g u i n g in P u b l i c a t i o n r e c o r d f o r t h i s b o o k is a v a i l a b l e f r o m the B r i t i s h

Library.

P r i n t e d a n d b o u n d in t h e U n i t e d S t a t e s o f A m e r i c a T h e p a p e r u s e d in t h i s p u b l i c a t i o n m e e t s t h e @

requirements

of the A m e r i c a n N a t i o n a l S t a n d a r d for P e r m a n e n c e of Paper for Printed Library Materials 5

4

3

2

1

Z39.48-1984.

of

Indian and the

Holy

laughter from the mountains and appeals to reason from the broad plains — Don DeLillo,

Americana

Contents Preface W h a t Is International Political E c o n o m y ? • Reading: "Learning Economics David Bensusan-Butt

..."

The Older Tradition, 8 World Affairs in Three Dimensions, 8 A Short History of IPE, 9 Recurring Concepts, 18

T h e G r a n d N a r r a t i v e : Mercantilism, Liberalism, and Marxism • Reading:

"Petition," Frédéric

Bastiat

Mercantilism, 34

• Reading:

"My First Job, " David

Lodge

Liberalism, 43

• Reading: "Robinson Crusoe and the Secret of Accumulation," Stephen Hymer

Primitive

Marxism, 65

Contending Narratives: A Postmodern IPE? • Reading: '"Women in Banana Republics, " Cynthia Enloe A P o s t m o d e r n IPE? 77

F r o m " I n t e r n a t i o n a l Political E c o n o m y " to " W o r l d Political E c o n o m y " • Reading:

"The Barbecue," Anthony

Sampson

Growth in Production, 103 The U n e v e n n e s s of the Growth in Production, 111

W o r l d Trade • Reading: "The Lawyer's Typist: Variations on a Theme by Paul Samuelson, " Cheryl Payer E x c h a n g e and Growth, 124 Restructuring World Trade, 140

vii

Vili

6

Contents World Finance • Reading: "The Economic Organisation P.O.W. Camp," R. A. Radford

145

of a

Currency and Credit, 157

7

World D e v e l o p m e n t ?

183

• Reading: "Depression Hits Robinson Crusoe's M. Atterbury

Island,"

M e a s u r e for M e a s u r e , 184 Imperialism, 188 The "Asian A l t e r n a t i v e , " 195 Regionalization, 199

8

World Development: U n m a k i n g the Environment • Reading: "A Modest Proposal," Jonathan

207

Swift

E n v i r o n m e n t a l Responsibility, 213

9

World Development: Making Margins

217

• Reading: "I Am a Global Commodity, " Pura Velasco Making Gendered Margins, 219

• Reading: "Surrender Speech," Hinmatoo Chief Joseph of the Nez Percé

Yalkikt,

M a r g i n a l i z i n g I n d i g e n o u s Peoples, 2 2 2

• Reading: "Buddhist Economics, " Ernst

Schumacher

M a k i n g Spiritual M a r g i n s , 2 3 0

10

Postscript: Thinking with a Clear Heart

235

• Reading: "Arthur and Dennis," Monty Python and the Holy Grail T h i n k i n g with a Clear Heart, 2 3 7

References Index About the Book

239 249 257

Preface International political economy (IPE) is a serious subject, and it inspires serious prose. Understanding the intricacies of world production and trade; describing and explaining the patterns of capital accumulation and work; making clear the connections among statemaking, international marketeering, and world development—these are hard tasks. And it shows. Could patterns of human practice as complex as these be analyzed in any other way? Many scholarly accounts of IPE seem to be as difficult to understand as the subject itself. Max Weber is supposed to have said once that he saw no reason his books should be any easier to read than they had been to write. How many students of IPE harbor similar sentiments? The first paragraph above is reasonably representative in this regard. It would be easy to use it as the basis for a random jargon generator. List the technical terms it cites in three columns of similar length. Read across these columns in any order. Three-part, impressive-sounding concepts prize themselves off the page. Some of these concepts will actually mean something. It is ultimately unjust, however, to complain that few analysts of IPE are great stylists when this is such a notable feature of social science analysis as a whole. Moreover, being hard to read does not in itself preclude the pursuit of "truth." Nor does being scintillating necessarily allow of superior insight. Which is why parodies, like random jargon generators, run the risk of confusing means and ends. After all, being boring doesn't mean that a piece of analytic prose can't serve a valid analytic purpose. We want to know how IPE works not just because we are intellectually curious but because we need to know how it works. It is, after all, a basic dimension of world affairs. Unless we decide to surrender to the flow of current events and think no more about it, we will want to direct that flow as best we can toward a vision of the future. Unless we believe this to be the best of all possible worlds, in other words, we will want to change it. To change it we will have to have some idea of what we want to change it to, and how to get from here to there. And to do that we will in turn have to have some idea of how the world works. Indicting scholars for being pretentious doesn't annul this purpose. Poking fun at jargon may make us a little more aware of the choice many analysts seem to make to objectify and to abstract, renewing at the same time our respect for plain English. It reminds us ix

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that b e i n g erudite m e a n s s o m e t h i n g m o r e than b e i n g difficult to read. It does not m e a n we should stop trying to u n d e r s t a n d the international political economy. T h e question is how well we are served by specialized v o c a b u laries and b y the o b j e c t i f y i n g m i n d - s e t such v o c a b u l a r i e s serve. S t a n d i n g b a c k from the forest of h u m a n practices is s u p p o s e d to allow us to appreciate better the patterns the trees make. C h o o s i n g words that are equally disengaged is supposed to m a k e that standing-back step easier to take. Disinterested language and mental detachment are m e a n t to m a k e for less-partial j u d g m e n t s and greater value neutrality. D o they? D e t a c h m e n t allows for n u a n c e d and sober analysis. That is undeniable. A c a d e m i c libraries a b o u n d w i t h thoughtful b o o k s that discuss the issues and the institutions of the international political e c o n o m y in self-consciously a c a d e m i c prose, and to variously informative effect. There is no end of detail about the key c o n c e p t s that recur in disciplinary narratives, the m a j o r analytic l a n g u a g e s used in m a k i n g sense of those concepts, and subtle critiques of these selfsame languages. T h e r e is shelf after shelf of intellectually challenging literature on world capitalism, the growth of the world market, the global patterns of production, the new international division of labor, t r a n s n a t i o n a l c o r p o r a t i o n s , the m a i n features of the w o r l d ' s trading and financial systems, and c o n t e m p o r a r y aspects of " d e v e l o p m e n t . " Similar w o r k s also abound about important global industries like oil, t r a n s p o r t , c o m m u n i c a t i o n s , t o u r i s m , a r m a m e n t s , drugs, and food. And all this is d o n e in full accord w i t h the c o n v e n t i o n s of scholarly d i s c o u r s e , c o n v e n t i o n s m e a n t to r e d u c e the i m m e d i a c y of the h u m a n presence and the u n w a n t e d influence this presence is supposed to have upon our capacity to u n d e r s t a n d it. D o e s this kind of w r i t i n g and t h i n k i n g w o r k ? D o e s it a l l o w us to u n d e r s t a n d IPE as well as it m i g h t ? T h e r e are n o w g r o w i n g d o u b t s that it does. I n d e e d , s o m e w o u l d a r g u e that s u c h an approach only allows part of any analytic story, including that of IPE, to be told. This w h o l e question raises deep issues of e p i s t e m o l o g y (knowing) and o n t o l o g y ( b e i n g ) that can't b e c o v e r e d in a short preface. T h e y are not new issues, nor are they confined to IPE. We do need to note, however, that the w h o l e E n l i g h t e n m e n t project is n o w under scrutiny. By this I m e a n that the bid w e have been m a k i n g for the last c o u p l e of h u n d r e d y e a r s for u n i v e r s a l , a b s o l u t e , and eternal a n s w e r s to e v e r y t h i n g has n o w itself b e c o m e d e b a t a b l e . M a n y analysts, though raised in the E n l i g h t e n m e n t tradition, n o w find it wanting, and I am one of them (Bernstein 1976; Lather 1991; D e n z i n and Lincoln 1994).

Preface

xi

T h e point I w a n t to m a k e here is that "social analysis [and this includes analysis of international political e c o n o m y ] can b e d o n e — differently, but quite v a l i d l y — e i t h e r from up close or f r o m a distance, either from within or from the outside" (Rosaldo 1989:188). All too often " t h e ideal of d e t a c h m e n t " leads in our discipline to " a c t u a l i n d i f f e r e n c e " ( R o s a l d o 1989:7). A n d even w h e n it d o e s n ' t , d e t a c h m e n t leads to partiality of a particularly insidious kind. Textual traditions b e c o m e realities instead of b e i n g used to r e p r e s e n t realities. W h a t is said is b e l i e v e d to reflect the w o r l d " a s it is." A r e a d i n g of the Western p h i l o s p h i c a l tradition in t e r m s of rational logic and empirical procedure is said to m a k e all m e a n i n g accessible to us, and in these terms alone. I a m not a romantic. To reject the claim that rationalism and e m piricism provide e x c l u s i v e access to truth is not of necessity to dive into the irrational or to celebrate the u n k n o w n . It is impossible, for e x a m p l e , to p e r f o r m c o m p l e t e l y aseptic surgery. B u t that d o e s not m e a n that we m i g h t as well operate in sewers. There m a y b e limits to w h a t the objective analysis of IPE can achieve; that d o e s n ' t m e a n w e give up on a n a l y s i s . It m a y m e a n , h o w e v e r , l o o k i n g for o t h e r w a y s to analyze IPE that transcend those limits. In practice, the search for alternatives means paying greater attention to emotive, subjective, unconventional accounts of the s u b j e c t — though this has its limits, too. I'm very wary, as I've said, of h o w quickly the " s e l f - a b s o r b e d Self" can lose sight of the " s e l f - a b s o r b e d Other" (Rosaldo 1989:7). And I know, just as well as the next person, how emotions can cloud our j u d g m e n t s and our understanding. I'm very familiar, too, with the way passionate particulars are wont to rise up to overwhelm our attempts to find the patterns to h u m a n practice. It is time, however, to take an interpretive turn. Simply put, this m e a n s m a k i n g a b i d for experiential as well as intellectual k n o w l edge, that is, for u n d e r s t a n d i n g s of a subjectifying as well as an objectifying sort. It w a s s o m e such sense—intuitive at first, but g r a d u a l l y gathering analytic shape o v e r the years as I m a d e it a matter for direct reflection—that p r o m p t e d me to look for readings that dealt with IPE in o t h e r - t h a n - a c a d e m i c and even d o w n r i g h t n o n a c a d e m i c w a y s . S o m e of the readings I found have been used as the b a c k b o n e of this b o o k . S o m e strike m e as ironic. S o m e are little narratives. S o m e are m o r e - c o n v e n t i o n a l a c a d e m i c a n a l y s e s of l e s s - c o n v e n t i o n a l topics. N o n e of t h e m w o u l d n o r m a l l y be a c c e p t e d as part of the o r t h o d o x disciplinary c a n o n . All, to m y m i n d , are arresting a n d r e v e a l i n g , and b y g i v i n g t h e m s u c h p r o m i n e n c e here I am m a k i n g t h e structure of this b o o k itself an a r g u m e n t for o t h e r w a y s of k n o w i n g aboutIPE.

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In c h o o s i n g to construct the b o o k this way, m y initial c o n c e r n w a s to alleviate " r e a d e r fatigue." Pertinent material that enlivens as well as informs provides a happy alternative to the usual scholarly fare, and as far as I ' m c o n c e r n e d , there can n e v e r be e n o u g h of it. M y first plan, therefore, w a s simply to c o m p l e m e n t an o r t h o d o x attempt to survey IPE with less-conventional material. T h e literature on the subject is w i d e and w o n d e r f u l , a n d s o m e of the u n c o n v e n tional bits, I've f o u n d , can be every bit as e n l i g h t e n i n g as those of the more conventional kind. Indeed, rather than using readings to c o m p l e m e n t a m o r e conventional analysis, I began to consider replacing such an analysis altogether with a selection of evocative essays by various authors that seemed to me to provide a richer experience of IPE than m y survey did, or even could. This plan fell through, mostly b e c a u s e publishers considered it commercially nonviable. The w h o l e process left me convinced, h o w e v e r , that readings of the kind p r o v i d e d here do illustrate how serious and substantial points can be m a d e about IPE, despite an u n f a m i l i a r focus or informal prose. M a k i n g those points this w a y can b e just as, and even more effective than, the o r t h o d o x alternatives. I n d e e d , I now believe that to further o u r u n d e r s t a n d ing of IPE w e have to look s o m e w h e r e other than the w o r k of conventional scholars. We have to l o o k from o t h e r than c o n v e n t i o n a l scholarly points of view. W h y is it that objectifying a n a l y s e s of subjects like IPE n e v e r seem to explain e n o u g h ? Is it that w e h a v e n ' t yet got it right? Or does the a n s w e r lie not in what we study but in how w e choose to study it? As social scientists, w e objectify. We c h o o s e to k n o w our subject intellectually, that is, b y m e a n s of rationalistic c o n c e p t s , mental models, and empirical research. We are taught and w e learn to privilege w h a t w e are pleased to call " t h e light of the m i n d . " If w e subjectify, on the other h a n d , w e are said to be o p t i n g for analytic chaos. We are said to be m o v i n g a w a y from the " t r u t h , " not tow a r d it. Is this so? After all, there is m o r e than one truth. I n d e e d , IPE is c h a r a c t e r i z e d b y highly c o m p e t i t i v e analytic l a n g u a g e s that present us w i t h v e r y different " t r u t h s . " W h a t ' s more, k n o w i n g is not only an intellectual process. We " k n o w " m u c h b y n o n i n t e l l e c tual means. To privilege the intellect is to marginalize our emotions, for example, and the other ways of k n o w i n g that feeling-states provide. It is to a s s u m e that nothing but the intellect can inform us, and in m a k i n g that assumption, it is actively to forgo what else the mind can do. T h e light of the intellect not o n l y i l l u m i n a t e s , it also b l i n d s . W h e n we privilege detachment w e m a r g i n a l i z e m u c h that actually goes on in the w o r l d — i n d e e d , m u c h that h a p p e n s b e c o m e s literally

Preface

x¡¡¡

incomprehensible to us. So much of IPE is about human emotions and wishes, visions and dreams. We can talk about these things in objectifying terms, but what do we " k n o w " when we talk this way? What do we " k n o w " when we talk about production or finance or trade in detached terms? We know how people think about these things—or how they say they think. We know about their feelings. But is knowing about such things the same as knowing these things themselves? Surely, if we are to understand other people and why they do what they do, we must try to understand them subjectively as well. Surely, at the very least, we should address their own writings about what they feel and why they behave the way they do, even when these writings are of a subjectifying sort. Indeed, might it not be these sorts of writings that are the most revealing in this regard? What we are told by such readings remains of necessity within the confines of linear print. Writing is writing after all. It is not a year in Somalia or in the bowels of IBM. Even the most unconventional readings can only suggest other ways of knowing about IPE. They can only show us vicariously what other understandings might be. How often, however, are we encouraged to venture even this far? Very seldom, in my experience. "Objectivity," "neutrality," "impartiality"—words like these get used every day in our discipline. They refer to the "subject positions" with the greatest "institutional authority," and the discipline's paradigm police work overtime to keep them there. And yet these positions are "arguably neither more nor less valid than those of more engaged, yet equally perceptive, knowledgeable social actors" (Rosaldo 1989:21). Or so I wish to argue here. It seems to me that responsible research is a matter of standing back from IPE to look at it, while standing close to listen as well. At the very least, we ought to " w o r k from one position and try to imagine (or consult with others who occupy) the other [or the others]" (Rosaldo 1989:189). But what if these others are muddled by false consciousness? What, heaven forbid, if we are too? Don't we need to stand back again to look from a distance? Yes, we do, so we objectify again, and our descriptions and explanations start missing the point again, and, oh dear, shouldn't we then stand close and listen again? Once more what we hear seems to be distorted by "their" understandings or our " o w n , " however, and so we step back to look, and so on. The circle we tread is a spiral one. Having listened in subjectifying ways, that is, we find ourselves objectifying differently when we come to do so again. We see more or we find that we no longer see in the same old way. Does the spiral go up or down, sideways or

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back on itself? I don't know. There are few alternatives, though. There is m a d n e s s and there is revelation and there is p o s t m o d e r n pastiche, and that's about it. The first two are not viable options for the academic student of IPE. The last has limits of its own. In this b o o k I move continuously around the spiral just described. I stand b a c k to reflect on what each reading has to say, making much of the competing analytic languages in which such reflections are made, and then I return to the readings again. Rather than create a dialog or a hybrid between rational-objective and nonacademic points of view, however, I've tried to construct a kind of double helix of experience and analysis. U n d e r s t a n d i n g IPE requires no less, since experience and analysis are inextricable. This b o o k has been long in the making. In its original form, as I've said, it never saw the light of day. In its stead is this one, a less bold but a much more measured attempt to address the limits that rationalism places upon the study of IPE. That it appears at all is due in no small part to Stewart Letford, who, much earlier in my life, shared with me his own intuition that seriousness of purpose and lightness of touch are entirely compatible. Much more recently, however, I would like to acknowledge the help of Setsuko Miike, who, when asked to show me where her mind is, as most Japanese would, immediately pointed to her heart. Only after that did she think to point to her head. —Ralph

Pettman

1 What Is International Political Economy? •

David Bensusan-Butt ( 1 9 8 0 ) "Learning Economics . . . " I

Let us imagine a youth who is entering a university—any university, anywhere—and choosing a subject for study. He [sic] has more than a meal ticket in mind, and he does not particularly plan an academic career. But he has the intention of remaining interested in later years, as more than a hobby, in the subject of his choice . . . he has been hearing about the Wealth of Nations and economics seems a possibility. But he is not at all sure what has happened to the subject over two centuries or how he will find it treated in his university. He consults an ancient of his acquaintance who came to the subject . . . since Marshall was allowed to establish a separate Economics tripos in Cambridge—the word went round that "it is time that Alfred had a little hell of his own"—and who, after watching recent developments has recently abandoned it for gardening and regrets. It is a case of si jeunesse savait, si vieillesse pouvait. As is proper in such cases they discuss the matter at length. The outcome is an oration from the young man to his future teachers, delivered with all the brashness nowadays expected of the young. It runs much as follows: II "Gentlemen: Not knowing what you teach as economics here or how you teach it, I venture to tell you what I want to start learning. I will first, briefly, define the subject as 1 wish to find it, in the broadest possible terms, and then, at greater length but still in generalities, explain what I hope to find within its main subdivisions. "Definition: I am told that two views of the scope of the subject persist among present-day teachers. Some following the older tradition take it to cover men's lives in which money and markets play an important role, and also public policies of all kinds that impinge upon those activities. Others, in a more recent tradition, regard it as the scientific study of the rationale of intelligent choice when means are scarce and ends numerous. When I first heard this it struck me that—since for one thing everything takes time and time is certainly scarce for each of us—the second definition would prove 1

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International Political Economy

too wide for my capacities. But after it had been explained to me that the proponents of Scientific Economics use language in ways different f r o m those of other people, it seems to me too narrow. "Apparently they do not mean by 'scientific' what most of us would expect: the cool impartial collection of any kind of fact, hard or soft, relevant to the matters to be discussed. They only admit hard ' o b j e c t i v e ' facts of an overtly quantitative, measurable kind. Hence they exclude all observation of the conscious psychology, private or social, of economic agents. Further they do not mean (as others do) by 'rational behaviour' the kind of decisionmaking entailed in first distinguishing and comparing the expected outcomes of all relevant possible actions and selecting that which, by some accepted and pre-examined criterion, is the best. It would be necessary, if they did that, to admit that most of our decisions are not rational and then their science would either have to be confined to the tiny fragment of our behaviour which is rational (and be prefaced by identifying this fragment), or it would degenerate into speculation about imaginary, though maybe ideal, modes of behaviour. They escape this dilemma, I learn with alarm, by the trick of asserting it as an axiom, not to be debated, that all behaviour is rational, though sometimes ill-informed, and proclaiming the science of 'revealed preference'. By this semantic jugglery they can construct a fake psychology that is implied by actions and employs language also used in real psychology; they can apply it to any topic for which a supply of statistics can be concocted, and they can, and I am told do, trumpet like anything about the superiority of a mindless economics over one in which the mind is observed. "Gentlemen, if there be Scientific Economists among you I must go elsewhere, for two reasons. First, I wish to learn about economic psychology for its own sake, and as a necessary foundation for both positive and normative economics. And, second I do not trust myself (or if I may say even you either) not to get into a welter of muddle and delusion in a group where s o m e are arguing from real mind to action and others from action to artificial imaginary minds, and where such basic terms as science and rationality are being simultaneously used in diverse and contradictory senses. "Permit me to assume that your views of the scope and method of the subject lie within the limits of the older traditions of the subject. Then I have still some observations to make about the contents of the different parts of economics and the balance between them as I wish to find them here. The subject shall, of course, have two main divisions, positive and normative, and I start with the principal sub-divisions of the first . . . Ill "Descriptive:

Naturally I am alarmed, as well as excited, by the prodigious

variety of hard and soft facts encompassed by economics (and the breadth of

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the gradation between the economic and the non-economic). Naturally 1 wish to generalise, and to have theory derived from generalisations w h i c h , when applied, will impose a recognisable order upon the chaos of e c o n o m i c events, past, present and future. Nevertheless 1 must from the very outset of my career learn facts, lots and lots of them, and my interest and delight in them must be fostered by the integrity, skill and taste with which you ( w h o have been among them so much longer than I) bring them before me during the years in which my appetite is liveliest, my learning capacity at its best, and 1 am most easily cheated by fanatics and doctrinaires. "1 must have a great deal of economic

history.

In my little scramble

from the cradle to the grave the world will change about me, for g o o d or ill. I cannot begin to understand the trends of events about me unless 1 see them in the context of a long evolution. Besides, 1 cannot properly rejoice in my luck or find consolation for my misfortune in being here for this one brief spell among all others unless I can vividly picture what went before. N o w is the time for me to acquire that sense of distance and that appreciation of the littleness of any direct experience that I can have, which mark out educated men. " N e e d l e s s to say 1 must have much about contemporary

affairs

also.

But one little patch of these will be a l w a y s around me, and my own e y e s and ears will show it to me unaided. Hence what I want especially will be an account of the larger social framework, the aggregates and the structure too large to see for myself, and information about parts of my own country's e c o n o m y and about other economies that 1 am unlikely ever to see at close quarters. I wish to learn the extent to w h i c h what I see familiarly will differ from what 1 do not see and to avoid j u d g i n g the world by the affairs of my parish. " W h e n 1 say information naturally 1 do not mean only statistics: though I must of course so swat at them as to d e v e l o p an "instinctive" sense of orders of magnitude. 1 do not want to load my mind with numbers, and will be entirely content to learn how to look them up. What 1 especially seek is a k n o w l e d g e of the range and variety of the w a y s men take e c o n o m i c decisions, individually and within organisations. I must get, too, some appreciation of the place e c o n o m i c affairs have vis-à-vis

the non-economic

in the lives of my contemporaries near and far in space and time. O b v i o u s l y this is elusive, prismatic, indefinite, literary stuff all too conveniently apt for sociological w a f f l i n g and hazy generalisation. But please make it as concrete for me as you can by letting me inspect detailed accounts of particular people and places as v i v i d as can be found. A n d may I, please, see as much as I can for myself. Visit factories, stay with families outside my circle, be helped to take temporary vacation j o b s outside the likely scope of my adult life, share in surveys, attend board meetings, sit in parliamentary galleries, supplement book-learning in every way you can manage for me. I do not wish to become a pedant peering out at reality from libraries and classrooms.

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Economy IV

"Theory:

I have been assured that you will certainly not raise any objection

in principle to assisting me towards this descriptive k n o w l e d g e but that you may intend to treat it as something merely consequential and subsidiary to e c o n o m i c theory, pure and applied. T h e s e branches of positive e c o n o m i c s , 1 have been w a r n e d , may be so s w o l l e n as to o c c u p y the great bulk of your students' time. Lest there be any misunderstanding between us 1 must explain to you the place I intend to g i v e them in my studies. " L i k e e v e r y o n e else l u c k i l y — o r u n l u c k i l y — e n d o w e d with the intellectual energy that takes them to universities I long, not only to know, but to understand; to d i s c o v e r how to e x p l a i n , to predict, to see the actual, past, present and to be, as the e x e m p l i f i c a t i o n of General L a w s . ( A n d like them 1 impatiently r e f u s e to resolve the contradiction between this conviction of Determinism and their other conviction of Free Will w h i c h 1 also share.) But just because I delight in the (relatively) simple processes of k n o w i n g , am s e l f - c o n s c i o u s about my o w n e x p e r i e n c e , and curious to o b s e r v e and sympathise with that of my f e l l o w - h u m a n s , 1 am shy of this second stage of generalisation, systématisation, c l a s s i f i c a t i o n , abstraction, rationalisation, explanation, prediction, scientification, polysyllabilisation. What multitudinous masses (or clouds) of e c o n o m i c phenomena, hard, s o f t , diaphanous and even gassy, there are to explain and predict! A n d how m i x e d up they are with equally hard, s o f t , diaphanous and g a s s y non-economic events! What a sea of words 1 must plunge into and how thick it is with the detritus of a million forgotten b o o k s and articles! B e f o r e 1 slide in, dressed in your second-best wet-suit and your spare o x y g e n cylinder, I want to be confident that you will lead me to those beds of pearls that I w o u l d delight to rifle. " I f you can credibly assure me that you have found them, I will j o y f u l l y f o l l o w you even if the journey be so long and arduous that 1 should postpone some of my ' d e s c r i p t i v e ' studies. ( E q u i p p e d with your pearls as touchstones the later collection of factual truth and the discarding of delusions would be greatly accelerated.) But have you found them? T h i s is what w o r r i e s me. I have been listening to the most distressing tales about your activities. " T h e y say that theory has b e c o m e e x c e e d i n g l y rigorous and mathematical and that, though e c o n o m i c s is not yet entirely c l o s e d to those w h o c o m e to it without a mathematical training, the rest have to spend much of their time in universities acquiring that training, simply in order to understand Modern Theory. " T h e great bulk of this theory, they tell me, consists of the a n a l y s i s of rational, w e l l - i n f o r m e d , selfish d e c i s i o n - m a k i n g , assumed to extend over the w h o l e range of e c o n o m i c behaviour (the extent of which in the totality of human action is undiscussed but tacitly supposed very w i d e , including everything measured in the G N P ) . Most of it, 1 am told, abstracts f r o m the passage of time and deals, with the greatest elaboration, with moments in

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which millions of these anthropomorphic computers acting independently dismiss myriads of alternatives in a flash and find a single optimal Equilibrium Solution. But a part, vast in itself, minutely scrutinises another class of dream worlds in which there are almost never more than two kinds of factor making one or two kinds of commodity in conditions so rigged that everything grows, to eternity, at constant rates either from the arbitrarily described starting point or after a little settling down. "These scholastic fantasies are, they say, regarded as the apogee of two centuries of theoretical endeavour. They lie at the frontiers of knowledge and the little titivations, the translations into more sophisticated brands of mathematics, the little 'generalisations' from one set of crazy postulates to another believed infinitesimally less so, upon which the leaders of theory spend their time, are presented as the triumphs of intellectual progress. I am warned that it will be your pride to take me to this frontier, and keep me apprised, when I am advanced enough, of these latest little nibbles being made at hitherto unimagined tracts of Cloud-Cuckoo Land beyond. "I have protested that this must be wrong, that in a world of sane men things cannot be. But it has been argued that they are, for reasons that sound plausible. Modern economic theory, it has been explained to me, arose in mid-Victorian times, when analogies with the mechanical and exact sciences were all the rage in the dawn of the social sciences, and mathematics accordingly had a high prestige. It was founded by an English metallurgist who had little mathematics and no psychology (Jevons), a French doctrinaire in the same case, a dear obsolete silly-billy of the first water (Walras), and an aristocratic Italian railway engineer of brilliant intellect and racing temper deeply contemptuous of the entire human race (Pareto). Between them they concocted a great web of abstract reasoning with the grandest pretensions. Its psychological foundations were appallingly weak, a crude Benthamism borrowed without scrutiny, and its mathematical structure was still incomplete. But it is easier to elaborate a superstructure than to dig in a boggy subsoil, and in the next generation, the progress of specialisation and the rise of pedagogics caused the foundations to be forgotten while university careers in economics came to be made, and pupils dazzled, by the endless polishing of the unearthly superstructure by men who knew theory but left themselves no time to know anything else. That at least is the tale 1 am told. "If these transparently false and artificial pearls be all that you can offer me why should I so labour to follow you down to them? And if you have come sincerely to believe them the real thing, then, gentlemen, you must all be suffering f r o m the bends. "If I am to understand, explain and predict as well as know, and to use conditional predictions in my efforts to improve the world about me, I must have theory. The world is too complex for unaided common-sense. That theory must be spun out of simplifications I grant in advance. But they must be good simplifications, not leaving many big things out, and I must be

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International Political Economy

taught what it is that they leave out. I forgive the founding fathers for missing out too much and not fully recognising what it was that they overlooked: what is progress in such a subject as this but a widening, deepening and thickening of basic theories boldly advanced in times of relative ignorance and in a much simpler world than that now around us? 1 can have no time for a version of classical theorising which has been narrowed, shallowed, and thinned out, in the name of rigour, into a patently preposterous mythology. "If this is what you offer me 1 must have permission to neglect your theory classes and get on with such theory as I find relevant in the older classics and the work of those who remain in their tradition and my own cultivated sense of observation. . . . VI "Normative Economics: Being young I am a prig. I wish the economics 1 learn here to be not only interesting but useful to me all my days. 1 wish it to improve not only the quality of my private economic decisions as an individual, but also the quality of my contributions to public policy as an active citizen, and to be correctly believed to know more of economic affairs than those not trained in the subject, and accordingly to be trusted by my friends. If you allow me enough descriptive economics I hope the wisdom of my private life will be increased—at least I shall lose the temptation to believe myself rational and well-informed and acquire some sympathetic understanding of other people's economic experience—but leave that to me. Here, I have only some remarks to make about what I hope that you will teach me about public policy. "You shall, of course, not tell me what policies I should espouse. Any stance on policy involves moral attitudes, and these are my private affair. It involves too a view on what is politically practicable and what the consequences of advocacy and activity will be to the advocacies and activities of others, and you are not political scientists. Besides I will only achieve political weight in years to come and you know the future no more than I. You must be cool about social issues: there is plenty of heat outside. "I say that with hesitation and apology. But I cannot help noticing that some professors sign manifestos at elections giving their university addresses and 1 have heard of promotion quarrels in which assertions of political creed are claimed to be relevant. And 1 have been told by one who has read Professor Harcourt's lively surveys of the disputes of pure theorists that they even accuse each other of choosing between two-sector models in the idiot conviction that such toys can have a tendency to justify laissez-faire capitalism or socialism. If I find such tomfooleries here it will be the last straw. "Nevertheless there is much that you can help me with. I have the inevitable inexperience and innocence of youth in all political matters; there

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is a din of fanaticism and flap doodle all around me, and economic issues, 1 am told, underlie most of the mass murder and misery 1 read of daily. Help me towards a sense of reality! 1 want in the descriptive part of my reading and lectures details of past and present legislation and its administration an awareness of what it means in the practice of daily life in more than my own type of economy, warts and all. I want some of the politics of political economy: how d o pressure groups operate in practice? And since 1 keep hearing about the splendours of revolutions, what are these like to those who live through them? If there be such things (other than in the creed of the Marxist religion), tell me about theories of the determination of economic policy—and let them not depress me by being altogether deterministic. Though, as I say, I do not want your moral or other verdicts, assist me at least to the detailed analysis of the concrete significance and practical interpretations of the large ideals I hear so much of, equality, freedom, etc. VII "To sum up I want you to lead me into economics as one of the moral sciences, dealing with the feelings and aspirations of ordinary mortals in one large tract of their daily lives, one indissolubly linked and only arbitrarily distinguishable f r o m the rest. It must therefore be (still) a largely literary study, much concerned with the subjective aspects of life that only words can approach. If that means it is not a science, so much the worse for science. "That s o m e measurable objective entities exist in it is, as I understand it, most fortunate. It gives its students an occasional opportunity to retreat into something like the simpler world of the natural sciences, and occasional relief f r o m the task of human sympathy and understanding, occasional, if remote, analogies with mechanics and an occasional excuse for mathematics. But of course to linger too long in these little corners of the subject, contemplating cobwebs, would be disastrous to my education. They have their place—in the corners. "That gentlemen, is how I see economics and the pattern of education in it that I seek. Please tell me whether you agree. If you do not, please try to persuade me that what you offer is a superior article. And if you do not succeed, forgive me if I slink sadly away. I may remain interested in the subject as I interpret it, but I will be an amateur and you will be professionals. We need not meet again." VIII Here, at last, the young man shuts up. An embarrassed silence certainly follows. But then?

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International Political Economy

THE OLDER TRADITION Bensusan-Butt's arrogant y o u n g man has c o m e to a university, perhaps to study " e c o n o m i c s . " What he really wants to do, however, is study "international political economics," which is the " o l d e r tradition" he refers to early in his harangue. To him, " e c o n o m i c s " is one of the " m o r a l " sciences, not one of the " n a t u r a l " sciences that most contemporary economists would have it be. We are told that after laying down the law at some length, the impertinent student finally shuts up. He is met with an " e m b a r rassed silence," however, and the author asks, " W h a t then?" W h a t follows is an attempt to answer this question. There is a brief discussion of the older tradition of international political economy, a discussion cast in the context of the study of world affairs as a whole. I highlight some key concepts that recur in the study of international political economy, and I then outline the major analytic languages that have been developed over time to account for IPE in general terms, namely, mercantilism, liberalism, and Marxism. W h a t , then, is international political e c o n o m y ?

WORLD AFFAIRS IN THREE DIMENSIONS International political e c o n o m y is the study of the w e a l t h - m a k i n g dimension of world affairs. World affairs are most simply characterized in terms of their three major dimensions, namely, state making, wealth making, and mind making. "International political e c o n o m y " refers to the second of these dimensions. Though it has a lot to do, on the one hand with how states and the state system are made and maintained (the first dimension), and on the other hand with how people are coached to think and feel about the world (the third dimension), the issues and institutions currently associated with the concept of an international political economy allow a study of their own. The first dimension of world affairs is colloquially called " h i g h politics," and it is the domain of diplomats and military personnel: It is the world of foreign ministries and foreign policies, of defense budgets and strategic might, of the balance of power and war. It is the stuff of the study of international relations (or IR for short). T h e second dimension of world affairs is colloquially called " l o w politics," and it is the domain of entrepreneurs and those w h o sell their labor for a wage. It is the world of ministries of trade and central banks, of international firms and financing, of the balance of

A Short History of IPE

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productivity and global " d e v e l o p m e n t . " It is the stuff of the study of international political economy (or IPE for short). The third dimension of world affairs—only dimly recognized as such b y the scholars and practitioners of our day—lies s o m e w h e r e beyond low politics. It is the domain of ideologists and social movements. It is the world of education ministries and the media, of school curricula and cultural formations, of the b a l a n c e of ideologies and the battle for the world mind. It is the stuff of the study of international political culture (or IPC for short). E a c h dimension of world affairs clearly implicates the others. I've separated them out like this largely for analytic convenience, though each does have a life of its own, and they do reflect important differences in how world affairs work. There are scholars, however, w h o w o u l d n ' t accept this tripartite distinction. They w o u l d see the attempt to m a k e and sustain such distinctions as being part of an attempt to get world affairs to work that way, and they refuse to be party to such a project. The assumptions it makes are simply not ones they would share. While this is an important argument and one I'll consider as w e proceed, I do give enough credence to the c o m m o n practice to want to start with it, and that means identifying the particular issues and institutions currently considered most characteristic of IPE. The focus of international political economy typically falls upon world capitalism. More specifically, it falls upon the growth process in w o r l d markets; patterns of global production—primary, secondary, and tertiary; changes in the international division of labor; changes in the international labor market; trade and its commodity composition (such as the world trade in manufactured goods, technology, services, and natural resources, as well as the cause and effect of such international associations as the World Trade Organisation); international m o n e y flows and global financial and investment practices (particularly the p o s t - W o r l d War II ones instituted by the International Monetary Fund [IMF] and the World Bank); intensifying regionalism (as evident in the European Union, the North A m e r i c a n Free Trade Association, and the Asia Pacific E c o n o m i c Community); the story of global " d e v e l o p m e n t " and "underdevelo p m e n t " ; and the question as to w h e t h e r the h u m a n practices involved are sustainable or not—socially and ecologically.

A SHORT HISTORY OF IPE International political e c o n o m y has only recently b e c o m e a professional discipline. Indeed, scholars of international relations, which

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International Political Economy

is a relatively recent profession itself, were openly dismissive of IPE until the last few years. It was not until the global effects of the oil price rises of the 1970s b e g a n to be felt w o r l d w i d e , a shock to the system that culminated in a global debt crisis in the 1980s and global recession in the 1990s, that more than a handful of IR scholars began to take notice of the material dimension to their own discipline. This was well after ministries of foreign affairs had b e g u n renaming themselves ministries of foreign affairs and trade. In historical terms, however, an interest in international poltical economy is not new. The recent concern for wealth making in world affairs is s o m e t h i n g of a return, in fact, to the eighteenth century and beyond, and its reinstatement has meant rediscovering ways of looking at the world that later academic specialisms had supposedly made redundant. The term political economy was first used by the English administrative reformer Sir William Petty, in the year 1671 or so. In a w o r k on Ireland he talked about "Political O e c o n o m i e s " (Hull 1899:181). He did so, what's more, in notably " m o d e r n " ways. He showed, for example, a distinct preference for quantitative methods. He wanted to make a " P a r and Equation" between " L a n d s and Labour" so that he could express the " v a l u e of anything by either alone" (Hull 1899: 181). He wanted his political economy available in what he called a "Political A-llrithmetic" form, since as far as he was concerned mere intellectual arguments d i d n ' t have the same strength. Numerical ones were quantitative ones and as such, he believed, they had "visible Foundations in Nature." As for the " M i n d s , Opinions, Appetites, and Passions of particular M e n " — w e l l , you were just as well off, Petty believed, trying to predict " t h e cast of a D y e " (Hull 1899:244). T h e seventeenth century was the Age of R e a s o n in Europe. It was the century of D e s c a r t e s and Galileo, of B a c o n and the " n e w philosophy" of objective science and research, and true to the spirit of his age, Petty was a most rational man. He was a charter m e m b e r of the council of the Royal Society for Improving of Rational Knowledge and he clearly e m b o d i e d the spirit of his place and time. H e played an active part in an intellectual revolution that was eventually to revolutionize the w h o l e of human society. Petty's preference for numbers, not words, was prophetic. M a n y faced with a similar challenge today come to the s a m e conclusion Petty did three hundred years ago, and Bensusan-Butt parodies this preference. Petty's preference for n u m b e r s was a radical one, and he k n e w it. He realized that it was " n o t yet very usual" to solve the problem of how best to deal with feelings, intentions, and beliefs b y ignoring

A Short History

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them. He sensed, too, the authority of the statistic, and though he had few figures to work with, and he personally appreciated the need to generate more, he loved the precision they brought to his subject. As Bensusan-Butt argues, however, arithmetic can mislead. Precision can become an end in itself, and a surrogate for objectivity. It is all too easy to suppose that conclusions are "accurate" because their form is "definite." Thus: "mathematical presentations of industrial facts, both symbolic and graphic, have by their definiteness," Petty's editor, Hull (1899:lxviii), concluded, "encouraged many an investigator in the false conceit that he now knew what he sought, whereas he had at most a neat name for what he sought to know." Early political economists were not so misled, the most telling example in this regard being the Scottish moral philosopher, Adam Smith. In 1776, a century after Petty, Smith wrote what was to become one of the classics of international political economy, The Wealth of Nations—a book, by the way, that uses a great many words and very little arithmetic. Smith was the first to explore in detail the commonsense idea that greater productive power depends upon more-complex divisions of labor, as well as the less than commonsense idea that to promote personal gain is to promote the common good. Smith began by wondering how the most humble commodity in his immediate environment could possibly have come to be. Think, he said, of the "woolen coat" that "covers the day-labourer." Then think of the "joint labour of the great multitude of workmen" that went into making this single, seemingly simple garment: "the shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser," not to mention the "merchants and carriers . . . ship-builders, sailors, sailmakers, rope-makers," and so on (Smith 1892:9). In primary school social science courses children still list in similar vein what they had for breakfast and where everything came from. Smith's musings highlighted the seemingly miraculous way in which people's material needs get met from one moment to the next with no "conscious direction . . . guiding State . . . [or] planning instruments, only a market and competition" (Harris 1983:9). It's as if some "hidden hand"—to use Smith's most famous phrase—was at work, meshing the myriad pieces of a vast planetary mechanism that makes goods and services, prosperity and peace. "Were we to examine, in the same manner, all the different parts of . . . dress and household furniture," Smith concluded, " w e would soon realise that without the assistance and cooperation of many thousands, the

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International Political Economy

very meanest person in a civilized country could not be provided." Indeed, he compares civilized life most favorably, in this respect, with the life of an "African King." Even as "absolute master of the lives and liberties of ten thousand naked savages," Smith (1892: 9-10) says, an African king is worse off than a European peasant. What is it that makes all this possible? How do the "civilized persons" in Smith's industrious world pull off their amazing feat of production and supply? First, there is the way in which complex divisions of labor make for much greater output. While the technological amateur, Smith (1892:4) says, can only make one pin a day, ten men, who divide the eighteen distinct parts of the pin-making process between them, can make forty-eight thousand pins a day. "It is [in other words] the great multiplication of the productions of all the different arts, in consequence of the division of labour," says Smith, "which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people." Every w o r k m a n has a great quantity of his o w n work to dispose of b e y o n d w h a t he himself has occasion for; and every other workman being exactly in the same situation, he is enabled to exchange a great quantity of his o w n g o o d s for a great quantity, or, what comes to the same thing, for the price of a great quantity of theirs. H e s u p p l i e s them abundantly with what they have occasion for, and they a c c o m m o d a t e him as amply with what he has occasion for, and a general plenty d i f f u s e s itself through all the different ranks of the society (Smith 1892:8-9).

Note the simplicity of the math. Note also that the precondition is a "well-governed society." The second explanation for planetary production and supply is the way the division of labor works between countries as well as within them. This is called "comparative advantage," a concept associated most closely with one of Smith's heirs, the nineteenthcentury political economist David Ricardo, but one that Smith himself refers to. The "natural advantages which one country has over another in producing commodities," Smith says, are sometimes "so great" that it is acknowledged by all the world to be "in vain to struggle with them." He cites here as example the fact that "by means of glasses, hotbeds, and hot-walls, very good grapes can be raised in Scotland, and very good wine, too, can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines merely to encourage the making of claret and burgundy in Scotland?" (Smith 1892:347).

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Clearly not. Comparative advantage is a more efficient choice, and one that works for acquired advantages (like giving advice on political economy) just as well as for natural advantages (like a wine industry). Note once more the simplicity of the math and the way the argument is addressed, first and foremost, to state-making legislators. The third explanation for the workings of the world political economy is the coincidence of personal and social interest. Smith (1892:343) argued that "every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage, naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society." Greed is good, in other words, and it is good not only for the self but happily and coincidentally for society as a whole. The picture is not all as happy as Smith is wont to suggest, of course. What, one might ask, of the men and women who lose their jobs in one part of the world because of some event they know nothing about many thousands of miles away? What of the children who starve in a Peruvian fishing village "because news of the harvest of soya beans arriving in Chicago has depressed the price of their fathers' anchovy catch" (Harris 1983:9)? Here we get a glimpse of another, much darker, and much less desirable side to comparative advantage. While market practices like this do sustain more people today than this planet has ever carried before, and for many of them at a standard of living once enjoyed by only very few, this does not mean the market is beneficial for all. We don't, for example, see or hear the suffering that makes some or even much of world production possible. "The spoonful of tea you pop in the pot," for example, "does not cry out because the Tamil fingers that plucked the leaf in Sri Lanka were weak with malnutrition. Fortunately, commodities are mute" (Smith 1892:9-10). Examples like these are legion since the "liberal reward of labour" is a mixed one at best. Market-induced misery was apparent long ago to another great international political economist, Karl Marx. A century after Smith (but still more than a century short of our own) we find another classic of international political economy, the Communist Manifesto. This was a direct attack on the system Smith so admired; a system that by the nineteenth century had "pitilessly torn asunder the motley feudal ties that bound man to his 'natural superiors'" to leave "no other nexus between man and man than naked selfinterest, than callous 'cash payment.'" This was a system that had "drowned," Marx said, "the most heavenly ecstacies of religious

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fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation." It had resolved "personal worth into exchange value" and in place of the "numberless indefeasible chartered freedoms" it had set up "that single unconscionable freedom—Free Trade" (Marx and Engels 1942:207-208). Marx had no doubt about what was to blame. The problem was the market system itself. This was not a system, as Smith had claimed, that ran itself. The system was capitalist and was run by capitalists, that is, those who owned and managed the means of production. Marx called the class of capitalists the "bourgeoisie." Those with no means of production of their own, who were reduced to selling their labor power in order to live, he called the "proletariat." All history, he said, was a history of class struggle, and our own history was no different. It was characterized by class struggle between the bourgoisie and the proletariat—a struggle Marx believed the bourgeoisie were going to lose. In their time the bourgeoisie had been revolutionaries. "The bourgoisie cannot exist," Marx argued, "without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society." Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the b o u r g e o i s epoch from all earlier ones. All fixed, fast frozen relations, with their train of ancient and venerable prejudices and opinions, are s w e p t away, all new-formed ones b e c o m e antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned (Marx and Engels 1942:208-209).

What drove the bourgeoisie on so? Comparative advantage? For Marx it was more as if, having roused a sleeping giant, having filled him with terrible resolve, the bourgeoisie no longer had a choice. It was as if having conjured up a means of production so profound, "like the sorcerer who is no longer able to control the power of the nether world whom he has called by his spells" (Marx and Engels 1942:211), they had to see the whole process through to the end. The end, of course, being a revolutionary one as befitted revolutionary times; one where the expropriators were expropriated, as Marx put it, and it was the proletariat that prevailed. A century on from Smith, Marx was deeply impressed by the extraordinary changes going on around him. A "constantly expanding market for its products" was chasing the bourgeoisie all over the globe to "nestle everywhere, settle everywhere, establish connections everywhere" (Marx and Engels 1942:209). "Old-established

A Short History of IPE

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national industries" were being destroyed by "new industries" whose introduction was becoming a "life and death question for all civilised nations . . . industries that no longer work[ed] up indigenous raw material" but drew those materials from the "remotest zones"; industries whose products were consumed "not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country," the bourgeoisie found "new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency," they found "intercourse in every direction, universal interdependence" (Marx and Engels 1942:209). Marx's logic was relentless. With the "rapid improvement of all instruments of production [and with] immensely facilitated means of communication," he could not see that any country would be able to resist. The highest walls of national seclusion would be battered down by cheaply priced commodities—the "heavy artillery" of the new order; the big guns, as it were, that would compel "all nations," on "pain of extinction," to adopt the "bourgeois mode of production" (Marx and Engels 1942:209). Marx's logic was not only relentless, it was comprehensive. Everyone was involved, potentially if not actually. A new civilization was being built, with huge cities that agglomerated whole peoples, that subjected the country to the rule of the towns, that centralized all the means of production, concentrating property in the hands of a few, focusing governments and codes of law, clearing whole continents for cultivation, and conjuring entire populations "out of the the ground" (Marx and Engels 1942:210). "What earlier century had even a presentiment," Marx concluded, "that such productive forces slumbered in the lap of social labour?" Who could have known that with the advent of free competition there could be such a thing as overproduction? Who could have known that there might one day be "too much civilisation, too much means of subsistence, too much industry, too much commerce" and a crisis potentially so acute as finally to cause the "whole superincumbent strata of official society" to be "sprung into the air" (Marx and Engels 1942:208-211, 217)? Who could have known that by specializing to improve their competitiveness, nations would no longer be free not to trade, and once locked into the capitalist world system, could only be driven by it into oblivion? The analytic language that Marx used was very similar to Smith's. It was very different too. It was similar in that both of them talked of human production and labor as a total social process. It was different in that Smith saw nothing better replacing the world

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political economy he so graphically described. Marx saw the best as yet to come. Once the social logic of this revolutionary interlude had been played out, socialism and communism were supposed to ensue, a revolutionary vision that was to inspire millions of men and women who, like Marx, wanted to replace the capitalist world political economy with something more orderly and humane. Smith inspired generations of owners and managers who saw their task as making the system more efficient. The argument continues in both their names. One notable difference between Smithians and Marxists today is the way Smithians talk about the economics of international politics or the politics of international economics, and Marxists talk about international political economy. Anglo-American libertarians separate politics from economics and turn the latter into the more or less quantitative study of free markets. Most European scholars, however, would be puzzled that anyone might seriously think that economics and politics can be studied apart (Caporaso 1987a:2). The conceptual divorce of economics from politics was achieved in the nineteenth century and was due, in no small part, to the work of the English theorist William Jevons (1871). In his key text, The Theory of Political Economy, Jevons initiated what has been called the "marginalist" revolution—so called because of its concern with the effects of marginal changes in a commodity on production, consumption, and price. Unlike Smith or Marx, Jevons focused less on capital and labor and more on personal satisfaction and exchange. Value, he argued, was dependent "entirely upon utility," that is, upon personal benefit or satisfaction. This meant that instead of wondering, for example, as Smith did, at the wonderful way a woolen coat gets put on a day-laborer's back, Jevons wondered how it was that people managed to get them in a world where there were not enough coats to go around. This led directly to questions of supply and demand. Jevons (1970:52, 77) believed, as Petty did, that a science of wealth making was possible and that a science of value should be expressed mathematically. Jevons had trained as a scientist and this had clearly inspired him to see "economy" not only as a separate subject but also as a "calculus." Economics was a calculus of "pleasure and pain," he believed. Its principal concern was to maximize pleasure by allowing its purchase for a minimum of pain. To Jevons, the whole theory of value and of wealth could be explained in this way. He likened it to mechanics and to the way the "theory of statics is made to rest upon the equality of indefinitely small amounts of energy" (Jevons 1970:44).

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Thus it was that the classic political economy of Smith became the economics of neoclassic "marginalism." The rational choices made by Smith's self-interested citizens became "optimizing behaviour," to be quantitatively assessed. The optimizing behavior of private individuals—believed in turn to derive from the fact that "every person will choose the greater apparent good [since] human wants are more or less quickly satiated [and] prolonged labour becomes more and more painful" (Jevons 1970:88)—became the basis for a new science, one dedicated to accounting mathematically for the "efficient allocation of scarce resources among competing ends" (Caporaso 1987a:2). Politics became residual. Students of politics were those who theorized about public policy and the relationship between the individual and the state. The disciplinary divide thus forged between economics and politics also allowed for talk about international economics as separate from international politics, with international economics being the workings of the world market, and international politics being the workings of the world state system. There were some adventurous transdisciplinarians who talked of the politics of international economics or the economics of international politics, but they remained, until relatively recently, relatively few. Such linkages were seen, in the Anglo-American tradition at any rate, as being of peripheral concern. The recent interest in international political economy in AngloAmerican universities has largely been of the transdisciplinary kind. The collapse of the Soviet Union and the rush to embrace liberal capitalist market principles by the former East European and Soviet societies, as well as the moves by mainland Chinese in a similar direction, are supposed to have completely discredited international political economy of the Marxist sort. Marxist IPE was always anathema anyway to Anglo-American liberal capitalists, and it was a cause of considerable satisfaction to the latter when Soviet communism collapsed. Discounting Marxist international political economy always was, and still is, a very grave mistake, however. It confuses German Marxism with Soviet or Chinese communism. Indeed, it is most ironic that Marx himself would have expected the Russian and Chinese revolutions to fail, since to get to socialism you have first, he argued, to go through capitalism. When the Russians and the Chinese jumped the historical gun, Marx would have said that this couldn't be sustained. It was capitalism in his view, not socialism, that followed on from feudalism, and that, for Marx, was a historical law.

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RECURRING CONCEPTS It is very tempting in these " p o s t c o m m u n i s t " times to write off the Marxist tradition of thought as the flawed ideology of a failed worldview. If w e resist this temptation, then another question arises. Which, we might ask, is more accurate, Smith's liberalism or Marx's Marxism? Which is the more " t r u e " ? Or is "reality" best described and explained some other way in another, more neutral language, applicable to them both? Despite an intensive search for a neutral language with which to address both kinds of classical political economy, none has yet been found that provides a clearly specified account of the international political economy that all can accept. Even the "scientific m e t h o d " — s o fruitful in u n d e r s t a n d i n g the natural u n i v e r s e — h a s been shown to be an ideologically loaded discourse when applied to IPE. This doesn't mean that such a search should b e abandoned, or that we should turn our b a c k on any attempt to be analytical. It does suggest, however, that w e m a y always h a v e i n c o m m e n s u r a b l e accounts of wealth making in the world; and that these accounts may never be reconciled because of the different values they espouse and the different views of human nature that underpin them. This leaves us with the image of IPE as an ongoing argument between more or less coherent worldviews. The key words that recur in these worldviews, words like state, firm, market, capital, and labor, should be seen in this light. None of these terms stands alone. Each plays its part in the webs of meaning woven by each worldview.

State Consider the concept of the state. To S m i t h ' s w a y of thinking, the state is a mixed blessing. State makers serve a useful purpose providing public goods like harbors and roads, courts and mass literacy, but to the most doctrinaire of such " l i b e r a l s " a state-made world is a political impediment to economic activity. It only makes it harder for the world's b u s i n e s s p e o p l e to provide the prosperity and peace that is the great promise of "free enterprise." In classical Marxist terms, by contrast, state makers are apologists for those w h o own and manage the dominant mode of production (the bourgeoisie), which in our day and age is capitalism. Rather than seeing economics and politics as separate and opposed, with economics the domain of the market and politics the domain of the state, classical Marxists see the headlong rush to accumulate capital as the defining characteristic of world affairs, and the attempt to discriminate

Recurring Concepts

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between economics and politics as part of the bourgeois plot to mystify the process of capitalist exploitation. The state is the "executive committee" that looks after the public affairs of the governing class of bourgeois owners and managers. It "arises with, is transformed by and itself affects the accumulation of capital" (Edwards: 1985:203). T h e state is a highly contingent, relatively recent, and historically novel way to organize human affairs. It w a s given its contemporary form as the particular solution (the Treaty of Westphalia) to a particular problem (the Thirty Years' War) in seventeenth-century E u r o p e . It is now nominally universal, one c o n s e q u e n c e of a long and complex process of European imperialism. States have been a "political e c o n o m y " project from the beginning. T h e state-making practices of seventeenth-century European kings and queens, for example, required wealth. Regal power pres u p p o s e d prosperity, and the royal houses of Europe saw wealth m a k i n g as state m a k i n g by other means. T h e y were what w o u l d now be called mercantilists, or economic nationalists, or, more particularly, protectionists, and their ideological descendants still argue the need to maximize state strength and autonomy by using protective tariffs (duties on imports), import substitution (measures that encourage h o m e production and local buying), and vertical integration (productive chains that minimize any potential loss to h o m e state entrepreneurs). T h e classical mercantilist notion that the right w a y to augment state power is to foster production at home, buy as little as possible from abroad, and accumulate wealth in the convenient form of precious metals, still has great emotional appeal. With very few exceptions, however, state m a k e r s today are liberal m a r k e t e e r s as well. They believe in "rationality," "efficiency of supply and d e m a n d , " and "free" and " o p e n " competition, while black markets from Myanm a r to Azerbaijan are said to testify to the p o w e r of liberal " e c o n o m i c s " to find ways, even where these are formally denied, to meet human wants and needs. T h e state presupposes other states. State makers know they live in a world of other state makers, running other, formally equal, formally a u t o n o m o u s territorial domains, all committed, by an elaborate kind of g e n t l e m e n ' s agreement, to not interfering in each o t h e r ' s affairs. M o d e r n state makers also know they live in the middle of an industrial revolution, a revolution that has magnified by a factor that can no longer be calculated the human capacity to make things and to provide services. This much-enlarged capacity has changed radically the meaning of state making, as well as many of the means by which it gets done.

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Industrial capitalism has replaced the mostly mercantile form that preceded it to become the dominant ideology of an age so productive one could well be excused for seeing politics as contingent upon economics. Having entered the most materially dynamic phase in all human history, everything seems to shine in the light of that fact—the state included. Marxist theorists in particular would see the "national state" this way, that is, as "only part of the overall structure of power in a global capitalist society" (Picciotto 1991:60). The development such productivity makes possible has clearly advantaged the state, though it doesn't always advantage particular citizens who live therein. Indeed, there are a n u m b e r of states in the world where d e v e l o p m e n t means only the d e v e l o p m e n t of the state itself or, at most, the state sector. In fact, in a n u m b e r of cases, the d e v e l o p m e n t of the state has been the best predictor of the u n d e r d e v e l o p m e n t of society. . . . Some scholars have, consequently, defined development as the process in the n a m e of w h i c h the state mobilizes resources internally and externally and, then, eats them up itself, instead of all o w i n g them to reach the bottom and the peripheries of the society (Nandy 1992:270).

Liberally inclined scholars, though they readily admit that markets have "developmental poles" and can cause inequalities, believe that everyone is better off the more that state makers allow free enterprise. Admittedly, free enterprise is not equal either. Knowledge and capital, "the two [factors of production] that have most easily escaped the control of the state and that can most easily slip across territorial frontiers," certainly move more freely than "labour and land" (Strange 1988:15). But open commerce is supposed to work to the mutual benefit of all, and in the liberal worldview states and their citizens cannot help but develop. In its most idealized version, the "tide of economic growth lifts all boats together" (Gilpin 1974:42). Marxist-style scholars respond by asking what kind of social relationships the state represents (Holloway 1994:27). They see state makers protecting capitalists and defending the social disparities that are capitalism's key consequence. And they talk about the powers of the state being used to augment the wealth of the bourgeoisie (Braverman 1974:286). In some cases, like Germany or Japan, the state was built at the same time as capitalism, and has been integral to it in every way. In others, like England or the United States, "the capitalist class . . . marked off for the government a more circumscribed sphere of operations, and . . . the growth of . . . interventionism on the part of the state . . . appeared to develop as a struggle against capital" (Braverman 1974:285).

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The debate goes on. Meanwhile, of course, most people cope as best they can with whatever worldview those in power happen to visit upon them.

Firm Another feature of the basic debate about political economy is the liberalist emphasis on the "market" as the conceptual counterpart to the "state." Gilpin, for example, begins his book The Political Economy of International Relations by juxtaposing market and state. "The parallel existence and mutual interaction of 'state' and 'market' in the modern world," he says, "create political economy." The state, on the one hand, is a territorial entity, and state making is designed to engineer loyal citizens, well-defined frontiers, and a domestic monopoly (supposedly legitimate) of the use of force. It is the domain of political science. The market, on the other hand, is a transactional entity, and marketeering involves contracts, buyers and sellers, price signals, and supply and demand. It is the domain of economics (Gilpin 1987:8, 10-11). Gilpin, need one say, is a self-professed liberal. Eden, on the other hand, is not. She specifically dismisses Gilpin's dichotomy and posits instead, as the more "appropriate" counterpoint to the state, the "multinational enterprise" or "firm." The largest six hundred of these, Eden says, currently produce one-quarter of the world's wealth, and the "crucial problem" now, she believes, "is the tension between states and multinationals, not states and markets" (Eden 1993:26). She would locate states within the market, rather than juxtaposing them, and she would see firms as the "key nonstate actor" in both "domestic and international markets." Strange (1991a:44) also talks of the need to acknowledge the way large firms now operate globally. She says attention now has to be given to "state-to-firm" and "firm-to-firm" interactions as well as to the more familiar "state-to-state" ones. She castigates international relations analysts for "self-protective myopia" in neglecting these interactions. This, she says, has stunted the growth of IPE and kept such concerns on the disciplinary margins when they ought to be at its core (Strange 1991b:102). While it is certainly correct to accuse "international relationists" of myopia, liberal analysts like Gilpin, for example, do give pride of place to the state-market dichotomy, and they do talk about multinational enterprises (Gilpin 1975; 1987:Ch. 6) in exactly the terms that Strange recommends. Gilpin (1987:262) makes a point of highlighting, for example, the "complex pattern of relationships among corporations, home governments, and host countries that has

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increasingly politicized foreign investment both at home and abroad." And he clearly notes the way "who benefits" is determined not only by firms seeking comparative advantages but also by state makers' attempts to control such firms to suit themselves. Liberals tend to see firms as ultimately benign, responding to market opportunities to the ultimate benefit of all. Trolling the world for productive opportunities and profits, these vast commercial conglomerates are part of the nineteenth-century liberal dream of a universal end to human poverty. In this dream global firms put "to their best uses . . . like a good housekeeper, the world's resources and abilities" in such a way as to serve "not merely the survival of the economically fittest but the great cause of liberty, the cause of inventive art and the fertility of the untrammeled mind against the forces of privilege and monopoly and obsolescence." By doing so—and this is one of the most appealing aspects of this powerful vision—they are also supposed to serve the causes of "peace, . . . international concord," and "economic justice" as well (Keynes 1933:36). Liberalists like the famous English economist John Maynard Keynes who are mercantilists too worry about the costs of global enterprise, particularly for citizens in the hands of state makers who act more out of self-interest than out of any sense of duty to the nation as a whole. Global firms seek to maximize profits. State makers seek to protect state independence and security. Signing over to global firms access rights to large amounts of a national resource, natural or human, can compromise independence and security. And though state makers retain the power to regulate the local practices of multinational enterprises, this power may not always amount to much, either because of collusion between particular state makers and firm managers, or because exercising such power may mean revenue loss or increased unemployment or loss of access to technology. Even more so than the mercantilists, Marxists see global firms as rapacious and malevolent; as "imperialistic predators, exploiting all for the sake of the corporate few" (Gilpin 1987:231). This is not a matter of states contending with the global market, or states and firms contending with each other within that market. It is a question of the way in which industrial capitalism works, and of the way in which industrial capitalism has become a global system. To maximize the amount of capital they can make from capital (the point of the process, anyway) capitalists have historically increased the size of the production process and formed monopolies, either by beating out the competition or by coming together under the same managerial structures. In the United States, at the end of the nineteenth century, the

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rapid growth of capitalist monopolies of this kind led to what Braverman (1974:265) describes as the "peculiar shape of a movement for reform." Trust-busting by the U.S. Congress, instead of breaking monopolies, only hastened the process of "concentration by outright mergers." This fostered in turn a "corporate liberalism" that did little, in Marxist eyes, to inhibit the spread of U.S.-based firms or their use of what were later to be called "restrictive business practices." Classical Marxists applaud the spread of transnational firms, since the quicker the capitalist mode of production becomes global, the quicker its contradictions will become manifest, and the quicker the whole system will collapse. Neo-Marxists, concerned with the capacity capitalists have shown for sustaining their system, and concerned as well with the way capitalists create underdevelopment as well as development in the world, are less convinced the end is nigh, and less happy with the extent to which global firms perpetuate world poverty and neoimperialist exploitation. The debate goes on. Meanwhile people live in a world political economy built in considerable part by transnational, multinational companies that supply them with a wide range of commodities; if, that is, they are able to pay for them. Market Having briefly explored the firm as a counterpoint to the state, I want to return to the market and to consider in a little more detail the arguments about what "marketeering" entails. In liberalist terms, markets are the spontaneous result of the human desire to benefit by exchange. In a marketplace buyers and sellers meet to exchange goods and services, and the prices are set by haggling. In premodernist societies markets were only a small part of life. In modernist, market economy ones, however, marketeering goes on throughout them, and the haggling is done in much more stylized ways. It is the lack of regulation that so appeals to liberals, hence their aversion to "all attempts to limit the market" (Berthoud 1992:77) and their embrace of market values as definitive of contemporary "development." Classical liberals believe that the evolution of market societies from markets was a natural evolution and a wholly beneficial one. They believe that markets set the " b e s t " prices and are the most supportive of productive and commercial creativity. They see marketeering as not just one way to make exchanges but as the best and only way (Berthoud 1992:70).

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At the global level classical liberals see the comparative advantages particular states possess leading spontaneously to markets and marketeering. They consider this a good thing. Mercantilists have never been so convinced, of course, remaining wary of the ways in which global exchange can undermine state self-sufficiency and arguing for controls that can protect state integrity and strength. But classical liberals see such protectionism as misconstrued. They say it inhibits free competition across borders, thereby sheltering the inefficient and distorting price. Classical Marxists take a very different view, construing the market in terms of the mode of production of the day. Thus a slaveowning society has a slave-owning market, a feudal society has a feudal market, and a capitalist society has a capitalist market. To a Marxist, the key characteristic of the capitalist market is not the "opportunity or choice" that so fascinates liberals but rather "compulsion." Material life and social reproduction in capitalism are universally m e d i a t e d by the market, so that all individuals m u s t in one w a y or another enter into market relations in order to gain access to the m e a n s of life; and the dictates of the capitalist market—its imperatives of competition, a c c u m u l a t i o n , profit m a x i m i z a t i o n , and increasing labor p r o d u c t i v i t y — r e g u l a t e not o n l y all e c o n o m i c transactions but social relations in general. A s relations a m o n g h u m a n b e i n g s are m e d i a t e d b y the p r o c e s s of c o m m o d i t y exc h a n g e , social relations a m o n g p e o p l e appear as relations a m o n g things, the "fetishism of c o m m o d i t i e s " in Marx's f a m o u s formula (Wood 1994:15).

Marxists see the global market as the consequence of capitalist imperialism, and the setting up of this market as having been highly coercive. Though there has been competition between capitalist imperialists and the states they control, this has not been as important, in the classical Marxist view, as the way in which capitalist imperialists have tried to monopolize the world market and exploit the world's workers. Here we have a revolutionary rather than an evolutionary process. It is not the revolutionary outcome of technological change either, where industrial machines need to be used nonstop to justify their installation, thus making of labor as much a commodity as that made by the machines (Polanyi 1957). Here the revolutionaries are capitalists, that is, the people who produce not for use but for profit. This is the so-called market principle. They make this profit from the workers, to whom they pay only part of the value of the work the workers do. This in Marxist parlance is the capitalist market principle.

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We have on the one hand, then, the notion of the m a r k e t as a self-regulating, relatively impersonal place and marketeering as the g u a r a n t e e of an efficient relationship b e t w e e n " w h a t people want and what is p r o d u c e d . " The weak, the useless, and the inefficient may go to the wall but this is what keeps the system strong, and a strong system is ultimately to the benefit of all. On the other hand w e have a very different notion of the market as a "direct instrument of class power manipulated b y capital in its control of labor, not to mention as a medium of a new imperialism, in which advanced capitalist economies, with the help of the state, are i m p o s i n g m a r k e t 'disciplines' on the Third World and on the 'new democracies,'" and degrading the environment to boot (Wood 1994:39). Here the weak, the useless, and the inefficient are crushed as a matter of routine, and a "vicious cycle of decline" (Gilpin 1987: 21) rips whole societies apart—all to the benefit of a privileged few. The debate goes on. Thus Gilpin, a liberal, argues that it w a s the market that "first released" the "forces of capitalism and . . . subsequently also channeled t h e m " (Gilpin 1987:15-16). Thus Braverman, a Marxist, argues the opposite, namely, that it was capitalism that "transformed all of society into a gigantic marketplace" (Braverman 1974:271). Wood (1994:25) brings the concepts of market and capital together, citing as decisive the advent of a particular kind of market society, the capitalist market society, where people p r o d u c e things in competition with each other, rather than just e x c h a n g i n g things. Meanwhile, people make do and get by as best they can, largely oblivious to these conceptually abstract concerns, but living nonetheless under conditions dictated by one or the other of them. The island villager, for example, w h o lives entirely b y subsistence, catching fish and growing fruit and vegetables, lives outside the global market. If she goes to the nearest town once a w e e k to sell s o m e of her surplus and to buy there cloth or a radio, then at that point she enters the world market. If she sees an o u t b o a r d motor and decides she would like to have one for the family canoe, that means a much larger sum of m o n e y and recurrent costs like repairs and fuel. For that she may have to sell her capacity to w o r k for a wage, as a h o u s e m a i d , for example, to the wife of the expatriate doctor at the local hospital. Or her husband may have to go to w o r k on a nearby copra plantation, where a large multinational firm b u y s his labor for an hourly, daily, or w e e k l y w a g e . At that point he or she enters the capitalist world market, and life can change dramatically. Entering this m a r k e t means not only cash in hand, it m e a n s direct exposure to the capitalist market culture, where a belief in " p r o g r e s s , " c o m p e t i t i v e profit making, the private possession of

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property, entrepreneurial flair, and work itself are all highly regarded. Some or all of these values may clash with those of the culture from which the villager comes, at considerable cost to both. Unlike the villager, the self-employed orchardist, producing apples by industrial agricultural means and competing with other orchardists to sell them to local firms who sell them worldwide, is already part of the capitalist world market. If he can't do this "efficiently," that is, if the pesticides he uses on the apples make him too ill to work, for example, then other orchardists sell what he would have done and his little manufacturing unit dies. So he bulldozes out all his orchard trees and goes to work for a wage, planting pine for a government department, and growing organic vegetables before and after work and on the weekends. He becomes, that is, a "proletarian," and his status as a free and independent proprietor is destroyed. This profound and highly personal defeat eventually kills him. Such people are not fictional. Little stories like these are legion. Telling one or two, however, helps remind us of the human experiences that abstract concepts like "the market" try to document. The words we use when we discuss such concepts denote lived human lives. It is all too easy for detached analysis to forget this fact. Hence the need for understandings of a less reified sort. Hence the need for more-attached analysis and for nonobjectifying ways of knowing. Labor "Labor" has three general meanings. It is used to denote "all productive work" (Williams 1983:177). It is used in a more specialized sense to denote one of the factors of production, which also include money, land, machinery, natural resources, knowledge, and skills. And it is used to refer to the social class of those who work. Laboring has been a basic feature of human life throughout history. Laboring for a wage is a relatively new experience, however, and the vast scale on which this now occurs is newer still. The labor power that the worker puts on the market for a wage, selling it for use like any other commodity, is a familiar concept in classical liberal political economy. Smith himself (1892:49-68) wrote about wages. Marx, however, argued that it was the "appropriation" of labor power through the wage mechanism that allowed capitalists to make their profits. This appropriation process he considered to be definitive of contemporary capitalism. "Only that worker is now 'productive,'" he said, "who produces surplus value for the capitalist, and thus promotes the self-expansion of capital" (Marx 1946:552).

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What if no one wants to b u y the labor power the worker offers for sale? U n e m p l o y m e n t follows, which in a society no longer reliant u p o n subsistence, means no money to buy commodities for use, such as food. Given the growing reach of the capitalist market today this makes all the more significant the contemporary levels of unemployment. In liberalist terms, this is a temporary p h e n o m e n o n . If marketeering is allowed full rein, the consequent upsurge in entrepreneurial activity is b o u n d to sweep u p those unemployed. The cause of their unemployment is immaterial. Whether due to wage-greed (that is, workers pricing themselves out of the market) or innovations in labor-saving technology (robots, for example), the problem of unemployment always responds best to unfettered free enterprise. In Marxist terms, it is quite a different matter. The unemployed are the reserve labor army, permanently on call and a sobering reminder to those in more-regular jobs of what awaits them if they don't toe the line and produce their quota of surplus value. Unemployment is currently r u n n i n g at about 10 percent t h r o u g h o u t the industrialized world. In the nonindustrialized parts it is significantly worse (UNDP 1993:35). Where there is growth, it is increasingly "jobless growth," and where recessions are on the wane, they are jobless, too (UNDP 1993:36). Is there comfort to be d r a w n from the fact that "informal" employment is increasing at the same time? Does it help to have work of a low-wage, impermanent kind? Not in Marxist terms, where this is just one more measure of the exploitative character of a capitalist world political economy. Capital In classical liberal terms, "capital" refers to various "factors of production." These are the inputs to any production process. Whether "fixed," as in the form of machinery, or more movable, as in the form of "working" capital like money, inputs such as these are combined to make commodities for the market. The image such a definition provides is that of a factory, where things make other things. There is hardly a h u m a n being in sight here. The classical Marxist approach could not be more different. "Capital is not a thing," said Marx, "but a social relation between persons" (albeit a relation "determined by things"). Marx wrote a major work u n d e r this conceptual heading. In it he defines capital as money, though he's at some pains to emphasize from the outset that he means by this money that circulates (Marx 1946:132, 849).

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Money that does not circulate, he says, is not capital. It is money as money only. For example, if I sell something, and with the money I make I buy something, the money that comes to me from the original sale goes back into the commodity I then buy and my money is gone. This is money as money. If, however, I use money to buy something with and I then sell what I've bought for money again, the money circulates. It becomes "capital" (Marx 1946:133). Selling to buy may help satisfy my wants. It won't make me more money, though. Money that circulates, on the other hand, will. Putting it out of circulation is only the prelude to bringing it back "enlarged." Out of circulation it takes the form of commodities, but the capitalist knows that "all commodities, however paltry they may look or however evil they may smell, are in faith and in truth money." They are (in what must be the most bizarre metaphor Marx ever used) "inwardly circumcised Jews" (Marx 1946:140). Capitalists are those who consciously move money around. They have no interest in what money can buy. Their motive is the "increasing appropriation of abstract wealth" (Marx 1946:138). They value only the "neverending process of profit making"; the "urge toward absolute enrichment"; the "passionate hunt for value" (Marx 1946:138). So what, you might ask, if you don't have money to start with? Can you then be a capitalist? The answer is yes. You borrow money and you then circulate it, which makes of capitalism nothing more than the creative use of credit! If Marx construes capital in terms of the circulation and enlargement of money, how is it that money can enlarge? What makes for the profit in this process? How is it that more money can come out of the circuit than is ever put in? Where, in other words, does the "surplus value" come from? In its pure form circulation is an exchange of equivalents, and does not, Marx argues, create value. Surplus value can only be made from circulating money if you cheat, he says. Surplus value can be made without cheating, however, from unpaid labor. Smith was well aware of how labor makes things valuable. He considered labor to be the "real measure of the exchangeable value of all commodities." He called it the "real price of everything" and said we are rich or poor "according to the quantity of . . . labour" we command (Smith 1892:22). What Marx did, however, was go one step further to define capital as "fundamentally . . . the command of unpaid labour" (Marx 1946:580). The capitalist buys the worker's labor power, for example, paying for it only part of what it is then used to produce. The part not paid for is the surplus. This the capitalist is free to expropriate. No wonder, Marx says, as we leave the "sphere

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of simple circulation or exchange" we note a "change in the physiognomy" of our dramatis personae. "The one w h o came to the market as the owner of money, leaves it striding forward as a capitalist; the one w h o came to the market as the owner of labor power, brings u p the rear as a worker. One of them, self-important, self-satisfied, with a keen eye to business: the other, timid, reluctant, like a man w h o is bringing his own skin to market, and has nothing to expect but a tanning" (Marx 1946:165). Having talked about some of the key concepts that recur in IPE, I would like now to give a more systematic account of the attempts m a d e historically to describe and explain how IPE works. I hope Bensusan-Butt's prospective student has not yet slunk away.

2 The Grand Narrative: Mercantilism, Liberalism, and Marxism •

Frédéric Bastiat (1909) "Petition of the Manufacturers of Candles, Wax-lights, Lamps, Candlesticks, Street Lamps, Snuffers, Extinguishers, and of the Producers of Oil, Tallow, Resin, Alcohol, and generally, of Everything connected with Lighting"

To Messieurs the Members of the Chambers of Deputies: Gentlemen: You are on the right road. You reject abstract theories, and have little consideration for cheapness and plenty. Your chief care is the interest of the producer. You desire to protect him from foreign competition, and reserve the national market for national industry. We are about to offer you an admirable opportunity of applying your— what shall we call it? your theory? No; nothing is more deceptive than theory—your doctrine? your system? your principle? But you dislike doctrines, you abhor systems, and as for principles you deny that there are any in social economy. We shall say, then, your practice—your practice without theory and without principle. We are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light that he absolutely inundates our national market with it at a price fabulously reduced. The moment he shows himself our trade leaves us—all consumers apply to him; and a branch of native industry, having countless ramifications, is all at once rendered completely stagnant. This rival, who is no other than the sun, wages war to the knife against us, and we suspect that he has been raised up by perfidious Albion (good policy as times go); inasmuch as he displays towards that haughty island a circumspection with which he dispenses in our case. What we pray for is, that it may please you to pass a law ordering the shutting up of all windows, sky-lights, dormer-windows, outside and inside shutters, curtains, blinds, bulls'-eyes; in a word, of all openings, holes, chinks, clefts, and fissures, by or through which the light of the sun has been in use to enter houses, to the prejudice of the meritorious manufactures with which we flatter ourselves we have accommodated our country—a country which, in gratitude, ought not to abandon us now to a strife so unequal. We trust, Gentlemen, that you will not regard this our request as a satire, or refuse it without at least previously hearing the reasons which we have to urge in its support.

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And, first, if you shut up as much as possible all access to natural light, and create a demand for artificial light, which of our French manufactures will not be encouraged by it? If more tallow is consumed, then there must be more oxen and sheep; and, consequently, we shall behold the multiplication of meadows, meat, wool, hides, and, above all, manure, which is the basis and foundation of all agricultural wealth. If more oil is consumed, then we shall have an extended cultivation of the poppy, of the olive, and of rape. These rich and exhausting plants will come at the right time to enable us to avail ourselves of the increased fertility which the rearing of additional cattle will impart to our lands. Our heaths will be covered with resinous trees. Numerous swarms of bees will, on the mountains, gather perfumed treasures, now wasting their fragrance on the desert air, like the flowers from which they emanate. No branch of agriculture but will then exhibit a cheering development. The same remark applies to navigation. Thousands of vessels will proceed to the whale fishery; and, in a short time, we shall possess a navy capable of maintaining the honour of France, and gratifying the patriotic aspirations of your petitioners, the undersigned candlemakers and others. But what shall we say of the manufacture of articles de Paris? Henceforth you will behold gildings, bronzes, crystals, in candlesticks, in lamps, in lustres, in candelabra, shining forth, in spacious wardrooms, compared with which those of the present day can be regarded but as mere shops. No poor resinier from his heights on the seacoast, no coalminer from the depth of his sable gallery, but will rejoice in higher wages and increased prosperity. Only have the goodness to reflect, Gentlemen, and you will be convinced that there is, perhaps, no Frenchman, from the wealthy coalmaster to the humblest vendor of lucifer matches, whose lot will not be ameliorated by the success of this our petition. We foresee your objections, Gentlemen, but we know that you can oppose to us none but such as you have picked up from the effete works of the partisans of Free Trade. We defy you to utter a single word against us which will not instantly rebound against yourselves and your entire policy. You will tell us that, if we gain by the protection which we seek, the country will lose by it, because the consumer must bear the loss. We answer: You have ceased to have any right to invoke the interest of the consumer; for, whenever his interest is found opposed to that of the producer, you sacrifice the former. You have done so for the purpose of encouraging labour and increasing employment. For the same reason you should do so again. You have yourselves obviated this objection. When you are told that the consumer is interested in the free importation of iron, coal, corn, textile

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fabrics—yes, you reply, but the producer is interested in their exclusion. Well, be it so; if consumers are interested in the free admission of natural light, the producers of artificial light are equally interested in its prohibition. But, again, you may say that the producer and consumer are identical. If the manufacturer gain by protection, he will make the agriculturist also a gainer; and if agriculture prosper, it will open a vent to manufactures. Very well; if you confer upon us the monopoly of furnishing light during the day, first of all we shall purchase quantities of tallow, coals, oils, resinous substances, wax, alcohol—besides silver, iron, bronze, crystal to carry on our manufactures; and then, we, and those who furnish us with such commodities, having b e c o m e rich will consume a great deal, and impart prosperity to all the other branches of our national industry. If you urge that the light of the sun is a gratuitous gift of nature, and that to reject such gifts is to reject wealth itself under pretence of encouraging the means of acquiring it, w e would caution you against giving a death-blow to your own policy. Remember that hitherto you have always repelled foreign products, because they approximate more nearly than home products to the character of gratuitous gifts. To comply with the exactions of other monopolists, you have only half a motive; and to repulse us simply because we stand on a stronger vantage-ground than others would be to adopt the equation + x + = - ; in other words, it would be to heap absurdity upon absurdity. Nature and human labour co-operate in various proportions (depending on countries and climates) in the production of commodities. The part which nature executes is always gratuitous: it is the part executed by human labour which constitutes value, and is paid for. If a Lisbon orange sells for half the price of a Paris orange, it is because natural, and consequently gratuitous, heat does for the one what artificial, and therefore expensive, heat must do for the other. When an orange comes to us from Portugal, we may conclude that it is furnished in part gratuitously, in part for an onerous consideration; in other words, it comes to us at half-price as compared with those of Paris. Now, it is precisely the gratuitous half (pardon the word) which we contend should be excluded. You say, How can national labour sustain competition with foreign labour, when the former has all the work to do, and the latter only does one-half, the sun supplying the remainder? But if this half., being gratuitous, determines you to exclude competition, how should the whole, being gratuitous, induce you to admit competition? If you were consistent, you would, while excluding as hurtful to native industry what is half gratuitous, exclude a fortiori and with double zeal, that which is altogether gratuitous. Once more, when products such as coal, iron, corn, or textile fabrics are sent us f r o m abroad, and we can acquire them with less labour than if we made them ourselves, the difference is a free gift conferred upon us. The gift is more or less considerable in proportion as the difference is more or

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less great. It amounts to a quarter, a half, or three-quarters of the value of the product, when the foreigner only asks us for three-fourths, a half, or a quarter of the price we should otherwise pay. It is as perfect and complete as it can be, when the donor (like the sun in furnishing us with light) asks us for nothing. The question, and we ask it formally, is this: Do you desire for our country the benefit of gratuitous consumption, or the pretended advantages of onerous production? Make your choice, but be logical; for as long as you exclude, as you do, coal, iron, corn, foreign fabrics, in proportion as their price approximates to zero, what inconsistency it would be to admit the light of the sun, the price of which is already at zero during the entire day!

• • • MERCANTILISM As one might tell from his name, Bastiat is a Frenchman. In this reading he accuses England ("perfidious Albion") of sending the sun to shine on France in order to destroy the market for local manufacturers of artificial lighting. Monsieur Bastiat will have none of it. A stronger domestic lighting industry, he says, is highly desirable. It will employ more workers and stimulate domestic production. As a consequence, laws must be passed to plunge every house into darkness, even at high noon. The whole country, he argues, will only benefit thereby. Monsieur Bastiat is a mercantilist. Historically the oldest way of thinking about the international political economy, "mercantilism" (or "neomercantilism" as this worldview is called today, or "protectionism," which is a more descriptive label) is state making by material means. Those who propose such a worldview see in "foreign competition" a threat to the "national market for national industry." They see a direct relationship between state independence in finance and production, and state autonomy and power. The state that is not in control of its money or its manufacturing and that doesn't protect itself as a market will find itself, mercantilists argue, weak and vulnerable in all other ways as well. The strong state will be the one that does protect its domestic industries, while saving hard against a rainy day. People don't like being called doctrinaire. They like even less being said to have an ideology. So Monsieur Bastiat, in his speech to the Chambers of Deputies on behalf of the lighting industry, appeals directly to their members' sense of the national interest. He reminds them that the national interest is that of its producers. He urges them not to believe abstract theories to the contrary, theories,

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for example, that promise national plenty through free trade. He recommends "practice without theory and without principle." After all, someone has to stop these foreign rivals dumping cheap goods on the domestic market and driving local manufacturers out of business. The situation is clearly intolerable. The relationship between "defense" and "opulence" (Viner 1948: 17) was first analyzed in detail by nineteenth-century Prussian scholars in their bid to highlight the importance of having a Prussian state (Viner 1948:1-2). These scholars saw in particular protectionist policies of the past a model for the present and the future. They argued, in effect, for policies that serve the same function in the'international political economy as statism serves in the international state system, namely, self-help. Where my gain is seen as your loss, and vice versa; where the system as a whole is ungoverned and conflict is always imminent; in such a world, countries, they would say, should be self-sufficient and strong. Mercantilists argue that state makers can promote their powers in one of two ways. They can try and be exclusivist, turning inward, closing down their borders and going it alone. Or they can try and be inclusivist. They can turn outward and self-aggrandize by more imperialistic means. Exclusivity, or "classical" mercantilism, comes in different forms. At their most radical, mercantilists advocate autarky, that is, absolute autonomy and a withdrawal from the world. Those who have come the closest to this in contemporary times have been the state makers of Myanmar (Burma) and Albania. Less-radical and considerably more pervasive have been the attempts to protect the national interest with current account surpluses, that is, with attempts to export more and import less. Here the logic is to outtrade everyone else. Though this was not part of the classical mercantilist view, most mercantilists today would accept that they live in a world of other mercantilists, and that there may be good reasons for dealing with them. Their desire for state autonomy remains paramount, however, so that while it may be permissible to lend to others it is not seen as permissible to borrow from them. Thus protectionist tariffs and other controls are brought to bear, to maximize independence and minimize interdependence. As well as these more exclusivist ways of behaving, we find a form of mercantilism that goes " o u t " rather than " i n " ; that tries to make the outside part of the inside. Autonomy and self-reliance are achieved by making others subordinate. The fight to prevail is construed in terms of the fight to control shares in "total world economic activity" (Brown 1974:27). "Trade and the flag" are moved around together.

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In terms of the capitalist world market, this means not just exporting more and importing less. It means actively fighting for control of world market shares. The historic attempt by Japanese manufacturers, for example, to d o m i n a t e the global color TV market might be seen in this light, since they had the full sanction and support of Japanese state makers, and indeed, their ploy was part of the overall national plan for Japanese development. To maximize global market shares to the full, you need "vertical integration," that is, control of the whole production, exchange, and distribution process from the neocolonized " p a d d o c k " to the metropolitan "patio." This was the J a p a n e s e strategy for m a k i n g and i m p o r t i n g Australian beef, for example. Everything, from the blade of grass in New South Wales to the supermarket shelf in Osaka, was o w n e d by Japanese. This included the land, the herds, the abatoirs, the port facilities, the ships, the local transport, and the shops. Any attempt to break into the chain w a s met with threats of relocation. Except for the initial start-up costs and some local materials, taxes, and workers' wages after that, all the money went to Japan. W h a t states get b y b e i n g either exclusivist or inclusivist has been much debated. Should a current account surplus be preferred as a w a y of protecting the d o m e s t i c labor force b y preventing unemployment? Is it good to promote the expansion of local manufacturing? Can such expansion be used to foster technological progress (Schmitt 1 9 7 9 : 9 3 - 9 8 ) ? Questions like these can b e c o m e very pressing, particularly in times of politicoeconomic downturn. Keynes, for example, writing in 1933 in the midst of the Great Depression, saw protectionism as an imperative. Like most Englishmen of his day, he was raised to view free trade as not only rational but as part of " m o r a l law." He came to the conclusion during the Depression, however, that international interdependence was dangerous. Let goods be " h o m e s p u n , " he argued. And above all, he thought at that time, let finances be " p r i m a r i l y national." Similar fears a b o u n d , even in nondepressed times. H o w often do we hear politicians and producers bemoaning the lack or loss of access to essential materials or markets abroad? How often is the banner of "responsible statecraft" raised above protectionist state policies (Schmitt 1979:109)?

•

David Lodge (1980) "My First Job"

You don't have to be a Protestant to have the Protestant Ethic, I tell my students, when we come to Weber in my survey course on Sociological

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Grand Theory. Look at me, I say: Jewish father, Catholic mother—and I develop an allergic rash at the mere mention of the word ' h o l i d a y ' , with all its connotations of reckless expenditure of time and money. Accumulate, accumulate!—that's my motto, whether it's publications, index cards, or those flimsier bits of paper that promise to pay the bearer so many pounds if he presents them to the Bank of England. Work! Strive! Excel! For the j o b ' s own sake! My students, lolling in their seats, mentally preoccupied with the problem of how to draw the dole and hitchhike to Greece this summer, grin tolerantly and unbelievably at me through their beards and fringes. Sometimes, to try and make them understand, 1 tell them the story of my first job. Once upon a time, long, long ago, in the olden days, or, to be more precise, in the summer of 1952 (so I begin), at the age of seventeen and three-quarters, I got my first job, selling newspapers and magazines off a little trolley on Waterloo Station. It was a temporary job, to fill in a few weeks between getting my A-level results (which were excellent, 1 need hardly say) and going to University. There was no real economic need for me to work, and the weekly wage of £3 10s Od (even allowing for subsequent inflation) made it scarcely worthwhile to travel up from my home in Greenwich daily. It was a matter of principle. My father, who ran his own dressmaking business employing thirty people (which he intended to hand on to me, his only child), was dubious of the point or profit of a university education, and determined that at least I should not loaf idly about the house while I waited to commence it. It was he who spotted the advert in the Evening Standard, phoned up the manager of the shop, and talked him into giving me the job on a temporary basis, without even consulting me. My mother looked at the advertisement. "It says, 'suitable school-leaver'," she observed. "Well, he's left school, hasn't he?" demanded my father. " ' S c h o o l - l e a v e r ' means some no-hope fifteen-year-old f r o m a secondary modern," said my mother. "It's a e u p h e m i s m . " She was a well-educated woman, my mother. "Pays like a euphemism, too," she added. Years of marriage to my father had imparted a Yiddish edge to her Irish sense of humour. "Never mind, it will give him an idea of what the real world is like," said my father. " B e f o r e he buries his head in books for another three years." "It's true, he ought to give his eyes a rest," my mother agreed. This conversation took place in the kitchen. I overheard it, sitting in the dining-room, going through my stamp collection (I was totting up the value of all my stamps in the Stanley Gibbons catalogue: I seemed to be worth thousands, though I had no intention of selling). I was meant to overhear the conversation, and to be ready to give an answer when the substance of it was formally put to me. Diplomatic leaks of this kind oiled the wheels of family life wonderfully. My father came into the dining-room. "Oh, there you are," he said, affecting surprise, " I ' v e found a j o b for you."

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Narrative

" W h a t kind of j o b ? " I e n q u i r e d coyly. I had a l r e a d y d e c i d e d to a c c e p t it. T h e next M o n d a y m o r n i n g , 1 p r e s e n t e d m y s e l f , p r o m p t l y at 8 . 3 0 at t h e b o o k s t a l l , a large g r e e n island in t h e m i d d l e of W a t e r l o o S t a t i o n . W a v e s of o f f i c e w o r k e r s a r r i v i n g on s u b u r b a n t r a i n s s u r g e d a c r o s s the station p r e c i n c t as if p u r s u e d by d e m o n s , p a u s i n g only to snatch n e w s p a p e r s and m a g a z i n e s f r o m t h e c o u n t e r s of the s h o p f o r the next s t a g e of their j o u r n e y s by tube or b u s . Inside t h e s h o p , in a c r a m p e d and s t u f f y little o f f i c e , seated at a d e s k h e a p e d w i t h i n v o i c e s and r i n g e d w i t h the t r a c e s of i n n u m e r a b l e m u g s of t e a , w a s t h e m a n a g e r , M r H o s k y n s : a h a r a s s e d , i r a s c i b l e little m a n w h o had e v i d e n t l y s u f f e r e d a s t r o k e or s o m e kind of palsy, s i n c e t h e r i g h t - h a n d s i d e of his f a c e w a s p a r a l y s e d a n d t h e c o r n e r of his m o u t h w a s held u p by a little gold h o o k and c h a i n s u s p e n d e d f r o m his s p e c t a c l e s . O u t of the other c o r n e r of his m o u t h he asked m e h o w m u c h c h a n g e I w o u l d g i v e f r o m a t e n - s h i l l i n g note to a c u s t o m e r w h o had b o u g h t t h r e e i t e m s c o s t i n g n i n e p e n c e , t w o and s i x p e n c e , and a p e n n y - h a l f p e n c e , r e s p e c t i v e . S u p p r e s s i n g an urge to r e m i n d h i m that 1 had just p a s s e d A - l e v e l M a t h s - w i t h - S t a t s w i t h f l y i n g c o l o u r s , I patiently a n s w e r e d t h e q u e s t i o n , with a s p e e d that s e e m e d to i m p r e s s h i m . T h e n M r H o s k y n s t o o k m e o u t s i d e to w h e r e t w o y o u t h s loitered beside three mobile news-stands. These were green-painted wooden barrows, their s t e e p l y - a n g l e d s i d e s f i t t e d w i t h r a c k s f o r d i s p l a y i n g m a g a z i n e s and newspapers. " R a y ! M i t c h ! T h i s ' e r e ' s t h e n e w boy. S h o w ' i m t h e r o p e s , " said M r H o s k y n s , and d i s a p p e a r e d b a c k into his lair. R a y w a s a b o y of a b o u t m y s t a t u r e , t h o u g h (I g u e s s e d ) a b o u t a year y o u n g e r . H e w a s s m o k i n g a c i g a r e t t e w h i c h d a n g l e d rakishly f r o m his l o w e r lip, and w h i c h he o c c a s i o n a l l y t r a n s f e r r e d f r o m o n e side of his m o u t h to t h e o t h e r w i t h o u t using his h a n d s , as if to d e m o n s t r a t e that in o n e respect at least he had an a d v a n t a g e o v e r M r H o s k y n s . He kept his h a n d s p l u n g e d into t h e p o c k e t s of an A r m y S u r p l u s w i n d - b r e a k e r , and w o r e h e a v y b o o t s p r o t r u d i n g f r o m f r a y e d t r o u s e r s . M i t c h (1 n e v e r did d i s c o v e r w h e t h e r this w a s a n i c k n a m e or a c o n t r a c t i o n of a real first or s e c o n d n a m e ) w a s very small and of i n d e t e r m i n a t e age. H e had a dirty, w i z e n e d little f a c e like a m o n k e y ' s , and bit his nails c o n t i n u o u s l y . He w o r e a c o l l a r l e s s shirt and t h e j a c k e t and t r o u s e r s of t w o d i f f e r e n t striped suits, of the kind w o r k i n g - c l a s s b o y s o f t e n w e a r f o r S u n d a y b e s t in c h e a p i m i t a t i o n of their f a t h e r s : t h e j a c k e t w a s b r o w n and t h e t r o u s e r s w e r e b l u e , and b o t h g a r m e n t s w e r e in a state of c o n s i d e r a b l e disrepair. T h e y l o o k e d at m e in m y g r e y f l a n n e l s and t h e g r a m m a r school blazer w h i c h , on the a d v i c e of m y m o t h e r , I had d e c i d e d to " w e a r o u t " on t h e j o b , s i n c e 1 w o u l d h a v e no f u r t h e r u s e f o r it. " W o t c h e r w a n n e r d e a d - e n d j o b like t h i s f o r t h e n ? " w a s R a y ' s first utterance. " I ' m o n l y d o i n g it f o r a m o n t h , " 1 s a i d . " J u s t w h i l e I ' m w a i t i n g to g o to University."

Reading: Lodge

39

"University? Yer mean, like Oxford and Cambridge? The Boat race and that?" (It should be remembered that going to University was a rarer phenomenon in 1952 than it is now.) " N o , London University. The London School of Economics." "Whaffor?" "To get a degree." "What use is that to yer?" I pondered a short, simple answer to this question. "You get a better j o b in life afterwards," 1 said at length. I didn't bother to explain that personally 1 w o u l d n ' t be looking for a job, since a thriving little business was being kept warm for me. Mitch, nibbling his fingers, stared at me intently, like a savage pigmy surprised by the appearance of a white explorer in the jungle. Mr Hoskyns popped an angry head round the door. "I thought I said, ' S h o w 'im the ropes', didn't I?" T h e ropes were simple enough. You loaded your trolley with newspapers and magazines, and trundled off to platforms where trains were filling up prior to their departure. There were no kiosks on the actual platforms of Waterloo Station in those days, and we were meant to serve passengers who had passed through the ticket barriers without providing themselves with reading matter. The briskest trade came f r o m the boat trains that connected at Southampton with the transatlantic liners (remember them?) whose passengers always included a quota of Americans anxious to free their pockets of the heavy British change. Next in importance were the expresses to the holiday resorts and county towns of the south-west, especially the all-Pullman 'Bournemouth Belle', with its pink-shaded table lamps at every curtained window. The late-afternoon and early-evening commuting crowds, cramming themselves back into the same grimy carriages that had disgorged them in the morning, bought little except newspapers from us. Our brief was simply to roam the station in search of custom. When our stocks were low, we pushed our trolleys back to the shop to replenish them. Brenda, a pleasant young married woman with elaborately permed hair, w h o served behind the counter would give us the items we asked for and make a note of the quantities. I did not dislike the work. Railway stations are places of considerable sociological interest. The subtle gradations of the British class-system are displayed there with unparalleled richness and range of illustration. You see every human type, and may eavesdrop on s o m e of the most deeply emotional moments in people's lives: separations and reunions of spouses and sweethearts, soldiers off to fight in distant wars, families off to start a new life in the Dominions, honeymoon couples off to . . . whatever honeymoon couples did. I had only very hazy ideas about that, having been too busy swotting for my A-levels to spare much time for thinking about sex, much less having any, even the solitary kind. When Ray told me on my second day that 1 ought to have some copies of the Wanker's Times on my trolley, I innocently went and asked Brenda for some. The word was new to me. As for the activity to

40

The Grand Narrative

which it referred, my father had effectively warned me off that in his Facts of Life talk when 1 was fourteen. (This talk was also delivered ostensibly to my mother while I eavesdropped in the dining-room. "1 never wasted my strength when I was a lad, you know what 1 mean?" my father loudly declared. "1 saved it for the right time and place." "1 should think so too," said my mother.) Brenda turned brick red, and went off muttering to complain to Mr Hoskyns, who came bouncing out of his office, impassive on one side of his face, angry on the other. " W h a t ' s the idea, insulting Brenda like that? You's better wash your mouth out, my lad, or out you go on your arse." He checked himself, evidently recognising my bewilderment was genuine. "Did Ray put you up to it then?" He sniggered, and shook his shoulders in suppressed mirth, making the little golden chain chink faintly. "All right. I'll speak to 'im. But don't be so simple, another time." Across the station's expanse, lurking beside the Speak Your Weight machine, I could see Ray and Mitch watching this scene with broad grins on their faces, nudging and jostling each other. "And by the way," Mr Hoskyns threw over his shoulder as he returned to his office, "we never send out Health and Efficiency on the trolleys." ( H e a l t h and Efficiency, I usually have to explain to the children at this point, was one of the very few publications on open sale, in those days, in which one might examine photographs of the naked f e m a l e form, tastefully disposed among sand dunes, or clasping strategically-positioned beach-balls.) At the end of the day we took our money to be counted by Mr Hoskyns and entered in his ledger. On my first day I took £ 3 15s 6d, Mitch £5 7s 8d, and Ray £7 0s 5d. It w a s n ' t really surprising that I lagged behind the other two, because they knew from experience the times and locations of the trains that provided the best custom. By the following Friday, the busiest day of the week, I had almost caught up with M i t c h — £ 8 19s 6d to his £ 9 Is 6 d — though Ray had taken £10 15s 9d. " W h a t ' s the highest amount y o u ' v e taken in one day?" I asked, as we left the shop, pocketing our meagre wages, and prepared to join the homegoing crowds. It irked me somewhat that these secondary modern types, even allowing for their greater experience, were able to take more cash than me. It bothered me much more than the practical j o k e over Health and Efficiency. "Ray took Eleven par nineteen ' n ' six one Friday," said Mitch. " T h a t ' s the all-time record." Fatal phrase! Like the smell of liquor to an alcoholic. The j o b was suddenly transformed into a contest—like school, like examinations, except that one's performance was measured in £sd instead of percentage marks. 1 set myself to beat R a y ' s record the following Friday. I still remember the shocked, unbelieving expressions on R a y ' s and Mitch's faces as Mr Hoskyns called out my total. "Twelve pounds eggs-actly\ Well done, lad! That's the best ever, I do believe."

Reading: Lodge

41

The following day, Saturday, I noticed that Ray was assiduously working the long lines of holidaymakers queuing for the special trains to the seaside resorts, milking their custom before they ever got to the platforms where Mitch and I plied our trade. When Mr Hoskyns announced the tallies at the end of the day, Ray had taken £12 7s 8d—a new record, and particularly remarkable in being achieved on a Saturday. Suddenly, we were locked in fierce competition. Economically, it was quite absurd, for we were paid no commission on sales—though Mr Hoskyns certainly was, and manifested understandable pleasure as our daily and weekly takings escalated. At the sound of our trolleys returning in the late afternoon, he would come out of his cubbyhole to greet us with a lopsided smile, his gold chain glinting in the pale sunlight that slanted through the grimy glass of the station roof. The old record of £11 19s 6d soon seemed a negligible sum—something any one of us could achieve effortlessly on a wet Monday or Tuesday. On the third Friday of my employment, we grossed over fifty pounds between us. Ray's face was white and strained as Mr Hoskyns called out the totals, and Mitch gnawed his fingernails like a starving cannibal reduced to self-consumption. Mitch had taken £14 10s 3d, Ray £18 4s 9d and myself £19 1 s 3d. The following week was my last on the job. Aware of this fact, Ray and Mitch competed fiercely to exceed my takings, while I responded eagerly to the challenge. We ran, literally ran, with our trolleys from platform to platform, as one train departed and another began to fill up. We picked out richlooking Americans in the boat-train crowd and hung about in their vicinity with our most expensive magazines, Vogue and Harper's Bazaar that cost a whole half-crown each, prominently displayed. We developed an eye for the kind of young man on the "Bournemouth Belle" who would try to impress his girlfriend with a lavish expenditure of money on magazines that clearly neither of them would be reading. We shuffled our stocks and rearranged them several times a day to appeal to the clientele of the moment. We abbreviated our lunch-hour, and took our tea-breaks on the move. In takings, Ray and 1 were neck and neck, day by day: sometimes he was the winner by a few shillings, sometimes myself. But the real needle match between us was on the Friday, which was to be my last day of work, since I had earned some overtime which entitled me to have the last Saturday off. Both Ray and 1 realised that this Friday would see the record smashed yet again, and perhaps the magic figure of £20 in a single day—the four-minute mile of our world— achieved by one or other of us. Recklessly we raced across the station with our trolleys, that day, to claim the most favourable pitch, beside the first-class compartments of departing expresses; jealously we eyed each other's dwindling stocks. Like Arab street-traders we accosted astonished passengers and pestered them to buy our wares, forcing our way into intimate circles of tearfully embracing relatives, or tapping urgently on the windows of carriages whose occupants

42

The Grand Narrative

had already settled themselves for a quiet snooze. At one point 1 saw Ray actually running beside a moving train to complete the sale of a copy of Homes and Gardens. At the end of the day, Mitch had taken £15 8s 6d, Ray £20 Is 9d and myself £21 2s 6d. Ray turned away, sick and white, and ground the cigarette he had been smoking under his heel. Mitch swore softly and drew blood from his mutilated finger ends. I felt suddenly sorry for them both. The future stretched out for me as rosy as the table lamps of the "Bournemouth Belle". Within a few years, I had reason to hope, it would be me who would be taking his seat for luncheon on the plump Pullman cushions; and although 1 didn't actually guess that before many more had passed 1 would be catching the boat-train for the Queen Mary and a Fellowship in the United States, I had a hunch that such extended horizons would one day be mine. While for Ray and Mitch the future held only the prospect of pushing the trolleys from platform to platform, until perhaps they graduated to serving behind the counters of the shop—or, more likely—became porters or cleaners. 1 regretted, now, that I had won the competition for takings, and denied them the small satisfaction of beating me in that respect at least. But worst was still to come. Mr Hoskyns was paying me off: three one pound notes and a ten shilling note. " Y o u ' v e done well, son," he said. "Sales f r o m the trolleys have turned up a treat since you came 'ere. You've shown these two idle little sods what 'ard work really means. And mark my words," he continued, turning to Ray and Mitch, "1 expect you two to keep up the good work after ' e ' s gorn. If you don't turn in this sort of sum every Friday, f r o m now on, I'll want to know the reason why—you understand?" The next day 1 overheard my parents talking in the kitchen. " H e seems very moody," said my mother, " D o you think he's fallen in love?" My father snorted derisively. "In love? He's probably just constipated." "He seemed very quiet when he came home from work yesterday," said my mother. " Y o u ' d almost think he was sorry to leave." " H e ' s probably wondering whether it's a good idea to go to University after all," said my father. "Well, he can come straight into the business now, if he wants to." I burst into the kitchen. "I'll tell you why I ' m moody!" 1 cried. "You shouldn't listen to other people's private conversations," said my mother. "It's because I've seen how capitalism exploits the workers! How it sets one man against another, cons them into competing with each other, and takes all the profit. I'll have nothing more to d o with it!" My father sank on to a kitchen chair with a groan, and covered his face with his hands. "I knew it, I knew it would happen one day. My only son, w h o I have been slaving for all these years, has had a brainstorm. What have 1 done to deserve that this should happen to m e ? " So that was how I became a sociologist. My first j o b was also my last. (I d o n ' t call this a j o b — r e a d i n g books and talking about them to a captive audience; I would pay to do it if they weren't paying me.) I didn't, as you

Liberalism

43

see, g o into business; I went into a c a d e m i c life, w h e r e the Protestant ethic d o e s less harm to o n e ' s fellow m e n . But the f a c e s o f R a y and M i t c h still haunt me, as 1 last saw them, with the realisation s l o w l y sinking in that they w e r e c o m m i t t e d to maintaining that punishing t e m p o o f w o r k , that e x t r a ordinary v o l u m e o f sales, indefinitely, and to no personal a d v a n t a g e , or else be s u b j e c t e d to constant c o m p l a i n t and abuse. All b e c a u s e o f m e . A f t e r m y lecture on W e b e r , I usually g o b a c k to M a r x and E n g e l s .

LIBERALISM M a x Weber, the G e r m a n sociologist, attributed the extraordinary power of capitalism to what he called the Protestant Ethic. Driven by a desire to know they were one of the Elect, w h o got to Heaven when they died, the Calvinists in the Geneva of the M i d d l e Ages chose to celebrate sobriety and industry. They worked hard, in other words, to prove to themselves that they were worthy of the spiritual honor of a divine outcome to their lives. This m a d e them, without them even realizing it, highly competitive. C o m p e t i t i v e n e s s has been a hallmark ever since of an efficient political economy. Lodge shows clearly, in the reading above, how powerful this feeling can be, and h o w it can overtake even someone in his first job, selling newspapers. T h e b o y s Lodge describes at Waterloo Station were acting like mercantilists. Their behavior was highly competitive, as if one boy's gain was another b o y ' s loss. Was this their only choice, h o w e v e r ? W h y didn't they collude, for example, dividing the w o r k a m o n g them and sharing the w a g e s they subsequently made? That would have b e e n the rational w a y to behave. Their energies could then have been used, not against each other, but in outselling other newspaper kiosks that employed other groups of boys. It fell to Adam Smith to show the limits of what is a mercantilist w a y of thinking. Mercantilists are highly defensive about w i n n i n g and losing. Smith argued for the opposite. He saw opulence as the outcome of open competition, where everyone gains and no one loses. Wealth doesn't come from jealously guarding your own little patch, he said. It comes from free enterprise, and the freer the better. Thus, "every town and country," he said, " . . . in proportion as they have opened their ports to all nations, instead of being ruined by this free trade . . . have been enriched by it" (Smith: 1892:380). A country, Smith argued, can easily import " t o a greater value than it exports for half a century" (Smith: 1892:380). It doesn't matter, he said, if the " g o l d and silver which c o m e s into it during . . .

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The Grand Narrative

this time may be all immediately sent out of i t . . . . [E]ven the debts, too, which it contracts in the principal nations with whom it deals may be gradually increasing" to no ill effect if its "real wealth," the "exchangeable value of the annual produce of its lands and labor . . . during the same period, have been increasing in a much greater proportion" (Smith 1892:380-381). That's the rub. A country doesn't need to be protective if it's productive. Make enough and autonomy doesn't matter. Smith's philosophy of free enterprise is the classically liberal one. It corresponds to the politicostrategic philosophy of self-help through cooperative interdependence. While the "bottom line" may still entail territorial defense, it's what goes on above this line that matters most. Indeed, a world in which all state makers actively embrace a nondefensive, outward-looking, open-borders approach to trade and investment is one, Smithians believe, that will never get to the bottom line. Imagine a world, Smith seems to suggest, where self-interested men and women meet in markets to do what suits them best. In pursuing their self-interest, they carry the whole society to new heights. Prosperity and harmony are the inevitable result. " U n a nimity without conformity" (Friedman 1962:23) is the fortunate consequence. Inhibit people's freedom to buy and sell, however, and this law will be prevented from working to its best effect. "It is a rather daunting thought," says Cole (1991:6-7), "that whenever an economist talks uncritically about supply and demand in a market, there is, behind those apparently uncontroversial terms, the assumption of a whole philosophy of possessive individualism and liberal politics." The notion that there are "natural laws" that govern "individual" behavior was highly characteristic of the eighteenth century European era when Smith thought and wrote. At this time of socalled "Enlightenment" scholars began asking "what we might do on earth now, rather than what we might do to regain a glorious past, or how to reach heaven in the future" (Cole 1991:6-7). Not only did this more secular attitude make the natural universe seem more accessible, it also opened the human world to applied reason. One such application was Smith's idea of liberal marketeering. What went on in the village square once a week, perhaps, seemed to have been made into a whole way of thinking. Profit and loss, supply and demand began to seem timeless and universal. They seemed to make possible a new human "science" of unprecedented precision, namely, economics. The words seem and seemingly are very important here, since the "economic man" that liberal thinkers devised is a part-person, not a

Liberalism

45

whole one. By assuming that he is much given to unambiguous, self-serving decisions, it does become possible to summarize his behavior, and that of all those like him, in terms of a kind of market mechanics. And this can be quite useful as a first approximation. It is only a first approximation, however, since market mechanics allows of "no leaving, no forgetting, no blunders, no impulsive decisions (made on unquestioned and possibly unintended recommendations from half-known exemplars), no adventurous or experimental decision (made to see what would happen), no developing or fading tastes, no flow of surprises and unintended and unnoticed consequences, [and] no accumulation of regrets at opportunities rejected or unperceived" (Bensusan-Butt 1980). The assumption that what happens now on earth should be what economic man decides to do now on earth, was used to justify the entrepreneurial activity of eighteenth- and nineteenth-century European businessmen. So successful were these activities that manufacturers and traders eventually turned to the landed aristocrats who still dominated Europe and said, in effect: "Please note! We don't perform in some inferior sideshow, supplying luxuries and novelties, alleviating the occasional famine, stocking your homes and supplying your armies. We are the main players in a new game. We are the makers of national prosperity. We deserve political freedom and public acclaim." Not all liberals accept the classical idea that markets work best when unfettered. Not all liberals believe that state makers should be excluded from markets as much as possible. Experience has shown many of them that markets can be "inefficient" and can fail. Harmony has to be helped to happen, if, for example, unequal starting conditions are not to be made by marketeers into even more unequal outcomes. Many liberals have, as a consequence, come to advocate a role for state makers as referees and facilitators. These "reformist" liberals—people like Keynes, for example, in his nonmercantilist mode—consider statist intervention to be necessary to smooth out the market's bust and boom cycles. The state provides public goods like contract adjudication procedures. It protects other public goods, like the environment, which might otherwise be damaged beyond repair before marketeers decide to make a profit from the repair process. Reformist liberals like Gilpin believe that the world market as a whole needs an interventionist ring holder. They would look to one hegemonic country to police global free trade agreements and to act as "lender of last resort." They would invite the intellectuals of such a country to take a lead in defining ways to defend global public goods (Gilpin 1987:307).

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The Grand

Narrative

Contemporary neoclassical liberals like Hayek ("neoliberals," as they are currently called) have never given u p the idea that governments distort markets, and that markets that are fully free are the only ones to be preferred (Hayek 1988). They want what Ashley (1983:463) calls "economism." They want deregulated economies, despite the negative effects deregulation has on employment levels or national morale. These shortcomings pale, they say, beside the benefits that entrepreneurs can provide, benefits like jobs, profits, and general prosperity. What should a state maker do? Intervene in ways that reformist liberals recommend and classical liberals deplore? Bring the state "back in"? Or get out of the market, regardless of the short-term results, and hope to Adam Smith that what follows makes enough money for enough people to police the resultant crime and revolution? No wonder the debate within the liberal ranks often seems so fierce. Lodge on his windy station platform could sense some of the awful cost of constant competition. At least, we can say, those three boys had a job. Those thrown out of work by entrepreneurs w h o relocate factories or w h o replace h u m a n labor with more machines tell a different story. Like Lodge in his lectures, it is no surprise when they turn to Marx.

•

Stephen Hymer (1971) "Robinson Crusoe and the Secret of Primitive Accumulation" Every living being is a sort of imperialist, seeking to transform as much as possible of the environment into itself and its seed.—Bertrand Russell Note on Primitive Accumulation

The word primitive is here used in the sense of "belonging to the first age, period, or stage," i.e. of being "original rather than derivative," and not in the sense of "simple, rude, or rough." M a r x ' s original term was "ursprungliche akkumulation," and as Paul Sweezy suggests, it would have been better translated as "original" or "primary" accumulation. But it is too late to change current usage, and the word primitive should be interpreted in a technical sense, as in mathematics, where a primitive line or figure is a line or figure "from which some construction or reckoning begins." In economics primitive accumulation refers to the period from which capitalist accumulation springs. It was not simple, though it was rude and rough. 1

Reading: Hymer

47

The solitary and isolated figure of Robinson Crusoe is often taken as a starting point by economists, especially in their analysis of international trade. He is pictured as a rugged individual—diligent, intelligent, and above all frugal—who masters nature through reason. But the actual story of Robinson Crusoe, as told by Defoe, is also one of conquest, slavery, robbery, murder, and force. That this side of the story should be ignored is not at all surprising, "for in the tender annals of political economy the idyllic reigns from time immemorial." The contrast between the economist's Robinson Crusoe and the genuine one mirrors the contrast between the mythical description of international trade found in economics textbooks and the actual facts of what happens in the international economy. The paradigm of non-Marxist international trade theory is the model of a hunter and fisherman who trade to their mutual benefit under conditions of equality, reciprocity, and freedom. But international trade (or, for that matter, interregional trade) is often based on a division between superior and subordinate rather than a division between equals; and it is anything but peaceful. It is trade between the centre and hinterland, the colonizers and the colonized, the masters and the servants. Like the relation of capital to labour, it is based on a division between higher and lower functions: one party does the thinking, planning, organizing; the other does the work. Because it is unequal in structure and reward it has to be established and maintained by force, whether it be the structural violence of poverty, the symbolic violence of socialisation, or the physical violence of war and pacification. In this essay I would like to go over the details of Crusoe's story—how, starting as a slave trader, he uses the surplus of others to acquire a fortune— in order to illustrate Marx's analysis of the capitalist economy, especially the period of primitive accumulation which was its starting point. For capitalist accumulation to work, two different kinds of people must meet in the market (and later in the production process); on the one hand, owners of money eager to increase their capital by buying other people's labour power; on the other hand, free labourers unencumbered by precapitalist obligations or personal property. Once capitalism is on its legs, it maintains this separation and reproduces it on a continuously expanding scale. But a prior stage is needed to clear the way for the capitalist system and get it started—a period of primitive accumulation. In the last part of Volume 1 of Capital, Marx sketched the historical process by which means of production were concentrated in the hands of the capitalist, leaving the worker no alternative but to work for him. He showed how a wage labour force was created through the expropriation of the agricultural population and he traced the genesis of the industrial capitalist to, among other things, the looting of Africa, Asia, and America "in the rosy dawn of the era of capitalist production." In the story of Robinson Crusoe, Defoe describes how a seventeenth-century Englishman amassed capital and organised a labour force to work for him in Brazil and in the Caribbean. Of

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c o u r s e w h a t C r u s o e e s t a b l i s h e d w a s not a m a r k e t e c o n o m y s u c h as e m e r g e d in E n g l a n d but a p l a n t a t i o n and settler e c o n o m y s u c h as w a s u s e d by c a p i t a l ism in t h e n o n - E u r o p e a n w o r l d . It m i g h t t h e r e f o r e b e called t h e story of primitive underdevelopment. D e f o e ( 1 6 5 9 - 1 7 3 1 ) w a s p a r t i c u l a r l y well p l a c e d to o b s e r v e and u n d e r s t a n d the e s s e n c e of t h e r i s i n g b o u r g e o i s i e and t h e s e c r e t s of its o r i g i n s . T h e s o n of a L o n d o n b u t c h e r , h e w a s e n g a g e d in t h e b u s i n e s s of a h o s i e r y f a c t o r a n d a c o m m i s s i o n m e r c h a n t until he w e n t b a n k r u p t . D u r i n g his life he w r o t e m a n y e s s a y s and p a m p h l e t s on e c o n o m i c s , d i s c u s s i n g a m o n g o t h e r t h i n g s , b a n k s , road m a n a g e m e n t , f r i e n d l y and i n s u r a n c e s o c i e t i e s , idiot a s y l u m s , b a n k r u p t c y , a c a d e m i e s , military c o l l e g e s , w o m e n ' s e d u c a t i o n , social w e l f a r e p r o g r a m s , and national w o r k s h o p s . H e w a s o n e of t h e first w r i t e r s to rely o n t h e g r o w i n g m a r k e t of t h e m i d d l e c l a s s to e a r n his l i v i n g . 2

(1) Merchants' Capital R o b i n s o n C r u s o e ' s story can b e told in t e r m s of a s e r i e s of c y c l e s , s o m e r u n n i n g s i m u l t a n e o u s l y , t h r o u g h w h i c h h e a c c u m u l a t e s capital. In t h e early d a y s t h e s e t a k e t h e f o r m M - C - M , i.e. h e starts off w i t h m o n e y , e x c h a n g e s it f o r c o m m o d i t i e s , and e n d s up w i t h m o r e m o n e y . In t h e later p h a s e s w h e n he is o u t s i d e t h e m o n e y e c o n o m y , they take the f o r m C - L - C , as he uses his s t o c k of c o m m o d i t i e s to gain c o n t r o l o v e r o t h e r p e o p l e ' s l a b o u r and to p r o d u c e m o r e c o m m o d i t i e s , e n d i n g u p w i t h a small e m p i r e . R o b i n s o n C r u s o e w a s b o r n in 1632. T h e son of a m e r c h a n t , he c o u l d h a v e c h o s e n to f o l l o w t h e m i d d l e station of life and r a i s e his f o r t u n e " b y a p p l i c a t i o n and industry, with a life of ease and p l e a s u r e . " Instead h e c h o s e to g o to s e a — p a r t l y for a d v e n t u r e , partly b e c a u s e of g r e e d . In his first v o y a g e he starts off with £ 4 0 in " t o y s and t r i f l e s , " g o e s to t h e G u i n e a coast (as m e s s - m a t e , and c o m p a n i o n of t h e captain w h o m he b e f r i e n d e d in L o n d o n ) , and c o m e s b a c k w i t h f i v e p o u n d s nine o u n c e s of g o l d w o r t h £ 3 0 0 . T h i s is t h e first circuit of his capital. H e l e a v e s £ 2 0 0 of this s u m in E n g l a n d w i t h t h e c a p t a i n ' s w i d o w ( t h e c a p t a i n d i e d s o o n a f t e r their r e t u r n ) a n d , u s i n g t h e r e m a i n i n g £ 1 0 0 as f r e s h capital, s e t s o f f on a s e c o n d v o y a g e as a G u i n e a trader in o r d e r to m a k e m o r e c a p i t a l . I n s t e a d he m e e t s w i t h d i s a s t e r . T h e s h i p is c a p t u r e d by M o o r s and he b e c o m e s a s l a v e in N o r t h A f r i c a . H e e s c a p e s s l a v e r y in a boat t a k e n f r o m his m a s t e r , a c c o m p a n i e d by a f e l l o w s l a v e Xury, a b l a c k m a n , to w h o m h e p r o m i s e s , " X u r y , if y o u will b e f a i t h f u l to m e , I'll m a k e you a great m a n . " T o g e t h e r they sail a t h o u s a n d m i l e s a l o n g t h e coast of A f r i c a , until they a r e met and r e s c u e d by a P o r t u g u e s e c a p t a i n . F o r t u n a t e l y f o r R o b i n s o n , t h e r e is h o n o u r a m o n g c a p i t a l i s t s . T h e c a p t a i n , w h o is o n his w a y to B r a z i l , f e e l s it w o u l d b e u n f a i r to t a k e e v e r y t h i n g f r o m R o b i n s o n a n d b r i n g him to Brazil p e n n i l e s s . "I h a v e s a v e d y o u r l i f e on n o o t h e r t e r m s than I w o u l d b e g l a d to be s a v e d m y s e l f . . . . W h e n I c a r r y you to B r a z i l , s o great a w a y f r o m y o u r o w n c o u n t r y , if I s h o u l d t a k e f r o m you

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what you have, you will be starved there, and then 1 only take away that life I have given." Robinson of course does not tell the captain that he still has £ 2 0 0 in England. Instead, he sells the captain his boat (i.e. the boat he took when he escaped) and everything in it, including Xury. An African is an African, and only under certain conditions does he become a slave. Robinson has some pangs of guilt about selling "the poor boy's liberty who had assisted me so faithfully in procuring my o w n . " However, the captain offers to set Xury free in ten years if he turns Christian. "Upon this, and Xury saying he was willing to go to him, I let the captain have him" (for sixty pieces of eight). C o m m o d ities are things and cannot go to market by themselves. They have to be taken. If they are unwilling, they can be forced. Robinson arrives in Brazil where he purchases "as much land that was uncured as my money would reach, and formed a plan for my plantation and settlement, and such a one as might be suitable to the stock which I proposed to myself to receive from England." He soon finds "more than before, I had done wrong in parting with my boy Xury," for he needed help and found there was "no work to be done, but by the labour of my hands." He sends a letter to the w i d o w in England through his Portuguese captain friend instructing that half of his Pds200 be sent to him in the form of merchandise. The captain takes the letter to Lisbon where he gives it to some London merchants who relay it to London. The widow gives the money to a London merchant who, "vesting this hundred pounds in English goods, such as the captain had writ for, sent them directly to him at Lisbon, and he brought them all safe to me to Brazil; among which, without my direction (for I was too young in my business to think of them), he had taken care to have all sorts of tools, ironwork, and utensils necessary for my plantation, and which were of great use to me." The cargo arrives, bringing great fortune to Robinson. The Portuguese captain had used the £ 5 the w i d o w had given him for a present to purchase and bring to Robinson, "a servant under bond for six years service, and would not accept of any consideration, except a little tobacco which I would have him accept, being of my own produce." Moreover, he is able to sell the English goods in Brazil "to a very great advantage" and the first thing he does is to buy a Negro slave and a second indentured servant. This series of transactions presupposes an elaborate social network of capitalist intercommunications. The mythical Robinson is pictured as a selfsufficient individual, but much of the actual story, even after he is shipwrecked, shows him as a dependent man belonging to a larger whole and always relying on help and co-operation from others. The social nature of production turns out to be the real message of his story as we shall see again and again. There is no real paradox in this. To capitalism belong both the production of the most highly developed social relations in history and the production of the solitary individual.

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R o b i n s o n n o w integrates h i m s e l f into the c o m m u n i t y as a s u c c e s s f u l p l a n t e r and a c c u m u l a t e s steadily. But he c a n n o t b e c o n t e n t and s o o n l e a v e s " t h e h a p p y v i e w I had of b e i n g a rich and t h r i v i n g m a n in my n e w p l a n t a t i o n , o n l y to p u r s u e a rash a n d i m m o d e r a t e d e s i r e of r i s i n g f a s t e r than the n a t u r e of the t h i n g a d m i t t e d . " T h e p l a n t a t i o n s in Brazil w e r e short of labour, f o r " f e w N e g r o e s w e r e b r o u g h t , and t h o s e e x c e s s i v e d e a r " s i n c e t h e slave t r a d e at that t i m e w a s not f a r d e v e l o p e d and w a s c o n t r o l l e d by royal m o n o p o l i e s of t h e k i n g s of S p a i n and P o r t u g a l . R o b i n s o n had t o l d s o m e f r i e n d s a b o u t his t w o v o y a g e s to t h e G u i n e a C o a s t and the e a s e of p u r c h a s i n g t h e r e " f o r t r i f l e s not o n l y gold d u s t but N e g r o e s in great n u m b e r s " ( N B . that the trifles listed are b e a d s , toys, k n i v e s , s c i s s o r s , h a t c h e t s , bits of g l a s s , and the l i k e — a l l but the first t w o are by no m e a n s t r i f l e s , as R o b i n s o n w o u l d s o o n f i n d o u t ) . T h e s e f r i e n d s a p p r o a c h e d him in s e c r e c y w i t h a plan for o u t f i t t i n g a s h i p to get s l a v e s f r o m the G u i n e a C o a s t w h o w o u l d then be s m u g g l e d into Brazil privately and d i s t r i b u t e d a m o n g their o w n p l a n t a t i o n s . T h e y a s k e d R o b i n s o n to g o as " s u p e r c a r g o in the s h i p to m a n a g e t h e t r a d i n g part a n d o f f e r e d [ h i m ] an equal s h a r e of the N e g r o e s w i t h o u t p r o v i d i n g any part of t h e s t o c k . " R o b i n s o n a c c e p t s , and it is on this v o y a g e that his f a m o u s s h i p w r e c k o c c u r s . Years later, in t h e d e p t h s of isolation, he had c a u s e to regret this d e c i s i o n w h i c h he v i e w s in t e r m s of his original sin of " n o t b e i n g s a t i s f i e d with t h e station w h e r e i n G o d a n d n a t u r e had placed [ h i m ] . . . " " W h a t b u s i n e s s had I to l e a v e a settled f o r t u n e , a w e l l - s t o c k e d p l a n t a t i o n , i m p r o v i n g and i n c r e a s i n g , to turn s u p e r c a r g o to G u i n e a , to f e t c h N e g r o e s , w h e n p a t i e n c e and t i m e w o u l d h a v e s o i n c r e a s e d o u r stock at h o m e that w e c o u l d h a v e b o u g h t t h e m f r o m t h o s e w h o s e b u s i n e s s it w a s to f e t c h t h e m ? A n d t h o u g h it had cost us s o m e t h i n g m o r e , yet t h e d i f f e r e n c e of that price w a s by n o m e a n s w o r t h s a v i n g at so great a h a z a r d . " In f a c t he c o m e s out a h e a d f o r by the end of the story R o b i n s o n h a s s u c c e e d e d in a c c u m u l a t i n g m u c h f a s t e r than if he had r e m a i n e d c o n t e n t , f o r he a d d s a n e w f o r t u n e f r o m his island e c o n o m y to the g r o w t h of his p l a n t a tion. T r u e , h e m u s t s u f f e r a l o n g p e r i o d of isolation, b u t in m a n y w a y s his solitary s o j o u r n r e p r e s e n t s the a l i e n a t i o n s u f f e r e d by all u n d e r c a p i t a l i s m — t h o s e w h o w o r k and r e c e i v e little a s well as t h o s e like R o b i n s o n w h o a c c u m u l a t e and a l w a y s m u s t G o o n , G o on.

(2) Island Economy: The Pre-TVade Situation T h e key f a c t o r s in R o b i n s o n C r u s o e ' s survival and p r o s p e r i t y on his island in t h e sun are not his i n g e n u i t y a n d r e s o u r c e f u l n e s s but t h e p l e a s a n t c l i m a t e and the large store of e m b o d i e d l a b o u r he starts out w i t h . In t h i r t e e n t r i p s to his w r e c k e d s h i p he w a s a b l e to f u r n i s h himself w i t h m a n y t h i n g s , t a k i n g a vast array of m a t e r i a l s and t o o l s h e n e v e r m a d e but w e r e still his to e n j o y . T h e s e he u s e s to gain c o m m a n d o v e r n a t u r e and o v e r o t h e r m e n . Of chief i m p o r t a n c e in his initial stock of m e a n s of p r o d u c t i o n is a plentiful s u p p l y

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of guns and ammunition, which give him decisive advantage in setting the terms of trade when his island economy is finally opened up to trade. Robinson himself is fully aware of the importance of his heritage (see table 1). "What should 1 have done without a gun, without ammunition, without any tools to make anything or work with, without clothes, bedding, a tent, or any manner of coverings?" he asks. And "by making the most rational judgment of things every man may be in time master of every mechanic art. I had never handled a tool in my life, and yet in time, by labour, application, and contrivance, 1 wanted nothing but 1 could have made it, especially if I had had the tools" (emphasis added). A European is a European and it is only under certain conditions that he becomes a master. It was not their personal attributes that gave Robinson and other European adventurers their strength vis-à-vis non-Europeans but the equipment they brought with them, the power of knowledge made into objects. This material base was the result of a complicated social division of labour of which they were the beneficiaries not the creators.

Table 1 Defence: Food:

Clothing: Furniture and miscellaneous:

Tools:

Raw

materials:

Animals: Things he misses badly:

Items Taken by Robinson Crusoe from the Shipwreck ammunition, arms powder, 2 barrels musket bullets, 5 - 7 muskets, large bag full of small shot biscuits, rum, bread, rice, cheese, goat flesh, corn, liquor, flour, cordials, sweetmeats, poultry feed, wheat and rice seed men's clothes, handkerchiefs, coloured neckties, 2 pairs of shoes hammock, bedding, pens, ink, paper, 3 or 4 compasses, some mathematical instruments, dials, perspectives, charts, books on navigation, 3 Bibles carpenter's chest, 203 bags full of nails and spikes, a great screwjack, 1 or 2 dozen hatchets, grindstone, 2 saws, axe, hammer, 2 or 3 iron crows, 2 or 3 razors, 1 large scissors, fire shovel and tongs, 2 brass kettles, copper pots, gridiron rigging, sails for canvas, small ropes, ropes and wire, ironwork, timber, boards, planks, 203 hundredweight of iron, 1 hundredweight of sheet lead dog, 2 cats ink, spade, shovel, needles, pins, thread, smoking pipe

His island is a rich one, again thanks in part to the activities of other people. He surveys it with little understanding since most of the plants were unfamiliar to him. He makes no independent discovery but finds certain familiar items—goats, turtles, fruits, lemons, oranges, tobacco, grapes—

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m a n y of w h i c h 1 i m a g i n e c o u l d not h a v e got t h e r e e x c e p t if t r a n s p l a n t e d by p r e v i o u s v i s i t o r s f r o m o t h e r islands. His o w n d i s c o v e r y of a g r i c u l t u r e is a c c i d e n t a l . A m o n g the t h i n g s he r e s c u e d f r o m the s h i p w a s a little b a g w h i c h had o n c e b e e n f i l l e d w i t h c o r n . R o b i n s o n s e e i n g n o t h i n g in the b a g but h u s k s and dust, and n e e d i n g it f o r s o m e o t h e r p u r p o s e , s h o o k the h u s k s out on t h e g r o u n d . A m o n t h or s o later, not e v e n r e m e m b e r i n g he had t h r o w n t h e m t h e r e , he w a s " p e r f e c t l y a s t o n i s h e d " to f i n d b a r l e y g r o w i n g . C o n d i t i o n e d by capitalist t r a d i t i o n , C r u s o e tried to k e e p a c c o u n t of his activities and " w h i l e my ink lasted, 1 kept t h i n g s v e r y exact; b u t a f t e r that w a s g o n e , 1 c o u l d not, for I c o u l d not m a k e a n y ink by any m e a n s I c o u l d d e v i s e . " He d r a w s up a c o s t - b e n e f i t a n a l y s i s of his p o s i t i o n , s t a t i n g in it " v e r y impartially like d e b t o r and creditor, t h e c o m f o r t s 1 e n j o y e d , a g a i n s t t h e m i s e r i e s I s u f f e r e d . " H e f i n d s his d a y d i v i d e d into three. It took h i m o n l y a b o u t three h o u r s g o i n g out with his g u n , to get his f o o d . A n o t h e r p o r t i o n of his day w a s s p e n t in o r d e r i n g , c u r i n g , p r e s e r v i n g , and c o o k i n g . A third portion w a s s p e n t on capital f o r m a t i o n , p l a n t i n g barley and rice, c u r i n g raisins, b u i l d i n g f u r n i t u r e and a c a n o e , and s o f o r t h . T h i s p a s s i o n for a c c o u n t i n g m i g h t s e e m to c o n f i r m the e c o n o m i s t s ' p i c t u r e of R o b i n s o n as t h e rational m a n par e x c e l l e n c e , a l l o c a t i n g his t i m e e f f i c i e n t l y a m o n g v a r i o u s activities in o r d e r to m a x i m i z e utility. But then c o m e s this a s t o n i s h i n g o b s e r v a t i o n , " B u t m y t i m e or labour w a s little w o r t h , and s o it w a s as well e m p l o y e d o n e w a y as a n o t h e r " ! C o n t r a r y to t h e usual m o d e l s of e c o n o m i c theory, R o b i n s o n C r u s o e , p r o d u c i n g only f o r use and not f o r e x c h a n g e , f i n d s that t h e r e is no s c a r c i t y and that labour h a s n o v a l u e . T h e d r i v i n g f o r c e of c a p i t a l i s m , the p a s s i o n f o r a c c u m u l a t i o n v a n i s h e d w h e n he w a s a l o n e . " A l l I c o u l d m a k e use of w a s all that w a s v a l u a b l e . . . . T h e m o s t c o v e t o u s , g r i p i n g m i s e r in the w o r l d w o u l d h a v e b e e n c u r e d of t h e v i c e of c o v e t o u s n e s s , if he had b e e n in my c a s e . " R o b i n s o n ' s o w n e x p l a n a t i o n of this p h e n o m e n o n is m a i n l y in t e r m s of d e m a n d . B e c a u s e he is a l o n e , his w a n t s a r e limited and satiated b e f o r e he e x h a u s t s his a v a i l a b l e l a b o u r t i m e : 1 w a s r e m o v e d f r o m all t h e w i c k e d n e s s of the w o r l d here. 1 had neither t h e lust of the f l e s h , the lust of t h e e y e or the pride of life. I had n o t h i n g to c o v e t ; f o r I had all that I w a s n o w c a p a b l e of e n j o y i n g . I w a s lord of the w h o l e m a n o r ; or if I p l e a s e d , I m i g h t call m y s e l f king, or e m p e r o r o v e r t h e w h o l e c o u n t r y w h i c h 1 had p o s s e s s i o n of. T h e r e w e r e n o rivals. I had n o c o m p e t i t o r . . . T h i s is t r u e as f a r as it g o e s , b u t it is o n e - s i d e d . R o b i n s o n ' s g r e e d w e n t a w a y b e c a u s e t h e r e w e r e no p e o p l e to o r g a n i s e and master. M a r x ' s p r o p o sition w a s that s u r p l u s l a b o u r w a s t h e s o l e m e a s u r e and s o u r c e of capitalist w e a l t h . W i t h o u t s o m e o n e e l s e ' s l a b o u r to c o n t r o l , t h e c a p i t a l i s t ' s v a l u e s y s t e m v a n i s h e d : no b o u n d l e s s thirst f o r s u r p l u s l a b o u r a r o s e f r o m t h e n a t u r e

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of p r o d u c t i o n itself; the goals of efficiency, m a x i m i z a t i o n , and accumulation faded into a wider system of values. Later w h e n R o b i n s o n ' s island b e c o m e s populated, the passion to organize and accumulate returns. It is only when he has no labour but his own to control that labour is not scarce and he ceases to m e a s u r e things in terms of labour time. As R o b i n s o n ' s reference to the miser shows, it is not merely a question of the d e m a n d for c o n s u m p t i o n g o o d s . T h e miser accumulates not for c o n s u m p t i o n but f o r accumulation, just as the purposeful man in the capitalist era, as Keynes noted, " d o e s not love his cat, but his c a t ' s kittens; not, in truth, the kittens, but only the kittens' kittens, and so on f o r w a r d f o r e v e r to the end of c a t - d o m . For him j a m is not j a m unless it is a case of j a m tomorrow and never j a m today." 3 M o n e y and capital are social relations representing social power over others. R e g a r d l e s s of what goes on in the m i n d s of misers and capitalists when they look at their stock, it is power over people that they are accounting and a c c u m u l a t i n g , as they would soon find out if they, like R o b i n s o n , were left alone. R o b i n s o n is partially aware of this when he m e d i t a t e s on the uselessness of gold on his island: I smiled to myself at the sight of this money. " O d r u g ! " said I aloud, " w h a t are thou good for? T h o u art not worth to me, no not the taking off of the g r o u n d , one of those knives is worth all this heap; I have no m a n n e r of use f o r thee; e ' e n remain w h e r e thou art, and g o to the bottom as a creature w h o s e life is not worth saving." However, upon s e c o n d thoughts, I took it away . . . He t h u s negates the Mercantilist system which m a d e a fetish out of gold, but does not fully pierce the veil of money to uncover the underlying basis of surplus l a b o u r — d o e s not in his theories, that is; in his daily practice he is fully a w a r e of the real basis of the economy. This s h o w s up w h e n he discusses the concept of Greed. In R o b i n s o n ' s eyes, his original sin is the crime of w a n t i n g to rise above his station instead of f o l l o w i n g the calling chosen f o r him by his father. Isolation and estrangement are his p u n i s h m e n t , and he f e e l s that his story should teach content to those " w h o cannot enjoy c o m f o r t a b l y what God has given t h e m . " He feels guilty for violating the feudal institutions of status, patriarchy, and God. He d o e s not consider that when he a c c u m u l a t e s , he violates those w h o m he e x p l o i t s — X u r y , the A f r i c a n s he sold into slavery, his indentured servants, and soon Friday and others. From the ideological point of view, Robinson is a transitional man looking b a c k w a r d and upward instead of f o r w a r d and d o w n w a r d . T h i s is why he learns n o t h i n g (morally speaking) f r o m his loneliness. T h e miser is not in fact cured, the vice of covetousness easily returns. Since the relationship of trade, accumulation, and exploitation is so crucial to understanding e c o n o m i c s , we might dwell on it a little longer. T h e argument can be traced back to Aristotle, w h o felt that a self-sufficient c o m m u n i t y would not be driven by scarcity and a c c u m u l a t i o n , since natural

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wants were limited and could easily be satisfied with plenty of time left over for leisure. Such a community would practice the art of householding which has use value as its end. But Aristotle, an eyewitness to the growth of the market at its very first appearance, noted that there was another art of wealth getting—commercial trade—which had no limit, since its end was the accumulation of exchange value for its own sake. Aristotle was more interested in the effects of the rise of commerce than in its base and did not make the connection between exchange value and surplus labour. But it was there for all to see. The emergence of the market in ancient Athens was a byproduct of its imperial expansion, the looting of territories liberated from the Persians, the collection of tribute and taxes from other Greek states for protection, and the forced diversion of the area's trade to Athens' port. 4 Keynes, though analytically imprecise, glimpsed the same point in his article on "National Self-Sufficiency" (Yale Review, 1934) where he instinctively saw that some withdrawal from international trade was necessary to make the life made possible by science pleasant and worthwhile. He wanted to minimise rather than maximise economic entanglements among nations so that we can be "our own masters" and "make out favourite experiments toward the ideal social republic of the future." He was all for a free exchange of ideas, knowledge, science, hospitality, and travel, "but let goods be home-spun whenever it is reasonably and commercially possible, and, above all let finance be primarily national." He knew that it was not invidious consumption that was the problem, but the desire to extend oneself by penetrating foreign markets with exports and investment, which in the end comes down to an attempt to transform as much as possible of the world into oneself and one's seed, i.e., imperialism. To return to Robinson Crusoe. It is important to note that his isolation was accompanied not so much by loneliness as by fear. The first thing he did when he arrived on his beautiful Caribbean paradise was to build himself a fortress. It was only when he was completely "fenced and fortified" from all the world that he "slept secure in the night." His precautions during the first eleven years when he is completely alone are astonishing. Yet during these years he is in no danger from wild animals or any living thing. His chief problem comes from birds who steal his seeds. He deals with them with dispatch, shooting a few and then "I took them up and served them as we serve notorious thieves in England, viz., hanged them in chains for a terror to others." And, as we shall see in the next section, when signs of other human beings come to him, he does not run out with joy, ready to risk everything to hear a human voice after so many years in solitary confinement. Instead his fears and anxieties rise to a frenzied pitch, and he fences and fortifies himself more and more, withdrawing further and further into isolation. Perhaps this is what one should expect from a man isolated for so long a period. But at times it seems to me that Defoe, in describing Robinson

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Crusoe, w a s not only talking about a man w h o by accident b e c o m e s isolated, but is presenting an allegory about the life of all men in capitalist s o c i e t y — solitary, poor, uncertain, afraid. T h e isolation is more intense in R o b i n s o n ' s mind than in his actual situation. For what c o m e s out clearly, in encounter after encounter, is that w h e n e v e r Robinson has to face another person he reacts with fear and suspicion. His isolation, in short, is no more nor less than the alienation of possessive individualism, repeated a million t i m e s in capitalist society, and in our days symbolized by the private c i v i l - d e f e n s e shelter protected f r o m n e i g h b o u r s by a m a c h i n e gun.

(3) Opening Up of lYade: Forming an Imperial Strategy T h e o p e n i n g up of his e c o n o m y to the outside world does not c o m e to Robinson Crusoe in the f o r m of abstract prices generated in a n o n y m o u s markets but in the f o r m of real people with w h o m he must c o m e to terms. After f i f t e e n years on the island, he c o m e s upon the print of a naked m a n ' s foot on the shore. His first reaction is fear. He w a s "terrified to the last degree, looking behind me at every two or three steps, mistaking every bush and tree, and f a n c y i n g every s t u m p at a distance to be a man." He g o e s to his retreat. " N e v e r frightened hare fled to cover, or f o x to earth, with more terror of mind, than I." From then on he lived "in the constant snare of the fear of man . . . a life of anxiety, fear and care." He thinks of d e s t r o y i n g his cattle enclosure, cornfield, and dwelling, "that they might not find such a grain there . . . and still be prompted to look further, in order to find out the persons inhabiting." He builds a second wall of fortifications, armed with seven muskets planted like a cannon and fitted "into f r a m e s that held t h e m like a carriage, so that I could fire all the seven guns in t w o m i n u t e s ' time. T h i s wall I w a s many a weary month a - f i n i s h i n g and yet never thought myself safe till it was d o n e . " He pierces all the g r o u n d outside his wall with stakes or sticks so that in five or six years' time he had "a w o o d b e f o r e my d w e l l i n g growing so monstrous thick and strong that it was indeed perfectly impassable; and no men of what kind soever would ever imagine that there w a s anything beyond it." T h r e e years after he sees the footprint, he c o m e s across bones and other remains of cannibalism. (We leave aside the historical question of w h e t h e r or not cannibalism w a s practised by the Caribbeans. It is enough that R o b i n s o n thought so. European readiness to believe other people were cannibals, regardless of fact, plays the same role in d e t e r m i n i n g trade patterns as the inter-European solidarity exhibited, for example, b e t w e e n the Portuguese captain and R o b i n s o n . ) He withdrew further and " k e p t close within my circle for almost two years." Gradually fear w e a r s off, and he begins to c o m e out more. But he proceeds cautiously. He d o e s not fire his gun, for fear it would be heard,

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and he is always armed with a gun, two pistols, and a cutlass. At times he even thinks of attack, and builds a place f r o m which he can "destroy s o m e of these monsters in their cruel bloody entertainment and, if possible, save the victim they should bring hither to destroy." But then he thinks, " T h e s e people had done me no injury . . . and therefore it could not be just for m e to fall upon t h e m . " He chastises the Spaniards f o r their barbarities in A m e r i c a " w h e r e they destroyed millions of these people . . . a mere butchery, a bloody and unnatural piece of cruelty, unjustifiable either to God or man; as for which the very n a m e of a Spaniard is reckoned to be frightful and terrible to all people of humanity or of Christian c o m p a s s i o n . " He decides it is " n o t my business to meddle with them unless they first attacked me." D u r i n g the next few years he keeps himself " m o r e retired than ever," seldom going f r o m his cell. Fear "put an end to all invention and to all the contrivances 1 had laid for my f u t u r e a c c o m m o d a t i o n s . " He w a s afraid to drive a nail, or c h o p a stick of w o o d , or fire a gun, or light a fire for fear it would be heard or seen. He w a n t s " n o t h i n g so m u c h as a safe retreat," and finds it in a hidden grotto. "I fancied myself now like one of the ancient giants which were said to live in caves and holes in the rocks, where none could c o m e at t h e m . " Yet even in this d e e p isolation, it is only people that he feared. With s o m e parrots, cats, kids, and tame seafowl as pets, "1 began to be very well contented with the life 1 led, if it might but have been secured f r o m the dread of the s a v a g e s . " In his twenty-third year he finally sights s o m e of the Caribbeans w h o periodically visit the island. He first retreats to his fortifications; but, no longer " a b l e to bear sitting in ignorance," he sets himself up in a safe place f r o m which to observe "nine naked savages sitting round a small f i r e . " T h o u g h t s of "contriving how to circumvent and fall upon them the very next t i m e " c o m e once more to his mind and soon he is d r e a m i n g " o f t e n of killing the s a v a g e s . " His loneliness intensifies when o n e night he hears a shot fired f r o m a distressed ship and next day f i n d s a s h i p w r e c k . He longs for contact with Europeans. " O that there had been one or two, nay, or but one soul saved out of this ship, to have escaped to me, that 1 might have one c o m p a n i o n , one fellow creature to have spoken to m e and to have conversed with!" His thoughts move f r o m d e f e n s e to o f f e n s e . His moral misgivings about Spanish colonization recede into the b a c k g r o u n d , and he begins to f o r m an imperial strategy. The plan c o m e s to him in a d r e a m in which a captured s a v a g e escapes, runs to him, and b e c o m e s his servant. Awaking, "I m a k e this conclusion, that my only way to go about an attempt for an escape was, if possible, to get a savage into my possession: and if possible it should be one of the prisoners." He has s o m e fears about whether he can d o this and s o m e moral q u a l m s about whether he should; but though "the thoughts of s h e d d i n g human blood for my deliverance w e r e terrible to m e , " he at length resolved "to get one of these savages into my hands, cost what it w o u l d . "

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About a year and a half later a group of about twenty or thirty Caribbeans come ashore. Luck is with him. One prisoner escapes, followed by only two men. "It came now very warmly upon my thoughts and indeed irresistibly, that now was my time to get me a servant, and perhaps a companion or assistant." Robinson knocks down one of the pursuers and shoots a second. The rescued prisoner, cautious and afraid, approaches. "He came nearer and nearer, kneeling down every ten or twelve steps. . . . At length he came close to me, and then he kneeled down again, kissed the ground, and laid his head upon the ground, and taking me by the foot, set my foot upon his head; this, it seems, was in token of swearing to be my slave forever." Robinson has his servant. An economy is born. (4) Colonization Friday, tired f r o m his ordeal, sleeps. Robinson evaluates his prize. The relationship they are about to enter into is an unequal and violent one. ("Violence," writes R. D. Laing in The Politics of Experience, "attempts to constrain the o t h e r ' s freedom, to force him to act in the way we desire, but with ultimate lack of concern, with indifference to the other's own existence or destiny.") It requires an ideological superstructure to sustain it and make it tolerable. Friday is an independent person with his own mind and will. But Robinson's rule depends upon the extent to which his head controls Friday's hand. To help himself in his daily struggle with Friday, Robinson begins to think of Friday not as a person but as a sort of pet, a mindless body that is obedient and beautiful. ("The use made of slaves and of tame animals is not very different; for both with their bodies minister to the needs of life." Aristotle, The Republic.) The following is a verbatim quote of his description of Friday, except for the substitution of "she" for "he", "her" for " h i m " . This is not done to suggest homosexuality but to emphasize how rulers conceive of the ruled only as bodies to minister to their needs. (To quote Aristotle again, "the male is by nature superior, and the female inferior; and the one rules, and the other is ruled.") She was a comely, handsome w o m a n , perfectly well made, with straight strong limbs, not too large, tall and well-shaped, and as 1 reckon, about twenty-six years of age. She had a very good countenance, not a fierce and surly aspect, but seemed to have something very manly in her face and yet she had all the sweetness and softness of a European in her countenance too, especially when she smiled. Her hair was long and black, not curled like wool; her forehead very high and large; and a great vivacity and sparkling sharpness in her eyes. The colour of her skin was not quite black, but very tawny: and yet not of an ugly yellow, nauseous tawny, as the Brazilians and Virginians, and other natives of A m e r i c a are; but of a bright kind of a

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Robinson has a gun, but he cannot rule by force alone if he wants Friday to be productive. He must socialize his servant to accept his subordinate position. Robinson is at a great advantage for he has saved the man's life, but a careful program is still necessary, going through several stages of development, before the servant internalizes the authoritarian relationship and is able to act "independently" in a "dependent" fashion. The parallels between Robinson's education of Friday, and the actual procedures of colonization used in the last two hundred years are striking. Step 1: The first thing Robinson does is set the stage for discourse by giving himself and Friday names that are humiliating to Friday and symbolic of his indebtedness. "First I made him know his name should be Friday, which was the day I saved his life; I called him so for the memory of the time; I likewise taught him to say Master, and then let him know that was to be my name." Step 2: Robinson further establishes relative status by covering Friday's nakedness with a pair of linen drawers (taken from the shipwreck) and a jerkin of goat's skin and a cap of hareskin he had made himself. He "was mighty well pleased to see himself almost as clothed as his master." Step 3: Robinson gives Friday a place to sleep between the two fortifications, i.e., a middle position, partly protected but outside the master's preserves. He sets up a burglar alarm so that "Friday could in no way come at me in the inside of my innermost wall without making so much notice in getting over that it must needs waken me," and takes other precautions such as taking all weapons into his side every night. Yet as Robinson says, these precautions were not really needed, "for never man had a more faithful, loving, sincere servant than Friday was to me; without passions, sullenness, or designs, perfectly obliged and engaged; his very affections were tied to me like those of a child to a father; and 1 dare say he would have sacrificed his life for the saving of mine upon any occasion whatsoever." The allocation of space helps remind Friday of his position and keep him subordinate. Step 4: Friday is then given the skills necessary for his station and his duties, i.e., the ability to understand orders and satisfy Robinson's needs. "I . . . made it my business to teach him everything that was proper to make him useful, handy, and helpful; but especially to make him speak and understand me when I spoke." Step 5: Next comes a crucial moment in which Robinson, through a cruel show of force, terrifies poor Friday into complete submission. Robinson takes Friday out and shoots a kid with his gun. (He is no longer afraid of being heard.)

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The poor creature, who had at a distance indeed seen me kill the savage, his enemy, but did not know or could imagine how it was done, was sensibly surprised. . . . He did not see the kid 1 had shot at or perceive 1 had killed it, but ripped up his waist-coat to feel if he was not wounded, and as I found presently, thought 1 was resolved to kill him, for he came and kneeled down to me, and, embracing my knees, said a great many things 1 did not understand; but 1 could easily see the meaning was to pray me not to kill him. In this ritual death and rebirth, Friday learns the full extent of Robinson's power over him. Robinson then kills various animals, and teaches Friday "to run and fetch them" like a dog. But he takes care that Friday never sees him load the gun, so that he remains ignorant of the fact that you have to put in ammunition. Step 6: The first stage of initiation is completed, Robinson can move on to establishing the social division of labour on a more subtle base. He teaches Friday to cook and bake, and "in a little time Friday was able to do all the work for me, as well as 1 could do it for myself." Then Robinson marks out a piece of land "in which Friday not only worked very willingly and very hard, but did it cheerfully." Robinson explains that it was for corn to make more bread since there were now two of them. Friday, by himself, discovers the laws of property and capitalist distribution of income in fully mystified form. "He appeared very sensible of that past, and let me know that he thought I had much more labour upon me on his account than I had for myself, and that he would work the harder for me, if I would tell him what to do." Step 7: Graduation: Robinson now instructs Friday in the knowledge of the true God. This takes three years, during which Friday raises such difficult questions that Robinson for a time withdraws, realizing that one cannot win by logical argument alone, and only divine revelation can convince people of Christianity. Finally, success. "The savage was now a good Christian." The two become more intimate, Robinson tells Friday his story and at long last "let him into the mystery, for such it was to him, of gunpowder and bullet and taught him how to shoot." Robinson gives Friday a knife and a hatchet and shows him the boat he was planning to use to escape. Step 8: Eternal Policeman: Even after granting independence, Robinson cannot trust Friday. The master can never rest secure. One day, while watching the mainland f r o m the top of a hill on the island, Robinson observes an extraordinary sense of pleasure appeared on Friday's face . . . and a strange eagerness, as if he had a mind to be in his own country again; and this observation of mine put a great many thoughts into me, which made me at first not so easy about my new man Friday as 1 was before; and 1 made no doubt but that if Friday could get back to

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his o w n nation a g a i n , he w o u l d not only f o r g e t all his religion, but all his o b l i g a t i o n to m e ; and w o u l d b e f o r w a r d e n o u g h to g i v e his c o u n t r y m e n an a c c o u n t of m e , and c o m e b a c k , p e r h a p s with a h u n d r e d or t w o of t h e m , a n d m a k e a f e a s t u p o n m e , at w h i c h he m i g h t b e as m e r r y as he u s e d to b e w i t h t h o s e of his e n e m i e s , w h e n they w e r e t a k e n in war. R o b i n s o n c o n t i n u o u s l y p u m p s Friday to s e e if he c o u l d u n c o v e r a n y c r a c k s ; then h e f e e l s guilty o v e r his s u s p i c i o n . I m p e r i a l i s m k n o w s n o peace.

(5) Partnership and Expanded Reproduction For r o u g h l y ten y e a r s , b e t w e e n t h e t i m e he first s a w t h e print of a f o o t in t h e s a n d until he met Friday, R o b i n s o n C r u s o e led a l i f e of fear, anxiety, and c a r e d u r i n g w h i c h t i m e his p r o d u c t i v e a c t i v i t i e s w e r e r e d u c e d to a m i n i m u m and he s c a r c e l y d a r e d to v e n t u r e o u t s i d e the n a r r o w c o n f i n e s of his s t r o n g h o l d s . W h e n Friday c o m e s he b e c o m e s e x p a n s i v e a g a i n , t e a c h i n g , b u i l d i n g , a c c u m u l a t i n g . T h o u g h no m e n t i o n is m a d e of a c c o u n t i n g , o n e can d e d u c e that l a b o u r again b e c a m e v a l u a b l e , for R o b i n s o n is o n c e m o r e p u r p o s e f u l , and interested in a l l o c a t i o n and e f f i c i e n c y , as he o r d e r s , c a u s e s , g i v e s Friday to d o o n e t h i n g or a n o t h e r , i n s t r u c t s h i m , s h o w s h i m , g i v e s h i m d i r e c t i o n , m a k e s t h i n g s f a m i l i a r to h i m , m a k e s h i m u n d e r s t a n d , t e a c h e s h i m , lets h i m see, c a l l s h i m , h e a r t e n s h i m , b e c k o n s him to r u n a n d f e t c h , s e t s h i m to w o r k , m a k e s him build s o m e t h i n g , etc. etc. T h r o u g h his social relation with Friday, he b e c o m e s an e c o n o m i c m a n . Friday b e c o m e s l a b o u r and he b e c o m e s c a p i t a l — i n n o v a t i n g , o r g a n i z i n g , and b u i l d i n g an e m p i r e . A b o u t three y e a r s a f t e r Friday arrives, R o b i n s o n ' s t w e n t y - s e v e n t h y e a r on t h e island, an o p p o r t u n i t y f o r e n l a r g e m e n t c o m e s . T w e n t y - o n e s a v a g e s and t h r e e p r i s o n e r s c o m e a s h o r e . R o b i n s o n d i v i d e s t h e a r m s w i t h Friday and they set out to attack. O n t h e w a y , R o b i n s o n a g a i n has d o u b t s as to w h e t h e r it w a s right " t o g o and d i p my h a n d s in b l o o d , to a t t a c k p e o p l e w h o had n e i t h e r d o n e or i n t e n d e d m e a n y w r o n g . " " F r i d a y , " h e o b s e r v e s , " m i g h t j u s t i f y it, b e c a u s e he w a s a d e c l a r e d e n e m y , and in a state of w a r w i t h t h o s e v e r y p a r t i c u l a r p e o p l e ; and it w a s l a w f u l f o r h i m to attack t h e m , " but, as he c o u l d not say t h e s a m e for h i m s e l f , he r e s o l v e s u n i l a t e r a l l y f o r both of t h e m not t o act u n l e s s " s o m e t h i n g o f f e r e d that w a s m o r e a call to m e than yet 1 knew of." T h e call c o m e s w h e n h e d i s c o v e r s o n e of t h e v i c t i m s is a w h i t e m a n and he b e c o m e s " e n r a g e d t o the h i g h e s t d e g r e e . " A s it t u r n s o u t , the p r i s o n e r is a S p a n i a r d ; given w h a t R o b i n s o n had p r e v i o u s l y said a b o u t S p a n i s h colonial policy, o n e might h a v e t h o u g h t he w o u l d h a v e s o m e d o u b t s a b o u t w h a t w a s l a w f u l . But he d o e s not, and a l o n g with Friday, a t t a c k s — k i l l i n g s e v e n t e e n and r o u t i n g four. ( F r i d a y d o e s m o s t of the killing, in part b e c a u s e he " t o o k

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his aim so much better" than Robinson, in part b e c a u s e Robinson w a s directing and Friday doing.) T h e Spaniard is rescued and they find another victim in a boat w h o turns out to be Friday's father, his life luckily saved b e c a u s e his fellow captive w a s white. N o w they were four. Robinson has an e m p i r e which he rules firmly and justly with a certain d e g r e e of permissiveness and tolerance. M y island w a s now peopled, and I thought myself very rich in s u b j e c t s ; and it w a s a m e r r y reflection, which I f r e q u e n t l y m a d e , how like a king I l o o k e d . First of all, the w h o l e country w a s my o w n property, so that I had an undoubted right of d o m i n i o n . Secondly, my p e o p l e w e r e p e r f e c t l y s u b j e c t e d . I w a s absolute lord and l a w g i v e r ; they all o w e d their lives to me, and w e r e ready to lay d o w n their lives, if there had been occasion of it for me. It w a s remarkable, too, w e had but three subjects, and they were of three different religions. My man Friday w a s a Protestant, his father w a s a pagan and a cannibal, and the Spaniard w a s a Papist. H o w e v e r I allowed liberty of conscience throughout my dominions. T h e period of primitive accumulation is over. Robinson now has property. It is not based on his previous labour, but on his fortunate possession of arms. T h o u g h his capital c o m e s into the world dripping blood f r o m every pore, his o w n e r s h i p is undisputed. Friday was not a lazy rascal s p e n d i n g his subsistence on more riotous living, yet in the end he still has nothing but himself, while the wealth of Robinson Crusoe increases constantly although he has long ceased to w o r k . With time, more people arrive on his island. Robinson shrewdly uses his m o n o p o l y of the m e a n s of production to m a k e them submit to his rule. A s the empire grows, its p r o b l e m s b e c o m e more c o m p l e x . But Robinson is ever resourceful in using terror, religion, frontier law, and the principle of delegated authority to consolidate his position and p r o d u c e a s e l f - p r o d u c i n g order. Robinson learns that there are fourteen more Spaniards and P o r t u g u e s e staying with the Caribbeans, " w h o lived there at peace indeed with the s a v a g e s . " T h e y had arms but no powder and no hope of escape, for they had "neither vessel, or tools to build one, or provisions of any kind." Robinson of course has the missing ingredients for their rescue, but how can he be sure he will be paid back? "I feared mostly their treachery and ill usage of me, if I put my life in their hands, f o r that gratitude w a s no inherent virtue in the nature of man; nor did men always square their dealings by the obligations they had received so much as they did by the a d v a n t a g e they e x p e c t e d . " Robinson cannot d e p e n d on the law to guard his property. Instead he uses religion. Europeans d o not require so elaborate a socialization procedure as Friday because they have c o m e by education, tradition, and habit to look

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upon private property as a self-evident law of nature. T h e Spaniard and Friday's father are to go to where the other Europeans are staying. T h e y would then sign a contract, "that they should be absolutely under my leading, as their c o m m a n d e r and captain; and that they should swear upon the Holy S a c r a m e n t s and the Gospel to be true to me and to go to such Christian country as that 1 should agree to, and no other; and to be directed wholly and absolutely by my orders." R o b i n s o n converts their debt to him into an obligation t o w a r d s God. T h u s men are ruled by the products of their mind. T h e trip is postponed for a year, while R o b i n s o n ' s capital stock is expanded so that there will be enough f o o d for the new recruits. T h e work process is now more complicated because of the increase in n u m b e r s . A vertical structure separating operations, co-ordination, and strategy is established on the basis of nationality—a sort of multinational corporation in miniature. "I marked out several trees which 1 thought fit for our work, and I set Friday and his father to cutting t h e m d o w n ; and then I caused the Spaniard, to w h o m 1 had imparted my thought on that affair, to oversee and direct their w o r k . " W h e n the harvest is in, the Spaniard and Friday's father are sent out to negotiate. W h i l e they are away, an English ship arrives at the island. Robinson is filled with indescribable joy at seeing a ship " m a n n e d by [his] own countrymen, and consequently f r i e n d s . " Yet at the same time, " s o m e secret doubts hung about [him]," for perhaps they were thieves and murderers. T h i s we have seen is a typical reaction of Robinson Crusoe to other people; it is a prudent attribute in a society of possessive individuals where all are the enemy of each. Caveat Emptor. S o m e of the crew c o m e ashore with three prisoners. W h e n the prisoners are left unguarded, Robinson approaches them: "1 am a m a n , an Englishman, and disposed to assist you, you see; I have one servant only; w e have arms and a m m u n i t i o n ; tell us freely, can w e serve y o u ? " T h e three prisoners turn out to be the captain of the ship, his mate, and one passenger. T h e others are mutineers, of w h o m the captain says, " T h e r e were two desperate villains a m o n g them that it w a s scarce safe to show any mercy to"; but if they were secured, he believed "all the rest would return to their duty." T h e charges being laid, a quick decision and verdict is reached. Robinson sides with authority. T h e captain o f f e r s a generous contract to Robinson: " B o t h he and the ship, if recovered, should be wholly directed and c o m m a n d e d by me in everything; and if the ship w a s not recovered, he would live and die with me in what part of the world soever I would send him; and the other two men the s a m e . " R o b i n s o n asks for much less: recognition of his undisputed authority w h i l e they are on the island, free passage to England for himself and Friday if the ship is recovered. T h e men w h o brought the captain ashore are attacked. T h e two villains are summarily executed in the first round, the rest are made prisoners or

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allowed to join the captain and Robinson. More men are sent to shore f r o m the ship, and are soon captured. One is made prisoner, the others are told Robinson is governor of the island and that he would engage for their pardon if they helped capture the ship. The ship is seized with only one life lost, that of the new captain. Robinson, still posing as governor, interviews the five prisoners and hearing the "full account of their villainous behaviour to the captain, and how they had run away with the ship and were preparing to commit further robberies," offers them the choice of being left on the island or being taken to England in chains to be hanged. They choose the island and Robinson is so much the richer. Law makes criminals and criminals make settlers. In a repeat of his lesson to the birds, Robinson orders the captain "to cause the new captain who was killed to be hanged at the yardarm, that these men might see him." On the 19th December, 1686, twenty-eight years and two months after his arrival, Robinson goes on board the ship, taking with him his great goatskin cap, his umbrella, one of his parrots, and the money he had taken off the ship. He also takes Friday but does not wait for the return of Friday's father and the Spaniards. Instead he leaves a letter for them with the prisoners being left behind, after making them "promise to treat them in common with themselves." He returns to civilization and discovers capital's power for selfsustaining growth. His trustees had given in the account of the produce of my part of the plantation to the procurator fiscal, who had appropriated it, in case I never came to claim it, one third to the kind, and two thirds to the monastery of St. Augustine, to be expended for the benefit of the poor and for the conversion of Indians to the Catholic faith; but that if I appeared, or anyone for me, to claim the inheritance, it should be restored: only that the improvements, or annual production, being distributed to charitable uses, could not be restored. He was thus a rich man, "master all of a sudden of about £5,000 sterling in money, and had an estate, as 1 might well call it, in Brazil, of about a thousand pounds a year, as sure as an estate of lands in England." He also had his island to which he returns in 1694. He learns how the Spaniards had trouble with the villains when they first returned but eventually subjected them, of their battles with the Caribbeans, "of the improvements they made upon the island itself and of how five of them made an attempt upon the mainland, and brought away eleven men and five women prisoners, by which, at my coming, I found about twenty young children on the island." Robinson brings them supplies, a carpenter, and a smith and later sent seven w o m e n "such as 1 found proper for service or for wives to such as would take them."

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B e f o r e he l e a v e s t h e i s l a n d , he r e o r g a n i z e s it on a s o u n d b a s i s . D i v i d i n g it into parts, he r e s e r v e s to h i m s e l f t h e p r o p e r t y of t h e w h o l e , a n d g i v e s o t h e r s s u c h parts r e s p e c t i v e l y as they agreed u p o n . A s to t h e E n g l i s h m e n , h e p r o m i s e d to s e n d t h e m s o m e w o m e n f r o m E n g l a n d , " a n d t h e f e l l o w s p r o v e d v e r y h o n e s t and diligent a f t e r t h e y w e r e m a s t e r e d and had their p r o p e r t i e s set apart f o r t h e m . " With p r o p e r t y and the f a m i l y f i r m l y e s t a b l i s h e d , t h e g r o u n d is c l e a r f o r steady g r o w t h .

(6) Moral We m a y s t o p at this point and c o n s i d e r t h e v e r y high rate of return e a r n e d by R o b i n s o n on his original capital of £ 4 0 . H e c a n n o t b e said to h a v e w o r k e d very hard f o r his m o n e y , but h e w a s certainly a great o r g a n i s e r and e n t r e p r e n e u r , s h o w i n g e x t r a o r d i n a r y c a p a c i t y to take a d v a n t a g e of s i t u a t i o n s and m a n a g e other p e o p l e . H e s u f f e r e d t h e p a i n s of s o l i t u d e and t h e v i c e s of g r e e d , d i s t r u s t , and r u t h l e s s n e s s , but he e n d s u p with " w e a l t h all r o u n d m e " and F r i d a y — " e v e r p r o v i n g a m o s t f a i t h f u l s e r v a n t u p o n all o c c a s i o n s . " T h e a l l e g o r y of R o b i n s o n C r u s o e g i v e s us better e c o n o m i c history a n d better e c o n o m i c theory than m a n y of the tales told by m o d e r n e c o n o m i c s a b o u t the national and i n t e r n a t i o n a l division of labour. E c o n o m i c s t e n d s to stay in t h e m a r k e t p l a c e a n d w o r r y a b o u t prices. It has m o r e to say a b o u t h o w R o b i n s o n ' s s u g a r relates to his c l o t h i n g than h o w he relates to Friday. To u n d e r s t a n d h o w capital p r o d u c e s and is p r o d u c e d , w e m u s t l e a v e t h e noisy s p h e r e of the m a r k e t w h e r e e v e r y t h i n g t a k e s p l a c e on t h e s u r f a c e a n d enter into t h e h i d d e n r e c e s s e s of t h e f a c t o r y and c o r p o r a t i o n , w h e r e t h e r e is usually no a d m i t t a n c e e x c e p t on b u s i n e s s . D e f o e ' s capitalist is t r a n s p o r t e d to a desert island o u t s i d e the m a r k e t s y s t e m , and his relations to o t h e r people are direct and visible. T h e i r secret of capital is r e v e a l e d , n a m e l y , that it is based on other p e o p l e ' s labour and is o b t a i n e d t h r o u g h f o r c e and illusion. T h e birth c e r t i f i c a t e of R o b i n s o n ' s capital is not as b l o o d y as that of m a n y other f o r t u n e s , but its c o e r c i v e n a t u r e is clear. T h e international e c o n o m y of R o b i n s o n ' s t i m e , like that of today, is not c o m p o s e d of equal p a t t e r n s but is o r d e r e d a l o n g class lines. R o b i n s o n o c c u p i e s o n e of the u p p e r - m i d d l e levels of t h e p y r a m i d . ( T h e h i g h e s t l e v e l s are in the c a p i t a l s of E u r o p e . ) C a p t a i n s , m e r c h a n t s , and p l a n t e r s are his p e e r g r o u p . With t h e m he e x c h a n g e s on t h e b a s i s of f r a t e r n a l c o l l a b o r a t i o n . ( A r a b c a p t a i n s e x c e p t e d . ) T h e y t e a c h h i m , r e s c u e him, d o b u s i n e s s f o r h i m , a n d k e e p him f r o m f a l l i n g b e n e a t h his class. He in turn g e n e r a l l y r e g a r d s t h e m as honest and p l a i n - d e a l i n g m e n , s i d e s w i t h t h e m against their r e b e l l i o u s s u b o r d i n a t e s , and is easy w i t h t h e m in his b a r g a i n i n g . T o w a r d s w h i t e s of l o w e r rank he is m o r e d e m a n d i n g . If they d i s o b e y , he is s e v e r e ; but if they are loyal, he is w i l l i n g to s h a r e s o m e b o o t y and d e l e g a t e s o m e a u t h o r i t y . A f r i c a n s and C a r i b b e a n s a r e s o l d , killed, t r a i n e d , or u s e d as w i v e s by his m e n , as t h e c a s e m a y b e . A b o u t t h e w h i t e i n d e n t u r e d s e r v a n t s , a r t i s a n s , etc., little is said by D e f o e in his story.

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The contradictions between Robinson and other members of the hierarchy give the story its dynamics. He is forever wrestling with the problem of subordinating lower levels and trying to rise above his own. The fact that he does not see it this way but prefers to make up stories about himself makes no difference. He denies the conflict between himself and Friday by accepting Friday's mask o f willing obedience. And he conceives o f his greed as a crime against God instead of against man. But his daily life shows that his social relations are antagonistic and that he knows it. In the last analysis, however, the story is only partly dialectical. We hear only of how Robinson perceives the contradictions and how he resolves them. In this work o f fiction he is always able to fuse two into one. In actual life one divides into two, and the system develops beyond the capitalist's fantasy o f proper law and order. E c o n o m i c science also needs the story of Friday's grandchildren.

• • •

MARXISM

Marx did not believe in the harmony of the market. He emphasized the contradictions of capitalism instead, contradictions that exist, as Hymer points out, from the very beginning. Every society, Marx says, is riven by class conflict. As the mode of production of the day is destroyed by such conflict, another arises, like a phoenix, to take its place. This is riven in turn by the conflicts it engenders, and so history goes. The mode of production of Marx's time was industrial capitalism. It remains so today. The class conflict within capitalism, Marx said, is between those who own the means of production and those who work for these owners for wages. It is labor power that provides, in Marx's view, the ultimate source of value. As a recent analyst put it, in every society the material e n v i r o n m e n t is changed through production into things that individuals want to use. T h e type of techn o l o g y will . . . d e t e r m i n e the technical division of labor, but . . . the drive to increase labor productivity and, therefore, improve the profitability of a p a r t i c u l a r e n t e r p r i s e creates a t e n d e n c y for the profitability of capital . . . to fall. This . . . leads to increased pressure by capitalists on the labor force to increase profitability,

a process of escalating exploitation that only exacerbates class conflict and that "cannot be resolved by the action of the state. . . . Rather, the

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state reflects the imbalance of class forces and acts in favour of the interests of the dominant class" (Cole 1991:11). Ultimately, Marx believed, capitalism would come to an end. Whether it was brought down by angry workers or the laws of capitalist dynamics, capitalism could not last. Nor should it, since in Marx's view the best was yet to come. With capitalism out of the way, the immense productive power of the species that capitalism itself had helped liberate could then be used to create communities that were fair, efficient, and democratic. The state, without a class rationale, would "wither away." All that would be left of it would be "mere administration." To a mercantilist, capitalism is most readily understood in terms of consumption. It means the consolidation of capital in the form of land, and the accumulation of capital in the form of finance. To a liberal, capitalism is most readily understood in terms of exchange. It denotes the use of capital to make more capital. It denotes the pursuit of profit in the context of a self-regulating market. To a Marxist, however, capitalism is best understood in terms of its prodigious productivity. Its productivity is made possible by paid wage laborers whose work is exploited, as was that of the slaves and serfs of previous modes of production, to provide capitalists with privileges they don't themselves work to earn. From the sixteenth century on it is this way of producing things that has come to predominate. This doesn't make the capitalist world market the definitive way to produce commodities. It is, however, the main way it is done at the moment. How such a system arose is much debated. Some cite as decisive the influx of precious metals into Europe that followed the European discovery of the New World. Some cite as the key cause the accumulation of wealth through trade with the Indies. Others cite the technological improvements made possible by progress in the natural sciences. Others again cite population growth, or a revolution in religious convictions (such as the spread of Protestantism). Hymer, in his analysis of Robinson Crusoe, emphasizes Marx's concept of cycles of capital accumulation. Like Crusoe's, the story of early capitalism is a story, Hymer says, of "primitive accumulation." It is a story of "conquest, slavery, robbery, murder, and force"; of cheap labor, colonial possessions, and the surplus they provide. This list begs as many questions as it answers, however. Similar causes to those existing at the beginnings of the capitalist world system can be shown to have existed elsewhere at other times, and yet capitalism was not their result. On the other hand we find, where capitalism does not even exist, people articulating a capitalist worldview. It is said, for example, that "the America of the eighteenth century was economically primitive, but it is in the maxims of Franklin that the

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spirit of bourgeois capitalism . . . finds . . . its . . . most lucid expression" (Tawney 1930). In historical terms, capitalism and state making are clearly cognate. You can make a state, in the liberal or mercantilist sense, without relying on capitalists; and you can be a capitalist without having to help, or be helped by, makers of states. To a Marxist, however, the one is in effect the other. In Marxist terms, you would expect state makers and capitalists to arrive on the historical stage together, since state making, after all, is just one dimension of the capitalist mode of production. It is where the owners of capital order their public affairs. While more than one attempt has been made to impose a single public order on the capitalist world system, none has yet prevailed, unless you think the global bourgeoisie are already cohesive enough to amount to a global ruling class. Capitalism has also not yet collapsed. Capitalists continue to find ways to survive, plowing profits back into "welfare state" provisions that buy off dissent, seeking new markets for their commodities and exploiting cheap sources of supply to make this possible. The imperialism of the nineteenth century has given way to the neoimperialism of the twentieth, while control of territory and all that it contains has given way to the kind of collusion between global capitalists and local "comprador elites" that makes such territorial intervention unnecessary. Classical Marxists applaud the march of capital, assuming that the sooner the world has been revolutionized in this way, the sooner the class conflict it creates will destroy it, and the sooner socialism will ensue. They cheer the bourgeoisie along, while scanning the social horizon for hopeful signs of revolutionary zeal on the part of the world working class. Reformist Marxists (otherwise known as neo-Marxists) are keenly aware of the staying power of the capitalist system. They see Marx's laws of capitalist dynamics, like the law of the falling rate of profit, failing to take effect. Particularly in his later works Marx came to believe that the action of these laws would cause capitalism to collapse of its own accord. So far it hasn't, and reformist Marxists have had to explain why. So far, also, the revolutionary potential of capitalism has taken much longer to realize than Marx, particularly in his earlier analyses, seemed to assume. They have had to worry, not only that the revolution seems to be much delayed, but also about the ways in which it might have become stuck, skewed, or put in reverse. Reformist Marxist theorists, for example, write about the frozen class relationships that seem to have stopped the growth of a revolutionary working class in its tracks. World systems theorists (Wallerstein 1979) and the so-called dependency theorists (Cardoso 1972) talk in Marxist

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terms about the lopsided structures that have characterized capitalism since it started in the sixteenth century. What with centers dominating peripheries, and with semiperipheries in between, revolution has not had much of a chance. Development theorists talk about the "development of underdevelopment" (Frank 1978) and how a united world working class has been fragmented by nationalism, not united b y their common hatred of the bourgeosie. Like Godot, the "lonely hour of the last instance" hasn't come. With exploitation, poverty, and suffering still endemic, what is to be done? Reformist Marxists are surrounded by the casualties of capitalism. They stand in the middle of a long, violent war that cripples and kills for profit alone. W h o can intervene? Reformist Marxists don't find it easy to turn to state makers for help, since, by their own lights, state makers are there to protect the interests of the capitalists, not those of the poor working class. So reformist Marxists tend to turn instead to the margins of the capitalist system and more particularly, to the "social movements" they find there. These movements articulate the concerns of a wide range of people who are integral to the system but who have little voice in it. These people are manifestly there, but they have been made invisible—at least in the eyes of those who determine the terms of public debate. These movements speak out on behalf of the millions of women, blacks, indigenous peoples, greens, and others for whom capitalism does not deliver the goods. Although these movements can do considerably less to protect the exploited from capitalist greed than state makers can, they have not, on the whole, been bought off either. At least from the higher moral ground that social movements usually stand on some pressure can be put on state makers, and while this pressure may have little practical effect, where else is there to turn until capitalism collapses or is overthrown?

NOTES 1. Stephen Hymer is professor of Economics at the New School for Social Research. He writes, "I would like to thank Heidi Cochran, Harry Magdoff, and Frank Rossevelt for their help. I have not seen the Bunuel movie of Robinson Crusoe but have been influenced by a second-hand account of it." 2. For studies of Defoe dealing with economic aspects see: E. M. Novak, Economics and the Fiction of Daniel Defoe, University of California Press, 1962. H. M. Robertson, Aspects of the Rise of Economic Individualism, Cambridge University Press. Ian Watt, The Rise of the Novel, Chatto and Windus, 1957; Peregrin Books, 1963. Dorothy Van Ghent, The English Novel, Harper Torchbook, 1961, chapter on Moll Flanders. Brian Fitzgerald, Daniel Defoe, Seeker Warburg, 1954. Pierre Macherey, Pour une Theorie de la Production Litteraire,

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François Maspero, 1966. John Richetti, Popular Fiction Between Defoe and Richardson. 3. J. M. Keynes, "Economic Possibilities for our Grandchildren," in Essays in Persuasion, W. W. Norton & Co., Inc., 1963, p. 370. 4. See Karl Polyani, "Aristotle Discovers the Economy," in K. Polyani et al., Trade and Markets in the Early Empires, N e w York: Free Press, 1957; and A. French, The Groioth of the Athenian Economy, London: Routledge and Kegan Paul, 1964.

3 Contending Narratives: A Postmodern IPE? •

Cynthia Enloe (1990) "Women in Banana Republics"

It is a l w a y s worth asking, " W h e r e are the w o m e n ? " A n s w e r i n g the question reveals the d e p e n d e n c e of most political and e c o n o m i c s y s t e m s not just on w o m e n , but on certain kinds of relations between w o m e n and men. A great deal has been written about countries derisively labelled " b a n a n a republics." They are described as countries w h o s e land and soul are in the clutches of a foreign c o m p a n y , supported by the might of its own g o v e r n m e n t . A banana republic's sovereignty has been so thoroughly c o m p r o m i s e d that it is the butt of jokes, not respect. It has a g o v e r n m e n t , but it is staffed by people w h o line their own pockets by doing the b i d d i n g of the o v e r s e a s corporation and its political allies. B e c a u s e it is impossible for such c o m p r o m i s e d rulers to win the support of their own citizens, many of w h o m are exploited on the c o r p o r a t i o n ' s plantations, the g o v e r n m e n t d e p e n d s on guns and jails, not ballots and national pride. T h e quintessential banana republics were those Central American countries which c a m e to be dominated by the United Fruit C o m p a n y ' s monoculture, the US marines and their hand-picked dictators. Their r e g i m e s have been backed by American presidents, m o c k e d by Woody Allen, and overthrown by nationalist guerrillas. Yet these political systems, and the international relationships which underpin them, have been discussed as if w o m e n scarcely existed. T h e principal actors on all sides have been portrayed by conventional c o m m e n tators as men, and as if their being male w a s insignificant. T h u s the w a y s in which their shared masculinity allowed agribusiness entrepreneurs to f o r m alliances with men in their own diplomatic corps and with men in Nicaraguan or Honduran society have been left u n e x a m i n e d . E n j o y i n g C u b a n cigars together after dinner while wives and mistresses p o w d e r their noses has been the stuff of s m u g cartoons but not of political curiosity. Similarly, a banana republic's militarized ethos has been taken for granted, without an investigation of how militarism f e e d s on masculinist values to sustain it. Marines, diplomats, corporate m a n a g e r s and military dictators may mostly be male, but they tend to need the f e m i n i n e " o t h e r " to maintain their self-assurance. O n e of the conditions that has pushed w o m e n off the banana republic stage has been the masculinization of the b a n a n a plantation.

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Banana-company executives imagined that most of the jobs on their large plantations could be done only by men. Banana plantations were carved out of wooded acres. Clearing the brush required workers who could use a machete, live in rude barracks, and who, once the plantation's trees were bearing fruit, could chop down the heavy bunches and carry them to central loading areas and from there to the docks, to be loaded by the ton onto refrigerator ships. This was men's work. Not all plantation work has been masculinized. Generally, crops that call for the use of machetes—tools that can also be used as weapons—are produced with large inputs of male labour: bananas, sugar, palm oil. Producers of crops that require a lot of weeding, tapping and picking hire large numbers of women, sometimes comprising a majority of workers: tea, coffee, rubber. Nor is the gendered labour formula on any plantation fixed. Plantation managers who once relied heavily on male workers may decide to bring in more women if the men become too costly; if their union becomes too threatening; if the international market for the crop declines necessitating cost-cutting measures such as hiring more part-time workers; if a new technology allows some physically demanding tasks to be done by workers with less strength. Today both sugar and rubber are being produced by plantation companies using more women workers than they did a generation ago. What has remained constant, however, is the presumption of international corporations that their position in the world market depends on manipulations of masculinity and femininity. Gender is injected into every Brooke Bond, or Lipton tea leaf, every Unilever or Lonrho palm-oil nut, every bucket of Dunlop or Michelin latex, every stalk of Tate & Lyle sugar cane. Like all plantation managers, banana company executives considered race as well as gender when employing what they thought would be the most skilled and compliant workforce. Thus although the majority of banana workers were men, race was used to divide them. On United Brands' plantations in Costa Rica and Panama, for instance, managers recruited Amerindian men from the Guaymi and Kuna communities, as well as West Indian Black men and hispanicized Latino men. They placed them in different, unequally paid jobs, Latino men at the top (below white male managers), Amerindian men at the bottom. Amerindian men were assigned to menial jobs such as chopping grass and overgrown bush, thus ensuring that Latino men's negative stereotypes of Amerindians—cholos, unskilled, uncultured natives—would be perpetuated. The stereotypes were valuable to the company because they forestalled potential alliances between Latino, Black and Amerindian men over common grievances. Manager: It's easier to work with cholos. They're not as smart and don't speak good Spanish. They can't argue back at you even when they're right. . . . Hell, you can make a cholo do anything.

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Latino foreman: My workers are [not] cholos. . . . It's different here. Sure I can grab them [Latino and Black male workers] and make them work faster; but the consequences will catch up with me tomorrow. We're not cholos here . . . you understand? To say, therefore, that a banana plantation is masculinized is not to say that masculinity, even when combined with social class, is sufficient to forge political unity. On the other hand, the presumption that a banana plantation is a man's world does affect the politics of any movement attempting to improve w o r k e r s ' conditions, or to transform the power relationships that comprise a "banana republic". A banana plantation's politics are deeply affected not just by the fact that the majority of its workers—and virtually all of its managers and owners—are men, but by the meaning that has been attached to that masculinization. Even male banana workers employed by a foreign company that, in alliance with local elites, had turned their country into a proverbial banana republic, could feel some pride. For they were unquestionably performing men's work. They knew how to wield a machete; they knew how to lift great weights; they worked outside in close co-ordination with trains and ships. Whether a smallholder or a plantation employee, a banana man was a man.

Tourist, white man, wipin his face, Met me in Golden Grove market place, He looked at m ' o l ' c l o t h e s brown wid stain, An soaked tight through wid de Portlan rain, He cas his eye, turned up his nose, He says, "You're a beggar man, I s u p p o s e ? " He says, "Boy get some occupation, Be of some value to your nation." 1 said, "By God and dis big right han You mus recognise a banana man . . . D o n ' t judge a man by his patchy clothes, I'm a strong man, a proud man, an I ' m f r e e Free as dese mountains, free as dis sea, I know myself, an 1 know my ways, An will say wid pride to de end o my days Praise God an m ' b i g right han 1 will live an die a banana man."

In the 1920s when banana workers began to organize and to conduct strikes that even the US government and local elites had to pay attention to,

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their d e m a n d s reached b e y o n d w o r k i n g conditions to political structures. T h e s e w o r k e r s ' protests took on strong nationalist overtones: the local regime and foreign troops were as m u c h the target of their protests as the plantation c o m p a n i e s . But so long as banana plantation work w a s imagined to be m e n ' s work, and so long as the banana w o r k e r s ' unions were organized as if they were m e n ' s organizations, the nationalist cause would be masculinized. A banana republic might fall, but patriarchy remained in place.

Women Weed, Women Clean T h e b a n a n a plantation has never been as exclusively male as popular imagery suggests. It takes w o m e n ' s paid and unpaid labour to bring the golden fruit to the w o r l d ' s breakfast tables. A banana plantation is closest to a male enclave at the beginning, w h e n the principal task is bulldozing and clearing the land for planting. But even at this stage w o m e n are d e p e n d e d upon by the c o m p a n i e s — a n d their male e m p l o y e e s — t o play their roles. As in the m a l e - d o m i n a t e d mining industry f r o m Chile to South Africa and Indonesia, c o m p a n i e s can recruit men to live away f r o m h o m e only if s o m e o n e back home takes care of their f a m i l i e s and maintains their land. T h e "feminization of agriculture"—that is, leaving small-scale f a r m i n g to w o m e n , typically without giving them training, equipment or extra f i n a n c e — h a s always been part and parcel of the m a s culinization of mining and banana plantations. T h e male labour f o r c e has to m a k e private arrangements with wives, mothers or sisters to assure them of a place to return to when their contracts expire, w h e n they get fed up with s u p e r v i s o r s ' c o n t e m p t u o u s treatment or when they are laid off b e c a u s e world prices have p l u m m e t e d . Behind every all-male banana plantation stand scores of w o m e n p e r f o r m i n g unpaid domestic and productive labour. C o m p a n y executives, union spokesmen and export-driven g o v e r n m e n t officials have all preferred not to take this into account when w o r k i n g out their bargaining positions. International agencies such as the International Monetary Fund scarcely give a thought to w o m e n as wives and subsistence f a r m e r s w h e n they press indebted g o v e r n m e n t s to open up more land to plantation c o m panies in order to correct their trade imbalances and pay off foreign b a n k e r s . O n c e the banana trees have been planted, w o m e n are likely to b e c o m e residents and workers on the plantations. Plantation managers, like their diplomatic and military counterparts, have f o u n d marriage both a political asset and a liability. On the one hand, having y o u n g male w o r k e r s without w i v e s and children has advantages: the men are in their physical prime, they are likely to view life as an adventure and be willing to tolerate harsh w o r k i n g and living conditions. On the other hand, y o u n g unattached men are more volatile and are willing to take risks if angered precisely b e c a u s e they will not j e o p a r d i z e a n y o n e ' s security aside f r o m their o w n . T h i s m a k e s the married male worker seem more stable to a calculating plantation manager. He may d e m a n d more f r o m the company in the f o r m of rudimentary

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a m e n i t i e s for his w i f e and children, but he is more likely to toe the c o m p a n y line f o r their sake. W o m e n are most likely to be e m p l o y e d by the banana c o m p a n i e s if the plantation cannot recruit men f r o m a low-status ethnic group, like A m e r i n d ians in Central A m e r i c a , to do the least prestigious and lowest-paid j o b s . In all sorts of agribusiness, w o m e n tend to be given the most tedious, least " s k i l l e d " jobs, those that are most seasonal, the least likely to o f f e r yearround e m p l o y m e n t and those c o m p a n y b e n e f i t s awarded to f u l l - t i m e e m p l o y e e s . Weeding and cleaning are the quintessential " w o m e n ' s " j o b s in agriculture, both in socialist and capitalist countries. B a n a n a s today are w a s h e d , weighed and packed in factories on the plantations b e f o r e being transported to the d o c k s for shipment overseas. Inside these packing houses one finds the w o m e n on the m o d e r n b a n a n a plantation. They r e m o v e the b u n c h e s of fruit f r o m the thick stems, an operation that has to be d o n e carefully (one might say skilfully) so that the b a n a n a s are not d a m a g e d . T h e y wash the b a n a n a s in a chemical solution, a hazardous job. They select the rejects, which can amount to up to half the b a n a n a s picked in the fields. C o m p a n i e s often d u m p rejected b a n a n a s in nearby streams, causing pollution which kills local fish. Women weigh the fruit and finally attach the c o m p a n y ' s tell-tale sticker on each b u n c h . T h e y are paid piece-rates and f o r e m e n expect them to work at high speed. In between harvests they may have little work to d o and not receive any pay. At harvest time they are expected to be available for long stretches, s o m e t i m e s around the clock, to meet the c o m p a n y ' s tight shipping schedule. Tess is a Filipino w o m a n w h o works for T A D E C O , a subsidiary of United Brands, Philippines. She w o r k s on a plantation on the c o u n t r y ' s southern island, M i n d a n a o . A decade-long war has been fought in the area between government troops and indigenous Muslim g r o u p s protesting against the leasing of large tracts of land either to multinational pineapple and banana c o m p a n i e s or to wealthy Filipino landowners, w h o then work out lucrative contracts with those corporations. Tess herself is a Christian Filipina. She, like t h o u s a n d s of other w o m e n and m e n , migrated, with g o v e r n m e n t e n c o u r a g e m e n t , to M i n d a n a o f r o m other islands in search of work o n c e the bottom fell out of the o n c e - d o m i n a n t sugar industry. She w o r k s with other y o u n g w o m e n in the plantation's p a c k i n g plant, preparing b a n a n a s to be shipped to J a p a n by Japanese and A m e r i c a n import c o m p a n i e s . She is paid approximately $1 a day. With an additional living allowance, Tess can m a k e about $45 a month; she sends a third of this home to her family in the Visayas. Tess uses a chemical solution to w a s h the c o m p a n y ' s bananas. T h e r e is a large, reddish splotch on her leg where s o m e of the chemical spilled accidentally. At the end of a day spent standing for hours at a time, Tess goes " h o m e " to a b u n k h o u s e she shares with 100 other w o m e n , twenty-four to a r o o m , sleeping in eight sets of three-tiered b u n k s .

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Many w o m e n w o r k i n g on banana plantations are young and single, and, in the Philippines, o f t e n have secondary-school or even college educations. They may be the d a u g h t e r s of male e m p l o y e e s , or they may be recruited f r o m outside. T h e y are subjected to sexual harassment in the p a c k i n g plants and can be fired if f o u n d to be pregnant. T h e life of a banana w a s h e r is dull and isolated: "We have no choice than to stay here. First, the c o m p a n y is quite far f r o m the highway and if w e . . . spend our fare what else w o u l d be left for our f o o d ? " Large banana c o m p a n i e s — G e e s t in Britain, United Brands, Del M o n t e and Dole in the United States and J a p a n ' s S u m i t o m o — a l s o require w o r k e r s at the other end of the f o o d chain, in the countries w h e r e they market their bananas. T h e docks, the trucks and the ripening plants reveal how c o m p a n y managers shape the sexual division of labour. Stevedores in every country are thought of as d o i n g a classic " m a n ' s " j o b , though again ethnic politics may determine which men will unload the b a n a n a s f r o m the c o m p a n y ' s ships. Today in Japan, w h e r e immigrant labour is being increasingly relied upon to do the low-status, low-paid jobs, Filipino men do the heavy work of transferring b a n a n a s f r o m ships to trucks. T h e j o b has b e c o m e so closely associated with the fruit that to be a longshoreman in Japan is to be a " b a n a n a " . Women are hired in all the c o n s u m e r countries to weigh and sort at the ripening plant b e f o r e the fruit heads for the supermarket. Food processing is as f e m i n i z e d — a s dependent on ideas about f e m i n i n i t y — a s nursing, secretarial work and sewing. Women are hired by the banana c o m p a n i e s to do low-paid, o f t e n seasonal j o b s that o f f e r little chance of training and promotion; s o m e involve the hazards of chemical pollution and sexual harassment. But many w o m e n still seek these j o b s b e c a u s e they seem better than the alternatives: dependence on fathers or h u s b a n d s (if they are e m p l o y e d ) , life on the d o l e (if work is not available), work in the entertainment industry around a military base, subsistence f a r m i n g with few resources, emigration. Many w o m e n are heads of households and take exploitative j o b s in order to support their children; other w o m e n see their e m p l o y m e n t as part of being dutiful daughters, s e n d i n g part of their m e a g r e earnings back to parents, w h o may be losing f a r m land to agribusinesses. Neither w o m e n nor men w o r k i n g on any p l a n t a t i o n — b a n a n a , tea, rubber, sugar, pineapple, palm oil, c o f f e e — are simply " w o r k e r s . " T h e y are wives, husbands, daughters, sons, mothers, fathers, lovers; and each role has its o w n politics. T h e politics of being a daughter, a mother or a w i f e allows First World and Third World g o v e r n ments to rely on international plantation c o m p a n i e s , which in turn are able to recruit and control w o m e n workers and win the c o n s u m e r loyalty of w o m e n buyers. " D a u g h t e r , " " m o t h e r , " and " w i f e " are ideas on which the international political system today depends.

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A POSTMODERN IPE? Where are the women in IPE? They are there, as Enloe demonstrates. The system depends on them. And yet analyses of IPE are mostly made as if women did not exist. The conventional study of IPE mostly details the doings of men and their maleness and how this maleness is maintained. These are important features of IPE and topics of considerable analytic interest. So, however, is the fact of gender bias itself, and the ways gendering is done in IPE so as to privilege diverse patriarchal and fraternal practices. Gender bias and the production of patriarchy are apparent in each of the analytic languages discussed above. It is bias and hierarchy of a particular sort, however. While most people are born biologically sexed in either a male or female form, gender roles are social constructs, and most people behave as their cultures have taught them to. There are considerable variations between what cultures expect of their women and men, and as a cosequence I should write "people who are ' w o m e n ' " instead of " w o m e n " as such, and "people who are 'men'" instead of "men" as such. In the interests of uncluttered prose I shall take this formulation as read wherever " m e n " or " w o m e n " appear. I do want to emphasize, however, that the conventional ideologies of IPE were all formulated in England, Scotland, and continental Europe and as a consequence they all show a clear preference for English and Scottish and European models of gender difference. As to mercantilism, for example, the state whose autonomy is so highly prized is a gendered construct, spoken for and thought about in ways typical of European stereotypes. Orthodox mercantilism assumes that state makers are competitive and violent, for example, and that there can be no relationships between such state makers other than those of constant vigilance and eternal suspicion. Orthodox mercantilists actively deny the potential for global community, and it is this kind of argument that distorts our understanding of how the world works and how it could work (Tickner 1992:79-80; Hartsock 1983; Peterson and Runyan 1993; Sylvester 1994; Beckman and D'Amico 1994). The result is patriarchal mercantilism and not matriarchal mercantilism. Matriarchal mercantilism may well be a contradiction in terms. Even if it isn't, most feminists would see matriarchal mercantilism as being more affirmative than that of the patriarchal sort, if only because it would be more likely to produce living beings than opulence or commodities. As to liberalism, the self-maximizing, rationalistic, economic man at the heart of what was originally a Scottish and English

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worldview can only be seen as a culturally specific and highly gendered construct. In his orthodox form this opportunistic individual is notably male. Based b y classical liberals like A d a m Smith, not necessarily on themselves but certainly on cultural stereotypes with which they were familiar, he is a highly reduced version of a human being. H e is competitive and calculating. And he is only interested in material self-gratification. It is the height of cultural arrogance to see such traits as existing "prior to and apart from c o m m u n i t y " (Tickner 1992:73), as orthodox liberals do. It is to promote an ideology that is emphatically not shared by many men and most women. It is a limited and limiting belief, and while it can, and has, w o r k e d market wonders, it has done so very unevenly and at considerable cost. This cost has notably been borne b y the female half of the species. Though its status as a statistic is s o m e w h a t unclear, a conclusion attributed in 1981 to a U N report by the Committee on the Status of Women maintains that " w h i l e w o m e n represent half the global population and one-third of all w o r k i n g hours, they receive only one-tenth of world i n c o m e and o w n less than 1 percent of world property" (Tickner 1992:75). Even as a ballpark figure this indicates something of the size of the gender injustice liberal marketeering involves. It is females more than males w h o have been impoverished in the process of world d e v e l o p m e n t — a n effect most notable in the poorer, agricultural parts of the world where firms, seeking l o w - w a g e , unskilled workers, find an abundant supply of female labor. It is also male makers of states in debt w h o choose to submit to the rigors of classical liberalism as the price for international b a l a n c e - o f - p a y m e n t s relief and w h o then visit these rigors disproportionately on w o m e n , since it is the w o m e n , of course, w h o are expected to provide most of the services that the men in government decide to cut. This dismal picture is well d o c u m e n t e d b y m o r e than one U N agency. B y the end of the United Nations D e c a d e for the Advancement of W o m e n ( 1 9 7 5 - 1 9 8 5 ) , for example, it was apparent that " w i t h few exceptions . . . w o m e n ' s relative access to e c o n o m i c resources, income, and employment ha[d] worsened, their burdens of w o r k ha[d] increased, and their relative and even absolute health, nutritional, and educational status ha[d] declined" (Sen and Grown 1987:16). The 1989 World Survey on the Role of Women in Development confirmed this conclusion. R e v i e w i n g the world political e c o n o m y at that time, it said, " p o v e r t y a m o n g w o m e n has increased, even in the richest countries [while] for the majority of d e v e l o p i n g countries, e c o n o m i c progress for w o m e n has virtually

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s t o p p e d " (UN 1 9 8 9 : 5 - 6 ) . In global terms, that is, poor w o m e n are getting poorer, more w o m e n are getting poor, and w o m e n are getting poorer compared to men (Pettman 1991:123). As to Marxism, it is apparent that by emphasizing class and the c l a s s - m a k i n g c o n s e q u e n c e s of m o d e s of production, both classical Marxists and neo-Marxists are able to ignore the significance of gender and the gender-specific nature of h u m a n reproduction. Consider how classes change as m o d e s of production do. Then consider how the general pattern of gendering practices remains the s a m e regardless. W h i l e slave o w n e r s h a v e given w a y to feudal lords, w h o have given w a y in turn to capitalist rentiers and entrepreneurs, men h a v e remained d o m i n a n t regardless. W h i l e slaves have been replaced b y serfs, w h o have been replaced in turn b y free w a g e laborers, w o m e n have remained subordinate throughout. One w o u l d expect, in Marxist terms, w o m e n w h o b e c o m e free w a g e w o r k e r s to b e a r the same relationship to owners of capital as men do. However, they don't. There are two classes of proletarian, a female class and a male class, and of the two the male is the m o r e privileged. O n e w o u l d expect in Marxist terms a gender-neutral bourgeoisie. However, it isn't. This w o u l d suggest that the social construct gender is more basic than the Marxist social category class, and that the feminist concept of patriarchy is more basic than the Marxist concept of capitalism. It also shows how male capitalists receive most of the undeclared gender dividend. The patriarchal consequence is imperial. Not for nothing does Mies (1988) call w o m e n the world's "last colony." Consider how g e n d e r i n g practices are used to consign w o m e n to the h o m e , to perform there, on account of their gender status alone, the family labor necessary to reproduce the species. Not for nothing do analysts on the margins of IPE see the trend toward a global division of labor between waged male and unwaged female w o r k e r s as intrinsic to the capitalist m o d e of production. Indeed, without the systematic devaluation of housework, the systematic attempt to define w o m e n universally as housewives (Mies 1986:116), and the systematic subsidy that the w o m e n w h o mostly do such h o u s e w o r k provide, it is not unfair to argue that capitalism could not have succeeded. Again, because of their focus on class, Marxists fail to appreciate the radical significance of the social construction of gender or the radical inequality that gendering entails. Again, it has fallen to feminists to point out the revolutionary potential of a model of international political e c o n o m y predicated on the " p r o duction of life rather than the production of things and w e a l t h " (Tickner 1992:96).

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Women's movements argue from a wide variety of perspectives. I don't mean to suggest by choosing a reading from Enloe alone, or by talking about a feminist critique of the orthodox analytical languages, that there is only one such critique. Quite the contrary, feminist critiques proceed from highly diverse standpoints and cover the full gamut of ideological views. The same applies to any other social movement. Critiques of IPE in environmental terms, for example, range from light to deep green; from radical ecology to liberal attempts to find market solutions to problems of overpopulation, pollution, and resource depletion; from recycling and organic gardening to the overthrow of the world capitalist system. Petty's dream of finding one quantitative solution to the problems posed by IPE was distinctively modern. The rejection of Petty's dream in favor of a plurality of perspectives is distinctively postmodern. Singular truths stultify, postmodernists say, and in critiquing all attempts to arrive at such limited and limiting outcomes, they help give voice to those who have been silenced by modernist thinking. What we hear from those who have been stifled are voices in the plural, however, not one voice that speaks for each social movement. What are we to make of this Babel? We not only have the orthodox analytical languages to contend with. We also have them in their extremist and reformist forms. And we now have critiques by women, greens, indigenous peoples, and religious groups, too. It is a veritable riot of analysis and argument. What should we do to come to terms with such a range of ideas and opinions? First of all, we should accept that IPE will ultimately defy definitive explanation. It is such a complex array of repeated human practices that we will never exhaust its capacity for surprise. Second, we should recognize that complex though the subject is, IPE is not chaotic. IPE events do not occur completely at random, otherwise we could say nothing at all about the subject, except perhaps this one thing. There are patterns to IPE. They are not precise or very clear but they do exist. What is more, different analytic languages have been devised to describe and explain these patterns. These languages differ because they differ in the assumptions they make about human nature and the value premises each adopts. They all claim to represent IPE in its essentials. They each have large numbers of adherents. None, however, has ever received universal acclaim. Third, we should appreciate that, if we want a comprehensive knowledge of IPE, we will have to understand all of the different ways in which it is described and explained and not just one or two

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of them. Unlike the blind men and the elephant, we are going to have to fumble our way around the whole beast. If we want to know its shape and size, we won't be able to stay in one place, proclaiming in effect that elephants are anacondas because we happen to be clutching the trunk. No one would believe us, anyway, particularly when they are saying that elephants are wrinkly trees, or ropes with tassles at the end. This means that we are also on occasion going to contradict ourselves. Like Walt Whitman, however, we are going to have to work at being large enough to contain contradictions. We are going to have to work at an understanding of IPE as an ongoing argument about and among radically divergent analytic languages. Arriving at such an understanding does not mean we should run these languages in parallel like disengaged soliloquies. Nor does it mean staging a raucous kind of cat fight between them. It means understanding how orthodoxies become like the air we breathe and the water we drink. It means actively trying to account for them all and for diverse unorthodoxies, too, relinquishing thereby any one-dimensional account of IPE. It means, in short, becoming more eclectic. There is, after all, no "correct" or permanently preferable approach to IPE. Moreover, "how" we talk about IPE determines in turn "what" we make of it in substantive terms. The ways in which we describe and explain IPE help constitute in turn the very world we are describing and explaining. Nowhere is this more apparent than in the policy choices that present themselves in response to specific issues. Consider, for example, the issue of a crippling, state-specific debt. Mercantilists would not have gotten into debt in the first place. If their protectionism was of the in-turned kind, they would have protected their finances by not borrowing from foreign banks. If it was of the out-turned kind, they would have built up trade surpluses, which they might then have lent to others. They would not, however, have compromised their sovereignty by putting themselves in such a mendicant position. Liberals, by contrast, see debt crises as primarily an economic issue (albeit one with political consequences). They look for macroeconomic shocks or market imperfections. Extremist liberals opt for solutions that involve less government intervention and more openness to the world market. Reformist liberals sanction more government intervention than this. They might recommend debt-servicing agreements, perhaps, to promote market revival. Marxists see debt crises as the predictable work of capitalist profit-predators. Extremist Marxists see revolt on the part of the

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exploited as the inevitable outcome. The owners of debt they see as living on borrowed time. Reformist Marxists, who have watched capitalists mount the rescue of their system more than once and who are less optimistic about Marx's laws of history finally prevailing, advocate default. Gender-sensitive analysts highlight the extent to which the debt burden falls more heavily upon women than on men. They prescribe policies that deal, in various ways, more fairly with that fact. Deep greens want small-scale, ecologically aware communities that disaggregate the state, and its debt burden with it, while light greens argue for market strategies that expand production and trade, make interest repayments, but not at the expense of the environment. And so on. Unlike academics, policymakers do have to make a choice. They can't stop at analysis. Surely it is better to choose from a full range of ideological options, however, than to privilege one analytic language only. The alternative is to dismiss in advance all contending points of view, along with any potential contributions other points of view might make. And given the paucity of creative policies in the world, that would seem to be rash at best and ideologically arrogant at worst. Consider, for example, a regional famine. There is, first, the problem of talking about any famine in objectivizing terms. After all, the commitment to the practices that caused the famine in the first place are hardly likely to collapse under the "accumulated weight" of "exquisite papers prepared for . . . seminars in political economy" (Robert Martin, cited in Staniland 1985:192). Famine is appalling by any measure of human suffering. Talking about famine in an abstract way can seem, as a consequence, extraordinarily inappropriate. We do talk about famine in this way, however, in the hope that the knowledge we get will help us to choose the best policies and to alleviate the most suffering. Abstraction by policymakers requires ideological choices, however. Should potential helpers join a UN agency or a nongovernmental aid organization, for example, or would they save more lives bombing the headquarters of selected international corporations? Should they lobby for more international aid? Or should they just sit and wait for capitalism to self-destruct in the hope that a less famine-prone system can then be put in its place? As a victim, is it best to try and overthrow the local government and install a regime more dedicated to food self-sufficiency? Should international travel corporations be invited to make a comparative advantage out of the famine itself? They could make a tourist spectacle out of the starving people and pay a percentage of their profits

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to provide some sort of famine relief (thereby reducing comparative advantage, but helping alleviate the famine nonetheless)? Should the famine be encouraged in the hope that the advantage of being famine-stricken will help bring the whole global system down so that something more h u m a n e can then be put in its place? Should immediate efforts go toward empowering women, who, given the primary role they play in food provision, are best placed to do the most good? It is not hard to recognize here different and highly divergent points of view. Extremist liberals look as ever for marketeering solutions, though to them a truly liberal IPE would not have famines in it in the first place. Famines occur because of market distortions. Reformist liberals argue for state intervention, such as more effective global social welfare policies—perhaps a kind of world dole. Extremist Marxists see the end of capitalism as nigh and gleefully await its demise. Reformist Marxists argue for intervention meanwhile and the delinking of famine-stricken countries from the global political economy. Feminists paint the problem in terms of patriarchy. Greens do so in terms of environmental degradation. And so on. The arguments ramify, and the longer they continue the more obvious it becomes that choices are being made on the basis of different analytic languages about how the world works and how it should work. These languages are impossible to reconcile because the particular interests they promote and protect represent different assumptions about human nature and human values. Despite claims that "state automony" or "free marketeering" or "anti-imperialism" or "female liberation" will provide the key interpretive principle, in IPE in practice such overarching claims have never been accepted as universally applicable. Which is why "claims to have 'the' theory are invariably false, certainly arrogant, and possibly dangerous" (Staniland 1985:204). The arguments continue, both between and within the realms of discourse defined here, and so they should. Without these arguments all change would be at an end, and we really would then be stuck with this as the best of all possible worlds. To show how integral analytical languages are to our understanding of IPE and how differently they interpret its practices or processes, it is worth considering, as well as the couple of issues discussed above, a few contemporary industries (Galloway 1991). What these industries are doesn't particularly matter. Nor do I want to discuss them at any great length. What I do want to do is lay each industry out as an argument, so that we can see and hear various analytic voices at work as clearly as possible. The industrial civilization of our day relies on myriad machines. These machines magnify enormously people's muscle power and

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mental capacities. Of the machines used in industrialized countries none are more important than those of transport and communications. Indeed, it has become something of a cliché in analyses of IPE to acknowledge the significance of global changes in these technologies; which is understandable when we recall, for example, how our species has gone from moving around on foot or with the help of animals, to landing craft on the moon, within one generation. Many of the people in the world still do move around on foot or with the help of animals, though most have other options now, and it is this change that is revolutionary (Owen 1987:1). In terms of transportation, the liberal conception of comparative advantage would make no sense at all without the capacity to move people and freight in large quantities from one country to another. While autarkic mercantilists do not need international transport, the more imperialistically minded mercantilists certainly do. It would be impossible, for example, to sustain vertically integrated productive chains without ships and planes, trucks and trains. Marxists have long appreciated the way in which capitalist expansiveness has been contingent upon advances in transport technology. How, after all, can industries draw "raw material . . . from the remotest zones" without transport, and how can capitalists get their products "consumed not only at home, but in every quarter of the globe" if there is no way to get them there (Marx and Engels 1942:209)? While world transportation has grown at an extraordinary rate, it has also grown very unevenly. We live as a consequence on a planet "partly mobile and affluent and partly immobile and impoverished" (Owen 1987:6; Button and Rothengatter 1993). In terms of communications, too, technological advances have been very fast and their effects have been very uneven. In the case of communications, the added factor of rapid growth in human powers of computation has made for what is now called an "information revolution." While information has become a factor of production in its own right, this does not mean that manufacturing is becoming less important. It means, rather, that intellectual labor and intellectual capital have become more important in relation to physical labor and material capital (Wriston 1992:6). In mercantilist terms, the information revolution makes state autonomy virtually impossible to maintain and raises profound fears. In liberalist terms, it makes possible a world market of exemplary purity; one that has already created, it is claimed, a "new . . . monetary standard," an "information standard" no less, that like a "giant vote-counting machine" provides a "running tally on what the world thinks of a government's diplomatic, fiscal, and monetary

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policies" (Wriston 1992:9). No wonder analysts talk of the world's electromagnetic spectrum as being a more valuable natural resource than oil (Frederick 1993:121). In Marxist terms, though the selling of mental labor for a wage may have become relatively more important than the selling of manual labor, the ruling-class appropriation of surplus value goes on regardless. It doesn't matter from their perspective whether the labor is knowledge-intensive or not. Marxists also note that the transnational flow of information is increasingly dominated by a "handful of huge conglomerates" that now control "most of the world's important newspapers, magazines, books, radio and television outlets, cinema, recording industries, and vidéocassettes" (Frederick 1993:124). So concentrated has this oligopoly become that one analyst sees the whole electronic highway as the potential province now of just "seven American [business] men" (Harris 1995:81). None of which would matter except that concentration of ownership means that what goes along the electronic highway can be, and is, homogenized and controlled to maximize profit and to foster the culture of capitalism itself. Thus the traffic flow along the electronic highway can be, and is, directed largely one way, with the global North telling the global South what to think, how to feel, and when to laugh. Cultural "dependency" and cultural imperialism are ongoing consequences, with new disparities opening up daily between the "info-rich" and the "info-poor" (Frederick 1993:146). Social movements like the Association for Progressive Communications, which was founded in 1990, labor mightily in the global public interest to provide a freer flow of information, alternative news services, and other ways of talking about all of these issues. One does wonder, however, about those who are still effectively silent because they are not plugged in. What would they say if they had the chance? Would they see "plugging in" as beneficial, anyway? One also wonders whether there is not behind the association's enthusiasm for global civil society, alternative news sources, and freer information flows, the same Enlightenment agenda that has fostered liberalism for more than two hundred years. And while liberalism has been a very creative ideology, it is not the only one, and it has not been an unmixed blessing. The new cybernations forming in the cyberspace that computers and communication technologies have created are in a sense Enlightenment rationalism's new frontier. It is not certain, however, that we should be embracing wholeheartedly such an abstracted, objectifying medium. Even liberals have started pointing out that people are not "thinking machines," since they absorb "at least as

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much information from sight, smell and emotion as they do from abstract symbols" (Economist, March 5, 1994:11). While we push on with rationalist experiments like the Internet, we are reminded by other social movements of a less technology-centered kind that our nonrational selves are equally intrinsic. At the cutting edge of the communications revolution we find the same feeling that led me to write this book. One of the industries made possible by contemporary transportation and communications is tourism. This industry is arguably now the largest in the world. While there are many kinds of tourism and many different kinds of tourist (Murphy 1985:6), it can be said of all of them that tourism is "as much ideology as physical movement. It is a package of ideas about industrial, bureaucratic life . . . it is about power" (Enloe 1990:28, 40). The size of the contemporary tourism industry, plus the sense that much more may be going on here than mass attempts to get a suntan, would suggest we take it very seriously indeed. It is curious, therefore, that we do not. Perhaps it seems too frivolous still. If so, one would then expect scholars to have the same attitude to the political economy of the world's entertainment empires, and yet, the corporate control of Hollywood and the cultural imperialism that Hollywood film and television industries make possible are familiar enough topics to analysts of IPE; likewise, discussions of who controls the satellite television broadcasting "footprints" in Asia. The neglect of an industry as large as and as significant as tourism appears in this light to be doubly strange. Perhaps, in the end, why tourism is "not discussed as seriously . . . as oil," for example, tells us more about the "ideological construction of 'seriousness' than about the political economy of tourism itself" (Enloe 1990:40). The size and significance of tourism of all kinds can make state makers highly ambivalent about opening their borders to tourists. Seasonal hordes of foreign visitors can be seen as having undesirable politicoeconomic and politicocultural effects. They build up "dependence," it is said, while trivializing local ways of life. Merc a n t i l i s t s state makers may, as a consequence, impose restrictions on tourists to slow the undesired effects of large transcultural flows on local peoples. Frances Bugotu of the Solomon Islands, for example, later to head the South Pacific Commission, waged a long-running campaign to prevent the extension of the airstrip at Honiara, the nation's capital, to stop jumbo jets from landing there and bringing in larger numbers of tourists. State makers can also decide to bow to the inevitable, however, while trying to control the industry in such a way as to maximize state autonomy. They may, for example,

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prohibit foreign charter airlines from providing internal flights, for example, thus protecting national carriers and maximizing revenues, much as Kenya once did. Liberal state makers, on the other hand, argue for open borders and for every commercial effort to meet the demand for tourism. They provide all the necessary permissions to allow the freest tourist trade possible. They see tourism as one way to exploit a country's comparative advantage, and particularly so for materially poor states with little else to export. They want to turn "underdevelopment" to advantage. They consider it an asset to be " u n spoiled," "exotic" even, and they actively promote local scenery and cultural " c o l o r " as commodities for foreign consumption. The developmental consequences can, indeed, be problematic, but that does not stop the "It's Better in the Bahamas" and the "Enjoy Paradise, Enjoy Puerto Rico" campaigns. Richter, for example, tells of being asked to provide a report on tourist "development" for the state makers of Belize. " A cursory reading on the country led me," she says, to conclude t h a t . . . it needed a sewage system for its capital city before it needed to develop tourism. . . . Later I discovered that another tourism consultant . . . had told them the s a m e thing in an earlier . . . report. It was shelved. Eventually a tourism consultant will help Belize develop tourism. It is less certain when someone will help Belize develop Belize (Richter 1989:19).

Liberal state makers, and particularly the more reformist liberal state makers, are unimpressed by such a conclusion. Indeed, they see building sewage systems as contingent upon the income the tourist industry provides. And they argue that it is the tourist industry itself that provides the incentive to build such sewers. In Marxist parlance, tourism is one more capitalist ploy. Every alienated worker is a potential tourist. He or she seeks to escape from workplaces robbed of meaning by the wage relationship and emptied of purpose by labor for exchange rather than use. Tourism, in this regard, is more a matter of a flight from the capitalist world economy, than a going toward a holiday abroad (Richter 1989:208). For the capitalist, whether in collusion with the state maker or one and the same person, tourism is the chance to exploit a need to profitable effect; to accumulate more capital, that is, by satisfying people's desires for out-of-country experiences. Monopolies will be preferred. For example, by integrating diverse firms—travel agencies, tour operators, transportation companies, hotels—into transnational production chains, profits can be maximized. Into these carefully constructed funnels it is then possible to pour millions of

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people, to parade them past natural objects, historical monuments, collections of artifacts, and diverse caricatures of local cultures, while providing food and fun to highly profitable effect. Indeed, it is possible to build "entire infrastructure^]" in this way with "foreign goods, controlled by foreigners, and used by foreigners," while repatriating all the profits abroad (Richter 1989:181). This, in Marxist terms, is neoimperialism. No one's territory has been taken away. It has been merely rented, and facilities have been installed on it for either large-scale, charter travel for the masses, or small-scale, capital-intensive travel for the wealthy. Tourist masses blotting whole landscapes by the sheer weight of their numbers may prompt the odd mercantilistic reaction but those in the best position to implement such controls are usually those most integral to the system, in which case they are likely to favor neoimperialism rather than neomercantilism. The tourists with the greatest wealth intrude in other ways. The facilities for them may be more discreet, but they will also be more expensive, more dependent on outside management, more conspicuous about the levels of consumption they make possible, and more resented by the locally deprived. Mercantilism may rear its head here too, though again, what state makers are going to convert back into housing for the poor, perhaps, luxurious " p l a n t " and equipment they may want to enjoy themselves? What state makers are going to build (though it takes the same investment) modest hotels for use throughout the country by both national and international visitors, rather than a capital city status symbol to the nation and themselves? Notable throughout the tourist industry as a whole is the role played by women. Not only are most of the service jobs involved in tourist care done by females (for example, chambermaiding), but females also play an important part in the international trade in one particular global commodity, namely, sex. Sex tourism is big businesss. The sexuality of Asian women, for example, commodified and sold worldwide, is a case in point. The trade in Asian sexuality "feeds off and into representations of colonial and third world women as passive/exotic. . . . Media images, tourist brochures and airline advertising like the Singapore 'girl' associate the Asian woman with male adventure and female availability. . . . They join the . . . scenery as 'unspoiled' and natural resources, there for the taking" (Pettman 1991:13). The exploitation of women, children, and men too in this way is one particularly sorry form of masculinist imperialism. It is also an integral part of the story of world development; of indebted countries, desperate for foreign currency; and of "structural adjustment," as contrived and executed by men. The critique of this trade illustrates well the socially created and

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culturally differentiated n a t u r e of the d e m a n d , h i g h l i g h t s the div e r s e n e t w o r k s of p r o d u c t i o n , s h o w s h o w the i n d u s t r y could n o t function on its current scale w i t h o u t global transportation and c o m m u n i c a t i o n ( m e n flying i n t o B a n g k o k , for e x a m p l e ) , depicts in g r a p h i c detail the use of i n d i v i d u a l s as c o m m o d i t i e s , and outlines the limits of mercantilist, liberal, and Marxist analyses (since the sex trade d o e s n ' t threaten n a t i o n a l power, d o e s n ' t p r o m o t e greater individual l i b e r t y — b u t can c e r t a i n l y c o n s t r a i n or e l i m i n a t e i t — a n d isn't a d e q u a t e l y c o m p r e h e n d e d in class terms). A p o r n o g r a p h i c trade of a very different sort is e x e m p l i f i e d b y J o h n J a n e ' s classic, first p u b l i s h e d in 1898, All the World's Fighting Ships. It s e e m s there is n o living in a capitalist state system w i t h o u t the " m e r c h a n t s of d e a t h " a n d in a liberal w o r l d political e c o n o m y w i t h o u t t h e i r glossy, c o l o r f u l b r o c h u r e s a n d a d v e r t i s i n g m a t e r i a l , each o n e a g r a p h i c e x a m p l e of industrial capitalism at its most obscene ( a m n o n c 1995:1). J a n e ' s b o o k on ships w a s the first in w h a t is now a w i d e range of specialized periodicals that not only sell information about world a r m a m e n t s but also about the kind of c o m m e r cial o p p o r t u n i t i e s the m a n u f a c t u r e of a n d the t r a d e in a r m a m e n t s p r o v i d e . J a n e ' s is e x e m p l a r y in this regard: it c u r r e n t l y p u b l i s h e s , for e x a m p l e , an I n t e r n a t i o n a l D e f e n s e D i r e c t o r y that lists not o n l y 36,000 s e n i o r d e f e n s e p e r s o n n e l b u t also 16,400 d e f e n s e companies and organizations and the m a n u f a c t u r e r s of 3,500 types of defenserelated p r o d u c t s from o v e r 180 countries. In the defense business, " a c c u r a t e i n f o r m a t i o n " not only m e a n s the difference b e t w e e n life and death. It also means w h e t h e r to trade and invest or not. T w o n o t e s run t h r o u g h t h e c a t a l o g a c c o u n t of t h e p u b l i s h i n g services that J a n e ' s p r o v i d e s — t h a t of the n e e d for military h a r d ware and intelligence, and that of the unparalleled c o m m e r c i a l opportunities that m e e t i n g s u c h n e e d s can p r o v i d e . T h e s e t w o n o t e s are in perfect counterpoint. There is the bass of the one crying, " B e w a r e , b e w a r e . " T h e r e is the d e s c a n t of the o t h e r p r o m i s i n g m o r e lethal c a p a c i t i e s for y o u r lira, m o r e m a n g l e d m u l t i t u d e s for y o u r lempira, or w h a t e v e r else y o u r currency might be. In m e r c a n t i l i s t t e r m s , t h e a r m a m e n t s t r a d e is a n a t h e m a . Selfsufficiency in w e a p o n s p r o d u c t i o n a n d supply is basic to sovereign autonomy. H o w is it p o s s i b l e , for e x a m p l e , to b e " i n d e p e n d e n t " if the fighter p l a n e s in o n e ' s national air force need spare parts f r o m s o m e w h e r e else? As i n d u s t r i a l p r o d u c t i o n c h a i n s h a v e b e c o m e m o r e i n t e r n a tional and as finished g o o d s have c o m e to i n c o r p o r a t e c o m p o n e n t s from m o r e a n d m o r e d i s p e r s e d m a n u f a c t u r i n g sites, m e r c a n t i l i s t c o n c e r n s h a v e b e e n shared m o r e widely. State m a k i n g h a s historically entailed w a r m a k i n g , a n d w a r is seen in mercantilist t e r m s as

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always i m m a n e n t . Worst case scenarios a b o u n d , k e e p i n g the pressure on to be a r m e d and ready. In mercantilist terms, " w e a p o n s , being the source of p o w e r (analogous to specie [i.e., gold or silver])," should not be t r a d e d "except for strictly political reasons" (Krause 1992:14). Hence the mercantilists measure state " p o w e r " in terms of industrial self-sufficiency a n d not just in t e r m s of a r m e d forces. Not every state maker has the m e a n s to make the arms needed for war, however; hence the arms trade. In extremist liberal terms, of course, a r m a m e n t s are commodities, just like any other, a n d laissez-faire production and trade, even a r m a m e n t s production and trade, benefits all. Trade m e a n s g r o w t h , g r o w t h m e a n s prosperity, and prosperity m e a n s peace. In liberal parlance, therefore, a r m s dealing actually m a k e s for peace. Unlike mercantilists, liberals see no need to place restrictions on a r m s m a k i n g and a r m s trading. To liberals, state makers w h o subsidize domestic a r m a m e n t s industries to reinforce their a u t o n o m y u n d e r m i n e the benefits that c o m p a r a tive a d v a n t a g e and the global division of labor bring. Where state makers subsidize such industries to make for themselves a comparative advantage, however, as the f o r m e r Czechoslovakia did in explosives technology, then extremist liberals w o u l d say that they should be allowed to sell their explosives w o r l d w i d e on the o p e n market. The market nexus of s u p p l y and d e m a n d will set the price, and the prosperity that results will reduce any necessity to use such explosives for a n y t h i n g other than peaceful purposes. Indeed, h o w such explosives get used raises political questions, extremist liberals say, that are essentially separate f r o m those of m a r k e t economics, and i m p i n g e u p o n that m a r k e t only at peril to the prosperity a n d peace it provides. The lethal irony, for example, in the historical fact that in 1899 "British soldiers were shot d o w n by British g u n s that British a r m a m e n t s firms had sold to the Boers"; that in 1914 "Germ a n soldiers were killed by German g u n s m a n n e d by the armies of King Albert and Czar Nicholas II"; a n d that examples like these are legion should not obscure the more f u n d a m e n t a l fact, as extremist liberals see it, that t r a d i n g e n o u g h g u n s is a route to wealth, a n d wealth in turn precludes war. Reformist liberals d o n ' t believe marketeers can be relied u p o n to provide such public goods as law and order. They are more likely as a consequence to argue for state intervention to prevent marketeers from t r a d i n g themselves to death. Reformist liberals are aware, in other words, that markets left alone do not provide for national security. A d a m Smith himself acknowledged that a m o n g the possible " m a r k e t failures" w a s the failure to secure a c o u n t r y ' s defense.

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The concern for national security is antiliberal in the classical sense, and there is a deep ambivalence through all liberal thinking about whether to privilege the market or the state. Smith, though a classical liberal, was also a mercantilist. He was concerned to secure the wealth of nations, after all, not the wealth of the individuals who are brought together in the world market. And though the logical consequence of classical liberal thinking is a world of individuals, not states, few liberals are prepared to be less nationalistic just to be intellectually consistent. Reformist liberals argue for a referee at the global level as well. In a self-help world state makers retain the right to bear arms. A world of armed sovereign states makes necessary (reformist liberals argue) a hegemonic state capable of intervening to prevent individual members of the system of states from using their arms to threaten the system as a whole, and the global market that that system makes possible. In Marxist terms the focus falls on who owns and manages the factories and supply chains, and who works for them. The robust character of capitalism is clearly manifest in the way major armaments manufacturers survive the defeat of governments in war and go on to rearm whoever prevails in the subsequent peace. Here we get a good glimpse of a map behind the usual map of the world on the wall. Do Japanese state makers sustain Mitsubishi, for example, or does Mitsubishi sustain Japanese state makers? Extremist Marxists await the revolutionary overthrow of the whole capitalist system. The exploitation characteristic of such a system is the necessary precursor to its collapse, they say. So they are not likely to want to intervene to control armaments flows to poor countries, for example, for use in repressing local populations, since the system must "ripen" before it will fall, and armaments industries are part of the ripening process. Since the masses will need weapons when they ultimately revolt, armaments industries are necessary to provide the proletariat with arms when the revolution finally comes. Reformist Marxists, concerned about capitalism's continued survival, and concerned, too, about the way capitalists who make arms continue to work not only for their own survival but for the ongoing worldwide exploitation of working people, seek controls on arms. In a state-made world, state makers are the ones best placed to effect these controls. Where state makers serve the interests of capitalists, however, this becomes irrelevant. Thus military officers from "developing" countries are trained in "developed" ones to respect not only the rules of strategic global practice but those of capitalist marketeering as well. Under such circumstances

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r e f o r m i s t M a r x i s t s can t u r n only to t h e social m o v e m e n t s of " t h e p e o p l e " themselves, a n d to the court of w o r l d opinion. Feminist m o v e m e n t s h a v e explored in s o m e detail the links bet w e e n males, masculinity, a n d war. The " b o y s " will h a v e t h e i r " t o y s , " w h e t h e r b e c a u s e of a s u r f e i t of t e s t o s t e r o n e or s o m e m o r e c u l t u r a l l y i n d u c e d cause, a n d the a r m a m e n t s i n d u s t r y is t h e r e to p r o v i d e the b r i g h t e s t a n d shiniest possible. State m a k i n g is closely allied, both historically a n d systemically, w i t h w a r m a k i n g , a n d w a r m a k i n g , for w h a t e v e r r e a s o n , h a s a l w a y s b e e n a h i g h l y g e n d e r e d activity, w i t h males d o i n g the f i g h t i n g a n d females relegated to s u p p o r t roles while p r o v i d i n g s o m e of the rationale. Like the g e n d e r construction of h u m a n society, the global a r m s i n d u s t r y is highly hierarchic. The U n i t e d States a n d the f o r m e r Soviet U n i o n p r o v i d e d t w o - t h i r d s of all global a r m s o v e r t h e w h o l e p o s t - W o r l d War II p e r i o d . T h o u g h still highly hierarchic, the w o r l d ' s a r m a m e n t s i n d u s t r y is d i f f u s i n g , h o w e v e r . "In 1945," f o r e x a m p l e , " o n l y 4 c o u n t r i e s o u t s i d e the d e v e l o p e d w o r l d p r o d u c e d m i l i t a r y e q u i p m e n t ( A r g e n t i n a , Brazil, India, a n d S o u t h Africa)." Today " a b o u t 40 d o so" (Roberts 1995:7). The d i f f u s i o n p r o c e s s is n o t a typically liberalist one. A r m s are not typical c o m m o d i t i e s , a n d t h e y h a v e n o t f o l l o w e d t h e w a y in w h i c h i n t e r n a t i o n a l d i v i s i o n s of labor are typically m a d e ( K r a u s e 1992:92, 125, 213-214). The p o l i t i c o e c o n o m i c story of d i f f u s i o n , at least in the capitalist w o r l d , has b e e n a mix of hard-sell capitalism a n d the mercantilist desire of state m a k e r s in countries w i t h o u t adv a n c e d metallurgical or chemical i n d u s t r i e s to be able to m a k e sufficient q u a n t i t i e s of m o d e r n w e a p o n s r e g a r d l e s s . The c o m b i n a t i o n of p u s h b y a r m a m e n t s e n t r e p r e n e u r s a n d pull f r o m state m a k e r s w a n t i n g to b e self-sufficient h a s m a d e f o r a w e b of c o p r o d u c t i o n , offset, a n d licensing a r r a n g e m e n t s (Williams 1986). T h e s e h a v e m a d e for m a n y m o r e sites of w e a p o n s m a n u f a c t u r e . T h e s e f o r c e s h a v e also, however, tied countries into vertically i n t e g r a t e d c h a i n s that constitute a global version of the military-industrial c o m p l e x . Vertical i n t e g r a t i o n of the k i n d a p p a r e n t in the a r m a m e n t s ind u s t r y is also a p p a r e n t in the a g r i c u l t u r a l i n d u s t r y . The large t r a n s n a t i o n a l a g r i b u s i n e s s e s build chains of p r o d u c t i o n a n d s u p p l y t h a t reach u n b r o k e n " f r o m field to table." T h e tables the t r a n s n a tional c h a i n s s u p p l y are not local ones, t h o u g h . They are at a cons i d e r a b l e distance, a n d they are m o s t l y in t h e " d e v e l o p e d " c o u n tries of the global N o r t h (George 1986:158). T h e t r a n s n a t i o n a l f o o d i n d u s t r y u s e s local l a n d a n d labor, b u t the f o o d p r o d u c e d is " a l m o s t a l w a y s f o r e x p o r t " to those w h o can p a y m o s t . "Like m i n i n g , " George (1986:159) observes, t h e s e are "truly 'extractive i n d u s t r i e s , ' " and like mining, not only their h u m a n

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but also their environmental costs can be considerable. W h e t h e r in terms of the consequences of land clearance (Amazonia), or the effect of chemical fertilizers on water supplies (Taiwan), or the effect of synthetic industrial pesticides on those w h o w o r k in the industry and consume its products (everywhere), the costs of industrial agriculture are high and rising. Most state makers place a priority on food self-sufficiency. The mercantilist strategy w o u l d b e to ensure complete self-supply and agricultural autonomy. In extremist liberal terms, however, the opposite applies. It is the m a s s m a n u f a c t u r e of food and its sale on markets for profit, these liberals say, that is the only way to feed people and to solve the w o r l d ' s h u n g e r problems. Free market industrial food manufacture may well be harmful to the environment, as well as to small, family-level farms and people who don't fit corporate plans for the " r a t i o n a l i z a t i o n " of production, but it is plans like these, liberals argue, that a hungry world requires. It is the harm such rationalization represents and the capacity it has to undermine the market that reformist liberals find worrying in turn. Being multinational, agribusinesses can maximize their profits by m a n i p u l a t i n g w o r l d w i d e the mix of the factors of production they use. Profit for a g r i b u s i n e s s can very easily m e a n u n e m p l o y ment for " r a t i o n a l i z e d " w o r k e r s , for example, or environmental decay. K n o w i n g that t h e y ' v e been rationalized for the good of the market can be scant comfort to those w h o find they're unable to sell their labor. Finding your forests razed for wood chips in the n a m e of market efficiency can be equally distressing. To a Marxist, most immediately apparent is the way, in "less dev e l o p e d " countries, the export of primary products is used to "structurally adjust," that is, to qualify countries for debt relief loans from organizations like the IMF and the World Bank. T h e y note the use of arable land to produce luxury food products for the global North (McMichael and M y h r e 1991:100). And they note the w a y rural proletarians p r o v i d e surplus value using capital-intensive, highly m e c h a n i z e d , industrial farming techniques. T h e y see this as exploitation, not adjustment. To an extremist Marxist, the global pattern is reminiscent of nineteenth-century Europe. " A l l the varied horrors we look b a c k upon with mingled disgust and incredulity," George (1986:23) argues, have their equivalents, and worse, in the Asian, African and Latin American countries where one in ten people live in absolute poverty and where, just as the "propertied classes" of yesteryear opposed every reform and predicted imminent . . . disaster if

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eight-year-olds could no longer work in the mills, so today those groups that profit from the poverty that keeps people hungry want to keep the status quo between the rich and poor worlds.

A social picture like this, in Marxist terms, is a potentially revolutionary one. To a reformist Marxist, the tragedy is the ongoing lack of revolutionary change and the ongoing cost in human life and suffering. The tragedy is how avoidable world hunger happens to be. Scarcity and famine are entirely preventable, they say. With what we know and with the resources at our command we could easily feed all earth's people and more. " H u n g e r is not [in this repect] a scourge . . . [it's a] scandal" (George 1986:23). To various feminist social movements the scourge is sex-specific as well, and so is the scandal. The industrialization of agriculture and the marketeering to which liberals claim the world owes its living have not provided equally for women as opposed to men. Liberal feminists argue as a consequence for equality of opportunity. Socialist feminists argue for equality of treatment. Radical feminists argue for an inversion of the status quo; for better-fed women, that is, and worse-fed men. One final example of how ideologies contest the definition of a major global industry can be found not in food but in pharmaceuticals and drugs. Pharmaceuticals are mostly made in the industrialized world for the industrialized world, and more particularly, in those countries where the industry was first built, namely, the United States, the United Kingdom, Japan, Belgium, Germany, France, Italy, the Netherlands, Sweden, Switzerland, and most recently, China. The largest markets carry more than twenty thousand individual medicines (Ballance 1992:3-4). Mercantilist self-sufficiency in basic pharmaceutical supplies is possible in principle for any state. In practice, however, a fully fledged industry making the main drugs of mass relevance from raw materials requires a level of manufacturing sophistication well beyond that of most poorer countries. These must trade. They must go to the world marketplace, which is where the extremist liberals say they should have been from the start. Reformist liberals, by contrast, aware of the disparities in health care that marketeering results in, aware as well of how closely good health and human capital are allied, advocate greater state care. Extremist Marxists see such disparities as a structural feature of capitalism and as part of its revolutionary potential. Reformist Marxists, meanwhile, worry about ways to protect the pharmaceutically exploited. They are the

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most likely to be advocating prevention as an alternative to cure, and treatment regimes other than allopathic ones. The manufacture of and the trade in illicit drugs make up a large industry of their own. How large is impossible to say. For heroin, worth ounce for ounce ten times as much as gold, for cocaine, worth in the United States up to $40,000 a kilo wholesale, and for marijuana, it is certainly not inconsiderable. In the case of cocaine, for example, a figure of a thousand metric tons has been put upon Latin American production alone, with worldwide seizures making up only a fraction of that figure (Economist, December 24-January 6, 1995:20). Commodities valued so highly are bound to attract the opportunistic intervention of entrepreneurs, and so they have, producing and trading freely despite statist regulators and the U.S. "war on drugs." This war is a metaphorical one with "no frontiers and no fronts. . . . The 'enemy' is not in uniform, and he does not fight in formations. The nature of the threat is indirect and underground" (Levitsky 1992:160). In extremist liberal terms, regulation is uncalled for, since people should be free to consume what they want and can pay for. There should be no licit/illicit distinction at all. People who choose illegal drugs should have the right to do so, though the nature of what constitutes free choice in this regard is much debated, and clearly has a lot to do with the culture in which the individual lives. Smith's hidden hand rolls reefers, in liberal parlance, and harmony, prosperity, and peace quite naturally prevail. Reformist liberals wonder about the viability of a market that has such detrimental effects, even for cultures where illegal drugs play a more accepted part. They see the need for state intervention to mitigate those effects. In extremist Marxist terms, drug trafficking is a capitalist plot, doomed to fail. Like religion, illegal drugs are opiates for the masses— literally so. Those who own and manage the means of drug production and distribution are certainly capitalists, though how their business might contribute to capitalism's collapse is not clear. Perhaps it saps the entrepreneurial spirit of the bourgeoisie or the will to work of the proletariat. Short of revolution we find exploitation aplenty, however, whether it be of peasant growers or criminalized consumers. Reformist Marxists, who seek to protect the exploited, recommend reformist liberal intervention by the state. State makers, in Marxist terms in thrall to the bourgeoisie, are problematic people to turn to, however. Marxist reformers talk about civil society instead and the social movements that seek change by grassroots means. The drug trade relies, as they see it, on the uneven development of

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the world political economy. The problem of "hard drugs" is most apparent, they claim, in "precisely those urban centres in North America and Europe that have suffered the greatest job losses as a result of . . . 'the demise of manufacturing industry'" (Taylor 1994:494). On a global scale, it is "precisely those countries which have been disadvantaged in the new international global political economy, in part because they have not developed an indigenous industrial or financial commercial class," that now have to rely on the sale of "whatever agricultural product they can produce, with minimal technology," namely, drugs (Taylor 1994:495). Coca bushes can be harvested only a year and a half after they are first planted, and they can be harvested three or four times a year for up to twenty years. They provide, in other words, an early and a steady crop return (President's Commission 1986:29). This blanket conclusion does not explain why those countries in the global South who are manifestly "disadvantaged" and yet have not turned to the drug-growing and trading option, should have chosen differently. Nor does it explain the "de-developing" regions in the global North that are not notable drug users either. But there is enough of a correlation here to give us pause. Nor is the state much of a help in the cases where the correlation is clear; which leaves people having to somehow help themselves. I hope by now it is reasonably clear that how we talk about an issue really does determine what we make of it in substantive terms. Try holding a drinking glass upright against a wall and drawing a line around it. You get a rectangle. Turn the glass on its end and you get a circle. It's the same object, the same subject, the same reality, but you have two different shapes. It really does depend on how you look at it. No one way is more "correct" than the other, though this doesn't stop the rectangular people arguing with the circular people about the relative merits and demerits of their respective points of view, and of the analytic languages they choose to use. Because their premises are different, however, their arguments never end. They could only be reconciled by a cosmic perspective that could see all sides at once, or rather, by someone who could see a drinking glass as a sphere, since only a sphere has the same shape from any angle. There are all kinds of interconnections between these particular industries, just as there are many more industries that could have been discussed. There are connections between recreational spending on illegal drugs and tourism, for example. There are tensions between recreational spending on things like tourism and illicit drugs, and spending on necessities like food or pharmeceuticals or the products of other industries, such as oil. There are connections

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b e t w e e n money l a u n d e r i n g and computing. It was not my point to p u r s u e these connections here, rather I w a n t e d to demonstrate the radical influence perspective has u p o n w h a t we understand to be of significance in IPE and to note the limits any perspective places u p o n w h a t we see and do. Knowing about limits is the first step toward transcending them. That goes, as Enloe knows, for the rationalistobjective approach to IPE as a whole. But w h y reflect any further? Let's return to someone w h o knows what I mean, and what is more, can make the point in experiential terms.

4 From "International Political Economy" to "World Political Economy" •

Anthony Sampson (1973) "The Barbecue"

It w a s in B r u s s e l s , at t h e a n n u a l I T T [ I n t e r n a t i o n a l T e l e p h o n e a n d T e l e g r a p h ] b a r b e c u e of m a n a g e r s f r o m all o v e r t h e w o r l d , that I first felt t h e full i m p a c t . It w a s j u s t a f t e r t h e I T T s c a n d a l had b r o k e n in W a s h i n g t o n and C h i l e , a f t e r t h e g i a n t c o r p o r a t i o n had b e e n a c c u s e d of b r i b i n g the N i x o n g o v e r n m e n t to d r o p an a n t i - t r u s t suit, a n d of t r y i n g to u n d e r m i n e the e l e c t i o n s in C h i l e . I w a s a l r e a d y i n t e r e s t e d in 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 , a n d I had b e c o m e s p e c i a l l y c u r i o u s a b o u t t h i s c o n g l o m e r a t e , w i t h its a s t o n i s h i n g j u m b l e of w o r l d i n t e r e s t s , f r o m t e l e p h o n e s to c o s m e t i c s , f r o m h i r e - c a r s to h a m s , w i t h an a p p a r e n t l y u n s t o p p a b l e p o w e r to o p e r a t e b e y o n d t h e r e a c h of g o v e r n ments. I had been talking to people both inside and outside the c o m p a n y , a n d to m y s u r p r i s e 1 h a d b e e n i n v i t e d , as a s o l i t a r y j o u r n a l i s t , to a t t e n d t h i s self-contained company function. It w a s a s t r a n g e s e t t i n g , w h i c h s e e m e d o u t s i d e t i m e or p l a c e . It w a s at t h e " E x e c u t i v e M a n s i o n " , a b i g b o u r g e o i s h o u s e in a s u b u r b of B r u s s e l s , w h i c h I T T m a i n t a i n s as a c o m p a n y c l u b a n d a c e n t r e f o r e n t e r t a i n m e n t . A m a r q u e e h a d b e e n p u t u p in t h e g a r d e n , d r a p e d w i t h b l u e and w h i t e I T T b u n t i n g , a n d B e l g i a n w a i t e r s w e r e c o o k i n g s t e a k s and s w e e t c o r n on t h e charcoal grills, while the polyglot m a n a g e r s q u e u e d up docilely with their p l a t e s . T h e A m e r i c a n c o n t i n g e n t , sixty of t h e m , h a d f l o w n o v e r t w o d a y s b e f o r e , f o r their m o n t h l y i n s p e c t i o n of t h e E u r o p e a n a c c o u n t s : t h e y had t h e d a z e d , s l e e p - w a l k i n g l o o k of p e o p l e still c o n f u s e d by j e t - l a g , and s o m e of t h e m (I c o n f i r m e d ) still k e p t their w a t c h e s o n N e w York t i m e , in c a s e t h e y h a d to r i n g u p the h e a d o f f i c e . It w a s not i m m e d i a t e l y e a s y to tell t h e E u r o p e a n s f r o m t h e A m e r i c a n s , except perhaps f r o m the shoes and trousers; for the Europeans, t o o — w h e t h e r S w e d i s h , G r e e k or e v e n F r e n c h — h a d a h a i l - f e l l o w s t y l e a n d s p o k e f l u e n t A m e r i c a n , j o k i n g a n d r e m i n i s c i n g a b o u t o l d t i m e s in C o p e n h a g e n a n d R i o . I s o o n had a s e n s e of b e i n g e n v e l o p e d by t h e c o m p a n y , by its r i t e s , c u s t o m s a n d a r c a n e o r g a n o g r a m , of b e i n g s w e p t r i g h t a w a y f r o m B r u s s e l s , or E u r o p e , or a n y w h e r e . A f t e r a g o o d d e a l of b a c k - s l a p p i n g , s h o u l d e r - p u n c h i n g a n d s t o r y - t e l l i n g , t h e e x e c u t i v e s sat d o w n to their m e a l o n t r e s t l e - t a b l e s in the m a r q u e e . T h e r e w a s no s p e c i a l s e a t i n g p l a n ; t h e a t m o s p h e r e w a s d e t e r m i n e d l y d e m o c r a t i c

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and u n s n o b b i s h . But in the m i d d l e a bald h e a r t y m a n w a s p o i n t e d out to m e , the y o u n g p r e s i d e n t of I T T E u r o p e , M i k e B e r g e r a c ; and next to h i m l o o k i n g small by c o m p a r i s o n w a s an o w l i s h f i g u r e in a neat d a r k suit. T h i s , 1 r e c o g n i s e d , w a s the m a s t e r - m i n d b e h i n d t h e w h o l e c o r p o r a t i o n — H a r o l d Sydney Geneen. A f t e r the m e a l , there w e r e s p e e c h e s . A n Italian m a n a g e r told a long f u n n y story in c o m i c I t a l i a n - A m e r i c a n a b o u t m a r r i a g e and s e x . T h e r e w e r e r e f e r e n c e s to h o w f a m o u s I T T had b e c o m e in the past w e e k s , and h o w they no longer n e e d e d to read c o m p a n y r e p o r t s to learn n e w s of their c o m p a n y ; they could read it in t h e n e w s p a p e r s . T h e n M i k e B e r g e r a c m a d e a n o t h e r h u m o r o u s s p e e c h , in praise of G e n e e n , s p e a k i n g in a C a l i f o r n i a n d r a w l , w i t h an e a s y - g o i n g , o p e n - a i r c a s u a l n e s s w h i c h m a d e it hard to b e l i e v e that he had ever been F r e n c h . T h e c l i m a x of his j o k e c a m e w h e n he r e v e a l e d that G e n e e n had recently b e e n to L o n d o n , w h e r e he had b e e n o b s e r v e d — i m p r o b a b l y e n o u g h — e n j o y i n g w a t c h i n g a g a m e of cricket at Lords. B e r g e r a c then s u d d e n l y b r a n d i s h e d a c r i c k e t - b a g , out of w h i c h he p r o d u c e d a cricket bat, s t u m p s and p a d s (they had b e e n f l o w n o v e r at t h e last m o m e n t , I w a s told by my n e i g h b o u r , by l T T ' s a d v e r t i s i n g m e n in L o n d o n ) . H e held t h e m up, o n e by o n e , w h i l e the e x e c u t i v e s r o c k e d w i t h l a u g h t e r and G e n e e n t o o l a u g h e d with an impish grin w h i c h lit u p his f a c e . T h e n G e n e e n s t o o d up. H e c o n t i n u e d t h e j o k e , s w i n g i n g t h e bat with r e m a r k s about b a t t i n g for b u s i n e s s , b o w l i n g fast balls and n e e d i n g s t r o n g p a d s . But the p i c t u r e of G e n e e n as the c r i c k e t e r never really s e e m e d c o n v i n c i n g ; and he q u i c k l y w e n t on to talk a b o u t ITT, w i t h m o r e j o k e s a b o u t the t e r r i f i c publicity, and h o w this w a s a " n o n - s a n d w i c h e v e n i n g " ( m o s t of the e v e n i n g s w h e n the A m e r i c a n s c o m e o v e r are s p e n t in late-night c o n f e r e n c e s , w i t h only time for a s a n d w i c h ) . A s soon as he s p o k e , for all the i n f o r m a l i t y , it w a s clear that he d o m i nated the w h o l e g a t h e r i n g , like a h e a d m a s t e r at the end of t e r m p r e t e n d i n g to b e o n e of the b o y s , but f o o l i n g n o n e of t h e m . He talked a b o u t r e c o r d p r o f i t s , c o n t i n u i n g e x p a n s i o n , s u c c e s s f u l d e l e g a t i o n and m u l t i n a t i o n a l c o - o p e r a t i o n . His e y e s g l e a m e d as he w e n t on about I T T ' s brilliant p e r f o r m a n c e . He e n d e d by s a y i n g , "I w a n t you to k n o w that I ' m h a v i n g a lot of f u n , and I w a n t you to h a v e f u n , t o o . " T h e r e w a s a s u r g e of a p p l a u s e . It s e e m e d clear that he really w a s h a v i n g f u n ; t h o u g h I w a s less sure that the rest w e r e . Yet listening to the j o k e s and the s p e e c h e s , o n e w o u l d not think that this c o m p a n y had just b e e n t h r o u g h a b a r r a g e of p u b l i c c r i t i c i s m , e x a m i n a t i o n and c e n s u r e . I a s k e d the head of p u b l i c relations, N e d Gerrity, what e f f e c t he t h o u g h t t h e s c a n d a l had had on I T T ' s b u s i n e s s . He said it had really e s t a b l i s h e d the c o m p a n y ' s c o r p o r a t e identity: " T h e b o o k i n g s f o r S h e r a t o n h o t e l s h a v e b e e n a r e c o r d . " A f t e r the s p e e c h e s , the m a n a g e r s w a l k e d a r o u n d t h e g a r d e n and the h o u s e , d r i n k i n g and c h a t t i n g about t u r n o v e r and i n v e n t o r i e s . T h e y w e r e hearty in a rather t e n s e way, like a r e u n i o n of a l u m n i w h o are not quite sure

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how well they know each other. T h e tension w a s heightened by the presence of the b o s s e s — t h e senior vice-presidents w h o had f l o w n over f r o m New York, w h o wandered round warily. T h e r e was Tim Dunleavy, a big jolly Irishman with tousled hair, w h o had the cosy look of a teddy-bear, but w h o s e jollity w a s said to be only a s m o k e s c r e e n for a steel-trap mind. T h e r e was Jim Lester, inscrutable with his narrow eyes and c i r c u m f l e x mouth, like a sad mandarin; his implacable exterior, 1 w a s told, concealed an implacable interior. T h e r e w a s Ned Gerrity, regarded as the eyes and ears of his master, Geneen; a leathery man with pebble glasses, loping round the lawn with his cigar rolling round his mouth. T h e gathering was as emphatically masculine as a regiment or a football club; there w a s not even a waitress. T h e whole esprit w a s one of challenge and ordeal, with a whiff of grapeshot in the air: the appearance of a girl would have shattered the spell. Later in the evening I w a s taken to meet Geneen, w h o w a s standing talking in the now almost-empty marquee. It was a surprising encounter. I was introduced as an English writer, and he told me immediately how much he liked England, where he had been born, and how he loved c o m i n g back to London. T h e n he went on to explain how he had admired the British Empire, and w a s sorry it had been given u p so hastily. W h y d i d n ' t the British government support the White R h o d e s i a n s ? D i d n ' t they realise that f o u r - f i f t h s of the British people were behind Ian Smith? He went on to talk about A m e r ica's difficulties with the rest of the w o r l d — h o w her oil supplies were in danger, and how eventually she might need to m o v e into the Arab countries to protect them. As he w a r m e d to his tirade, his w h o l e f r a m e c a m e to life; he began gesturing, pointing, and laughing, his fingers darting around touching his nose, his ear, his chin, as if w e a v i n g s o m e private spell; his greeny-brown eyes twinkled, and he grinned and laughed like a gargoyle. He seemed no longer a dark-suited owlish accountant, but more like an imp or a genie: almost like Rumpelstiltskin, magically turning thread into gold. 1 noticed that a clutch of vice-presidents were standing round listening, w a t c h i n g him carefully: they laughed when he laughed, and nodded when he nodded. B u s i n e s s m e n , he explained, are the only people w h o know how to create jobs, and m a k e work for people; he w a s responsible for 4 0 0 , 0 0 0 e m p l o y e e s , all over the world, and it w a s his duty to lobby g o v e r n m e n t s on their behalf, as effectively as he could. W h a t d o g o v e r n m e n t s know about providing j o b s ? Why does the American g o v e r n m e n t waste time with anti-trust questions, when it should be supporting the big corporations which are battling with the Japanese, and contributing to the balance of p a y m e n t s ? As for these liberal n e w s p a p e r m e n w h o attack big business, what do they know about making j o b s ? I interrupted him to say: " P e r h a p s I'm a liberal n e w s p a p e r m a n ! " He looked at me in disbelief and roared with laughter, with the others in chorus. He argued f o r three-quarters of an hour in the marquee, treating me patiently, with amused tolerance, as a wayward sceptic w h o would soon see

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the true light of r e a s o n : he e v e n sent a m e s s a g e a f t e r w a r d s , s a y i n g h o w m u c h h e ' d e n j o y e d the talk. We parted a m i c a b l y , w i t h m u t u a l i n c o m p r e h e n s i o n . But in this m a r q u e e , like a n o m a d ' s e n c a m p m e n t , 1 had b e g u n for a m o m e n t to get t h e feel of b e i n g inside this a m a z i n g c o r p o r a t i o n , to g l i m p s e it t h r o u g h the e y e s of the master and f o l l o w e r s . F r o m their c a m p they l o o k e d out o n t o a w o r l d b e n i g h t e d with p r e j u d i c e and u n r e a s o n ; w h e r e g o v e r n m e n t s w e r e m e r e l y o b s t r u c t i n g the l o n g m a r c h of p r o d u c t i o n and p r o f i t ; w h e r e n a t i o n s w e r e like b a c k w a r d native tribes, to be p l a c a t e d , c o n v e r t e d , and o v e r c o m e . T h a t b a r b e c u e e v e n i n g a r o u s e d my curiosity, m o r e than it s a t i s f i e d it. It s e e m e d like a c a r i c a t u r e , e x a g g e r a t i n g all the c h a r a c t e r i s t i c s of these n e w o r g a n i s m s , the 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 r a i s i n g in an e x t r e m e f o r m t h e q u e s t i o n : w h o , if a n y o n e , can control t h e m ? H e r e w a s a giant c o m p a n y w h i c h had just u n d e r g o n e this e x t r e m e p u b l i c b a t t e r i n g , a p p a r e n t l y e m e r g i n g all t h e p r o u d e r and m o r e u n i f i e d f r o m the o r d e a l , as if it w e r e a pirate s h i p that had slipped t h r o u g h a naval e n g a g e m e n t . Its duality l o o k e d b a f f l i n g ; on o n e s i d e it p r e s e n t e d itself as a highly r e s p o n s i b l e w o r l d o r g a n i s a t i o n , c o n s t a n t l y m i n d f u l of its 2 0 0 , 0 0 0 s h a r e h o l d e r s , its 4 0 0 , 0 0 0 e m p l o y e e s , its s e v e n t y host nations, and held t o g e t h e r w i t h an a c c o u n t i n g s y s t e m of the strictest c o n t r o l : in the w o r d s of its a d v e r t i s e m e n t s " s e r v i n g p e o p l e and n a t i o n s e v e r y w h e r e . " Yet on the other side, in t h e m a r q u e e 1 had the p o w e r f u l i m p r e s s i o n that here w a s a c o m p a n y that w a s a c c o u n t a b l e to no nation, a n y w h e r e ; and held t o g e t h e r and inspired by o n e m a n , against w h o m n o - o n e cared to argue. A m a n , m o r e o v e r , w h o in s p i t e of his f a m o u s a c c o u n t i n g skills and d i s c i p l i n e , yet had the u n m i s t a k a b l e style of a b u c c a n e e r — w h o c o u l d stir up o t h e r s with p u r p o s e and e x c i t e m e n t , luring t h e m a w a y f r o m their f a m i l i e s and h o m e s into a w o r l d of hectic travel, latenight m e e t i n g s , c o n s t a n t p r e s s u r e and o u t r a g e o u s d e m a n d s . H o w did such a c o m p a n y c o m e a b o u t , and h o w had it so i n e x o r a b l y i n c r e a s e d its s c o p e ? H o w can o n e man d o m i n a t e a c o r p o r a t i o n and hold t o g e t h e r an industrial e m p i r e m a k i n g t h o u s a n d s of p r o d u c t s a c r o s s half the w o r l d ? H o w can g o v e r n m e n t s ever control s u c h an o r g a n i s m w h i c h is, like a j e l l y f i s h , b o t h e v e r y w h e r e and n o w h e r e ? A n d h o w d o e s the multinational c o r p o r a t i o n , of w h i c h I T T is a c o n v e n i e n t c a r i c a t u r e , fit in w i t h m o d e r n n o t i o n s of politics and d i p l o m a c y ? H o w d o e s it, or s h o u l d it, relate to the nation-state, to t h e C o m m o n M a r k e t or to the m o d e l s of world trade? . . . " H e ' s Captain A h a b , really," said o n e G e n e e n - w a t c h e r , and I c o u l d s e e w h a t he m e a n t — t h e m o n o m a n i a and o b s e s s i o n , t h e m a g n e t i c a s c e n d a n c y he cast o v e r his crew in the hunt f o r the w h a l e . But as 1 c o n t i n u e d my o w n t r a v e l s , 1 c a m e to think that G e n e e n and his c o r p o r a t i o n r e s e m b l e d not s o m u c h the crew of the Pequod, as the w h i t e w h a l e itself; a l e v i a t h a n secretly e n c i r c l i n g the w o r l d , usually d e t e c t a b l e o n l y by the t u r b u l e n c e of t h e water, but s u d d e n l y s h o w i n g o n e side of its h u g e s t r a n g e s h a p e , or

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s p o u t i n g dark water, first in o n e corner o f the g l o b e , then a f e w d a y s later at the o p p o s i t e end; b e c o m i n g a legend for ubiquity, immortality, and supernatural strength.

The emerging w o r l d business civilization has its roots d e e p in Europ e a n culture, b u t its branches and flowers are n o w f o u n d e v e r y w h e r e in the w o r l d . Driven b y a passionate c o m m i t m e n t to liberal capitalism, m e n like the m a n a g e r s of Sampson's ITT are a new kind of citizen. They carry a national passport—or two or three—but their real passport is their contract of e m p l o y m e n t with the c o m p a n y for which they work. They belong not so m u c h to an international political economy b u t a w o r l d political economy. They are cosmopolitan m e m b e r s of a global market that they build as they go. This market is g r o w i n g fast. What are its most significant features? Sampson suggests a few—multinational corporations, for example, c h a n g i n g patterns of e m p l o y m e n t , c h a n g i n g balances of productive power. These are all i m p o r t a n t features, b u t they are not the only ones. Moreover, each feature can be read from a different analytic perspective using different analytic languages. Features are as features are said to be.

GROWTH IN PRODUCTION To liberals the most i m p o r t a n t d e v e l o p m e n t in m o d e r n times has been the w a y markets have merged to define virtually every society in the world. Marketeering m o r e s have become part and parcel of virtually every h u m a n culture. Rather than haggle together once a w e e k in the village square, for example, we have countless chances, as b u y e r s and sellers, to meet together to effect the exchange of goods and services. Markets are now ubiquitous, and the rules and u n d e r s t a n d i n g s they require are ubiquitous, too. Like the state, their p r e d o m i n a n c e today is a strange and w o n d r o u s thing. In historical terms, it is unique. The market is n o w available virtually everywhere. In some places this is so all d a y and every day. In an intensely marketized country like Japan, for example, street v e n d i n g machines have been installed every h u n d r e d meters or so. They operate nonstop, p e d d l i n g not only a w i d e range of f o o d s and drinks, but compact discs, camera film, postcards and stamps, magazines and comics, d r y cell batteries, used

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underwear and phone cards. B y 1993 there were 5.5 million such machines, one for every twenty-two people in the country, and this, one should add, is just the curb-side fringe of a vast commercial web woven through the entire fabric of Japanese society. In a marketized world marketeering, in the sense of marketspecific behavioral practices, also becomes ubiquitous. Cultural values change to account, for example, for commodity display (advertising), stimulated desires (the "cult of the n e w " ) , status defined in terms of possessions ("you can't take it with you but you can have it n o w " ) , a cultivated neglect of environmental degradation (unquestioning acceptance of inbuilt obsolescence, for example), masculinized competitiveness (sales campaigns), and an extraordinary emphasis upon the getting and relinquishing of the main medium of exchange (namely, money). To Marxists the point of the market is that it is a capitalist market. Williams (1983:50-52) says that calling someone a "capitalist" goes back to the eighteenth century, which is also about the time that " c a p ital" began to be used as a specialized term to denote not just capital stock, like land, machinery, materials, or workers' skill levels, but capital as money invested to earn interest. Capitalism, as a word describing a "particular economic system," didn't appear until early in the nineteenth century, however, and it wasn't until later in the century that it began to be used, most notably by Marx himself, to denote privatized ownership of the means of production, in association with free wage labor. Not all analysts see capital or even the market itself as the most basic feature of the growth process. Some, for example, see the advent of industry and the Industrial Revolution as the distinguishing feature of the world political economy. It is the Industrial Revolution, they argue, that is primarily responsible for the extraordinary productivity of contemporary human beings (Landes 1969). "Since the Industrial Revolution," says Gilpin (1987:98), "the major cause of economic growth has been a series of technological innovations that have provided new opportunities for investment and economic expansion." Gilpin's use of the adjective economic to denote a discrete realm of human endeavor is the clue here. Gilpin, as noted earlier, is a reformist liberal. As such he is more inclined to think in terms of wealth making as separate from, say, politics. He thinks of technological change as having a life of its own. Other liberals, by contrast, particularly the more classically oriented ones, see industrialization making a difference only where free play is given to entrepreneurs. Marxists see industrialization as the means peculiar to the contemporary mode of production, with all that that entails. Being capitalist industrialization is what makes all the difference. To feminists, it is most notably

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patriarchist industrialization. To environmentalists, it is Pandora's box; and so on The growth of the international political economy has entailed growth in both breadth and depth. The system itself has gotten bigger, and the interactions in every part of it have become more intense. It is a phenomenon so profound that the concept of an international political economy, while still a meaningful one, has to be considered now in the context of another that is becoming equally if not more important, namely, that of a global political economy. Global Firms The global political economy is dominated not only by state makers, but also by the heads of transnational firms or corporations—men like Geneen of ITT, described so graphically by Sampson. "During the early 1990's," according to one UN report, "at least 37,000 parent firms controlled over 206,000 foreign affiliates" (UNCTAD 1994:4). In 1992 the largest one hundred of these firms (excluding the banking and finance ones) controlled about $3.4 trillion in global assets, over onethird of which were held outside the countries where these firms were based (UNCTAD 1994:5). Headquartered almost exclusively in the capitals of the countries of the European Union, as well as the United States, Japan, Australia, Canada, Finland, New Zealand, Norway, Sweden, and Switzerland, the top two among the top one hundred global firms, in terms of assets located abroad, are currently oil companies. Preeminence in the sense of assets abroad reflects the nature of the oil industry, and in particular, how geographically dispersed and capital-intensive it is. If companies are ranked in terms of quality service, however, visionary management, market responsiveness, financial soundness, or the example they set to others, then in the Asian region at any rate, where a survey of 4,500 professionals was conducted to determine the relative ranking of multinationals, the market leader is the beverage firm Coca-Cola, closely followed by Motorola and McDonald's (Leger 1994:38-39). All the top firms are notably transnational, either standing alone in foreign domains or meshing with local concerns (UNCTAD 1994:136). This meshing process is one of the most notable features of the world political economy. "Globalization is ultimately the product of decisions taken by firms," according to UNCTAD (1994:158), a conclusion borne out by the finding that five hundred global firms among them do four-fifths of all the production in the world, and only fifteen firms control between them the world trade in "all basic commodities, from food to minerals" (Gurtov 1994:29).

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Taken as a group it is the computer and electronic firms that hold the most assets abroad. These are followed closely by mining and petroleum, chemical and pharmaceutical, car-making, and food and beverage firms. Taken as a whole this makes global firms "major organizers of economic activity and an important source of capital, technology, managerial and organization know-how for both developed and developing economies" (UNCTAD 1994:163)—much as Sampson says. This is not to mention the role of global firms as the employers, directly and indirectly, of 150 million workers in high-technology secondary, that is, industrial, and tertiary, that is, service, industries (UNCTAD 1994:164). While this may be only 6 percent of the world's paid labor force, it is the leading edge of this force. Marxists in particular talk about the "incorporation of labor from many countries into an integrated worldwide corporate productive structure" (Hymer 1979:75). Firms are in the world market to outproduce and outsell each other, but technological change can also make what a particular firm offers obsolete. This provides firms with a pressing reason for constant research and innovation. This assumes the financial means to do so, which is why global firms have grown in parallel with the global capital market (Hymer 1979:82). The demand for credit on the part of global firms gets met from the world's supply of stored value, and the "savings of many nations" get mobilized for this purpose (Hymer 1979:82). Marxists in particular point to the symbiotic nature of this relationship, and the common sense of cause it creates between owners and managers of firms and capital. It is Marxists, too, w h o draw attention to what global firms do to labor. "Increased cooperation" between the workers of the world can only appear to the capitalist as "increased competition" (Hymer 1979:85), since to maximize their profits, global firms must, among many other things, buy labor power as cheaply as possible. "It costs $25 an hour," for example, "to employ a production worker in Germany (including non-wage costs such as social-security contributions) and $16 an hour in America; but only $5 in South Korea, $2.40 in Mexico, $1.40 in Poland and 50 cents or less in China, India and Indonesia" (Woodall 1994:14). Depending on how labor-intensive the production process happens to be, the cost of making finished goods may include only a small amount of what is paid to labor. If firms are trying to make money in highly competitive markets, however, every cost advantage can matter, even seemingly small ones. Laborers do come to the capitalists, but on the whole, capitalists take their production processes to the workers. Contemporary production technologies make this much more feasible. Capitalists also

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prevail u p o n state makers to use state borders to i m p e d e migration flows. This keeps the global labor force f r a g m e n t e d and therefore easier to control and easier to exploit. With the help of state makers, capitalists can also maintain, "by force or by education, the general structural conditions which cause laborers to come to w o r k each day and to accept the authority of the capitalist and his right to higher income, either as managerial compensation or as interest and d i v i d e n d s " (Hymer 1979:86). Global Production Sampson describes ITT as an "industrial empire m a k i n g t h o u s a n d s of products across half the world." It is productiveness of this sort, a n d on such a scale, that has c h a n g e d the international political economy into a w o r l d one. At the end of the last century and in the first years of this one global production chains were mostly to be f o u n d in the primary sector (agriculture). They have been m o v i n g ever since into the secondary (industrial) and tertiary (service) ones. "As a result," UNCTAD (1994: 146) believes, "a substantial share of global o u t p u t [four-fifths, by Gurtov's reckoning] is being reorganized u n d e r the c o m m o n governance of TNC's. . . . Trade and technology transfers . . . are being taken out of the market and internalized within T N C networks." This m e a n s that, "from being a collection of i n d e p e n d e n t national economies linked primarily through markets, the world economy is becoming, for the first time, an international production system, integrated increasingly through n u m e r o u s parts of the value-added chain of production" (UNCTAD 1994:146). What are w e to make of this process? The quotation above is couched in liberal language. The notion of "national economies" and of a "world e c o n o m y " as discrete entities only m a k e s sense in liberal terms. To the more extreme liberal, producers are not required to develop a "social outlook c o m m e n s u r a t e with the social production they create," since the system is s u p p o s e d to deliver such an o u t c o m e automatically. Reformist liberals are more pessimistic, however, retaining a place for state makers s o m e w h e r e "above . . . the market so that the waste of externalities can be reduced and the conflicts between capitals and between capital and labor can be ameliorated" (Hymer 1979:77). Mercantilists reject outright the w a y in which liberal reformists still expect the state to operate "with its h a n d s tied." Global firms, they say, should serve the "national interest" or be regulated accordingly (Hymer 1979:78).

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Marxists decry the "costs [under capitalism] of constant rivalry, the inability [of the system] to meet social needs, and the frustration of human development." They decry, too, the authoritarian way in which firms, and particularly global firms, keep the worker largely ignorant of the "cooperative process of which he is part," and the way in which they alienate the worker from "his work, his instruments and machines, and his product" (Hymer 1979:77). The globalization of production is most readily apparent to Marxists. Liberals and mercantilists talk about entrepreneurs connecting u p national economies, creating flows of goods and money. Theirs is a world economy of international exchange. Marxists, however, talk of global firms like ITT commanding integrated production chains that maximize value surpluses by myriads of transnational means. Theirs is a world political economy of production. It is one where "international" is unequivocally "global" and where "production" is "productivity" on a truly global scale (Robert 1992:175). Global Divisions of Labor Global firms have been instrumental not only in integrating production chains but in bringing about radical changes in the international division of labor. The classical international division of labor involved the exchange of industrial goods for primary commodities. It involved industrialized countries exporting finished goods to nonindustrialized ones, and importing primary commodities (raw materials) in return. This pattern has changed. Global firms now put manufacturing and assembly plants in relatively remote locations because of the tax-and-laborcost advantages and the chance to avoid strict environmental protection laws. They keep the knowledge-intensive parts of the production chain in more technologically advanced places, but the unskilled and semiskilled labor-intensive parts they put where workers are cheaper. Instead of the poorer countries on the world's productive peripheries exporting only raw materials, we then get them making and trading finished goods as well (Frobel et al. 1978). This is the new international division of labor. It involves the exchange of industrial goods for primary commodities and cheap labor, and while the analysis above suggests that global firms brought this about, it has also been argued that state makers in a number of poorer countries helped bring it about, too. In the 1930s and during World War II a number of these countries built labor-intensive import substitution industries in their bid to save foreign exchange and become more "developed." Exports from these industries had a significant impact on

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parallel industries in developed states. Global firms b e g a n to invest in the more successful of the peripheral m a n u f a c t u r i n g concerns, and a new international division of labor w a s created (Dolan 1991:4). This is not all the new international divison of labor involves, however. Capitalist firms in the w o r l d ' s productive cores have continued to p r o m o t e industrial research. This has enabled t h e m to change from more "material-intensive" p r o d u c t s and processes to lesser ones. "Fifty to 100 p o u n d s of fiberglass cable," for example, "transmit as m a n y telephone messages as does one ton of c o p p e r wire [and] requires no m o r e than five percent of the energy n e e d e d to p r o d u c e [it]. . . . T h u s it is quite unlikely that raw material prices will ever rise substantially as compared to the prices of m a n u f a c t u r e d goods (or high-knowledge services such as information, education or health care) except in the event of a major prolonged w a r " (Drucker 1989: 290-291). This has p u t considerable pressure on those peripheral countries that provide obsolescing mineral and energy resources. Resources have value because of the industrial technologies that turn them into commodities. The technologies that m a k e these resources w o r t h using are changing, however. Core countries are staying well ahead, and any prospect of a commodities squeeze being p u t on t h e m as resources deplete has so far not materialized. In more-extremist liberal terms, the change in the international division of labor is to be welcomed. Since the international economy is a self-equilibrating one, the end result of m o n e y flows and the world trade in managerial expertise, r a w materials, and machinery is an international division of labor n o b o d y planned b u t everyone benefits from (Caporaso 1987b:4). Labor, in these terms, is only part of w h a t makes for any finished product. International divisions of labor result from entrepreneurial decisions about h o w to combine all the factors of production to optimal effect. It is no more than Smith's pin-making process on a w o r l d scale. The result is m u c h m a g n i f i e d production capacities, b u t there is no more to it than that. In more-extremist Marxist terms, the significance of the changing international division of labor is notably greater, simply because the role that Marxists see labor p o w e r p e r f o r m i n g in the production process is m u c h greater. At the same time as global firms began to move their factories to cheap labor countries, for example, a u t o m a t e d robot workers also began to eliminate opportunities for blue collar e m p l o y m e n t in those w h e r e labor w a s more expensive. This trend became so m a r k e d that analysts began to w o n d e r w h e t h e r or not in a few years countries like the United States a n d Japan w o u l d be employing " n o larger a proportion of the labor force in m a n u f a c turing" than they currently employ in f a r m i n g that is, "at most, ten

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percent" (Drucker 1988:291-292). If this trend were to become a definitive feature of the world political economy, then we would see the " u n c o u p l i n g of manufacturing production from manufacturing employment" (Drucker 1988:291)—a revolutionary change indeed. Without other ways of reemploying those put out of work, this change could even be revolutionary in the extremist Marxist sense. It is no accident, therefore, that extremist liberals take such an interest in controlling crime, since this is one of the most direct consequences of high, chronic unemployment. It is no accident that reformist liberals want to bring the state back in. Or that mercantilist cries to "keep the jobs at home" and "buy local, or else" continue to have such appeal. Fordism and Post-Fordism The most characteristic way to manufacture large numbers of cheap, standardized commodities is that pioneered by Henry Ford. Using "large factories with dedicated machinery that produced large runs," with "well-paid workers" in large, homogeneous, strictly supervised groups, performing "single tasks in a long line," and with large stocks of components kept ready to feed onto an assembly line kept in constant operation, Ford was able to produce prodigious quantities of reliable, affordable cars (Dolan 1991:18). The speed with which his methods were copied is the best measure of their success. "Fordism," as this method has been called, involved not only production lines. It also involved a "rough compromise" among capitalists, workers, and state makers whereby each recognized the need to tie wage increases to increases in productivity. Such a compromise was common after World War II in most of the richer countries. It lasted as long as profits rose enough to satisfy capitalists, levels of consumption remained satisfactory to workers, and the welfare nets set by state makers remained wide enough to catch most of those who fell out of the system (Dolan 1991:1-2). Post-Fordism, by contrast, denotes a production process of "flexible specialization," competitive "differentiation," and quality control (Dolan 1991:18). The decomposition of production into three stages— design/engineering, manufacturing, and assembly—and the advent of improved transport and communications have been discussed already in the context of firms, global production, and the global division of labor. As noted, the possibilities for profit such highly adaptable production provides have made it highly attractive to capitalist investors worldwide. Post-Fordism also refers to the way overproduction (or underconsumption) in the developed countries has prompted capitalists to

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invest elsewhere in a bid to halt the decline in their rates of profit. The chance factories will relocate has helped create considerable fear among the work force in richer countries. Job losses always seem imminent now. These fears have been translated, with the help of those capitalists w h o feel threatened too, into calls on state makers to implement mercantilist measures to protect those Fordist industries at most risk, and to foster at the same time the development of more technologically advanced research and service concerns. State makers have responded by calling for a return to more-extremist liberal marketeering methods. They have begun deregulating, thus shifting as much responsibility as they can for the social costs of what is happening to the marketeers themselves. Reformist liberals look for statebased ways to save marketeers from themselves. The more extremist Marxists see the whole process as typical of a m o d e of production in a frenzy before it falls over. Neo-Marxists remain concerned that yet again capitalism has bought a reprieve by highly exploitative means.

THE UNEVENNESS OF THE G R O W T H IN P R O D U C T I O N The IPE is becoming bigger and more integrated. It is evident that this is an uneven process, however, and that this unevenness has several different dimensions. Ideologies "In our view," said U.S. Vice-President A1 Gore at the United Nations Social Summit in Copenhagen in March 1995, "only the market system unlocks a higher fraction of the h u m a n potential than any other form of economic organization, and has the demonstrated potential to create broadly distributed new wealth." Cuba's President Fidel Castro said, "In a world where the rich are becoming richer and the poor are growing poorer there can be no social development. Where there is no h u m a n feeling there can be no h u m a n rights." Gabon's President Omar Bongo said, "You take advantage of Africa and w h e n your belly is full you tell Africa not to be awkward" (Black 1995:4). As the world political economy has grown, so too have the range of views about how to describe and explain it. These views are highly disparate. In this sense they represent a highly uneven understanding of a major dimension of world affairs. From the protectionist defense of state autonomy; the Gore-style defense of free marketeering; the

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Marxist emphasis on u n d e r s t a n d i n g capitalism; or the critiques from the ideological margins by environmentalist, feminist, or indigenous people's movements; the analysis of the productivity of the world political economy is nothing if not diverse. It is also heartfelt. As m a n y found in Copenhagen, the tension between these different views can be high, and the disputes about their policy implications can be bitter indeed. For the forty years of the Cold War this disparity took the form of a g r a n d ideological dichotomy, that b e t w e e n the liberal capitalist West and the c o m m a n d socialist East. The g r o w t h of the world political economy took place in t w o separate zones, each one expressive of its o w n philosophy and each one explicitly committed to o u t d o i n g the other. In the event it w a s the c o m m a n d socialists w h o were outdone. The Soviet experiment with highly centralized, statecentric developmental planning collapsed. Chinese state makers began to "marketeer." Liberal capitalism became hegemonic, t h o u g h as the debates at C o p e n h a g e n showed, it remains radically contested still. Temporality The growth in the productivity of the international political economy has been very u n e v e n over time. T h o u g h this growth has been "truly remarkable," representing a " p r o l o n g e d and massive increase in aggregate wealth per capita . . . over several centuries" (Gilpin 1987: 100), it has also varied considerably. The rate of change has been far from constant. Price levels have risen and fallen, and growth has gone from boom to bust and back again to b o o m . These cycles have been of considerable interest to business theorists. Some discern a systematic pattern of u p w a r d and d o w n w a r d swings that is anything from three to fifty years long. Some describe alternating periods of rapid and slow g r o w t h but find nothing systematic about that fact at all. Others see such variations as mere e p i p h e n o m e n a , preferring to find in the march of h u m a n k i n d a single historical line. Whatever one makes of their causes a n d consequences, recessions and outright depressions have recurred throughout the period of overall growth, both large and small. There have also been periods of indifferent and very strong growth, also large and small. In general periods of d o w n t u r n the inclination is to opt for mercantilist policies in the attempt to protect national p o p u l a t i o n s from global malaise. In times of u p t u r n the inclination is to opt for more-liberal policies in the a t t e m p t to cash in on the general m o o d of entrepreneurial optimism. "In summary," Gilpin (1987:105) says, the world political economy has experienced a "traumatic experience" approximately every fifty

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years or so. Since the last such experience w a s the advent of recession in 1973 (the end of a twenty-year boom), w e can, by this logic, expect the next big s l o w d o w n in the 2020s (a return version, perhaps, of the Great Depression of the 1930s). Gilpin also notes that these "erratic . . . shifts have been global phenomena. Originating in the core economies, their effects have been transmitted . . . to the extremities of the planet, shattering individual economies and setting one . . . against another as each nation has tried to protect itself." These times of "expansion and contraction," he says, "have also been associated with profound shifts in the structure of the international . . . system." In liberal terms, the most popular explanation of these economic cycles is that of technological change. N e w productive inventions inspire n e w investments that lead to new spurts in growth. Once these spurts peter out, growth slows. This is not a problem, however, if the efficient are unimpeded, since marketeers can create new equilibriums if free to do so. Hence the importance that all liberals attach to free enterprise. In Marxist terms, a more likely explanation of the changes in growth speed over time is the combined effect, under capitalism, of the oversupply of commodities, the overconcentration of capital in fewer and fewer hands, and falling rates of profit. Because of these trends capitalism is seen as internally contradictory and prone to recurrent crises. Neo-Marxists like Lenin argue that the effects of these trends also force capitalists to seek markets, investment opportunities, and cheap supplies of the factors of production wherever they can find them. Capitalists do this not only to maximize their profits but to forestall the inevitable collapse of the capitalist system as a whole. They do it to buy off the downtrodden workers with goods and better wages. They stagger in the process from self-serving rescue mission to self-serving rescue mission, and the global experience of their doing so is bust and boom. Geography The growth in the productivity of the global political economy has also been uneven in geographic terms. There have been systemic growth poles for the last four hundred years, and a "major objective of states," Gilpin (1987:99) says, throughout this entire time has been to constitute one of them. The Portuguese, the Spanish, and the Dutch dominated the preindustrial international political economy by turns. A revolution in "steam power, iron metallurgy, and textiles" (Gilpin 1987:98) brought Britain to the fore, and the diffusion of Britain's Industrial Revolution created n e w high-growth areas—in North

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America, Germany, and Japan. Despite t w o disastrous wars, the first in Europe and the second in Europe, Asia, and the Pacific, these have remained growth poles to this day. They w e r e joined for half a century by the Soviet Union. This has since collapsed, while notable also has been the g r o w i n g productivity of Asian states other than Japan. At present, g r o w t h is concentrated in three global regions, and it is no accident that there is now a regional organization c o m m i t t e d to fostering each one. The regions are Europe, N o r t h America, and Northeast Asia, and the organizations are the European Union, the N o r t h A m e r i c a n Free Trade Association, and the Asia Pacific Economic Community. So striking is this regionalization (and the marginalization at the same time, particularly of Africa but also of much of Central and South America, plus parts of Asia, too) that analysts talk, in geographic terms, of a contraction rather than an expansion of global productive marketeering (Overbeek 1994). In liberal terms, it is largely u p to marketeers to sort out the tensions between g r o w t h poles and the rest of the international political economy, and b e t w e e n growth poles in ascendancy and g r o w t h poles in decline. The free m o v e m e n t of the factors of p r o d u c t i o n allows equilibrium to be maintained, it is argued, as capital and labor, commodities and technology, m o v e in various combinations f r o m countries in ascendancy to countries in decline. Market mechanics keep the system strife-free. In practice, however, state makers are called u p o n to intervene to protect those disadvantaged by the geographic disparities in patterns of growth and to expedite factor flows. As Gilpin (1987:99) observes, "In a world of nation-states and political b o u n d aries capital and especially labor cannot migrate easily from declining to rising sectors to find new employment. As a consequence, interstate conflicts arise as individual states seek either to promote their expanding industries or to protect their declining ones." Leading countries that are m o v i n g d o w n don't relinquish their dominance readily, while the competition from those on the rise can make for systemic crises that are commercially highly fraught. In Marxist terms, the logic of geographic growth poles is usually expressed as "cores" and "peripheries," with some a d d i n g in a "semiperiphery" as well. Growth poles were a definitive feature of capitalism (in the Marxist sense of a specific m o d e of production) f r o m the start. Capitalism w a s a European invention that Marx described, in the most graphic and dramatic of terms, as m a k i n g the world over into a place of o w n e r s and workers, bourgeois accumulators a n d proletarians in despair. Most notable, even in his day and m u c h more so in ours, is the highly u n e v e n character of this make-over. In its simplest form the capitalist countries of the global North are seen as systematically u n d e r d e v e l o p i n g those of the global South. The rising tide of

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world prosperity does not lift all the boats together, Marxists say. Rather, wealth rushes in to the world's centers, leaving those on the peripheries high and dry. The notion of the world as constituted of independent cores and dependent peripheries was ostensibly discredited by the success of the East Asian countries that grew so rapidly in the 1970s and 1980s. How come, it was said, if they were being "underdeveloped" by capitalist neoimperialists, they could show such convincing evidence that they were becoming developed? A good question, but the way the issue of Third World debt was dealt with in the 1980s and 1990s made Marxists wonder if the notion of cores and peripheries did not still have considerable substance to it. When an impoverished global South could be shown to be subsidizing a much more well-off global North; when for every pound sterling Britain gave in foreign aid to Africa it got two pounds sterling in debt repayments in return; then it would seem, at least on the surface, that the "development of underdevelopment" was still a feature of global capitalist practice. It would seem that the concepts core and periphery still had analytic validity, though their meaning may have changed from a statecentric, geographic one (with global core states as opposed to dependent state peripheries) to a social and systemic one (with cores of capitalists and capital managers and peripheries of "relatively disposable short-term temporary, parttime subcontracting, putting-out, and underground economy producers," plus those unemployed) (Cox 1991). Sectors Growth poles and regions have invariably been built, as noted above, around leading productive sectors. In very general terms, the world political economy can be said to have seen the predominance in turn of the primary (agricultural) sector, then the secondary (industrial) sector, then the tertiary (service) sector. The changing international division of labor has meant, as noted earlier, the industrialization of parts of labor-poor countries (with new employment opportunities in "export-processing zones") and the deindustrialization of parts of labor-costly ones (with high unemployment in places that once had manufacturing plants). It has also meant knowledge-intensive service industries like computing restructuring global production, with "information and communication . . . replacing raw materials as capital assets" (Walker 1988:39). Members of cultures like that of Japan have adapted industrial capitalism in the process, evolving their own management techniques and combining them with extensive subcontracting and such innovations as "just-in-time" component delivery to

11 6

From IPE to WPE

produce in the process sophisticated, high-quality commodities at highly competitive prices (Jenkins 1984:4). Social Aspects In liberal terms, free marketeering is bound to have uneven social consequences, since those w h o c o m m a n d more of the factors of production to begin with will be able to use them to profitable advantage, and those who have none will find themselves under a competitive handicap. This is not supposed to matter, however, since the productive power of free market enterprise is such that everyone benefits, albeit some more than others. In Marxist terms, this is self-serving nonsense, since it mystifies a process of patterned exploitation that Marxists believe is best described in terms of class conflict, and best explained in terms of the social relationships definitive of capitalism itself. The class conflict is not an acute one at this stage. While whose w h o own and manage the means of production may be said to show signs of cohering on a global scale, those w h o sell their labor for wages are hopelessly split into territorial and sociological fragments. Cox (1987:358) defines the dominant social groups in contemporary capitalist society as "those w h o control the big corporations operating on a world scale, those w h o control big nation-based enterprises and industrial groups, and . . . locally based petty capitalists." As to the subordinate social groups, he identifies "tendencies," at best, toward class formation a m o n g the "new middle stratum of scientific, technical, and supervisory personnel . . . closely linked to the functions of industrial management; . . . established workers [in the advanced capitalist countries]; . . . nonestablished [workers] . . . in advanced capitalist countries; .. . new industrial labor forces in industrializing Third World countries; . . . and . . . marginal populations and so-called informal sector e m p l o y e e s ] " in both the advanced capitalist countries and the Third World (Cox 1987:368). The last group, the marginalized one, has grown quickly as populations themselves have grown, as people have spilled from the land, and as industries have proved incapable of employing more than a tiny fraction of all the displaced. It is this last group that might be considered to represent a threat to dominant groups, though this threat has not so far materialized. It is little wonder since the recently marginalized are most likely to be apolitical and preoccupied with having to cope, while the longer-term marginalized find the more dominant groups in society armed against them. The very fact that they exist is used to rationalize police and military repression (Cox 1987:389).

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The other social u n e v e n n e s s that most characterizes contemporary g r o w t h is that of gender. The growth of the international political economy, as noted by the U N reports cited earlier, clearly benefits m e n more than w o m e n . Not to belabor the point, b u t global firms seeking cheap, formally free w a g e labor to d o their w o r k for them look for "unfree, 'femalized' . . . w a g e labour," that is, w a g e labor with " n o job permanency, the lowest wages, longest w o r k i n g hours, most monoton o u s work, no trade unions, no o p p o r t u n i t y to obtain higher qualifications, no promotion, no rights and no social security" (Von Werlhof 1988:169). They find w o m e n , but not so m u c h in m a n u f a c t u r i n g as in service industries. Women have not, in other words, been taking m e n ' s jobs in manufacturing. In the service industries, however, " ' w o m e n ' s ' jobs have e x p a n d e d in the past couple of decades, while traditional 'male' jobs have been d i s a p p e a r i n g " (Economist, March 5, 1994:61). The informal world political economy, inhabited in the main by Cox's marginals, is not recognized as part of any global production chain. It is therefore largely ignored, except by Marxist scholars a w a r e of the use of reserve labor armies to p u t the frighteners on w a g e laborers in established jobs. And yet even Marxists show little appreciation of the fact that "eighty to ninety per cent of the world population consists . . . of w o m e n , peasants, craftsmen, petty traders and such w a g e labourers w h o m one can call neither 'free' nor proletarian" (Von Werlhof 1988:171). T h o u g h radically neglected, this massive g r o u p is immensely important. After all, it is "not the 10% free w a g e labourers, but the 90% unfree non-wage labourers [who] are the f o u n d a t i o n of accumulation and g r o w t h . . . [who are, that is] the real ' p r o d u c e r s ' " (Von Werlhof 1988:173-174). It is the informal and largely invisible workers w h o form the base on which the capitalist world political economy is built. They are a kind of proletariat b e y o n d the proletariat. They d o the "part-time work, contract work, seasonal a n d migrant work, illegal work, ' b o r r o w e d ' work, as well as [the] u n p a i d w o r k like the so-called ' w o r k for one's o w n ' . . . , [the] ' s h a d o w w o r k ' . . . , [the] subsistence w o r k and, [the] mostly 'forgotten', housework" (Von Werlhof 1988:171). Structure Just as dramatic in productive terms as sectoral and social uneveness has been the growth of structural disparities between the relative mobility of finance capital and the relative immobility of labor. The mobility of finance capital is not absolute. State makers in richer countries have a w i d e range of policy i n s t r u m e n t s they can and do use to

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impede this mobility. The immobility of labor is also relative. The migration worldwide from the world's countrysides to the world's cities and towns may not cross state borders, but it represents nonetheless the greatest movement of peoples in the history of humankind. People do cross borders to look for work, too, despite policies to prevent them. Allowing a porous border can be a more attractive option than relocating a factory. A lack of local workers for fixed industries can make for lax border controls, and this applies not only to unskilled labor, like the Mexican agricultural workers in California, but also to skilled ones, like the "professional transients" in world advertising, management consultancy, or academia. Liberals downplay structural disparities. Woodall (1994:20), for example, argues that, in terms of capitalists relocating factories to take advantage of cheaper labor, "a few drops do not make a flood." As the United Nations Development Programme also observes, "of the global flows of foreign direct investment, the developing countries have been getting a steadily smaller share" (UNDP 1992:52). What investment there has been has gone to only a handful of potential recipients (UNDP 1992:52), and as Woodall also points out, this has been in service or agricultural industries, not in industrial manufacturing. The foreign direct investment (FDI) responsible for the new international division of labor, liberals say, has so far been relatively small. Certainly not enough, except in such industries as textiles and electronics, to account for the "hollowing out" of jobs in countries like the United States. FDI between the richer countries is still greater than that from the richer to the poorer ones. Indeed, "the entire net outflow of investment since 1990 has reduced the rich world's capital stock by a mere 0.5% from what it would otherwise have been" (Woodall 1994: 25). Woodall does not expect the relocation of factories to cheaper labor countries to increase dramatically in the future either, since the labor cost component of commodities is relatively low (and hence relatively little is to be saved by a move on these grounds alone), the infrastructural d e m a n d s of post-Fordist production chains are relatively high (often too high for cheaper labor countries to meet adequately), and the low education standards of cheaper labor countries restricts the range of what can be relocated. She is wise enough to hedge her bets, however, observing that "you ain't seen nothing yet." As a good liberal, the "net result," she claims, "will, of course, be a more efficient international divison of labour." She also observes, however, that the transition from a less to a more efficient such division "could be painful" (Woodall 1994:26). Nonliberals take a rather different view. They note, for example, the structural disparity in interest rates, which are higher for poorer countries than they are for richer ones (17 percent throughout the 1980s

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as opposed to 4 percent). They note the way global firms also tend to bypass poorer countries to invest in richer ones. Moreover, rich states keep tariffs high on those manufactured goods in which poorer countries do have a comparative advantage, such as clothing and shoes, and immigration laws are deliberately used to stop as many laborers as want to from moving from poorer countries into richer ones (stopping, in the process, the equilibrating mechanism of the world labor market from working the way classical liberals say it should) (UNDP 1992:48). " N o market is perfect," as the U N D P points out, "but the international market for labor is one of the most restricted of all. The supply is t h e r e . . . . And so could be the demand, if it were up to entrepreneurs only." However, international labor is "steered and controlled by the industrial countries," with the nonindustrial ones denied in the process both direct income and indirect income (such as remittance payments home) of "at least $250 billion a year" (UNDP 1992:54, 58). When this picture, and in particular the labor part of it, is put together with the facts that global unemployment is running at rates not seen since the Great Depression in the 1930s, that long-term unemployment has shown a "sharp increase" in Europe in particular (ILO 1994:1), and that the situation in poorer countries is now chronic (UNCTAD 1994:165), and the structural disparities of the global political economy begin to appear much more serious. Add to this the concentration of finance capital in the hands of bankers and corporate managers (Sklar 1987), and the distance between these people and popular scrutiny and democratic controls (Cox 1992), and the structural situation looks even grimmer. Bankers and the heads of global firms are not hired and fired by those whose lives they have such influence upon. While democracy waxes globally as a governmental ideal, it wanes as a politicoeconomic reality. All of which is hopeful stuff for classical Marxists, for w h o m the "violent restlessness of capital is the clearest indication of the inadequacy . . . of capital's incapacity to subordinate the power of labour" (Holloway 1994:43). It is not so hopeful, however, for reformist Marxists, w h o worry that capital has the measure of labor, and that the best labor can expect is more or less of the same, namely, structural exploitation. Environment

As the combined effects of population growth, resource depletion, and environmental degradation become more evident, it does become problematic how long these effects can be sustained. Simple extrapolation into the future from what prevails in the present is tempting, but it can be highly misleading as well. It can both overestimate and

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underestimate the magnitude of problems to come. Legitimate environmental concerns do exist, however, and they do generally get bigger as the globe's productive systems do. It has been apparent for some time now that "growth" and "development" are not synonymous in socioeconomic terms. It is becoming apparent that they are not synonymous in environmental terms either. A world in dynamic equilibrium is not inconsistent with liberal ideals, and scenarios have been sketched of steady-state world political economies that would work along liberal lines. They would be worlds of permanent disparity, though, since liberalists rely on growth to provide for the less advantaged or less entrepreneurial. Redistribution requires governmental intervention, which classical liberals deplore and reformist liberals sanction very warily. Without growth, the market could still work—there would be supply, demand, price signals, and a burgeoning "environmental industry"—but there would be no overall expansion of the system to make the poor richer and keep the rich rich at the same time (Daly 1973). Marxists find this "zero growth" alternative completely unfeasible. Capitalism is a driven system, they say. The desire to accumulate capital, to maximize profits, is what motivates capitalists to expand their reach and increase their holdings, and there is no limit to such a motive except those set from without; for example, those set by some kind of environmental collapse. Implicit in classical Marxism is the assumption that capitalism itself will collapse before the environment does. Neo-Marxists are not so sure, hence the interest they show in w a y s of protecting those worse off in the here and now, and their concern that we may be developing ourselves to death (Trainer 1988). Mercantilists are in somewhat of a bind. Some environmental issues are clearly international ones and can only be dealt with cooperatively. Acid rain from another country's factories, or radioactive emissions drifting d o w n from a failed nuclear plant, or logged forests that jeopardize the stability of major atmospheric systems are all clearly threats to autonomy, self-sufficiency, and national strength. Dealing with such issues can require cooperative initiatives that compromise the very sovereignty mercantilists are supposed to defend, however. Greens of various hue are likely to indict production for production's sake, though the more liberal of them are likely to see marketeering as able to provide the resources necessary to deal with production's worst environmental effects. The more radical of them, on the other hand, are likely to recommend much more localized production systems and much less of that long-standing mainstay of the global market, long-distance trade.

5 World Trade •

Cheryl Payer (1974) "The Lawyer's Typist: Variations on a Theme by Paul Samuelson"

Nora, w h o was Improving her Mind with a night school course in introductory e c o n o m i c s , settled down to do her h o m e w o r k . That w e e k ' s assignment w a s the chapter on international trade in the t e x t b o o k for the course (which the instructor had assured the class was T h e Very Best, being the seventh edition of Paul S a m u e l s o n ' s Economics: An Introductory Analysis). She found it difficult to follow, and therefore boring, until her attention w a s suddenly caught by a passage which seemed to make more sense than the rest: A traditional e x a m p l e used to illustrate this paradox of c o m p a r a t i v e a d v a n t a g e is the case of the best lawyer in town w h o is also the best typist in town. Will he not specialise in law and leave typing to a secretary? How can he a f f o r d to give up p r e c i o u s time f r o m the legal field, where his c o m p a r a t i v e advantage is very great, to perform typing activities in which he is efficient but in which he lacks comparative advantage? Or look at it f r o m the s e c r e t a r y ' s point of view. She is less efficient than he in both activities, but her relative d i s a d v a n tage c o m p a r e d with him is least in t y p i n g . Relatively s p e a k i n g , she has comparative advantage in typing. So with c o u n t r i e s . S u p p o s e A m e r i c a p r o d u c e s f o o d with onethird the labour that Europe does, and p r o d u c e s clothing with onehalf the labour. T h e n we shall see that A m e r i c a has a c o m p a r a t i v e d i s a d v a n t a g e in c l o t h i n g — t h i s , despite the fact that A m e r i c a is absolutely e f f i c i e n t in e v e r y t h i n g . By the s a m e token, E u r o p e has a c o m p a r a t i v e advantage in clothing ( S a m u e l s o n , p. 647). Nora, you see, was in fact a typist, w h o w o r k e d for one of the partners in a law office. It was natural that she should perk up when she discovered that the difficult concept of c o m p a r a t i v e advantage in international trade w a s being explained with an e x a m p l e f r o m her own life. Skipping briefly over the second paragraph, she returned to the first one to read it more slowly and carefully, for she felt an instant empathy with the secretary in the parable. Too much empathy, perhaps. Her first reaction w a s an uneasy resentment at the idea that her boss might after all be superior to her in the realm of

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secretary skills—the only marketable skill she had. It was bad enough, she thought, that he should know enough about the law to be able to command high fees and to pay her to do his office drudgery—but to deny that she had an absolute superiority in doing that kind of work, why, that was insult added to injury! Even though she kept reminding herself that it was just a story, the sense of humiliation lingered. Nora turned back to study the paragraph again. "Or look at it from the secretary's point of view. She is less efficient than he in both activities . . . " At this point Nora snorted. Less efficient in law practice! Non-existent was a better word. How could one compare efficiency when she'd never even been to law school (even if she had picked up some of the techniques and the jargon through rendering assistance to Mr Woodbore, her boss). She stopped laughing and began to think about it. Denigrating as the paragraph in the textbook was to her, it had stirred in her mind the first suggestion of the possibility that perhaps she ought to have the same skills which her boss was exercising, in order to make the example a fair test. What if (she choked with amusement at the idea) she turned out to be a more efficient lawyer than he? That delicious idea brought a further problem to her mind. Just how could efficiency be tested in such occupations? There were typing and dictation tests, of course, which measured your speed in each of those activities. But that, she knew, was only a small part of the skills which a really good secretary was expected to have; and, confident as she was that she was a good secretary, intelligent and reliable and discreet, she had no idea of how such qualities could ever be quantified. And how in the world, if she was a lawyer, could her efficiency in that activity be tested and measured against, say, that of Mr Woodbore? It just wasn't possible to time the preparation of legal briefs the same way one could clock typing speeds with a stopwatch, deducting errors from the total score. From her previous lessons in the Samuelson textbook, Nora had learned however that there was supposed to be a direct relationship between price and efficiency. Perhaps the efficiency of lawyers could be measured by what they earned? But as she thought about Mr Woodbore, his partners, and the other lawyers that she knew, she was not really satisfied with this hypothesis. She was not convinced that Mr Woodbore, who was a senior partner and handled a lot of corporation work, was more efficient (for surely efficiency had something to do with intelligence and hard work) than the young lawyers she knew who preferred to handle draft and civil liberties cases—but he certainly earned a lot more. And as for what she knew about the earnings of women lawyers (she had met one or two)—well! she was not prepared to accept that as the measure of her efficiency when (if?) she became a lawyer. She read the passage in the text again. It certainly did imply that Professor Samuelson was equating efficiency with the lawyers' earnings.

Reading: Payer

1 23

T h e first p a r a g r a p h , h o w e v e r , really d i d n ' t g o f a r e n o u g h to give her an idea of w h a t c o m p a r a t i v e a d v a n t a g e w o u l d m e a n if s h e w e r e a l a w y e r too, s o she read t h e s e c o n d p a r a g r a p h c a r e f u l l y . T h e n s h e got out her p a p e r and pencil and b e g a n to f i g u r e , m u t t e r i n g out loud as s h e did so: " N o w Mr W o o d b o r e e a r n s $ 1 2 0 a day w h i l e 1 earn $ 3 0 . If 1 a m only o n e third as e f f i c i e n t as a l a w y e r and only o n e half as e f f i c i e n t as a secretary, that m e a n s I could earn $ 4 0 a d a y as a l a w y e r and he c o u l d earn $ 6 0 as a typist. ( T h a t ' s r i d i c u l o u s , e v e n an e f f i c i e n t w o m a n l a w y e r w o u l d earn m o r e than an e x t r e m e l y e f f i c i e n t m a l e typist the w a y t h i n g s a r e set u p now, but 1 d o n ' t k n o w h o w else to f i g u r e it.) Well, o b v i o u s l y h e ' d be w o r s e off to be a s e c r e t a r y — b u t I'd b e better off to b e a l a w y e r even if 1 w a s at a relative as well as an a b s o l u t e d i s a d v a n t a g e there! " B u t if 1 h a v e a relative

a d v a n t a g e as a l a w y e r , b e i n g half as e f f i c i e n t as

he is b u t only o n e third as e f f i c i e n t as a s e c r e t a r y , then 1 w o u l d b e e a r n i n g $ 6 0 as a l a w y e r w h i l e he e a r n s $ 9 0 as a s e c r e t a r y ( t h a t ' s even m o r e a b s u r d , no s e c r e t a r y could p o s s i b l y earn that m u c h — 1 w o n d e r w h y not?). 1 w o u l d be b e t t e r o f f , but he c e r t a i n l y w o u l d n ' t b e h a p p y to t a k e the cut in e a r n i n g s . But Paul S a m u e l s o n s e e m s to be s a y i n g he o u g h t to! T h a t is, he w o u l d h a v e if h e ' d w o r k e d it out as I ' m d o i n g . " B u t then he c a n ' t be c o r r e c t w h e n he a r g u e s that e v e r y o n e w o u l d be b e t t e r off to d o w h a t he or she has a relative a d v a n t a g e d o i n g . O b v i o u s l y a n y b o d y at all w o u l d b e better o f f — p e r s o n a l l y s p e a k i n g — d o i n g w h a t p a y s t h e best ( w h i c h in this c a s e is p r a c t i s i n g law), e v e n if t h e y ' r e not as e f f i c i e n t as s o m e b o d y e l s e . " B u t if e v e r y b o d y w e r e a l a w y e r and n o b o d y did t h e t y p i n g , it w o u l d b e an i m p o s s i b l e s i t u a t i o n . For the s a k e of a r g u m e n t N o r a a d o p t e d an u n s e l f i s h point of v i e w and t h o u g h t a b o u t the i m p l i c a t i o n s to National I n c o m e , rather t h a n to her o w n salary, of the v a r i o u s c o m b i n a t i o n s she had b e e n p l a y i n g w i t h . N o r a had l e a r n e d e n o u g h e c o n o m i c s by n o w to k n o w that N a t i o n a l I n c o m e e q u a l s the s u m of e v e r y b o d y ' s e a r n i n g s , so it w a s a s i m p l e e x e r c i s e . 1 S h e d i s c o v e r e d that in the case w h e r e it w a s h y p o t h e s i z e d that she had the relative a d v a n t a g e as a lawyer, it m a d e no d i f f e r e n c e at all to the N a t i o n a l I n c o m e if M r W o o d b o r e w o r k e d full t i m e as a l a w y e r at $ 1 2 0 a d a y and s h e as a typist at $ 3 0 a day; if he w o r k e d full time as a typist at $ 9 0 a d a y and she as a l a w y e r at $ 6 0 ; or if both w o r k e d half a d a y at each task, in w h i c h c a s e his daily e a r n i n g s w o u l d b e $ 1 0 5 and hers w o u l d b e $ 4 5 . T h e s u m in all t h r e e c a s e s w o u l d b e $ 1 5 0 . W h e n she w o r k e d out the s u m s on t h e o p p o s i t e a s s u m p t i o n — t h a t her r e l a t i v e a d v a n t a g e w a s as a typist, not a l a w y e r — t h e n the National I n c o m e w o u l d fall, if she insisted on w o r k i n g as a l a w y e r , f r o m $ 1 5 0 a day to $ 1 0 0 . But N o r a w a s b e g i n n i n g to s u s p e c t by this t i m e that this m i g h t h a v e m o r e to d o w i t h t h e a b s o l u t e level of t y p i s t s ' s a l a r i e s r a t h e r than w i t h the inherent v i r t u e s of c o m p a r a t i v e a d v a n t a g e . A f t e r all, l a w y e r s really c o u l d n ' t p r o d u c e any f a s t e r or m o r e e f f i c i e n t l y than t h e s e c r e t a r i a l w o r k relating to their w o r k

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was done. And Nora did not forget that even when the National Income fell by one third her salary would have gone up by one third if she were a lawyer rather than a secretary. Nora had decided by the end o f the exercise that the absolute disadvantage o f being a secretary was a lot more important than any relative advantage to be had doing it efficiently. But Mr Woodbore flatly refused to take a typing test when she showed her calculations to him the next day, and Nora applied to the local law school. S h e was accepted in the course because, under pressure o f the w o m e n ' s movement, the law school had upped its quota o f female students from 5 to 15 per cent. S i n c e she has not graduated yet, we do not know whether she will find it to her advantage to hire a secretary to do her typing for her when she begins to practice law. She will be eternally grateful to Professor Samuelson for showing her (albeit probably against his will) where her true interest lies. She has not, however, opened his textbook since that fateful evening and occasionally still wonders whether the truths she discovered apply also to trade between nations.

• • • EXCHANGE A N D G R O W T H The cornerstone of the liberal conception of long-distance trade is that of comparative advantage. As Payer shows, this may not offer as much support to market arguments as classical liberals typically suppose. Along with the growth in global production has gone growth in global trade, and whether it be comparative advantage or some less automatic mechanism that prompts it, goods and services are now m o v e d in increasing quantities, often following land and sea routes that are thousands of years old. Global Trade The international trade of the mercantile era, as noted, is giving way to global trade within transnational firms. Goods and services cross state borders, but they do so under nonstate, suprastate auspices. Global trade is m o v i n g from primary and secondary sector trade to tertiary sector trade as well. The world tourist trade, for example, discussed earlier, is one of the biggest industries in the world. The tangible c o m p o n e n t to this trade involves the m o v i n g and storing, in planes and hotels, of increasingly large n u m b e r s of people. These people are usually intent on c o n s u m i n g something less tangible, however, called a " h o l i d a y , " which though it may

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h a v e tangible c o m p o n e n t s to it, like v i e w s of distant m o u n t a i n s or rides in fun parks, i n v o l v e s the subjective appreciation of a m o o d , sensation, or idea. This appreciation takes place in the context of a strict mental division b e t w e e n " w o r k " and " l e i s u r e . " G l o b a l trade, in o t h e r w o r d s , is also b e c o m i n g m o r e a b s t r a c t . This is very e v i d e n t w h e n w e c o m e to the trade in credit, n a t i o n a l currencies, or in such financial instruments as derivatives. H e r e no transport is needed, only rapid and c a p a c i o u s channels of c o m m u nication. T h e trade in national currencies alone is n o w forty t i m e s m o r e v a l u a b l e than the trade in c o m m o d i t i e s (Helleiner 1994:163). C o n t e m p o r a r y t e c h n o l o g y and the capitalist pursuit of profit h a v e fused to create a realm of " v i r t u a l " trading, or " h y p e r t r a d e , " w h i c h , as w e shall see later, is one of the most c o m p e l l i n g parts of the world political economy. H o w can trade b e c o m e " a b s t r a c t " ? To a n s w e r this q u e s t i o n w e need to look more closely at the p h e n o m e n o n of trade itself. Liberals will set up the analysis of trade in terms of a u t o n o m o u s states and firms, w h i c h e x c h a n g e goods and services. International trade has been g r o w i n g as such for several h u n d r e d years. In 1667, for e x a m p l e , over a h u n d r e d years before A d a m S m i t h ' s classic articulation of the liberalist doctrine, w e find J o h n D r y d e n , the English poet, talking of the a d v a n t a g e s of w o r l d trade in w h a t are unmistakeably liberal terms. In his " A n n u s Mirabilis," he writes:

Instructed ships shall sail to quick Commerce, By which remotest Regions are alli'd; Which makes one City of the Universe, Where some may gain, and all may be suppli'd. (McVeagh 1981:51)

N a t i o n s e x c h a n g e g o o d s in a m a r k e t , S m i t h says, b e c a u s e of s o m e c o m p a r a t i v e a d v a n t a g e they p o s s e s s , or s o m e c o m p a r a t i v e a d v a n t a g e they h a v e been able to m a k e for themselves. T h e y trade b e t w e e n them the g o o d s and services they m a k e and do best. Even if one or more countries are good at m a k i n g and d o i n g e v e r y t h i n g , it is still m o r e efficient, R i c a r d o w e n t on to add, if they t r a d e between them those g o o d s and services they m a k e and do best. T h e notion of efficiency here is a restricted one, h o w e v e r , as P a y e r points out. T h e very definition of efficiency itself is restricted. It refers only to the " e f f i c i e n t allocation of resources," w h i c h is not a n o t i o n m e r c a n t i l i s t s w o u l d accept, since to m e r c a n t i l i s t s " e f f i c i e n c y " m e a n s " s t a t e s u r v i v a l . " O p e n c o m p e t i t i o n m a y w o r k for

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t h o s e w h o set up the s y s t e m in the first p l a c e . F o r the rest, m e r c a n tilists say, state r e g u l a t i o n a n d p r o t e c t i o n is m a n d a t o r y . M e r c a n t i l i s t s w o u l d r a t h e r that n a t i o n s r e m a i n e d a u t o n o m o u s , s i n c e it is a u t o n o m y , t h e y b e l i e v e , t h a t m a k e s a state s t r o n g a n d m o s t h e l p s it e n d u r e . T h e y e s c h e w t r a d e a l t o g e t h e r as a p e r n i c i o u s s o u r c e of " i n s e c u r i t y , d e p e n d e n c e a n d v u l n e r a b i l i t y " ( G i l p i n 1 9 8 7 : 172). O r t h e y c o n d u c t it a l o n g c h a i n s of v e r t i c a l l y i n t e g r a t e d p r o d u c t i o n a n d d i s t r i b u t i o n that m a x i m i z e t h e r e t u r n s to the core firm a n d c o u n t r y w h i l e m i n i m i z i n g t h e e r o s i o n of s o v e r e i g n c o n t r o l s . (Vertically i n t e g r a t e d f i r m s , as m e n t i o n e d earlier, o r g a n i z e the different p a r t s of a p r o d u c t i o n p r o c e s s , f r o m t h e r a w m a t e r i a l s at o n e e n d to the sale of the f i n i s h e d g o o d s at the other, in such a w a y as to m i n i m i z e costs, m a x i m i z e p r o f i t s , a n d c r e a t e " a k i n d of p r o t e c t i v e e n v e l o p e " that " c u s h i o n s " the f i r m f r o m m a r k e t f o r c e s [ C a p o r a s o 1987c:197]). M a r x i s t s a n d n e o - M a r x i s t s see t r a d e as p a r t of t h e c a p i t a l i s t p r o c e s s of v a l u e e x t r a c t i o n . T h e y see t h e w h o l e t r a d e s y s t e m as s k e w e d in f a v o r of t h o s e w i t h m o r e capital a g a i n s t t h o s e w i t h less. T h e y f i n d w o r l d t r a d e as p r o b l e m a t i c as m e r c a n t i l i s t s do, in o t h e r w o r d s , t h o u g h for v e r y different r e a s o n s . T h e m o r e e x t r e m i s t M a r x ists a w a i t a r e v o l u t i o n a r y o u t c o m e . T h e m o r e r e f o r m i s t M a r x i s t s , on the o t h e r h a n d , less s u r e r a d i c a l c h a n g e will e v e n t u a t e s o o n , s e e k m e a n w h i l e to protect the w o r l d ' s p o o r f r o m t h e e x p l o i t a t i v e logic of i n t e r n a t i o n a l c a p i t a l i s m . L i k e m e r c a n t i l i s t s , t h e y see the m a r k e t as f a v o r i n g t h o s e w h o b u i l t it a n d w h o b e n e f i t e d m o s t f r o m it first. C o m i n g to i n t e r s t a t e t r a d e later, l i k e m o s t c o u n t r i e s d i d in A f r i c a , S o u t h a n d Central A m e r i c a , a n d A s i a , m e a n t c o m i n g to it, r e f o r m i s t M a r x i s t s say, at a distinct d i s a d v a n t a g e . T h e o n l y w a y to c o p e w i t h this d i s a d v a n t a g e w a s to i m p l e m e n t p o l i c i e s to c o m p e n s a t e for it. In r e f o r m i s t M a r x i s t t e r m s , this m e a n t a c o u n t r y ' s g e t t i n g s p e c i a l a c cess f o r its e x p o r t s to t h e m a r k e t s of r i c h e r o n e s , g e t t i n g s p e c i a l t r a d e credits a n d t r a d e aid, a n d p u t t i n g u p tariff a n d n o n t a r i f f b a r riers a g a i n s t i m p o r t s likely to d e s t r o y local i n d u s t r i e s . T h i s w a s not a g u a r a n t e e of prosperity, b u t as M a c E w a n ( 1 9 9 2 : 2 9 ) a r g u e s (in distinctly illiberal t e r m s ) , the idea that active political control of a c o u n t r y ' s foreign economic relations is necessarily destructive is about as silly as the idea that life is not worth living—though of course some government control can be very nasty and some lives are not worth living. Just because it is complicated and takes some effort to lead a worthwhile and happy life, this does not justify the simple solution of suicide. And just because it is complicated and takes some effort to forge a useful set of political controls of economic life, this does not justify the simple solution of free trade.

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With such c o n t e n d i n g " t r u t h s " in m i n d , w h a t can w e say a b o u t w o r l d trade? Trade starts w i t h barter, that is, the direct e x c h a n g e of g o o d s or services for g o o d s or services. Barter does not n e e d , nor d o e s it use, a m e d i u m of e x c h a n g e like money. P e o p l e b a r t e r w h a t e v e r t h e y h a v e as s u r p l u s , w h a t e v e r they h a v e some a d v a n t a g e in p r o d u c i n g , or, if t h e y ' r e desperate, a n y t h i n g at all. My f a t h e r d i d the g a r d e n i n g f o r t h e o s t e o m a s s e u r w h o t r e a t e d m y m o t h e r ' s p r o l a p s e d spinal disc. E n t r e p r e n e u r s in the e i g h t e e n t h a n d n i n e t e e n t h c e n t u r i e s t r a d e d g u n s a n d i n d u s t r i a l t r i n k e t s for South Pacific b e c h e - d e - m e r a n d s a n d a l w o o d . It's all barter. It's all trade. The s i m p l e t r a d e that b a r t e r entails is a f e a t u r e of h a r d times. It is o f t e n the only alternative for the poor, w h i c h is w h y it's a f e a t u r e of hard-sell industries, like the a r m a m e n t s one, w h e r e m a n u f a c t u r ers u s e t h e fears a n d desires of p o o r state p u r c h a s e r s to d o deals, e v e n t h o u g h the p u r c h a s e r s h a v e only c o m m o d i t i e s , not lines of credit, w i t h w h i c h to pay. In the relatively more p r o s p e r o u s w o r l d , p o s t - W o r l d War II, the m o r e h i g h l y i n d u s t r i a l i z e d c o u n t r i e s h a v e t r a d e d multilaterally, u s i n g money. The b a r t e r i n g a n d the bilateralism that w e r e a f e a t u r e of the G r e a t D e p r e s s i o n p e r i o d of the 1930s (liberals w o u l d a r g u e they w e r e key c a u s e s of that D e p r e s s i o n a n d of t h e w a r that foll o w e d it) w e r e k e p t on as a w a y to t r a d e w i t h t h e socialist bloc, w h i c h w a s a political e c o n o m y a p a r t . It w a s also u s e d as a w a y of t r a d i n g w i t h a n d b e t w e e n the p o o r e r c o u n t r i e s of the so-called Third World. With the collapse of the socialist bloc, the r e e m e r g e n c e of its c o m p o n e n t states as m e m b e r s of the i m p o v e r i s h e d part of the capitalist w o r l d political economy, a n d the o n g o i n g decline of m a n y of those already in that m a r k e t e e r i n g w o r l d , t r a d e b y b a r t e r r e m a i n s an i m p o r t a n t aspect of w o r l d t r a d e . E s t i m a t e s r a n g e f r o m 5 to 40 percent of all w o r l d trade ( G r i m w a d e 1989:261)—admittedly, a large m a r g i n for error, b u t even at the l o w e r estimate of 5 percent w e are still talking a b o u t a considerable v o l u m e of e x c h a n g e . " C o u n t e r t r a d e , " as b a r t e r is called, r e m a i n s a p o p u l a r o p t i o n , then, r e f e r r i n g in practice to a w i d e r a n g e of w a y s of d o i n g deals, s o m e of w h i c h even use money. " P u r e barter," as the label implies, involves the direct e x c h a n g e of g o o d s a n d services—oil f o r i n d u s t r i a l m a c h i n e r y , p e r h a p s , or dairy p r o d u c t s for c o m p u t i n g services. "Balanced flow" barter e n s u r e s that trade b e t w e e n t w o countries w o r k s o u t at the s a m e b o o k v a l u e over a set p e r i o d of time (say, three or five years). Accounts are established in each o t h e r ' s b a n k s . T h e s e are d e n o m i n a t e d in m o n e t a r y t e r m s . In t e r m s of the t r a d e

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itself, however, no m o n e y passes between the countries concerned. It is " p u r e barter," but it uses monetary accounting systems to value and balance the international exchange. "Counter purchase" barter (or "compensation trade," as it's also called) occurs w h e r e an i m p o r t i n g c o u n t r y closes a deal because w h o e v e r is exporting to it agrees to b u y back some other good or service as part of the deal. As G r i m w a d e (1989:257) says, this u s u ally involves two separate contracts. U n d e r one, goods or services are sold to a buyer for a specified price in hard currency. U n d e r the other, sellers are required to use part or even all of w h a t t h e y ' v e earned to buy back goods or services from the buyer. Indeed, there is even a kind of c o u n t e r p u r c h a s e specifically called "buy-back," w h e r e sellers buy back f r o m a plant they've just p r o v i d e d , part or all of that plant's o u t p u t as part or whole p a y m e n t for having supplied the plant in the first place. "Coproduction" barter is more complex. It takes place between firms in different countries that have different technological capacities. Imagine, for example, a particular p r o d u c t assembled f r o m a n u m b e r of c o m p o n e n t s of different technological complexity, a N o r t h - w o r l d firm m a k i n g the a d v a n c e d c o m p o n e n t s and a Southworld firm making the less advanced ones. If these firms swap comp o n e n t s and assemble the finished products from the complete inventory, either at h o m e or in some other place w h e r e assembly is cheaper, they both get to benefit. "Offset" barter is a tight kind of c o p r o d u c t i o n barter, or it can be a counter p u r c h a s e agreement. To close a deal, for example, a seller may specifically agree to take some part of w h a t is being sold by the buyer. This offsets (reduces) for the buyer the cost of w h a t is being bought (a coproduction deal). The seller m a y also accept entirely different goods and services, in p a y m e n t or part p a y m e n t for what is being sold (a counter purchase deal). An airplane m a n u f a c turer, for example, m a y use plane parts m a d e by the buyer to offset the cost to that b u y e r of the finished plane he is buying. Or the m a n u f a c t u r e r may accept something else in return, such as b a n a n a s or dairy goods. "Switch trade" barter is w h e r e one country sells more to another country than it b u y s , b u i l d i n g u p over time a credit s u r p l u s with that other country. The first country then uses the credit surplus it's built up to buy goods from a third country. The third country takes this credit and uses it to b u y g o o d s from the second (deficit) country, goods that then act, in effect, as p a y m e n t for those originally supplied to the first country ( G r i m w a d e 1989:260). N o m o n e y changes h a n d s a n d the system is infinitely e x p a n d a b l e . Switch t r a d i n g often involves, as a consequence, more t h a n three

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countries, and discounts may be offered to get rid of u n u s e d credit. There are banks and trading firms that specialize in brokering such deals as a way of m a k i n g a living for themselves. Poor state traders like counter trade because it lets them trade w h e n they otherwise couldn't. It lets them pay off debts, get around protectionist import quotas and tariff barriers, and diversify. Free trade marketeers d o n ' t like c o u n t e r trade, because it uses reciprocity rather than pricing. They see it being used for d u m p i n g and as leading to protectionism, even t h o u g h it can be used in practice to get around protectionism. They think of it as a precapitalist hangover. It's too basic, too old-fashioned, and it d o e s n ' t p r o v i d e for profit in m o n e t a r y terms, profit that can then be used to store value and be invested, m a k i n g for more enterprise and profit. If we privilege free trade instead, as liberals r e c o m m e n d , then we can t r a d e either w h a t we have an absolute surfeit of (as Smith r e c o m m e n d e d ) or we can trade what we have a comparative surfeit of (as Ricardo thought we should). Historically, absolute a d v a n t a g e was the basis of international trade. In some cases it still is. Oil, for example, can be exchanged for a n y t h i n g — g o l d - p l a t e d Cadillacs, desert robes by Yves St. Laurent, sophisticated weaponry. Given the global d e m a n d for it, oil confers u p o n those w h o own the source of its s u p p l y an a b u n d a n c e of finished g o o d s and services. N o one w a n t s the desert sands above the Saudi fields in quite the same way, for example, t h o u g h they conceivably m i g h t one day, given the march of technological innovation. If, as a state-made citizenry, you d o n ' t have an absolute advantage in anything, you still have your labor power, and with it you can m a k e a relative a d v a n t a g e by mixing y o u r labor p o w e r with technical know-how, plus the entrepreneurial use of credit, m a n agement skills, and access to other resources. The consequence may well be highly marketable commodities that you can sell. By combining the factors of production in innovative ways, that is, you can m a k e a comparative a d v a n t a g e of the sort Ricardo saw as the central inspiration for free trade. Comparative Advantage

" M a n y have difficulty with this principle," B u r n i n g h a m (1991:320) notes, "although the idea is simple enough. Suppose," he says, "that a medical doctor can also type, file and take shorthand better than [her] secretary . . . " Despite such a p l e t h o r a of talents the doctor will still opt to practice as a doctor r a t h e r than w o r k as an office temp, since this is obviously where a d o c t o r ' s greatest comparative

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a d v a n t a g e (and greatest e a r n i n g p o w e r ) lies. T h i s is a c o m m o n s e n s e d e c i s i o n , t h o u g h as P a y e r p o i n t s o u t , c o m m o n s e n s e c a n m i s l e a d . L i k e t h e l a w y e r ' s t y p i s t in P a y e r ' s e x a m p l e , the d o c t o r ' s t y p i s t is a p p a r e n t l y less " e f f i c i e n t " in b o t h p r o f e s s i o n s . B u t d o n ' t w e b i a s o u r e x a m p l e by t a k i n g o n l y the d o c t o r ' s or the l a w y e r ' s p o i n t of v i e w ? H o w fair are t h e s e c o m p a r i s o n s , a n y w a y ? A r e n ' t t h e y s k e w e d f r o m the start? After all, w h i l e a d o c t o r or l a w y e r m a y h a v e l e a r n e d s o m e secretarial skills, their s e c r e t a r i e s will r a r e l y h a v e d o n e m e d i c i n e or law. If t h e y h a d , t h e y m i g h t h a v e f o u n d t h e y are b e t t e r d o c t o r s or l a w y e r s than t h e i r b o s s e s , in w h i c h c a s e their b o s s e s s h o u l d b e the s e c r e t a r i e s a n d t h e y s h o u l d b e d o c t o r s or l a w y e r s ( a s s u m i n g t h e y h a d no o t h e r c h o i c e ) . W h a t , f u r t h e r m o r e , as P a y e r a s k s , d o e s that troubled w o r d efficiency m e a n ? N o t o n l y is it difficult to m e a s u r e the efficiency of m e d i c a l , legal, or s e c r e t a r i a l p r a c t i c e , b u t if, for c o n v e nience, w e do e q u a t e t h e m in t e r m s of their relative p r i c e ( " w a g e s " ) , then, as P a y e r ( 1 9 7 4 : 4 7 ) p o i n t s o u t , " a n y b o d y at all w o u l d b e b e t t e r o f f — p e r s o n a l l y s p e a k i n g — d o i n g w h a t p a y s t h e b e s t . . . e v e n if t h e y ' r e n o t as e f f i c i e n t as s o m e b o d y e l s e . " In o t h e r w o r d s , s e c r e taries s h o u l d b e d o c t o r s or l a w y e r s , e v e n b a d d o c t o r s or l a w y e r s . Since l i b e r a l s o f t e n liken c o u n t r i e s to the i n d i v i d u a l s in the e x a m p l e just cited, t h e s a m e l o g i c a p p l i e s there, too, n a m e l y , that despite the s e e m i n g a d v a n t a g e of c o m p a r a t i v e a d v a n t a g e , this is o n l y a d v a n t a g e f o r the h i g h e r - e a r n i n g c o u n t r i e s . F o r l o w e r - e a r n i n g c o u n t r i e s t h e a b s o l u t e d i s a d v a n t a g e in b e i n g p o o r is g r e a t e r t h a n a n y r e l a t i v e a d v a n t a g e t h e r e m i g h t b e in b e i n g p o o r " e f f i c i e n t l y . " T h e solution, then, is not to l o o k for s o m e r e l a t i v e a d v a n t a g e to sell, b u t to try to get an a b s o l u t e a d v a n t a g e , w h i c h is e x a c t l y w h a t a n u m b e r of A s i a n n a t i o n s ( u n i m p r e s s e d by n i n e t e e n t h - c e n t u r y E n g lish liberal logic) h a v e c h o s e n to do to b e c o m e m o r e " d e v e l o p e d . " T h o u g h a r g u a b l y f l a w e d , the l o g i c of c o m p a r a t i v e a d v a n t a g e is still w i d e l y p r e s c r i b e d . T h u s w e f i n d W o o d a l l , in h e r s u r v e y of the g l o b a l e c o n o m y in 1 9 9 4 , p o i n t i n g o u t t h a t a " b o n d d e a l e r . . . is q u i t e h a p p y to p a y a l o w - w a g e l a u n d r y w o r k e r r a t h e r t h a n w a s h his o w n c l o t h e s , " that " s p e c i a l i s a t i o n i n c r e a s e s the l i v i n g s t a n d a r d s of b o t h p a r t i e s , " a n d t h a t t h e " c a s e for free t r a d e w i t h C h i n a is n o different" (Woodall 1994:5). She says nothing about the laundry w o r k e r , of c o u r s e , w h o w o u l d c l e a r l y b e b e t t e r off l e a r n i n g to t r a d e in b o n d s r a t h e r t h a n w a s h i n g b o n d d e a l e r s ' c l o t h e s . S h e s a y s n o t h ing a b o u t C h i n a in this r e s p e c t either. As c o u n t r i e s c o n v e r g e u p o n s i m i l a r levels of d e v e l o p m e n t , t h e c o m p e t i t i o n a m o n g t h e m m a k e s j u d g m e n t s of c o m p a r a t i v e a d v a n tage so fine that it is often h a r d to s e e w h a t p u r p o s e can b e s e r v e d b y t h e i r t r a d e . W h a t are w e to m a k e , f o r e x a m p l e , of t h e fact t h a t m o r e than 60 p e r c e n t of i n t e r n a t i o n a l trade in the p o s t - W o r l d W a r II

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period has been among developed countries, that these countries have very similar industrial structures, and that much of this trade has been "intraindustry," where one industrialized country exports cars to another, for example, and imports that other country's cars back again (Gilpin 1987:177)? The value of comparative advantage has clearly declined as it has become more a thing of state and firm policy than of competing factors of production. Indeed, the explanatory value of comparative advantage has declined so far by now that even a staunch liberal like Gilpin concedes that as an argument for free trade, it has "necessarily . . . become less relevant" (Gilpin 1987:178). All liberals are apt to rally at this point, however, as Gilpin quickly does, wagging his finger at nationalistic protectionists and arguing that free trade, while it won't help everyone, and won't provide equitable outcomes, will, if given time and the right attitude ("appropriate policies") benefit all in the end. What is more, it will benefit all "in absolute terms." (The notion that we have to wait for the long run in this regard is very similar to the Marxist notion that in the last instance there will be revolution and a new mode of production.) The implacable nature of liberal opposition to mercantilism was well expressed by key U.S. policymakers in the choice of epithet they used in condemning the first director-general elect of the World Trade Organisation. The unfortunate man, U.S. critics said, was a "protectionist," a term that according to the (classically liberal) periodical, the Economist, is "perhaps the most painful barb in the lexicon of trade politics." So bad was the candidate that Americans "stooped to the P-word," the Economist (March 25, 1995: 90) said, as the only way of expressing the depths of their disapproval. To mercantilists, this is nonsense. The free trade that the use of comparative advantage requires favors the most developed, they say. It throws countries open to exploitation by those with politicoeconomic power. It promotes specialization, especially in commodities for export, and in doing so "reduces flexibility, increases . . . vulnerability, . . . threatens . . . national security," and otherwise rots the moral fiber of the state (Gilpin 1987:183). Rather than risk being subordinated by world capitalists, people need protection and a trade policy that builds up domestic industries capable of sustaining import substitution and a self-sufficient state. This was the view historically of German and U.S. analysts, who saw free trade as a cover for continued British trade supremacy. And it is the view of underdog traders today. Mercantilists advocate a wide range of trade restrictions to frustrate liberalist resolve. These include tariffs (taxes on imports), quotas (specific limits on the quantity of imports or on their value), subsidies

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(made to particular industries to help them be competitive, such as d e p r e c i a t i o n a l l o w a n c e s , cash grants, tax h o l i d a y s , and the like), voluntary restrictions on i m p o r t s (voluntary in n a m e only and imposed b y an e x p o r t i n g c o u n t r y u n d e r pressure f r o m an i m p o r t i n g country), currency controls (that limit the availability of foreign currency for the purchase of foreign goods), and a d m i n i s t r a t i v e regulations (such as b u r e a u c r a t i c procedures, s y s t e m s of a d v a n c e p a y ment, m i n i m u m d o m e s t i c product content rules, special m a r k e t i n g s t a n d a r d s , and special safety and health p r o v i s i o n s ) ( B u r n i n g h a m 1991:324-325). Unequal Exchange In Marxist terms, capitalists m a k e their m o n e y not from trade or the c o m p a r a t i v e advantages that liberals so prize, so m u c h as from the laborers w h o m a k e the c o m m o d i t i e s or p r o v i d e the services that capitalists trade with. Capitalists are a l w a y s s e e k i n g to m i n i m i z e the costs of the factors of production they use, including the factor of labor power. T h e y s e e k c h e a p , m o t i v a t e d , d i s c i p l i n e d w o r k e r s , who will exchange m a x i m a l value (in terms of their work) for minimal v a l u e (in terms of their w a g e s ) . The m o r e u n e q u a l this exchange, the higher the profit. T h e price of all the g o o d s and services that capitalists trade will i n c l u d e this unequal e x c h a n g e , and since workers of the sort capitalists seek are predominantly w o m e n , trade prices will be a statement about gender inequalities as well as class ones. Growth S t r a n g e (1988:162) cites the global growth in international trade over the last hundred years as the first, and arguably the foremost, of its definitive features. " D u r i n g the whole of the present century," she says, " t r a d e b e t w e e n countries has g r o w n faster than their total production. That is to say, the proportion of production sold across state frontiers has steadily r i s e n . " Not only the p r o p o r t i o n of production t r a d e d across state b o r d e r s , but the total v o l u m e of trade across such frontiers has g r o w n , too, with the exception of periods like that of the Great D e p r e s s i o n in the 1930s, the recession of the early 1980s, or m a j o r w a r s . At these times it has declined or fallen (Green and Sutcliffe 1987:172). O n e w o u l d expect such g r o w t h , given w h a t has h a p p e n e d to the international political e c o n o m y as a w h o l e o v e r this period. B u t it is still i m p o r t a n t to k n o w how quickly w o r l d trade itself has

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grown. A scant forty years after World War II, for example, it was fifty-five times greater than it had been in 1945 (Strange 1988:162). Since trade has been a feature of h u m a n society for as far back as we can reliably discern (people wanting what they don't make at h o m e and exchanging what they do for commodities from afar), and since the number of people has been growing in the world, too, a change like this is hardly a surprise. It is still remarkable, however. In valorizing marketeering, liberals automatically sanction exchange. The m o d e r n success of liberal doctrine has legitimized trading as a creative, affirmative, wealth-making, peace-making practice, and this, too, has promoted the growth of trade. The mercantilist attempt to restrict this legitimacy to those trading ventures that directly enhance state autonomy and strength has not been able to halt the process. Marxist criticism of the use of trade as an instrument of exploitation has had even less of an inhibitory effect. And though the growth of trade has been overshadowed in recent times by the international flows of short-term and long-term investment, and the b u i l d i n g of "world factories," it remains a key and still expanding part of the world political economy. Uneven Growth Like the world political economy as a whole, trade has also grown unevenly—ideologically (in terms of the hegemonic as opposed to marginalized worldviews); temporally (in fits and starts); geographically (with some parts of the world trading more than others); sectorally (from raw materials to finished goods and services); socially (in terms of w h o participates); and structurally (in terms of the arguments about w h o benefits from the terms of trade). Ideologies The liberal, mercantilist, and Marxist ways of analyzing trade have all been discussed. The truths of the matter are no less significant as perceived by marginalized groups like environmentalists, indigenous peoples, or w o m e n , however. The success of the more orthodox perspectives on international trade as opposed to the less orthodox ones is the most notable unevenness in ideological terms. The Cold War that followed World War II introduced another ideological u n e v e n n e s s into the growth of world trade, and that was an East-West one. The world trading system was in practice two systems, one marketeering and capitalist, the other committed to central planning and so-called socialism. On the one side the United States sought to restrain its traders from dealing with

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socialist states, while placing similar restrictions u p o n its various allies. On the other side the r u l i n g regimes of the c o m m u n i s t world placed restrictions on their traders, too. Though this ideological exclusivity was breaking down, in trading terms, long before the end of the Cold War, it remained a p o w e r f u l inhibiting factor to the end, and it is obvious that the consequences of such a long ideological rift will be felt for a considerable time to come. Temporal

Aspects

The general growth trend conceals a host of particular irregularities. As the p r o d u c t i o n system as a whole has b o o m e d a n d b u s t e d , so has world trade. In the last century or so, for example, there have been three notable periods of rapid g r o w t h in world p r o d u c t i o n — after the Great Depression of the 1870s until World War I; after World War I until the Great Depression of the 1930s; and after World War II until the recession of the 1970s and 1980s. These have been periods of rapid trade growth, too (Strange 1988:166-167). It is interesting to note, Strange (1988:167) says, that the expansionary phases in w o r l d t r a d e occurred despite the protectionist measures of a n u m b e r of the main t r a d i n g nations: "Before World War I, for instance, trade was growing rapidly, even t h o u g h all the fastest-growing industrial countries—the United States, Japan, Germ a n y and France—were . . . highly protectionist. . . . The forces of the market a p p e a r e d to t r i u m p h over the policies of states." This seems paradoxical unless full measure is given to the fact that a double game was being played. None of these countries was an advocate of free trade at the time, though none of them eschewed it either. After World War II the t r i u m p h a n t leaders of the United States planned to p u t in place a package of measures that w o u l d produce an open international political economy over which they could still have some control. The Marshall Plan was the basis of their postwar foreign policy. This plan was designed to ensure a stable system for exchanging currencies, a n d free trade. "Free trade," in relative terms at least, is w h a t they managed to get, despite the protectionist proclivities of Japan, Germany, and even the United States itself. Environment

There is one temporal dimension not covered above, a n d that is the future. The growing problems of pollution, resource depletion, and overpopulation portend a time of planetary ill-health that few in the years ahead m a y be able to escape. We can't know. W h a t we do know, though, is that the h u m a n impact on the natural environment is immense.

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Trade itself in not the cause of most e n v i r o n m e n t a l concerns. There are important issues, however, that link w o r l d t r a d e to transnational pollution and to resource depletion in particular. One of these issues must surely be the extent to which what gets traded seems to be, in principle, r e d u n d a n t . Half of world trade, for example, consists of the importing and exporting of essentially the same goods (Low 1992). The main question is w h e t h e r freer t r a d e w o u l d be w o r s e for the environment than more-controlled trade. Would freer trade lead to competitive deregulation, for example, lower environmental standards, and "dirty" industries migrating to less-regulated places— "pollution havens," as they are called? Freer trade could conceivably encourage production that is less d a m a g i n g to the environment, rather than more damaging. Indeed, in liberalist terms, the d e m a n d for environmental repair industries s h o u l d be met, once the price is right, by an efficient s u p p l y of them. It is still feared, however, that lax s t a n d a r d s do act as a pull factor for those industries that want to cut costs by not having to pay for pollution inhibition measures. Perhaps, therefore, we should regulate to control transnational pollution. Might this not act as a p u s h factor, driving dirty industries out to produce and trade from somewhere else? Regulation could only w o r k if it were universal, in other words, which in a state-made world w o u l d require agreement of a kind that is always going to be hard to get. M a r k e t e e r s s h o w relatively little interest in e n v i r o n m e n t a l m a t t e r s . They see increasing w o r l d t r a d e as a result of increasing w o r l d c o m m e r c e a n d as m u c h to be d e s i r e d . Both are p a r t of a wealth-creating system that raises living s t a n d a r d s in poorer parts of the w o r l d and p r o v i d e s the m e a n s to invest in a cleaner envir o n m e n t . They see the ideology of e n v i r o n m e n t a l i s m , however, as an o p e n - e n d e d a r g u m e n t for restricting trade. They see it as a direct threat. Environmentalists themselves, t h o u g h more particularly the deep greens, see the planet being gutted by opportunistic entrepreneurs in the drive to industrialize. They place an absolute value on not d a m a g i n g or destroying the w o r l d ' s ecosystems, large or small. They w a n t green world trade, as they want green world production systems. Whether we can get sustainable global development without an end to growth, and therefore an end to the w o r l d capitalist system (which Marxists see as predicated on growth), is still, of course, an u n a n s w e r e d question. Fortunately or unfortunately, it is one that will be answered definitively only by the f u t u r e .

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Geography "To those who have shall be given m o r e , " it seems. T h u s those parts of the w o r l d that m a s t e r e d capitalist i n d u s t r i a l i s m first w e r e the parts that prospered first, and with their p r o s p e r i t y w e r e able to b u y the world's produce, either from each other or from elsewhere. M o s t trade in finished p r o d u c t s takes p l a c e today b e t w e e n the relatively rich countries. T h e s e are the o n e s w h o sell and can b u y the most goods and services, simply b e c a u s e they have the m e a n s to do so. It is between the countries of the " d e v e l o p e d " world, in other w o r d s , that we find the strongest g r o w t h in world trade. As to the relatively poorer ones, only 3 percent of the global trade total takes place b e t w e e n them (so-called S o u t h - S o u t h trade), while trade from South to North is n o w less than 10 percent of the total global sum. T h u s the " d e v e l o p i n g " countries enter the markets as u n e q u a l p a r t n e r s , leaving it again with u n e q u a l r e w a r d s ( U N D P 1992:68). W h e n they do try a n d trade they find t h e m s e l v e s p r e v e n t e d from d o i n g so by rich state protectionists. As they don't have the funds to wait and sell at the most profitable prices, they have to take " d i s t r e s s " ones, with the " d i s t u r b i n g result . . . that rich p r o d u c e r s are paid more than poor ones for identical g o o d s " ( U N D P 1992:60). T h e least well-off countries in the w o r l d have been the greatest losers, however. They suffer in a more serious form from all the liabilities m e n t i o n e d a b o v e . As a result m o s t s u b - S a h a r a n African countries, for example, have seen their trade share fall to a quarter of w h a t it was thirty years ago. A n d t h o u g h the poorest c o u n t r i e s h a v e nearly 10 percent of the w o r l d ' s p o p u l a t i o n , they e n g a g e in less than one-half of 1 percent of the w o r l d ' s trade ( U N D P 1992:48). For the duration of the Cold War there w a s another notable geo g r a p h i c unevenness in the growth of world trade, and that w a s the E a s t - W e s t one d i s c u s s e d a b o v e in i d e o l o g i c a l terms, and earlier again in terms of the uneven growth of the world political e c o n o m y as a whole. With the collapse of the Soviet Union, its rapid conversion to capitalism, and the b e g i n n i n g s of a similar c o n v e r s i o n evid e n t in m a i n l a n d C h i n a , the g r o u n d s for this p a r t i c u l a r d i s p a r i t y have been or are in the process of being removed. The disparities remain, however. The catch-up task is e n o r m o u s and despite n o t a b l e c h a n g e in C h i n a in particular, few e x p e c t the c o n s e q u e n c e s of the Cold War to disappear in one or even two generations. S t r a n g e points to another g e o g r a p h i c u n e v e n n e s s , one that is a l e g a c y of an earlier global system as well, namely, that of the great E u r o p e a n empires of the nineteenth century. The i n v e s t m e n t s that the imperial powers m a d e in their colonies at that time, and in the first part of the twentieth century, had lasting effects on trade flows,

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she says, so much so that "trade figures for African countries thirty years after i n d e p e n d e n c e still show a m a r k e d partiality for t r a d e with France, or Britain, as does Indonesian trade with the N e t h e r lands" (Strange 1988:170). A similar effect has followed u p o n U.S. i n v e s t m e n t s in Latin America and Japanese investments in Southeast Asia. The local prep o n d e r a n c e of these capitalist p o w e r s is reflected, Strange (1988:170) says, in trade flows "in both directions," flows that favor, as one w o u l d expect, the countries of the investors, not those of the investees. Sectors The u n e v e n g r o w t h of the world t r a d e system is also a p p a r e n t in changes in the nature of the goods traded. Since trade patterns are a picture, in a sense, of the commodity preferences of those w h o buy and sell, and those d o i n g most of the b u y i n g and selling are those w h o live in capitalist, industrialized countries, it is no surprise that most traded goods are secondary and tertiary rather than p r i m a r y ones. Today it is factory-made finished goods, and services like education, entertainment, tourism, and insurance, that p r e d o m i n a t e . This is a marked change from the nineteenth century, w h e n primary p r o d u c t s accounted for two-thirds of w o r l d trade (Strange 1988: 167), t h o u g h there is one glaring exception to this trend and that is oil, a commodity of no account last century, that in the twentieth became a kind of black, liquid gold. Social

Aspects

W h o are the w o r l d ' s traders? In liberalist terms, they are the entrep r e n e u r s who, risking ruin, bring goods between countries to sell in their markets, and who, in doing so, enrich some more than others, while enriching us all. U n e v e n n e s s matters less to them t h a n the g r o w t h they make possible for the system as a whole, t h o u g h traders do, unequivocally, make for unevenness. The ones w h o benefit most f r o m w o r l d t r a d e are the w o r l d ' s rich. Despite the industrial revolution and the capacity of our species to make food and other commodities on an u n p r e c e d e n t e d scale, the disparity between the w o r l d ' s rich and the w o r l d ' s poor is very great, and trade is one aspect of the global process that sustains that disparity. In mercantilist terms, the world's traders are either traitors or licensed patriots. The latter create international industries that trade as m u c h as possible to national a d v a n t a g e . U n e v e n n e s s is not a problem, since only national vulnerability is.

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In Marxist terms, the w o r l d ' s traders are capitalists w h o seek profits. They produce by exchanging. They are the creators of social classes whose interests are so divergent, so uneven, that only revolution can reconcile them. A revolution as such has not yet occurred, and unevenness prevails, which is w h y reformist Marxists want to act now. They want to alleviate the h u m a n suffering this entails. "Both the state and the market," argues Sylvester, are masculinist communities that d o m i n a t e those outside them, "those" in this case being specifically " w o m e n , " and the d o m i n a t i o n being that conceptualized by labels like "free exchange, c o m p a r a t i v e a d v a n tage or division of labor" (Sylvester 1990:240). To focus only on what states and firms do, or on h o w the world capitalist system works, is to miss, she says, h o w social attitudes and social practices have gender-specific effects u p o n states, firms, and the world capitalist system itself. More particularly it is to miss the g e n d e r dimension of the t r a d i n g a r r a n g e m e n t s that are m a d e b e t w e e n states and firms and within the w o r l d capitalist system. It is to miss, in short, the female standpoint. It is to tell stories about h o w states and firms, the world capitalist system and world t r a d e w o r k , in w a y s that deny w o m e n "agency"; in w a y s that deny, that is, that w o m e n " d o " anything. Which is nonsense, since w o m e n are traders, too, t h o u g h r e a d i n g the large literature on world t r a d e one w o u l d hardly think so. Structure In practical terms all this unevenness means dire structural inequalities. If we look at the disparities b e t w e e n the richer a n d poorer states, we find that the poorer ones seek to trade in primary sector products, that is, mineral and agricultural ones. We find that as a consequence of recession, of the substitution of other materials, and of overproduction (as well as shorter-term factors like business cycles, speculation, and the weather) there has been a decline in prices for primary agricultural commodities like coffee, cocoa, sugar, and rubber, or primary raw materials like bauxite, tin, copper, lead, and zinc. We find a price squeeze on p r i m a r y commodities, in other w o r d s (UNDP 1992:59). At the s a m e time the pressures to make money remain unrelenting. It is in this light that we must read poor state needs to pay off international debts and to buy w h a t they are not able to make and do. It is in this light that w e can begin to see the extent of the structural d i s a d v a n t a g e s such countries face. Poorer countries, acutely a w a r e of their plight, h a v e striven to diversify and industrialize. The d e p t h of their d e p e n d e n c e on

Exchange and Growth

1 39

p a r t i c u l a r p r i m a r y c o m m o d i t i e s can b e so great, however, they cann o t — p a r t i c u l a r l y w i t h d e c l i n i n g p r i c e s — r e a d i l y o v e r c o m e it. They m a y n e e d the r e v e n u e s f r o m such c o m m o d i t i e s too m u c h , however, to m a k e a n y " f u n d a m e n t a l structural c h a n g e s " ( U N D P 1992:62). As to i n d u s t r i a l i z a t i o n , it is o b v i o u s that by p r o c e s s i n g a n d f i n i s h i n g g o o d s , p o o r e r countries can a d d v a l u e to t h e m a n d can m a k e m u c h m o r e money. W h a t they f i n d w h e n they d o try to m a n u f a c t u r e a n d t r a d e m o r e f i n i s h e d g o o d s , h o w e v e r , is a r i s i n g wall of rich w o r l d p r o t e c t i o n i s m — t a r i f f a n d nontariff b a r r i e r s d e s i g n e d to k e e p t h e m in their place. It r e m a i n s to be seen h o w m u c h the World Trade Org a n i s a t i o n will be able to b r e a k d o w n this wall. M e a n w h i l e t r a d e in the m o s t t e c h n o l o g i c a l l y i n n o v a t i v e p r o d ucts a n d services r e m a i n s a rich w o r l d m o n o p o l y . H e r e protectionism is at its most intense. The question, for e x a m p l e , of intellectual p r o p e r t y rights, that is, the p r o t e c t i o n of p a t e n t s , c o p y r i g h t , a n d trademarks, has become a pressing one for richer countries determ i n e d to k e e p their p r o d u c t i v e e d g e . Such d e t e r m i n a t i o n is "in s t a r k c o n t r a s t , " as the U N D P p o i n t s out, to liberalist n o t i o n s of o p e n n e s s a n d f r e e d o m , a n d b e t r a y s a s t r u c t u r a l d i s p a r i t y at the heart of the w o r l d t r a d i n g s y s t e m that n o a m o u n t of p o o r w o r l d " d e v e l o p m e n t " has so far been able to u n d o ( U N D P 1992:66). I n d e e d , it h a s even b e e n a r g u e d that w e are e n t e r i n g a n e w t r a d i n g era, that of " a d v e r s a r i a l " t r a d e , w h e r e the objective is to m a x i m i z e m a r k e t shares r a t h e r than to seek c o m p l e m e n t a r i t i e s — a s in S m i t h ' s d a y — o r to c o m p e t e — a s , until recently, in o u r o w n ( D r u c k e r 1989:129). " C o m p l e m e n t a r y t r a d e , " says D r u c k e r (1989: 129-130), "seeks to establish a p a r t n e r s h i p . C o m p e t i t i v e t r a d e aims at creating a customer. A d v e r s a r i a l t r a d e a i m s at d o m i n a t i n g an ind u s t r y . C o m p l e m e t a r y t r a d e is a c o u r t s h i p . C o m p e t i t i v e t r a d e is f i g h t i n g a battle. A d v e r s a r i a l t r a d e aims at w i n n i n g the w a r by des t r o y i n g the e n e m y ' s a r m y and its capacity to fight." W h e r e adversarial t r a d e prevails, m e r e c o m p e t i t i o n is i n a p p r o priate. O t h e r d e f e n s e s m u s t be f o u n d . Liberals e s c h e w p r o t e c t i o n ism, so they seek other alternatives. O n e of these is regionalism, arg u a b l y a n e w k i n d of p r o t e c t i o n i s m , o n e of a collectivist k i n d . A n o t h e r a l t e r n a t i v e is "reciprocity," a c o n c e p t that is set, D r u c k e r says, to revolutionize the w o r l d t r a d e system, since it is "clearly the only t r a d e policy that can effectively w o r k in a w o r l d . . . that features a d v e r s a r i a l t r a d e . " It is this concept, he believes, that will integrate the w o r l d economy, just as c o m p e t i t i v e t r a d e i n t e g r a t e d the international economy (Drucker 1989:132). Clearly, structural changes are afoot, t h o u g h they are not o n e s that w o u l d seem, in D r u c k e r ' s scenario at least, to i n c l u d e the p o o r e r c o u n t r i e s at all.

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The c o m p e t i t i v e t r a d i n g o r d e r of the c o n t e m p o r a r y w o r l d w a s p u t t o g e t h e r by capitalist, industrialist countries after World War II. The a g r e e m e n t to create a G e n e r a l A g r e e m e n t on Tariffs a n d Trade (GATT) w a s m e a n t to r e s t r u c t u r e w o r l d t r a d e , a n d w h i l e " r e s t r u c t u r i n g " m a y be too strong a w o r d for w h a t w e n t on in practice, the GATT did b e c o m e a key feature of the global political economy. The General Agreement on Tariffs and Trade (GATT) The GATT w a s established in 1947-1948 b y t w e n t y - t h r e e c o u n t r i e s seeking freer a n d fairer international t r a d i n g practices. The national protectionism c o m m o n in the d e p r e s s e d 1930s w a s w i d e l y believed to h a v e been the c a u s e of a d r a m a t i c fall in e x p o r t s f r o m t h e m a i n i n d u s t r i a l countries at the time. The fall w a s i n d e e d spectacular. In five years, f r o m 1928 to 1932, w o r l d e x p o r t s d r o p p e d f r o m $33 billion to $13 billion (Moffitt 1984:16). The h i g h u n e m p l o y m e n t a n d the b a l a n c e - o f - p a y m e n t s p r o b l e m s that f o l l o w e d , w h e t h e r cause or c o n s e q u e n c e of this fall, w e r e socially d i s a s t r o u s a n d w e r e directly r e s p o n s i b l e , in p a r t at least, for the s u b s e q u e n t success of fascism a n d World War II. The GATT w a s d e s i g n e d , first to set rules for w o r l d t r a d e , and second to keep those rules u p to date. Three basic rules w e r e set. The first w a s the m o s t f a v o r e d nation principle, w h e r e b y GATT m e m b e r s a g r e e d to treat all o t h e r GATT m e m b e r s in a n o n d i s c r i m i n a t o r y way. A tariff on an i m p o r t from a GATT m e m b e r h a d to be placed on all GATT m e m b e r i m p o r t s , a n d vice versa (with the exception of c u s t o m s unions, c o m m o n m a r k e t s , or free t r a d e areas a l r e a d y in existence). A n o t h e r e x c e p t i o n w a s m a d e later to p r o v i d e a p r e f e r e n c e for m a n u f a c t u r e d i m p o r t s f r o m p o o r e r countries. This w a s the generalized system of preferences. It w a s , in effect, a f o r m of positive d i s c r i m i n a t i o n , since t r e a t i n g unequals equally w a s clearly unfair. In this case it w a s d e c i d e d to t r a d e a degree of f r e e d o m for greater fairness. Second, the GATT m e m b e r s agreed to restrict protection to the use of tariffs ( d i s m a n t l i n g import q u o t a s , for example). Third, GATT m e m b e r s agreed that tariff rates s h o u l d remain negotiable a n d that there s h o u l d be no "free riding," that is, the getting of concessions w i t h o u t offering any. There w e r e also escape clauses a n d e x c e p t i o n s t h a t c o u l d b e u s e d to s a f e g u a r d c o u n t r i e s s u f f e r i n g f r o m b a l a n c e - o f - p a y m e n t s imbalances. The w h o l e a g r e e m e n t w a s v o l u n t a r y , a n d t h o u g h t h e r e w e r e a d i s p u t e s p r o c e d u r e a n d an o r g a n i z a t i o n that s u p e r v i s e d the rules,

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the GATT had no powers of enforcement. The whole system ran on reciprocity and the willingness of the participants to abide by it. Follow-up tariff reduction negotiations have gone on practically n o n s t o p since the GATT w a s established. There h a v e been eight r o u n d s to date: Geneva (1947); Annecy (1949); Torquay (1950-1951); Geneva (1955-1956); Geneva (1960-1962, the so-called Dillon round); Washington (1964-1967, the so-called K e n n e d y round); Tokyo (1973-1979, the so-called Tokyo round); and Paris (1986-1994, the so-called U r u g u a y round). The r o u n d s have become longer as the size of the association has grown, a n d as the liberalist cause of nonprotectionism has become more p o p u l a r . They h a v e gotten progressively more ambitious, too. The Kennedy round, for example, resulted in an "acrossthe-board tariff cut of 35 percent on 60,000 p r o d u c t s " (Gilpin 1987: 192). This w a s counted a considerable victory by marketeers, t h o u g h it failed to deal with the g r o w t h of nontariff barriers, the needs of poorer countries, or the highly protected nature of agricultural trade; hence the Tokyo a n d U r u g u a y rounds. Nontariff barriers have p r e s e n t e d a particularly intractable problem. Statecentric protectionism is in practice a matter of infinite regress. "For the critics of GATT," Kahler (1993:2) argues, "its yeom a n service in r e m o v i n g barriers to t r a d e at national b o r d e r s has only revealed countless other barriers and distortions behind those borders. The decades-long process of l o w e r i n g t r a d e barriers resembles the draining of a lake that reveals mountain peaks formerly concealed or (more pessimistically) the peeling of an onion of barriers that conceals innumerable layers." Nontariff barriers have b e c o m e progressively m o r e complex, both technically and ideologically. As the United States has gone d e e p e r into debt, for example, the country's state m a k e r s have b e g u n looking for w a y s to t r a d e their w a y out of it. M e m b e r s of Congress h a v e b e g u n to favor "bilateral" solutions to w h a t they have increasingly characterized as "unfair practices" on the part of other traders. In 1988 they passed the O m n i b u s Trade and Competitiveness Act, strengthening section 301 of a previous trade act and m a k i n g it possible thereby for t h e m to single out particular countries as protectionist or dishonest (for example, as violators of intellectual property rights). The preferred p u n i s h m e n t was to close the U.S. market off to the s u p p o s e d offenders. "These extensions of American trade law were controversial," as Kahler points out, since they allowed the United States unilaterally to d e t e r m i n e w h e t h e r there was any unfairness or not, as well as threatening extra-GATT c o u n t e r m e a s u r e s if its d e t e r m i n a t i o n s w e r e not accepted. This extended U.S. d e m a n d s into policy areas and practices "in which there were not GATT obligations and in which the link to trade was

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a r g u a b l e (such as d e n i a l of w o r k e r rights, e x p o r t t a r g e t i n g , a n d anti-competitive b u s i n e s s practices)" (Kahler 1993:23). The U.S. a t t e m p t to w i d e n the GATT a g e n d a can be seen either as an a t t e m p t b y U.S. state m a k e r s to b r e a k d o w n nontariff barriers, or as a w a y of t r y i n g to c o m p e n s a t e for the d e c l i n i n g c o m p e t i t i v e ness of U.S. w e a l t h m a k e r s . It d e p e n d s on t h e national p e r s p e c t i v e one takes, a n d the ideological perspective o n e takes, too. The U.S. a t t e m p t to n e g o t i a t e a " s t r u c t u r a l i m p e d i m e n t s initiative" w i t h Japan w a s an a t t e m p t to negotiate, bilaterally, a r e d u c t i o n in nontariff barriers. In mercantilist terms, it w a s m a r g i n a l l y d e f e n sible. In practice, h o w e v e r , it placed " v i r t u a l l y a n y d o m e s t i c p r a c tice or national policy on the table as [a] possible i m p e d i m e n t . . . to international e x c h a n g e " (Kahler 1993:24). U.S. state m a k e r s w a n t e d to r e d u c e U.S. d e p e n d e n c e on Japanese savings, s a v i n g s that w e r e u s e d a n n u a l l y to cover the U.S. deficit. They w a n t e d to see the J a p a n e s e — s t a t e m a k e r s a n d cons u m e r s a l i k e — s p e n d i n g m o r e , a n d s p e n d i n g m o r e on U.S. g o o d s , t h o u g h in liberal t e r m s this w a s utterly indefensible. The m a i n U.S. b a r g a i n i n g card—increased protectionism on their p a r t — w a s decidedly not a liberal one. A n d h o w e v e r m u c h U.S. state m a k e r s a r g u e d their case in liberal t e r m s (as a bid to f r e e u p t r a d e w i t h the Japanese, f o r example), liberals r e m a i n e d u n c o n v i n c e d that U.S. state m a k e r s w e r e n ' t hypocrites; that they w e r e n ' t b e i n g d i s h o n e s t a b o u t their intentions. The J a p a n e s e w e r e equally skeptical. The Japanese h a v e not been the United States' only target. Up to the v e r y last m o m e n t , b e f o r e the s i g n i n g of the U r u g u a y r o u n d a g r e e m e n t in M a r r a k e s h in 1994, U.S. (and French) negotiators w e r e a r g u i n g for m o r e of a link b e t w e e n the t r a d e rules in the a g r e e m e n t a n d their non-GATT concerns for the labor s t a n d a r d s a n d w o r k e r s ' rights in other m e m b e r states. It's h a r d l y s u r p r i s i n g that i n d u s t r i a l capitalist countries like this s h o u l d discover a Marxist-like concern for the p o o r d o w n t r o d d e n w o r k e r s of the w o r l d just w h e n exporters f r o m a n u m b e r of countries, w h e r e these w o r k e r s live, w e r e beginn i n g seriously to i m p i n g e u p o n U.S. m a r k e t s . Called "social d u m p ing," that is, c o m p e t i t i o n d e e m e d u n f a i r b e c a u s e w o r k e r s ' basic rights h a v e b e e n d e n i e d and w o r k i n g c o n d i t i o n s are poor, this concept r e p r e s e n t s either a g e n u i n e concern f o r h u m a n s u f f e r i n g or a p a r t i c u l a r l y cynical f o r m of p r o t e c t i o n i s m . The t i m i n g w o u l d s u g gest the latter, that is, a m a t e r i a l interest c o u c h e d in t e r m s of a moral interest convenient to its cause. The World Trade Organisation (WTO) C r e a t e d by the U r u g u a y r o u n d GATT a g r e e m e n t n e g o t i a t i o n s , the W T O w a s a r e i n c a r n a t i o n of an original p r o p o s a l by the Western

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allies w h o met in Geneva in 1947 to plan a world trading order. The original proposal envisaged an international trade organization akin to the current WTO (the change f r o m "international" to " w o r l d " over the intervening years is saying m u c h in itself). The charter that enshrined the original proposal, agreed to in H a v a n a in 1948, was not ratified by the U.S. Congress. The notion that there should be an organization capable of overseeing world trade was not s u p p o r t e d , since Congress was not prepared to grant a non-U.S. b o d y control of any of its commercial policies. H a v i n g prevented its formation the first time, the U.S. Congress did not do so the second. The WTO was ratified in 1994. Clearly, many things had changed in the interim, not least being the reduced significance of trade itself in the w o r l d political economy. A r o u n d the same time, however, the Congress voted into being a major regional t r a d i n g bloc, the N o r t h American Free Trade Association (NAFTA)—originally, the United States, C a n a d a , and Mexico. This w o u l d lead one to w o n d e r w h i c h w a y the U.S. Congress saw the world going. P e r h a p s both w a y s at once, with tariff reduction between the NAFTA countries a n d other countries as a result of the G A T T / U r u g u a y , and even higher tariff r e d u c t i o n s b e t w e e n t h e m selves as a result of NAFTA. This raises the question as to w h e t h e r regional blocs inhibit or complement freer world trade. The U r u g u a y r o u n d did resolve one l o n g - s t a n d i n g issue in favor of a less bloclike, more o p e n global system, and that was agriculture. Long-term resistance on the part of the E u r o p e a n Union (EU), and particularly France, to cutting subsidies to farmers and to accepting the m a r k e t e e r i n g logic of the liberal globalizers was b r o u g h t to an end, in token f o r m at any rate. This w a s not before time. Many had noted the p a r a d o x of famine in Africa, for example, while E u r o p e a n state m a k e r s spent billions of dollars annually stockpiling excess food for which they could find no buyers. European price s u p p o r t systems long sustained production at a rate the market, as a m a r k e t (where food is for sale not use) could not absorb. The food could always h a v e been given to those w h o most needed it, of course, but no marketeer w o u l d countenance a policy like that. In getting a less bloclike world, notable persistence was s h o w n by the Cairns Group of thirteen primary p r o d u c i n g countries, a selfn o m i n a t e d g r o u p with m e m b e r s as diverse as N e w Zealand and Hungary. These countries tried h a r d for years to keep the issue of agriculture high on the GATT a g e n d a . In practice, t h o u g h , it w a s pressure from U.S. state makers, w h o saw U.S. wealth makers losing exports to the EU because of the protectionist policies of particular EU countries, that finally got the French to capitulate. The French trade-off was the right to protect themselves f r o m the cultural

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onslaught of Hollywood. This was no small right. One-quarter of world trade is now in such service industries as entertainment, industries that have now become more important globally than commodity manufacture. It was the United States that most wanted to move the GATT debate into the service domain, and for the first time a GATT round was dedicated to getting less state-made resistance to world trade in the tertiary sector. The reduction of protectionism in service industry areas advantages countries like the United States and the firms they harbor. This puts pressure on countries that want to protect themselves in this regard. Presumably the whole question of service sector protectionism will b e c o m e more acute as the trade in services increases. It will also b e c o m e more acute because of the move, not only on the part of richer countries into the services, but also on the part of poorer countries that opt for a more service-centered version of the East Asian development model. The United States is also s h o w i n g the way to a new model of development. For example, the most successful East Asian countries are currently seen as those that have eschewed the conventional import substitution model. T h e y have specialized in higher valueadded industries, using cheap labor and advanced technology, and they have exported their manufactures into high-spending markets while exploiting consumers at home. From the U.S. experience, however, it is possible to envisage a model of development that b y p a s s e s the m a n u f a c t u r i n g stage and goes directly to the tertiary one instead. Countries adopting this model might choose to develop their education industries, for example, or to specialize in information superhighway construction, or to advertise themselves as tourist attractions—much as Fiji with its University of the South Pacific, India with its computer software companies, or Nepal with its mountain-trekking industry are doing. Such countries provide services rather than finished goods. T h e y are harbingers of a world political e c o n o m y that produces and trades more in " m e n t a l " c o m m o d i t i e s than " m a n u a l " ones. They also indicate where global investors are going and how far the circuits of world finance now reach.

NOTE 1. Another p a r a d o x of national income accounting is the example of the man w h o marries his housekeeper. Let us say that the man pays his housekeeper $ 3 , 0 0 0 a y e a r for her services. W h e n he does this, the national income grows by a like a m o u n t . But if he and the housekeeper marry, and she is no longer on salary, the national income is diminished by $3,000.

6 World Finance •

R. A. Radford (1945) "The Economic Organisation of a P.O.W. Camp" Introduction

After allowance has been made for abnormal circumstances, the social institutions, ideas and habits of g r o u p s in the outside world are to be found reflected in a Prisoner of War C a m p . It is an unusual but a vital society. C a m p organisation and politics are matters of real concern to the inmates, as a f f e c t i n g their present and perhaps their f u t u r e existences. Nor does this indicate any loss of proportion. No one pretends that c a m p matters are of any but local importance or of more than transient interest, but their importance there is great. T h e y bulk large in a world of narrow horizons and it is suggested that any distortion of values lies rather in the minimisation than in the exaggeration of their importance. H u m a n affairs are essentially practical matters and the measure of immediate effect on the lives of those directly concerned in them is to a large extent the criterion of their importance at that time and place. A prisoner can hold strong views on such subjects as whether or not all tinned meats shall be issued to individuals cold or be centrally cooked, without losing sight of the significance of the Atlantic Charter. One aspect of social organisation is to be f o u n d in e c o n o m i c activity, and this, along with other manifestations of a group existence, is to be f o u n d in any P.O.W. camp. True, a prisoner is not dependent on his exertions for the provision of the necessaries, or even the luxuries of life, but through his e c o n o m i c activity, the e x c h a n g e of g o o d s and services, his standard of material c o m f o r t is considerably e n h a n c e d . And this is a serious matter to the prisoner: he is not "playing at s h o p s " even though the small scale of the transactions and the simple expression of c o m f o r t and wants in terms of cigarettes and j a m , razor blades and writing paper, make the urgency of those needs difficult to appreciate, even by an ex-prisoner of s o m e three m o n t h s ' standing. Nevertheless, it cannot be too strongly emphasised that e c o n o m i c activities do not bulk so large in prison society as they d o in the larger world. There can be little production; as has been said the prisoner is independent of his exertions for the provision of the necessities and luxuries of life; the e m p h a s i s lies in e x c h a n g e and the media of exchange. A prison c a m p is not to be c o m p a r e d with the seething crowd of hagglers in a street

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m a r k e t , any m o r e than it is to b e c o m p a r e d w i t h t h e e c o n o m i c inertia of a f a m i l y d i n n e r table. N a t u r a l l y t h e n , e n t e r t a i n m e n t , a c a d e m i c and literary interest, g a m e s and d i s c u s s i o n s of the " o t h e r w o r l d " b u l k larger in e v e r y d a y life t h a n they d o in the life of m o r e n o r m a l s o c i e t i e s . But it w o u l d b e w r o n g to u n d e r e s t i m a t e t h e i m p o r t a n c e of e c o n o m i c activity. E v e r y o n e r e c e i v e s a r o u g h l y equal s h a r e of e s s e n t i a l s ; it is by trade that i n d i v i d u a l p r e f e r e n c e s a r e g i v e n e x p r e s s i o n and c o m f o r t i n c r e a s e d . All at s o m e t i m e , and m o s t p e o p l e regularly, m a k e e x c h a n g e s of one sort or another. A l t h o u g h a P.O.W. c a m p p r o v i d e s a living e x a m p l e of a s i m p l e e c o n o m y w h i c h m i g h t b e used as an a l t e r n a t i v e to the R o b i n s o n C r u s o e e c o n o m y b e l o v e d by the t e x t - b o o k s , and its s i m p l i c i t y r e n d e r s t h e d e m o n s t r a t i o n of certain e c o n o m i c h y p o t h e s e s both a m u s i n g and instructive, it is s u g g e s t e d that the principal s i g n i f i c a n c e is s o c i o l o g i c a l . T r u e , there is interest in o b s e r v i n g the g r o w t h of e c o n o m i c institutions and c u s t o m s in a b r a n d n e w society, small and s i m p l e e n o u g h to p r e v e n t detail f r o m o b s c u r i n g the b a s i c pattern and d i s e q u i l i b r i u m f r o m o b s c u r i n g the w o r k i n g of the s y s t e m . But t h e essential interest lies in the u n i v e r s a l i t y and the s p o n t a n e i t y of this e c o n o m i c life; it c a m e into e x i s t e n c e not by c o n s c i o u s imitation but as a r e s p o n s e to the i m m e d i a t e n e e d s and c i r c u m s t a n c e s . A n y similarity b e t w e e n prison o r g a n i s a t i o n and o u t s i d e o r g a n i s a t i o n arises f r o m s i m i l a r stimuli e v o k i n g similar responses. T h e f o l l o w i n g is as brief an a c c o u n t of the essential data as m a y r e n d e r the n a r r a t i v e intelligible. T h e c a m p s of w h i c h the writer had e x p e r i e n c e w e r e O f l a g s and c o n s e q u e n t l y the e c o n o m y w a s not c o m p l i c a t e d by p a y m e n t s f o r w o r k by the d e t a i n i n g p o w e r . T h e y c o n s i s t e d n o r m a l l y of b e t w e e n 1,200 and 2 , 5 0 0 p e o p l e , h o u s e d in a n u m b e r of s e p a r a t e but i n t e r c o m m u n i c a t i n g b u n g a lows, o n e c o m p a n y of 2 0 0 or so to a b u i l d i n g . E a c h c o m p a n y f o r m e d a g r o u p w i t h i n t h e m a i n o r g a n i s a t i o n and inside the c o m p a n y the r o o m and the m e s s i n g s y n d i c a t e , a v o l u n t a r y and s p o n t a n e o u s g r o u p w h o f e d t o g e t h e r , f o r m e d the c o n s t i t u e n t units. B e t w e e n i n d i v i d u a l s there w a s active t r a d i n g in all c o n s u m e r g o o d s and in s o m e s e r v i c e s . M o s t t r a d i n g w a s for f o o d against c i g a r e t t e s or other f o o d s t u f f s , but c i g a r e t t e s rose f r o m the status of a n o r m a l c o m m o d i t y to that of currency. R M k . s [ R e i c h s m a r k s ] existed but had no c i r c u l a t i o n save f o r g a m b l i n g debts, as f e w articles could b e p u r c h a s e d w i t h t h e m f r o m the canteen. O u r s u p p l i e s c o n s i s t e d of r a t i o n s p r o v i d e d by the d e t a i n i n g p o w e r and ( p r i n c i p a l l y ) the c o n t e n t s of R e d C r o s s f o o d p a r c e l s — t i n n e d milk, j a m , butter, b i s c u i t s , bully, c h o c o l a t e , sugar, etc. and c i g a r e t t e s . S o far the s u p p l i e s to e a c h p e r s o n w e r e equal and regular. Private p a r c e l s of c l o t h i n g , toilet r e q u i s i t e s and c i g a r e t t e s w e r e also r e c e i v e d , and here e q u a l i t y ceased o w i n g to t h e d i f f e r e n t n u m b e r s d e s p a t c h e d and the v a g a r i e s of the post. All t h e s e articles w e r e the s u b j e c t of t r a d e a n d e x c h a n g e .

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The Development and Organisation of the Market Very soon a f t e r c a p t u r e p e o p l e r e a l i s e d that it w a s both u n d e s i r a b l e and u n n e c e s s a r y , in v i e w of the limited s i z e and the equality of s u p p l i e s , to give a w a y or to accept g i f t s of c i g a r e t t e s or f o o d . " G o o d w i l l " d e v e l o p e d into t r a d i n g as a m o r e e q u i t a b l e m e a n s of m a x i m i s i n g individual s a t i s f a c t i o n . We r e a c h e d a transit c a m p in Italy a b o u t a f o r t n i g h t a f t e r c a p t u r e and r e c e i v e d 1/4 of a R e d C r o s s f o o d parcel each a w e e k later. At o n c e e x c h a n g e s , a l r e a d y e s t a b l i s h e d , m u l t i p l i e d in v o l u m e . S t a r t i n g with s i m p l e direct barter, s u c h as a n o n - s m o k e r g i v i n g a s m o k e r f r i e n d his c i g a r e t t e issue in e x c h a n g e for a c h o c o l a t e ration, m o r e c o m p l e x e x c h a n g e s s o o n b e c a m e an a c c e p t e d c u s t o m . Stories c i r c u l a t e d of a p a d r e w h o started off r o u n d the c a m p with a tin of c h e e s e and f i v e c i g a r e t t e s and r e t u r n e d to his bed with a c o m p l e t e parcel in addition to his original c h e e s e and c i g a r e t t e s ; the m a r k e t w a s not yet p e r f e c t . Within a w e e k or t w o , as the v o l u m e s of trade grew, r o u g h s c a l e s of e x c h a n g e v a l u e s c a m e into e x i s t e n c e . S i k h s , w h o had at first e x c h a n g e d tinned beef for practically any other f o o d s t u f f , b e g a n to insist on j a m and m a r g a r i n e . It w a s realised that a tin of j a m w a s w o r t h 1/2 lb of m a r g a r i n e plus s o m e t h i n g else; that a c i g a r e t t e issue w a s w o r t h several c h o c o l a t e issues, and a tin of d i c e d c a r r o t s w a s w o r t h p r a c t i c a l l y n o t h i n g . In this c a m p w e did not visit other b u n g a l o w s very m u c h and p r i c e s varied f r o m p l a c e to place; h e n c e the g e r m of truth in t h e story of the itinerant priest. By t h e end of a m o n t h , w h e n w e r e a c h e d our p e r m a n e n t c a m p , there w a s a lively trade in all c o m m o d i t i e s and their relative v a l u e s w e r e well k n o w n , and e x p r e s s e d not in t e r m s of o n e a n o t h e r — o n e d i d n ' t q u o t e bully in t e r m s of s u g a r — b u t in t e r m s of c i g a r e t t e s . T h e c i g a r e t t e b e c a m e the s t a n d a r d of v a l u e . In the p e r m a n e n t c a m p p e o p l e started by w a n d e r i n g t h r o u g h t h e b u n g a l o w s c a l l i n g their o f f e r s — " c h e e s e f o r s e v e n " ( c i g a r e t t e s ) — a n d t h e hours a f t e r parcel issue w e r e b e d l a m . T h e i n c o n v e n i e n c e s of this s y s t e m s o o n led to its r e p l a c e m e n t by an E x c h a n g e and Mart notice b o a r d in every b u n g a l o w , w h e r e u n d e r the h e a d i n g s " n a m e " , " r o o m n u m b e r " , " w a n t e d " and " o f f e r e d " sales and w a n t s w e r e a d v e r t i s e d . W h e n a deal w e n t t h r o u g h it w a s c r o s s e d off the b o a r d . T h e p u b l i c and s e m i p e r m a n e n t r e c o r d s of t r a n s a c t i o n s led to c i g a r e t t e p r i c e s b e i n g well k n o w n and thus t e n d i n g to e q u a l i t y t h r o u g h o u t t h e c a m p , a l t h o u g h t h e r e w e r e a l w a y s o p p o r t u n i t i e s f o r an astute t r a d e r to m a k e a p r o f i t f r o m a r b i t r a g e . With this d e v e l o p m e n t e v e r y o n e , i n c l u d i n g n o n - s m o k e r s , w a s w i l l i n g to sell f o r c i g a r e t t e s , u s i n g t h e m to b u y at a n o t h e r t i m e and p l a c e . C i g a r e t t e s bec a m e the n o r m a l c u r r e n c y , t h o u g h , of c o u r s e , barter w a s n e v e r e x t i n g u i s h e d . T h e unity of the m a r k e t and t h e p r e v a l e n c e of a single price v a r i e d directly with the g e n e r a l level of the o r g a n i s a t i o n and c o m f o r t in the c a m p . A transit c a m p w a s a l w a y s c h a o t i c and u n c o m f o r t a b l e : p e o p l e w e r e o v e r c r o w d e d , no o n e k n e w w h e r e a n y o n e e l s e w a s living, and f e w took the

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t r o u b l e t o f i n d o u t . O r g a n i s a t i o n w a s t o o s l e n d e r to i n c l u d e an E x c h a n g e a n d M a r t b o a r d , a n d p r i v a t e a d v e r t i s e m e n t s w e r e t h e m o s t that a p p e a r e d . C o n s e q u e n t l y a transit c a m p w a s not o n e m a r k e t b u t m a n y . T h e p r i c e of a tin of s a l m o n is k n o w n to h a v e v a r i e d by t w o c i g a r e t t e s in 2 0 b e t w e e n o n e e n d of a hut a n d t h e o t h e r . D e s p i t e a h i g h level of o r g a n i s a t i o n in Italy, t h e m a r k e t w a s m o r c e l l a t e d in t h i s m a n n e r at t h e f i r s t t r a n s i t c a m p w e r e a c h e d a f t e r o u r r e m o v a l to G e r m a n y in t h e a u t u m n of 1 9 4 3 . In t h i s c a m p — S t a l a g V11A at M o o s b u r g in B a v a r i a — t h e r e w e r e u p t o 5 0 , 0 0 0 p r i s o n e r s of all nationalities. French, Russians, Italians and J u g o - S l a v s w e r e free to m o v e a b o u t w i t h i n t h e c a m p ; B r i t i s h a n d A m e r i c a n s w e r e c o n f i n e d to their c o m p o u n d s , although a f e w cigarettes given to a sentry would always p r o c u r e p e r m i s s i o n f o r o n e or t w o m e n to visit o t h e r c o m p o u n d s . T h e p e o p l e w h o f i r s t v i s i t e d t h e h i g h l y o r g a n i s e d F r e n c h t r a d i n g c e n t r e , w i t h its stalls and k n o w n p r i c e s , f o u n d c o f f e e e x t r a c t — r e l a t i v e l y c h e a p a m o n g t h e t e a d r i n k i n g E n g l i s h — c o m m a n d i n g a f a n c y p r i c e in b i s c u i t s or c i g a r e t t e s , a n d some enterprising people m a d e small fortunes that way. (Incidentally we f o u n d o u t later that m u c h of t h e c o f f e e w e n t " o v e r t h e w i r e " a n d s o l d f o r p h e n o m e n a l p r i c e s at b l a c k m a r k e t c a f e s in M u n i c h : s o m e of t h e F r e n c h p r i s o n e r s w e r e said t o h a v e m a d e s u b s t a n t i a l s u m s in R M k . s . T h i s w a s o n e of t h e f e w o c c a s i o n s on w h i c h o u r n o r m a l l y c l o s e d e c o n o m y c a m e into contact with other economic worlds.) T h e p e r m a n e n t c a m p s in G e r m a n y s a w t h e h i g h e s t l e v e l of c o m m e r c i a l o r g a n i s a t i o n . In a d d i t i o n to t h e E x c h a n g e a n d M a r t n o t i c e b o a r d s , a s h o p w a s o r g a n i s e d as a p u b l i c utility, c o n t r o l l e d by r e p r e s e n t a t i v e s of t h e S e n i o r British O f f i c e r , o n a n o p r o f i t b a s i s . P e o p l e left t h e i r s u r p l u s c l o t h i n g , toilet r e q u i s i t e s a n d f o o d t h e r e until t h e y w e r e s o l d at a f i x e d p r i c e in c i g a r e t t e s . O n l y s a l e s in c i g a r e t t e s w e r e a c c e p t e d — t h e r e w a s n o b a r t e r — a n d t h e r e w a s no h a g g l i n g . For f o o d at least t h e r e w e r e s t a n d a r d p r i c e s : c l o t h i n g is less h o m o g e n e o u s a n d t h e p r i c e w a s d e c i d e d a r o u n d a n o r m by t h e seller a n d t h e s h o p m a n a g e r in a g r e e m e n t ; s h i r t s w o u l d a v e r a g e s a y 8 0 , r a n g i n g f r o m 6 0 to 120 a c c o r d i n g to q u a l i t y a n d a g e . Of f o o d , t h e s h o p c a r r i e d s m a l l s t o c k s f o r c o n v e n i e n c e ; t h e c a p i t a l w a s p r o v i d e d by a loan f r o m t h e b u l k s t o r e of R e d C r o s s c i g a r e t t e s a n d r e p a i d b y a s m a l l c o m m i s s i o n t a k e n on t h e f i r s t t r a n s a c t i o n s . T h u s t h e c i g a r e t t e a t t a i n e d its f u l l e s t c u r r e n c y s t a t u s , a n d t h e market was almost completely unified. It is t h u s to b e s e e n that a m a r k e t c a m e into e x i s t e n c e w i t h o u t l a b o u r or p r o d u c t i o n . T h e B . R . C . S . m a y b e c o n s i d e r e d as " N a t u r e " of t h e t e x t - b o o k , and t h e a r t i c l e s of t r a d e — f o o d , c l o t h i n g a n d c i g a r e t t e s — a s f r e e g i f t s — l a n d or m a n n a . D e s p i t e this, a n d d e s p i t e a r o u g h l y e q u a l d i s t r i b u t i o n of r e s o u r c e s , a m a r k e t c a m e into s p o n t a n e o u s o p e r a t i o n , a n d p r i c e s w e r e f i x e d by t h e o p e r a t i o n of s u p p l y and d e m a n d . It is d i f f i c u l t to r e c o n c i l e t h i s f a c t w i t h the l a b o u r t h e o r y of v a l u e . A c t u a l l y t h e r e w a s an e m b r y o l a b o u r m a r k e t . E v e n w h e n c i g a r e t t e s w e r e not s c a r c e , t h e r e w a s u s u a l l y s o m e u n l u c k y p e r s o n w i l l i n g to p e r f o r m

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s e r v i c e s f o r t h e m . L a u n d r y m e n a d v e r t i s e d at t w o c i g a r e t t e s a g a r m e n t . B a t t l e - d r e s s w a s s c r u b b e d and p r e s s e d and a pair of t r o u s e r s lent for t h e interim p e r i o d of t w e l v e . A g o o d pastel portrait cost thirty or a tin of " H a m " . O d d t a i l o r i n g and other j o b s similarly had their p r i c e s . T h e r e w e r e also e n t r e p r e n e u r i a l s e r v i c e s . T h e r e w a s a c o f f e e stall o w n e r w h o sold tea, c o f f e e or c o c o a at t w o c i g a r e t t e s a c u p , b u y i n g his r a w m a t e r i a l s at m a r k e t p r i c e s and hiring labour to g a t h e r f u e l and to s t o k e ; he actually e n j o y e d the s e r v i c e s of a c h a r t e r e d a c c o u n t a n t at o n e stage. A f t e r a p e r i o d of great p r o s p e r i t y he o v e r r e a c h e d h i m s e l f and f a i l e d d i s a s t r o u s l y f o r several h u n d r e d c i g a r e t t e s . S u c h large scale p r i v a t e e n t e r p r i s e w a s rare but several m i d d l e m e n or p r o f e s s i o n a l t r a d e r s e x i s t e d . T h e p a d r e in Italy, or t h e m e n at M o o s b u r g w h o o p e n e d t r a d i n g r e l a t i o n s w i t h t h e F r e n c h , are e x a m p l e s : t h e m o r e s u b d i v i d e d the m a r k e t , t h e less p e r f e c t the a d v e r t i s e m e n t of p r i c e s , and the less s t a b l e t h e prices, t h e g r e a t e r w a s the s c o p e for t h e s e o p e r a t o r s . O n e m a n c a p i t a l i s e d his k n o w l e d g e of U r d u by b u y i n g m e a t f r o m the S i k h s and s e l l i n g b u t t e r and j a m in return: as his o p e r a t i o n s b e c a m e better k n o w n m o r e and m o r e p e o p l e e n t e r e d this t r a d e , p r i c e s in the Indian W i n g a p p r o x i m a t e d m o r e n e a r l y to t h o s e e l s e w h e r e , t h o u g h to the end a " c o n t a c t " a m o n g t h e I n d i a n s w a s v a l u a b l e , as l i n g u i s t i c d i f f i c u l t i e s p r e v e n t e d the trade f r o m b e i n g q u i t e f r e e . S o m e w e r e s p e c i a l i s t s in the Indian t r a d e , the f o o d , c l o t h i n g or e v e n t h e w a t c h trade. M i d d l e m e n t r a d e d on their o w n a c c o u n t or on c o m m i s s i o n . P r i c e rings and a g r e e m e n t s w e r e s u s p e c t e d and the traders certainly c o - o p e r a t e d . Nor did they w e l c o m e n e w c o m e r s . U n f o r t u nately the writer k n o w s little of the w o r k i n g s of these p e o p l e : p u b l i c o p i n i o n w a s hostile and the p r o f e s s i o n a l s w e r e usually of a retiring disposition. O n e trader in f o o d a n d c i g a r e t t e s , o p e r a t i n g in a p e r i o d of d e a r t h , e n j o y e d a high r e p u t a t i o n . His capital, c a r e f u l l y s a v e d , w a s o r i g i n a l l y a b o u t 5 0 c i g a r e t t e s with w h i c h he b o u g h t rations on issue d a y s and held t h e m until the price r o s e just b e f o r e t h e next issue. He also p i c k e d up a little by a r b i t r a g e ; several t i m e s a d a y he visited every E x c h a n g e or M a r t n o t i c e b o a r d and took a d v a n t a g e of e v e r y d i s c r e p a n c y b e t w e e n p r i c e s of g o o d s o f f e r e d and w a n t e d . His k n o w l e d g e of prices, m a r k e t s and n a m e s of t h o s e w h o had r e c e i v e d c i g a r e t t e p a r c e l s w a s p h e n o m e n a l . By t h e s e m e a n s he kept h i m s e l f s m o k i n g s t e a d i l y — h i s p r o f i t s — w h i l e his capital r e m a i n e d intact. S u g a r w a s issued on S a t u r d a y . A b o u t T u e s d a y t w o of us used to visit S a m and m a k e a deal; as old c u s t o m e r s he w o u l d a d v a n c e as m u c h of t h e price as he c o u l d s p a r e t h e n , and entered the t r a n s a c t i o n in a b o o k . O n S a t u r d a y m o r n i n g he left c o c o a tins on our b e d s f o r t h e ration, and p i c k e d t h e m u p on S a t u r d a y a f t e r n o o n . We w e r e h o p i n g for a c a l e n d a r at C h r i s t m a s , but S a m f a i l e d t o o . H e w a s l e f t h o l d i n g a big b l a c k t r e a c l e issue w h e n t h e price fell, and in this w e a k e n e d state w a s u n a b l e to w i t h s t a n d an u n e x p e c t e d arrival of p a r c e l s and t h e c o n s e q u e n t price f l u c t u a t i o n s . H e paid in f u l l , but f r o m his capital. T h e next T u e s d a y , w h e n I paid my usual visit he w a s out of b u s i n e s s .

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Credit entered into m a n y , p e r h a p s into m o s t , t r a n s a c t i o n s , in o n e f o r m or another. S a m paid in a d v a n c e as a rule f o r his p u r c h a s e s of f u t u r e d e l i v e r i e s of sugar, but m a n y b u y e r s a s k e d for credit, w h e t h e r the c o m m o d i t y w a s sold spot or f u t u r e . Naturally p r i c e s varied a c c o r d i n g to the t e r m s of sale. A treacle ration might b e a d v e r t i s e d for f o u r c i g a r e t t e s n o w or f i v e next w e e k . A n d in the f u t u r e m a r k e t " b r e a d n o w " w a s a v a s t l y d i f f e r e n t t h i n g f r o m " b r e a d T h u r s d a y " . B r e a d w a s issued on T h u r s d a y and M o n d a y , f o u r and t h r e e d a y s ' rations r e s p e c t i v e l y , and by W e d n e s d a y and S u n d a y night it had risen at least one c i g a r e t t e per r a t i o n , f r o m s e v e n to eight, by s u p p e r t i m e . O n e m a n a l w a y s s a v e d a ration to sell then at t h e p e a k price: his o f f e r of " b r e a d n o w " stood out on t h e b o a r d a m o n g a n u m b e r of " b r e a d M o n d a y s " f e t c h i n g o n e or t w o less, or not selling at a l l — a n d he a l w a y s s m o k e d on S u n d a y night.

The Cigarette Currency A l t h o u g h cigarettes as c u r r e n c y e x h i b i t e d c e r t a i n p e c u l i a r i t i e s , they p e r f o r m e d all the f u n c t i o n s of a m e t a l l i c c u r r e n c y as a unit of a c c o u n t , as a m e a s u r e of value and as a store of v a l u e , and s h a r e d most of its c h a r a c teristics. T h e y w e r e h o m o g e n e o u s , r e a s o n a b l y d u r a b l e , and of c o n v e n i e n t size f o r the smallest or, in p a c k e t s , for the largest t r a n s a c t i o n s . Incidentally, they c o u l d be clipped or s w e a t e d by r o l l i n g t h e m b e t w e e n the f i n g e r s so that t o b a c c o fell out. C i g a r e t t e s w e r e also s u b j e c t to the w o r k i n g of G r e s h a m ' s Law. C e r t a i n b r a n d s w e r e m o r e p o p u l a r than o t h e r s as s m o k e s , b u t for c u r r e n c y p u r p o s e s a c i g a r e t t e w a s a c i g a r e t t e . C o n s e q u e n t l y , b u y e r s u s e d the poorer q u a l i t i e s and the S h o p rarely s a w the m o r e p o p u l a r b r a n d s : c i g a r e t t e s s u c h as C h u r c h m a n ' s N o . 1 w e r e rarely used for t r a d i n g . At o n e t i m e c i g a r e t t e s h a n d - r o l l e d f r o m pipe t o b a c c o b e g a n to c i r c u l a t e . Pipe t o b a c c o w a s issued in lieu of c i g a r e t t e s by t h e Red C r o s s at a rate of 25 c i g a r e t t e s to t h e o u n c e and this rate w a s s t a n d a r d in e x c h a n g e s , but an o u n c e w o u l d p r o d u c e 30 h o m e - m a d e c i g a r e t t e s . Naturally, p e o p l e with m a c h i n e - m a d e c i g a r e t t e s b r o k e t h e m d o w n and re-rolled the t o b a c c o , and the real c i g a r e t t e virtually d i s a p p e a r e d f r o m the m a r k e t . H a n d - r o l l e d c i g a r e t t e s w e r e not h o m o g e n e o u s and p r i c e s c o u l d no l o n g e r be q u o t e d in t h e m w i t h s a f e t y : e a c h c i g a r e t t e w a s e x a m i n e d b e f o r e it w a s a c c e p t e d and thin o n e s w e r e r e j e c t e d , or extra d e m a n d e d as a m a k e w e i g h t . For a t i m e w e s u f f e r e d all the i n c o n v e n i e n c e s of a d e b a s e d c u r r e n c y . Machine-made cigarettes were always universally acceptable, both for w h a t they w o u l d buy and for t h e m s e l v e s . It w a s intrinsic v a l u e w h i c h g a v e rise to their principal d i s a d v a n t a g e as c u r r e n c y , a d i s a d v a n t a g e w h i c h exists, but to a far s m a l l e r e x t e n t , in the case of m e t a l l i c c u r r e n c y — t h a t is, a s t r o n g d e m a n d for n o n - m o n e t a r y p u r p o s e s . C o n s e q u e n t l y our e c o n o m y w a s r e p e a t e d l y s u b j e c t to d e f l a t i o n and to p e r i o d s of m o n e t a r y s t r i n g e n c y . W h i l e the R e d C r o s s issue of 5 0 or 25 cigarettes per m a n per w e e k c a m e in

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regularly, and w h i l e t h e r e w e r e fair s t o c k s h e l d , t h e c i g a r e t t e c u r r e n c y suited its p u r p o s e a d m i r a b l y . But w h e n the issue w a s i n t e r r u p t e d , s t o c k s s o o n ran out, p r i c e s fell, t r a d i n g d e c l i n e d in v o l u m e and b e c a m e i n c r e a s i n g l y a m a t t e r of barter. T h i s d e f l a t i o n a r y t e n d e n c y w a s p e r i o d i c a l l y o f f s e t by the s u d d e n i n j e c t i o n of n e w c u r r e n c y . P r i v a t e c i g a r e t t e p a r c e l s arrived in a t r i c k l e t h r o u g h o u t t h e year, but t h e b i g n u m b e r s c a m e in q u a r t e r l y w h e n the R e d C r o s s r e c e i v e d its a l l o c a t i o n of t r a n s p o r t . S e v e r a l h u n d r e d t h o u s a n d c i g a r e t t e s might arrive in t h e s p a c e of a f o r t n i g h t . P r i c e s s o a r e d , and then b e g a n to fall, s l o w l y at first but with i n c r e a s i n g rapidity as s t o c k s ran o u t , until t h e next big delivery. M o s t of our e c o n o m i c t r o u b l e s c o u l d b e a t t r i b u t e d to this f u n d a m e n t a l instability. Price M o v e m e n t s M a n y f a c t o r s a f f e c t e d p r i c e s , the s t r o n g e s t and m o s t n o t i c e a b l e b e i n g t h e p e r i o d i c a l c u r r e n c y i n f l a t i o n and d e f l a t i o n d e s c r i b e d in the last p a r a g r a p h s . T h e p e r i o d i c i t y of this price c y c l e d e p e n d e d on c i g a r e t t e and, to a f a r lesser extent, on f o o d d e l i v e r i e s . At one time in the early d a y s , b e f o r e any p r i v a t e p a r c e l s had arrived and w h e n there w e r e no i n d i v i d u a l stocks, the w e e k l y issue of c i g a r e t t e s and f o o d p a r c e l s o c c u r r e d on a M o n d a y . T h e n o n m o n e t a r y d e m a n d for c i g a r e t t e s w a s g r e a t , and less e l a s t i c than the d e m a n d for food: consequently prices fluctuated weekly, falling towards Sunday night and rising s h a r p l y on M o n d a y m o r n i n g . Later w h e n m a n y p e o p l e held r e s e r v e s , t h e w e e k l y issue had no such e f f e c t , b e i n g too small a p r o p o r t i o n of the total a v a i l a b l e . C r e d i t a l l o w e d p e o p l e with no r e s e r v e s to meet their n o n monetary d e m a n d over the weekend. T h e g e n e r a l price level w a s a f f e c t e d by o t h e r f a c t o r s . A n i n f l u x of n e w p r i s o n e r s , p r o v e r b i a l l y h u n g r y , raised it. H e a v y air raids in the v i c i n i t y of t h e c a m p p r o b a b l y i n c r e a s e d the n o n - m o n e t a r y d e m a n d for c i g a r e t t e s and a c c e n t u a t e d d e f l a t i o n . G o o d and bad w a r n e w s c e r t a i n l y had its e f f e c t , and the g e n e r a l w a v e s of o p t i m i s m and p e s s i m i s m w h i c h s w e p t the c a m p w e r e r e f l e c t e d in prices. B e f o r e b r e a k f a s t o n e m o r n i n g in M a r c h of this year, a r u m o u r of the arrival of p a r c e l s and c i g a r e t t e s w a s c i r c u l a t e d . Within ten m i n u t e s I sold a t r e a c l e ration, for f o u r c i g a r e t t e s ( h i t h e r t o o f f e r e d in vain for three), and m a n y s i m i l a r d e a l s w e n t t h r o u g h . B y 10 o ' c l o c k the r u m o u r w a s d e n i e d , and the treacle that d a y f o u n d n o m o r e b u y e r s e v e n at t w o c i g a r e t t e s . M o r e i n t e r e s t i n g than c h a n g e s in t h e g e n e r a l p r i c e level w e r e c h a n g e s in the price s t r u c t u r e . C h a n g e s in the s u p p l y of a c o m m o d i t y , in the G e r m a n ration s c a l e or in the m a k e - u p of R e d C r o s s p a r c e l s , w o u l d raise the price of one c o m m o d i t y relative to o t h e r s . T i n s of o a t m e a l , o n c e a rare and m u c h s o u g h t a f t e r luxury in the p a r c e l s , b e c a m e a c o m m o n p l a c e in 1943, and the p r i c e f e l l . In hot w e a t h e r t h e d e m a n d for c o c o a fell and that for s o a p r o s e . A n e w r e c i p e w o u l d be r e f l e c t e d in the price level: t h e d i s c o v e r y that r a i s i n s and s u g a r c o u l d b e t u r n e d into an a l c o h o l i c liquor of r e m a r k a b l e p o t e n c y

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reacted permanently on the dried fruit market. The invention of electric immersion heaters run off the power points made tea, a drop on the market in Italy, a certain seller in Germany. In August 1944, the supplies of parcels and cigarettes were both halved. Since both sides of the equation were changed in the same degree, changes in prices were not anticipated. But this was not the case: the non-monetary demand for cigarettes was less elastic than the demand for food, and food prices fell a little. More important however, were the changes in the price structure. German margarine and jam, hitherto valueless owing to adequate supplies of Canadian butter and marmalade, acquired a new value. Chocolate, popular and a certain seller, and sugar fell. Bread rose; several standing contracts of bread for cigarettes were broken, especially when the bread ration was reduced a few weeks later. In February 1945, the German soldier who drove the ration waggon was found to be willing to exchange loaves of bread at the rate of one loaf for a bar of chocolate. Those in the know began selling bread and buying chocolate, by then unsaleable in a period of serious deflation. Bread, at about 40, fell slightly; chocolate rose from 15; the supply of bread was not enough for the two commodities to reach parity, but the tendency was unmistakable. The substitution of German margarine for Canadian butter when parcels were halved naturally affected their relative values, margarine appreciating at the expense of butter. Similarly, two brands of dried milk, hitherto differing in quality and therefore in price by five cigarettes a tin, came together in price as the wider substitution of the cheaper raised its relative value. Enough has been cited to show that any change in conditions affected both the general price level and the price structure. It was this latter phenomenon which wrecked our planned economy. Paper Currency—Bully M a r k s Around D-Day, food and cigarettes were plentiful, business was brisk and the c a m p in an optimistic mood. Consequently the Entertainments Committee felt the moment opportune to launch a restaurant, where food and hot drinks were sold while a band and variety turns performed. Earlier experiments, both public and private, had pointed the way, and the scheme was a great success. Food was bought at market prices to provide the meals and the small profits were devoted to a reserve fund and used to bribe Germans to provide greasepaints and other necessities for the c a m p theatre. Originally meals were sold for cigarettes but this meant that the whole scheme was vulnerable to the periodic deflationary waves, and furthermore heavy smokers were unlikely to attend much. The whole success of the scheme depended on an adequate amount of food being offered for sale in the normal manner. To increase and facilitate trade, and to stimulate supplies and customers therefore, and secondarily to avoid the worst effects of deflation when it

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s h o u l d c o m e , a p a p e r c u r r e n c y w a s o r g a n i s e d by the R e s t a u r a n t and the S h o p . T h e S h o p b o u g h t f o o d on b e h a l f of t h e R e s t a u r a n t with p a p e r n o t e s and t h e p a p e r w a s a c c e p t e d e q u a l l y w i t h t h e c i g a r e t t e s in the R e s t a u r a n t or S h o p , and passed b a c k to the S h o p to p u r c h a s e m o r e f o o d . T h e S h o p acted as a b a n k of issue. T h e p a p e r m o n e y w a s b a c k e d 100 p e r c e n t by f o o d ; h e n c e its n a m e , the Bully M a r k . T h e B M k . w a s b a c k e d 100 percent by f o o d : t h e r e c o u l d be no o v e r - i s s u e s , as is p e r m i s s i b l e with a n o r m a l b a n k of issue, since the e v e n t u a l d i s p e r s a l of the c a m p and c o n s e q u e n t r e d e m p t i o n of all B M k . s w a s a n t i c i p a t e d in t h e near f u t u r e . O r i g i n a l l y o n e B M k . w a s w o r t h o n e c i g a r e t t e and for a short t i m e both c i r c u l a t e d f r e e l y inside and o u t s i d e the R e s t a u r a n t . P r i c e s w e r e q u o t e d in B M k . s and c i g a r e t t e s w i t h equal f r e e d o m — a n d for a short t i m e the B M k . s h o w e d s i g n s of r e p l a c i n g t h e c i g a r e t t e as c u r r e n c y . T h e B M k . w a s tied to f o o d , but not to c i g a r e t t e s : as it w a s issued against f o o d , say 4 5 f o r a tin of milk and so on, a n y r e d u c t i o n in the B M k . p r i c e s of f o o d w o u l d h a v e m e a n t that there w e r e u n b a c k e d B M k . s in c i r c u l a t i o n . But the price of b o t h f o o d and B M k . s could a n d did f l u c t u a t e w i t h the s u p p l y of c i g a r e t t e s . W h i l e the R e s t a u r a n t f l o u r i s h e d , the s c h e m e w a s a s u c c e s s : the R e s t a u r a n t b o u g h t heavily, all f o o d s w e r e s a l e a b l e and p r i c e s w e r e stable. In A u g u s t p a r c e l s and c i g a r e t t e s w e r e h a l v e d and t h e C a m p w a s b o m b e d . T h e R e s t a u r a n t c l o s e d for a short w h i l e and sales of f o o d b e c a m e d i f f i c u l t . Even w h e n the R e s t a u r a n t r e o p e n e d , the f o o d and c i g a r e t t e s h o r t a g e b e c a m e i n c r e a s i n g l y a c u t e and p e o p l e w e r e u n w i l l i n g to c o n v e r t such v a l u a b l e g o o d s into p a p e r and to h o l d t h e m f o r l u x u r i e s like s n a c k s and tea. L e s s of the right k i n d s of f o o d f o r the R e s t a u r a n t w e r e sold, and the S h o p b e c a m e g l u t t e d with dried f r u i t , c h o c o l a t e , sugar, etc. w h i c h the R e s t a u r a n t c o u l d not buy. T h e price level and the price s t r u c t u r e c h a n g e d . T h e B M k . fell to f o u r - f i f t h s of a c i g a r e t t e and e v e n t u a l l y f a r t h e r still, and it b e c a m e u n a c c e p t a b l e s a v e in the R e s t a u r a n t . T h e r e w a s a flight f r o m the B M k . , no longer c o n v e r t i b l e into c i g a r e t t e s or p o p u l a r f o o d s . T h e c i g a r e t t e r e - e s t a b l i s h e d itself. But the B M k . w a s s o u n d ! T h e R e s t a u r a n t c l o s e d in t h e N e w Year with a p r o g r e s s i v e f o o d s h o r t a g e and the long e v e n i n g s w i t h o u t lights d u e to i n t e n s i f i e d Allied air raids, and B M k . s c o u l d only be s p e n t in t h e C o f f e e B a r — r e l i c of the R e s t a u r a n t — o r on the f e w u n p o p u l a r f o o d s in t h e S h o p , the o w n e r s of w h i c h w e r e p r e p a r e d to a c c e p t t h e m . In the end all h o l d e r s of B M k . s w e r e paid in f u l l , in c u p s of c o f f e e or in p r u n e s . P e o p l e w h o had b o u g h t B M k . s f o r c i g a r e t t e s or v a l u a b l e j a m or b i s c u i t s in their h e y d a y w e r e a g g r i e v e d that they s h o u l d have stood the loss involved by their restricted c h o i c e , but they s u f f e r e d no actual loss of m a r k e t v a l u e . Price Fixing A l o n g with this s c h e m e c a m e a d e t e r m i n e d a t t e m p t at a p l a n n e d e c o n o m y , at p r i c e f i x i n g . T h e M e d i c a l O f f i c e r had l o n g b e e n a n x i o u s to c o n t r o l f o o d

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sales, for fear of some people selling too much, to the detriment of their health. The deflationary waves and their effects on prices were inconvenient to all and would be dangerous to the Restaurant which had to carry stocks. Furthermore, unless the BMk. was convertible into cigarettes at about par it had little chance of gaining confidence and of succeeding as a currency. As has been explained, the BMk. was tied to food but could not be tied to cigarettes, which fluctuated in value. Hence, while BMk. prices of food were fixed for all time, cigarette prices of food and BMk.s varied. The Shop, backed by the Senior Officer, was not in a position to enforce price control both inside and outside its walls. Hitherto a standard price had been fixed for food left for sale in the shop, and prices outside were roughly in conformity with this scale, which was recommended as a "guide" to sellers, but fluctuated a good deal around it. Sales in the Shop at recommended prices were apt to be slow though a good price might be obtained: sales outside could be made more quickly at lower prices. (If sales outside were to be at higher prices, goods were withdrawn from the Shop until the recommended price rose: but the recommended price was sluggish and could not follow the market closely by reason of its very purpose, which was stability.) The Exchange and Mart noticeboards came under the control of the Shop: advertisements which exceeded a 5 percent departure f r o m the recommended scale were liable to be crossed out by authority: unauthorised sales were discouraged by authority and also by public opinion, strongly in favour of a just and stable price. ( R e c o m m e n d e d prices were fixed partly from market data, partly on the advice of the M.O.) At first the recommended scale was a success: the Restaurant, a big buyer, kept prices stable around this level: opinion and the 5 percent tolerance helped. But when the price level fell with the August cuts and the price structure changed, the recommended scale was too rigid. Unchanged at first, as no deflation was expected, the scale was tardily lowered, but the prices of goods on the new scale remained in the same relation to one another, owing to the BMk., while on the market the price structure had changed. And the modifying influence of the Restaurant had gone. The scale was moved up and down several times, slowly following the inflationary and deflationary waves, but it was rarely adjusted to changes in the price structure. More and more advertisements were crossed off the board, and black market sales at unauthorised prices increased: eventually public opinion turned against the recommended scale and authority gave up the struggle. In the last few weeks, with unparalleled deflation, prices fell with alarming rapidity, no scales existed, and supply and demand, alone and unmellowed, determined prices. Public Opinion Public opinion on the subject of trading was vocal if confused and changeable, and generalisations as to its direction are difficult and dangerous. A tiny

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m i n o r i t y held that all t r a d i n g w a s u n d e s i r a b l e as it e n g e n d e r e d an u n s a v o u r y a t m o s p h e r e ; o c c a s i o n a l f r a u d s and s h a r p p r a c t i c e s w e r e cited as p r o o f . C e r t a i n f o r m s of t r a d i n g w e r e m o r e g e n e r a l l y c o n d e m n e d ; t r a d e w i t h the G e r m a n s w a s c r i t i c i s e d by m a n y . R e d C r o s s toilet articles, w h i c h w e r e in short s u p p l y and o n l y issued in c a s e s of actual n e e d , w e r e e x c l u d e d f r o m t r a d e by law and o p i n i o n w o r k i n g in u n s h a k a b l e h a r m o n y . At o n e t i m e , w h e n there had b e e n s e v e r a l c a s e s of m a l n u t r i t i o n r e p o r t e d a m o n g the m o r e d e v o t e d s m o k e r s , n o t r a d e in G e r m a n r a t i o n s w a s p e r m i t t e d , as t h e v i c t i m s b e c a m e an a d d i t i o n a l b u r d e n on the d e p l e t e d f o o d r e s e r v e s of t h e H o s p i t a l . But w h i l e c e r t a i n a c t i v i t i e s w e r e c o n d e m n e d as a n t i - s o c i a l , trade itself w a s p r a c t i s e d , and its utility a p p r e c i a t e d , by a l m o s t e v e r y o n e in the c a m p . M o r e i n t e r e s t i n g w a s o p i n i o n on m i d d l e m e n and prices. T a k e n as a w h o l e , o p i n i o n w a s hostile to the m i d d l e m a n . His f u n c t i o n , and his hard w o r k in b r i n g i n g b u y e r and seller t o g e t h e r , w e r e i g n o r e d ; p r o f i t s w e r e not r e g a r d e d as a r e w a r d f o r labour, but as the result of s h a r p p r a c t i c e s . D e s p i t e t h e f a c t that his v e r y e x i s t e n c e w a s proof to the contrary, t h e m i d d l e m a n w a s held to be r e d u n d a n t in view of t h e e x i s t e n c e of an o f f i c i a l S h o p and the E x c h a n g e and M a r t . A p p r e c i a t i o n only c a m e his w a y w h e n he w a s w i l l i n g to a d v a n c e the p r i c e of a s u g a r ration, or to b u y g o o d s spot and c a r r y t h e m against a f u t u r e s a l e . In these c a s e s the e l e m e n t of risk w a s o b v i o u s to all, and t h e c o n v e n i e n c e of the s e r v i c e w a s felt to merit s o m e r e w a r d . P a r t i c u l a r l y u n p o p u l a r w a s the m i d d l e m a n w i t h an e l e m e n t of m o n o p o l y , the m a n w h o c o n t a c t e d t h e ration w a g g o n driver, or the m a n w h o utilised his k n o w l e d g e of U r d u . A n d m i d d l e m e n as a g r o u p w e r e b l a m e d f o r r e d u c i n g prices. O p i n i o n n o t w i t h s t a n d i n g , m o s t p e o p l e dealt with a m i d d l e m a n , w h e t h e r c o n s c i o u s l y or u n c o n s c i o u s l y , at s o m e t i m e or a n o t h e r . T h e r e w a s a s t r o n g f e e l i n g that e v e r y t h i n g had its "just p r i c e " in c i g a r e t t e s . W h i l e t h e a s s e s s m e n t of the j u s t p r i c e , w h i c h i n c i d e n t a l l y varied b e t w e e n c a m p s , w a s i m p o s s i b l e of e x p l a n a t i o n , this price w a s n e v e r t h e l e s s pretty c l o s e l y k n o w n . It can best be d e f i n e d as the price usually f e t c h e d by an article in g o o d t i m e s w h e n c i g a r e t t e s w e r e p l e n t i f u l . T h e " j u s t p r i c e " c h a n g e d s l o w l y ; it w a s u n a f f e c t e d by s h o r t - t e r m v a r i a t i o n s in s u p p l y , and w h i l e o p i n i o n m i g h t b e r e s i g n e d to d e p a r t u r e s f r o m the " j u s t p r i c e " , a s t r o n g f e e l i n g of r e s e n t m e n t p e r s i s t e d . A m o r e s a t i s f a c t o r y d e f i n i t i o n of t h e "just p r i c e " is i m p o s s i b l e . E v e r y o n e k n e w w h a t it w a s , t h o u g h no o n e c o u l d e x p l a i n w h y it s h o u l d be so. A s s o o n as p r i c e s b e g a n to fall with a c i g a r e t t e s h o r t a g e , a c l a m o u r arose, p a r t i c u l a r l y a g a i n s t t h o s e w h o held r e s e r v e s and w h o b o u g h t at r e d u c e d prices. S e l l e r s at cut p r i c e s w e r e criticised and their a c t i v i t i e s r e f e r r e d to as t h e b l a c k m a r k e t . In e v e r y p e r i o d of dearth the e x p l o s i v e q u e s t i o n of " s h o u l d n o n - s m o k e r s r e c e i v e a c i g a r e t t e r a t i o n ? " w a s d i s c u s s e d to p r o f i t l e s s l e n g t h . U n f o r t u n a t e l y , it w a s the n o n - s m o k e r , or t h e light s m o k e r with his r e s e r v e s , a l o n g with t h e hated m i d d l e m a n , w h o w e a t h e r e d the s t o r m m o s t easily.

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T h e p o p u l a r i t y of the p r i c e - f i x i n g s c h e m e , and s u c h s u c c e s s as it e n j o y e d , w e r e u n d o u b t e d l y the result of this b o d y of o p i n i o n . O n several o c c a s i o n s the fall of p r i c e s w a s d e l a y e d by the general s u p p o r t g i v e n to the r e c o m m e n d e d scale. T h e onset of d e f l a t i o n w a s m a r k e d by a p e r i o d of sluggish trade; p r i c e s stayed u p but no o n e b o u g h t . T h e n p r i c e s fell on the b l a c k m a r k e t , and the v o l u m e of t r a d e r e v i v e d in that quarter. E v e n w h e n the r e c o m m e n d e d scale w a s r e v i s e d , t h e v o l u m e of trade in the S h o p w o u l d r e m a i n low. O p i n i o n w a s a l w a y s o v e r r u l e d by the hard f a c t s of t h e m a r k e t . C u r i o u s a r g u m e n t s w e r e a d v a n c e d to j u s t i f y price f i x i n g . T h e r e c o m m e n d e d p r i c e s w e r e in s o m e w a y related to the c a l o r i f i c v a l u e s of the f o o d s o f f e r e d : h e n c e s o m e w e r e o v e r v a l u e d and n e v e r sold at t h e s e p r i c e s . O n e a r g u m e n t ran as f o l l o w s : — n o t e v e r y o n e has p r i v a t e c i g a r e t t e p a r c e l s : thus, w h e n prices w e r e high and trade g o o d in the s u m m e r of 1944, o n l y t h e lucky rich could buy. T h i s w a s unfair to t h e m a n with f e w c i g a r e t t e s . W h e n p r i c e s fell in the f o l l o w i n g w i n t e r prices s h o u l d be p e g g e d high s o that the rich, w h o had e n j o y e d life in the s u m m e r , s h o u l d put m a n y c i g a r e t t e s into c i r c u l a t i o n . T h e fact that t h o s e w h o sold to the rich in the s u m m e r had also e n j o y e d life t h e n , and t h e fact that in the w i n t e r there w a s a l w a y s s o m e o n e w i l l i n g to sell at low prices, w e r e i g n o r e d . S u c h a r g u m e n t s w e r e hotly d e b a t e d each night a f t e r t h e a p p r o a c h of A l l i e d a i r c r a f t e x t i n g u i s h e d all lights at 8 PM. But p r i c e s m o v e d with the s u p p l y of c i g a r e t t e s , and r e f u s e d to stay f i x e d in a c c o r d a n c e with a theory of e t h i c s .

Conclusion T h e e c o n o m i c o r g a n i s a t i o n d e s c r i b e d w a s both e l a b o r a t e and s m o o t h w o r k i n g in the s u m m e r of 1944. T h e n c a m e the A u g u s t cuts and d e f l a t i o n . Prices fell, rallied with d e l i v e r i e s of c i g a r e t t e p a r c e l s in S e p t e m b e r and D e c e m b e r , and fell a g a i n . In J a n u a r y , 1945, s u p p l i e s of Red C r o s s c i g a r e t t e s ran out: and p r i c e s s l u m p e d still f u r t h e r : in F e b r u a r y the s u p p l i e s of f o o d parcels w e r e e x h a u s t e d and the d e p r e s s i o n b e c a m e a b l i z z a r d . F o o d , itself scarce, w a s a l m o s t g i v e n a w a y in o r d e r to m e e t the n o n - m o n e t a r y d e m a n d for cigarettes. L a u n d r i e s c e a s e d to o p e r a t e , or w o r k e d for p o u n d s or R M k . s : f o o d and c i g a r e t t e s sold f o r f a n c y p r i c e s in p o u n d s , hitherto u n h e a r d of. T h e restaurant w a s a m e m o r y and t h e B M k . a j o k e . T h e S h o p w a s e m p t y and the E x c h a n g e and Mart n o t i c e s w e r e full of u n a c c e p t e d o f f e r s f o r c i g a r e t t e s . Barter increased in v o l u m e , b e c o m i n g a larger p r o p o r t i o n of a s m a l l e r v o l u m e of trade. T h i s , the first s e r i o u s and p r o l o n g e d f o o d s h o r t a g e in the w r i t e r ' s e x p e r i e n c e , c a u s e d the price s t r u c t u r e to c h a n g e a g a i n , partly b e c a u s e G e r m a n r a t i o n s w e r e not easily d i v i s i b l e . A m a r g a r i n e ration gradually s a n k in v a l u e until it e x c h a n g e d directly for a t r e a c l e ration. Sugar s l u m p e d sadly. O n l y b r e a d retained its v a l u e . Several t h o u s a n d cigarettes, the capital of the S h o p , w e r e d i s t r i b u t e d w i t h o u t any n o t i c e a b l e e f f e c t . A f e w f r a c t i o n a l parcel and c i g a r e t t e issues, such as o n e - s i x t h of a

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parcel and twelve cigarettes each, led to momentary price recoveries and feverish trade, especially when they coincided with good news from the Western Front, but the general position remained unaltered. By April, 1945, chaos had replaced order in the economic sphere: sales were difficult, prices lacked stability. Economics has been defined as the science of distributing limited means among unlimited and competing ends. On 12th April, with the arrival of elements of the 30th US Infantry Division, the ushering in of an age of plenty demonstrated the hypothesis that with infinite means economic organisation and activity would be redundant, as every want could be satisfied without effort.

CURRENCY AND CREDIT Radford's account of the use of cigarettes as currency in a prisoner of w a r c a m p s u g g e s t s that w h e r e goods are scarce a n d a m e a s u r e and store of value d o not exist, people will make one. They will invent money. Even u n d e r conditions as restricted as a prison camp, w h e r e one w o u l d expect barter alone to be the m a i n m e a n s of exchange, the flexibility, the sheer usefulness of a unit of account will make some form of m o n e y indispensable. The w o r l d political economy is not a prisoner of w a r c a m p . In the "outside w o r l d , " as Radford points out, there is production. Unlike prisoners, most people in the world do not h a v e their basic needs met for them, either. Trade is a m u c h more c o m p r e h e n s i v e activity. The role that m o n e y plays is the same, however. Hence the intriguing character of the story Radford tells. Though the role money plays in the world market m a y be basically the same, it has been growing in importance. So m u c h so that it is argued that finance has been "decoupled" now f r o m production to become a p o w e r in itself; an "autocrat," in Cox's (1992) w o r d s , that rules over rather than moving within the world political economy. What is the substance of such a claim? W h a t is the role that money plays in the capitalist world market? The c o n t e m p o r a r y f o u n d a t i o n s for the international flow of finance capital were laid at Bretton Woods in 1944, in the concluding stages of World War II. Since then capitalists have built a vast superstructure of global credit, with corporate and n o n c o r p o r a t e private capital being m o v e d f r o m one country to another, in everincreasing a m o u n t s and to more and m o r e countries w o r l d w i d e . International financial flows via corporations and banks—the main

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transmission b e l t s — n o w tower over those of trade. So m a r k e d has been this d e v e l o p m e n t that Gilpin (1987:119) calls it a "virtual revolution" in w o r l d affairs. Consider, for e x a m p l e , FDI f l o w s . In the first half of the 1980s less than o n e - t h i r d of the total l o n g - t e r m capital f r o m private sources ( e x c l u d i n g n o n g u a r a n t e e d credit) that w a s m o v e d into ninety-three c a p i t a l - i m p o r t i n g c o u n t r i e s w a s m a d e up of FDI. B y the second half of the 1980s, however, it w a s three-quarters (Neyer 1994:6). Short-term capital flows have also shown m a r k e d increases. The global returns from portfolio i n v e s t m e n t s (stocks a n d shares), for example, were ten times higher in 1992 than they w e r e at the end of the 1970s. The increase was most dramatic in the area of foreign exchange, that is, currency transactions. To quote N e y e r (1994:12): Beginning with the formation of the euro- or offshore m a r k e t s in the late sixties, continuing with the growing volatility of e x c h a n g e rates in the seventies and leading to the d e r e g u l a t i o n s of the national stockmarkets in the U.S., the U.K., and later in J a p a n and the rest of Europe, the international trade in currencies is g r o w i n g . . . ever faster. . . . The daily turnover at the ten largest stock markets is n o w e s t i m a t e d to a m o u n t to U S $ 1 , 0 0 0 billion. This is . . . twice the total of all the currency reserves of the O E C D countries.

C o m p a r e this w i t h w o r l d w i d e e x p o r t s , w h i c h on a daily basis amount to less than U.S.$10 billion, or 1 percent of foreign exchange transactions. FDI is increasingly short-term, and increasingly self-referential. So m u c h so that the s p e c u l a t i v e play on financial asset prices has displaced the raising of capital as the chief task of the great financial houses. In a d d i t i o n , the use of c o m p u t e r s , plus c o n t e m p o r a r y t e l e c o m m u n i c a t i o n s , has created a h y p e r s p a c e for m o n e y that has m a d e a h y p e r s p a c e for capitalism, too. B e c a u s e of the speculative nature of so m a n y F D I t r a n s a c t i o n s today, derivatives have proliferated. Derivatives as a term is used to describe a range of financial instruments—futures, options, and the like—that are valued in terms of (derived from) other assets, such as equities or b o n d s . T h e y are useful as i n s u r a n c e . T h e y p r o v i d e the c h a n c e to h e d g e bets, such as the risks i n c u r r e d in s p e c u l a t i n g on c h a n g e s in the relative value of different currencies. As the w o r l d m a r k e t grows, c u r r e n c y speculation has g r o w n with it, and so has the use of derivatives. The n u m b e r of contracts in derivatives doubled, for e x a m p l e , b e t w e e n 1988 and 1992, by w h i c h time they were r u n n i n g at the rate of 143 contracts a s e c o n d ( N e y e r 1994:13). It is

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n o w at the p o i n t w h e r e d e r i v a t i v e s h a v e a life of their o w n , a n d they are able to drive the system in o p p o r t u n i s t i c ways. In practice they are a k i n d of g a m b l i n g , a n d as such they m a g nify m a r k e t u n c e r t a i n t y b y m u l t i p l y i n g the (debt-based) b u y i n g capacity (leverage) of i n s u r a n c e f u n d s (hedge f u n d s ) a n d other speculative financial i n s t r u m e n t s . The b u s i n e s s is d o m i n a t e d b y s o m e of the w o r l d ' s biggest b a n k s . T h e r e is risk in that t h e f a i l u r e of o n e d e r i v a t i v e s f i r m c o u l d cause others to d e f a u l t in a cascade, t h r e a t e n i n g in t u r n the integrity of the w h o l e w o r l d political economy. D e r i v a t i v e s tie b a n k s a n d o t h e r financial h o u s e s t o g e t h e r in c o m p l e x global w e b s that can quickly t r a n s m i t a local crisis to the system as a w h o l e . This risk is well d e f i n e d b y now, h o w e v e r , a n d m a j o r t r a d e r s h a v e l e a r n e d to m a n a g e it as p a r t of their e v e r y d a y business. In classical liberal p a r l a n c e , this k i n d of f r e e m a r k e t b e h a v i o r can only be beneficial. As s h o r t - t e r m m o n e y is sent f r o m c o u n t r i e s of low s h o r t - t e r m r e t u r n s to those w h e r e h i g h e r short-term r e t u r n s are available, it is s u p p o s e d to balance the different national rates of interest. This is s u p p o s e d to stabilize the m a r k e t system as a w h o l e . E v e r y o n e ostensibly b e n e f i t s , albeit s o m e m o r e t h a n o t h e r s , a n d since p r o s p e r o u s p e o p l e t e n d to prefer peace, the o u t c o m e is said to p r o m o t e h a r m o n y as well as opulence. W h a t a b o u t currency changes that halve the v a l u e of a f a r m e r ' s crop before he or she h a r v e s t s it, however, or that drive an e x p o r t e r out of business? W h a t a b o u t the takeovers, e n g i n e e r e d for financial gain alone, that cost w o r k e r s jobs? W h a t a b o u t the y o u n g d e r i v a tives trader, c a u g h t short in a g a m b l e on the stability of the Tokyo stock m a r k e t , w h o a t t e m p t s to b u y e n o u g h o p t i o n s to force that m a r k e t u p , a n d w h e n the m a r k e t falls i n s t e a d , m a n a g e s to b r i n g d o w n w i t h it o n e of B r i t a i n ' s oldest b a n k s (Baring's)? If w h a t gets d e c i d e d in the interests of s h o r t - t e r m p r o f i t in the office blocks of the w o r l d ' s financial centers, in other w o r d s , has such s u d d e n , u n p r e d i c t a b l e , a n d u n a v o i d a b l e effects (Strange 1986), in w h a t w a y can w e say that the system w o r k s , and for w h o m ? The m o r e e x t r e m e liberals w o u l d m a i n t a i n that m a r k e t " p u n i s h m e n t " is the price w e p a y for the s u p e r i o r benefits of h a v i n g the m a r k e t as a w h o l e . F i n a n c e capitalists are m o s t l y liberals of this sort. They are not c o n c e r n e d w i t h the concrete n e e d s of k n o w n people b u t w i t h abstract calculations of profit a n d loss, a n d this, they believe, is as it s h o u l d be. A f t e r all, it is p r o f i t that m a k e s s u c h a p r o d u c t i v e s y s t e m possible, a n d it is this s y s t e m that, in classical liberal terms, p r o v i d e s " m o s t of the Western proletariat and m o s t of the millions of the d e v e l o p i n g w o r l d " w i t h their very existence. It is this system, and the socially heedless, self-maximizing, s h o r t - t e r m ,

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p r o f i t e e r i n g s t r a t e g i e s u s e d b y t h e " a d v a n c e d " m e m b e r s of it, that c r e a t e s t h e o p p o r t u n i t i e s for p o o r p e o p l e to s u r v i v e ( H a y e k 1 9 8 8 : 1 3 1 ) . Take a w a y the r e w a r d s for e n t r e p r e n e u r i a l o p p o r t u n i s m , c l a s s i c a l l i b e r a l s say, a n d the s y s t e m w o u l d c o l l a p s e . T h e r e w o u l d b e n o i n c e n t i v e to p r o d u c e , a n d the p o o r w o u l d s u f f e r first. A n d a n y w a y , h o w else are w e to m o t i v a t e the w o r l d ' s m a r k e t e e r s ? H o w e l s e are w e to e l i m i n a t e t h e w e a k a n d t h e i n e f f i c i e n t ? H o w e l s e to m a k e for p r o s p e r i t y a n d p e a c e , u n l e s s b y p r o m o t i n g t h e p u r s u i t of p r o f i t , a c c e p t i n g the p a i n of " a d j u s t m e n t , " a n d a p p r e c i a t i n g t h e consequences? For empirical support liberals like these need turn no further t h a n t h e U n i t e d N a t i o n s C h i l d r e n ' s F u n d ' s ( U N I C E F ) " p r o g r e s s of n a t i o n s " report. In this r e p o r t the D e p u t y E x e c u t i v e D i r e c t o r n o t e s h o w , o v e r the last fifty y e a r s , a v e r a g e life e x p e c t a n c y in the d e v e l o p i n g n a t i o n s h a s r i s e n f r o m f o r t y to o v e r sixty y e a r s , c h i l d d e a t h r a t e s h a v e fallen f r o m three h u n d r e d to o n e h u n d r e d p e r t h o u s a n d b i r t h s , a n d a d u l t l i t e r a c y r a t e s h a v e d o u b l e d to r u n n o w at 7 0 % ( U N I C E F 1995a). T h e n there is U N I C E F ' s " s t a t e of the w o r l d ' s child r e n " r e p o r t , w h i c h d o c u m e n t s a g l o b a l r e d u c t i o n in m a l n u t r i t i o n , m a i n t e n a n c e or t h e i n c r e a s e of i m m u n i z a t i o n l e v e l s , s u c c e s s in the w a r a g a i n s t polio, e l i m i n a t i o n of i o d i n e a n d v i t a m i n A d e f i c i e n c i e s , a n d p r o g r e s s in p r i m a r y e d u c a t i o n ( U N I C E F 1995b). M o r e g e n e r a l l y t h e y h a v e the W o r l d B a n k ' s r e p o r t for 1 9 9 4 on the " s o c i a l i n d i c a t o r s of d e v e l o p m e n t . " T h e a g g r e g a t e statistics u s e d there f r o m 192 c o u n t r i e s s u g g e s t that the global picture is one of i m p r o v e m e n t . I n d e e d , the W o r l d B a n k c o n c l u d e s that t r e n d s o v e r the last t w e n t y y e a r s d e s c r i b i n g life e x p e c t a n c y and g r o s s national p r o d u c t ( G N P ) p e r c a p i t a are g o i n g up, w h i l e t h o s e d e s c r i b i n g i n f a n t m o r t a l i t y and the p e r c e n t a g e of p o o r in the w o r l d are g o i n g d o w n . At the s a m e t i m e , h o w e v e r , b y the W o r l d B a n k ' s o w n r e c k o n i n g , t h e a c t u a l n u m b e r of t h e p o o r is c o n t i n u i n g to i n c r e a s e . An e s t i m a t e d 1.1 billion p e o p l e in the w o r l d c u r r e n t l y s u b s i s t on the e q u i v alent of U . S . $ 1 a day, a n d this n u m b e r , t h e y say, g r o w s daily (World B a n k 1994b). In the last 10 years, in particular, falling c o m m o d i t y prices, rising military expenditures, poor returns on investment, the debt crisis, and structural adjustment p r o g r a m m e s [austerity measures required by the IMF in exchange for debt relief], have reduced the real incomes of approximately 800 million people in some 40 developing countries. . . . For many millions of families in the poorest villages and urban slums of the developing world, the daily consequences of these economic forces over which they have no control, is that they are unable to put enough food on the table, unable to maintain a home fit to live in, unable to dress and present

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t h e m s e l v e s decently, unable to protect their health and strength, unable to keep their children in school (UNICEF 1995b:2).

The World Bank's and other reports, therefore, contain both good and bad news. They can be used to justify the status quo. They p r o m p t cause for concern as well. It is because of the concern that reformist liberals w o r r y w h e t h e r global capital flows h a v e not become too big, too fast, and too d e t a c h e d to be sustained w i t h o u t d o i n g significant d a m a g e to the social consensus that m a k e s societies possible and to the natural environment as well. They recomm e n d regulation. Can marketeers afford not to have controls, they say, if the marketeering system is to survive? Because of their o w n experience with the d o w n s i d e of the global market system, for example, the heads of g o v e r n m e n t s at an EU summit meeting in 1994 decided that the u n e m p l o y m e n t that accompanies free marketeering had become too problematic an issue for European finance ministers to solve alone. They began looking at revising tax policies to reward firms for employing people and to p u n i s h them for d o i n g e n v i r o n m e n t a l d a m a g e . At the same time, and for the same reason, they c o m m e n d e d EU m o v e s to oblige multinational companies to consult EU staff on strategic corporate decisions. Classical Marxists, like classical liberals, a p p r o v e of the free m o v e m e n t of capital, t h o u g h for very different reasons. The sooner the class conflicts such m o v e m e n t s create t u r n revolutionary, they say, the sooner socialism will e n s u e and conditions will i m p r o v e . Since "neither the global e c o n o m y . . . nor g o v e r n m e n t , " Sweezy (1994:11) declares, "can deliver w h a t the great majority of the people in the w o r l d n e e d — d e c e n t jobs, security, livelihood—it seems clear that they have no choice b u t to challenge the structure itself." And he is confident that they will—"eventually." Reformist Marxists, long witness to the proven capacity of capitalists to p e r p e t u a t e their system, a n d less sure as a consequence that conflict will t u r n revolutionary, w a n t to mitigate the worst of its exploitative effects. They decry international capital flows that, directly or indirectly, establish more w a g e labor relationships (like FDI, or international bank lending to industrial capitalists) because these flows create more exploited w o r k e r s , more alienation, more capitalism. They also decry the success of those financial speculators who, in circulating fictitious capital in the form of derivatives, for example, f u r t h e r e m p o w e r the global bourgeoisie. Members of diverse social m o v e m e n t s note the differential gender effects of FDI, for example, or the relative i m p o v e r i s h m e n t of i n d i g e n o u s people, or the negative effects on the e n v i r o n m e n t , or

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the erosion of s p i r i t u a l a w a r e n e s s b r o u g h t a b o u t by the cons u m e r i s m a n d the m a t e r i a l i s m that FDI h e l p s foster. They note the relative absence of w o m e n or i n d i g e n o u s p e o p l e or e n v i r o n m e n t a l ists or the d e v o u t a m o n g those m a k i n g these i n v e s t m e n t s , and the relative p r e s e n c e of m e n , m e m b e r s of h e g e m o n i c c u l t u r e s , p l a n e t poisoners, and secularists. Money I've talked a b o v e as if w e all k n o w w h a t " f i n a n c e " m e a n s . O n e of the b e n e f i t s of r e a d i n g R a d f o r d , h o w e v e r , is the w a y w e are rem i n d e d by w h a t he h a s to say of h o w m u c h w e take for g r a n t e d w h e n w e u s e m o n e y as f i n a n c e . We take m o n e y for g r a n t e d in a cash economy. W h a t is it, however, w h a t does it do, a n d h o w does it do it? The g o o d s a n d services that p r o d u c e r s m a k e a n d p e r f o r m are t r a d e d w h e r e v e r a m a r k e t is f o u n d for t h e m . This t r a d i n g can be d o n e in b a r t e r f o r m , as m o s t w a s until recent times. Or it can be d o n e u s i n g i n d e p e n d e n t u n i t s of v a l u e against w h i c h the w o r t h of the g o o d s and services to be e x c h a n g e d can be m e a s u r e d . I n d e p e n d e n t units of v a l u e can be u s e d to store value, too. This is money. It can h a v e intrinsic w o r t h of its o w n (like gold) or it can h a v e s y m bolic v a l u e only (like p a p e r notes). It d o e s n ' t matter, as long as it is durable, portable, and its unit v a l u e is agreed. While b a r t e r t r a d e is still c o m m o n , m o n e t i z e d t r a d e is said to be m o r e efficient (in the liberal sense of a l l o w i n g the o p t i m a l combination of the factors of p r o d u c t i o n ) . M o n e t i z e d t r a d e is also said to be m o r e effective (in the s a m e liberal vein—it s u p p o s e d l y gives p e o ple m o r e choices, that is, a w i d e r selection of g o o d s a n d services a n d the c h a n c e to c o n s u m e these t h i n g s n o w or later). M o r e critically, m o n e t i z e d t r a d e is said to concentrate p o w e r in the h a n d s of a small n u m b e r of capitalist a c c u m u l a t o r s , w i t h o u t d e m o c r a t i c controls over w h a t they choose to do. P r o d u c t i o n a n d t r a d e s y s t e m s that use an i n d e p e n d e n t m e a s u r e and store of value, like money, can b e infinitely m o r e complex than ones that d o n ' t . Strange (1988:89-90) likens m o n e y to the blood s u p ply of the h u m a n body, w h i c h h a s to b e k e p t s t a u n c h , s o u n d , a n d w i t h i n specific limits, b u t w h i c h f l o w s t h r o u g h e v e r y p a r t of the w h o l e b e i n g a n d m a k e s it possible for us to s u r v i v e a n d thrive. So w i d e s p r e a d has the use of m o n e y b e c o m e that one is t e m p t e d to ass u m e that if w e d i d n ' t h a v e it, like R a d f o r d ' s p r i s o n e r s , w e ' d soon h a v e to i n v e n t it, as i n d e e d p e o p l e h a v e d o n e at m a n y d i f f e r e n t times, in m a n y d i f f e r e n t places, a n d in many, o f t e n q u i t e striking

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w a y s . There are alternatives to money, of course, t h o u g h i m a g i n i n g a w o r l d that f u n c t i o n s in t e r m s of reciprocal social obligations, for example, or spiritual t r a n s c e n d e n c e , is m o r e the stuff of science fiction or p r a y e r than international political economy. P r o d u c t i o n or t r a d e u s i n g m o n e y is not as c o m m o n as p r o d u c tion or t r a d e per se, b u t it is as ancient as the o r g a n i z e d c o n d u c t of t h e m both. W h e t h e r it be great stone w h e e l s as on the island of Yap, l o n g strings of feathers as in the n o r t h e r n Solomons, coins, notes, or n u m b e r s in c o m p u t e r s , it's all money. It's all a m a t t e r of n o m i n a t i n g relative w o r t h , m o v i n g its m e a s u r e f r o m place to place a n d f r o m the past to the f u t u r e , in reified f o r m s . Early f o r m s of m o n e y did h a v e intrinsic w o r t h — " m e r c h a n d i s e " money, A m i n (1993:6) calls it. T h e y w e r e items v a l u e d in a n d of t h e m s e l v e s , o f t e n for their aesthetic a p p e a l . Strings of f e a t h e r a n d shell, or pieces of silver a n d gold, w e r e c o n s i d e r e d d e c o r a t i v e a n d w e r e desired for their visual or tactile qualities alone. "In the gloom the gold g a t h e r s the light against it," says one of the earliest English p o e m s , c a p t u r i n g in a single line a clear sense of the p e r e n n i a l a p peal of this m u c h p r i z e d metal. M o n e y n e e d h a v e n o specific u s e or a p p e a l in itself, h o w e v e r , to f u n c t i o n as a m e d i u m of exchange. It is, after all, only a r e p r e s e n t a tion of v a l u e or w o r t h . I n d e e d , this p r o c e s s of r e p r e s e n t a t i o n h a s b e c o m e progressively m o r e a t t e n u a t e d over time, so that notes a n d coins n e e d only n o w b e strips of plastic or alloy slugs, or g l o w i n g figures on a c o m p u t e r screen, to p e r f o r m their symbolic task. It h a s b e e n n o t e d a l r e a d y t h a t m o n e y f l o w s n o w d w a r f t r a d e flows, a n d that m o n e y f l o w s h a v e b e c o m e a m a j o r f e a t u r e of the international political economy. Liberals see money, a n d the " i n t e r n a tional m o n e t a r y system," as s e p a r a t e f r o m the social o r d e r of w h i c h it is a p a r t . M o n e y is u s e d in a n " e c o n o m y " s e p a r a t e f r o m , a n d at m o s t r e s t i n g u p o n , a p a r t i c u l a r "political o r d e r " (Gilpin 1987:119). Marxists, b y c o n t r a s t , d o not s e p a r a t e " e c o n o m y " a n d " p o l i t y " in this way, a n d as a c o n s e q u e n c e , m o n e y for t h e m has a m u c h m o r e p r o f o u n d social m e a n i n g . Their talk of "capital," for e x a m p l e , is of m o n i e s that m a k e f o r " w a g e labor r e l a t i o n s h i p ^ ] , " classes (Mclntyre 1992:236), a n d ruling-class p o w e r . In d i s c u s s i n g m o n e y flows, in o t h e r w o r d s , liberals d e t a c h "econ o m i c s " a n d "politics" f r o m the social context in w h i c h such p r a c tices take place. This social context they detach in t u r n from the m a terial m e a n s u s e d to m a k e the g o o d s a n d services that p e o p l e use. H a v i n g s e p a r a t e d e c o n o m i c s f r o m politics, liberals p o s i t specific " e c o n o m i c " a r r a n g e m e n t s (such as m o n e t a r y ones) that can be pres u m e d in t u r n to " r e s t " — t o use G i l p i n ' s w o r d — o n p a r t i c u l a r political a r r a n g e m e n t s .

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For liberals, the key issue is the extent to which m o n e y flows make for human freedom. Whatever the virtues of this analytic language, its great vice is how it accounts for money flows in terms of power structures that only have "states" or " f i r m s " in them; that have "the United States" doing this and " M i t s u b i s h i " doing that as reified, unitary entities. As a consequence liberals miss the w a y m o n e y m a p s material power in terms of a world society " c o n d i t i o n e d " or " d e t e r m i n e d " (the verbs do matter) by world capitalism; where " e c o n o m i c s " and " p o l i t i c s " only have m e a n i n g as aspects of such a society; where capitalists use m o n e y flows to defend and extend capitalism (and the social relationships definitive of it); and where state makers participate, wittingly or unwittingly, in this d e f e n s i v e / e x t e n s i v e process. They miss, in a word, the way "international financial markets and institutions stand at the center of c o n t e m p o r a r y class restructuring" (Mclntyre 1992:243). They miss what Marxists see first, that is, the extent to which money makes, or fails to make, for social equality and well-being. Credit A thousand years ago there were no patterns of human behavior we can categorize as a world political economy. The most prominent productive systems were the great imperial jurisdictions of Near, South, and Far East Asia. By the sixteenth century, however, the Ottoman and Indian empires were in decline and the M a n c h u s were turning away from the world. Meanwhile, European explorers were looking for new trade routes for European merchants, and as it happened, they were the first drops in a subsequent deluge. A movie film of what E u o r o p e a n s were to build over the next five hundred years, taken from space and speeded up, would show roads and railways, power lines and telephone lines, sprouting prodigiously. It would show enormous cities, assembled at extraordinary speed. Forests and fish, birds and beasts would be erased only to reappear, as different species, in singular profusion. The world political economy described in genesis above would not have been possible without m o n e y as a way of storing value. What people value can be stored in the form of land, tools, skills, but the most convenient such store is a symbolic one—money. All these stores of value are called capital. They can all be loaned on the understanding that the loan will be returned, and a loan like this creates credit. Since "every materialist society . . . has to have a system for creating credit," and because money is so durable, portable,

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and flexible, this is one of the main things m o n e y is used to do (Strange 1988:89). Money, in other w o r d s , is the most p o p u l a r w a y of m a k i n g loans, that is, of creating credit. M o n e y is pooled and loaned in institutions called banks. Bankers store the m o n e y that people w a n t to save, and entrepreneurs rent this—plus money that does not materially exist—to f u n d their commercial projects, p a y i n g rent for the loan from their profits. This sustains banks and bankers as businesses, m a k i n g them in turn major players in any complex political economy. The portability of money is most evident where it has been rendered in electronic form inside computers, as symbols, that is, of what is already a symbol. This is "pure" money as it were; number without form. It only has a function, and as such can be used, in w a y s completely detached from production or trade, to facilitate its own production and supply. By placing these symbols of a symbol in strategic relationships, what is more, highly abstract profits (and highly abstract losses) can be made—practically instantaneously—half a world away from whoever is doing the relating. These profits and losses are respected because of what they represent. N o matter how abstract they are, they can be d o w n l o a d e d from their glowing screens into named accounts. The figures in these accounts can be converted into concrete national currencies, or in the case of losses, into legitimate claims for currency. The currency in these accounts can then be withd r a w n as hard cash and used to buy goods and services. The losses can be converted into debt, default, bankruptcy, unemployment, and if serious enough, into the collapse of the system as a whole. H o w are we to u n d e r s t a n d stored v a l u e and credit creation w h e n it takes such an a t t e n u a t e d form? W h a t does m o n e y m e a n w h e n it is used in such an abstracted way? In mercantilist terms, capital as portable as money, and more particularly, as cybermoney in c o m p u t e r s , enhances state vulnerability. Any state vulnerability, to any kind of mercantilist, will be intolerable. Mercantilism as a concept w a s coined to account for the defensive w a y in which European state m a k e r s of the seventeenth and eighteenth centuries sought to consolidate their sovereign aut o n o m y by building u p trade surpluses and storing what they had e a r n e d in precious metals of m a x i m u m intrinsic value. (This is no different f r o m people w i t h o u t debts w h o prefer others to be beholden to them and w h o put their savings in bullion u n d e r the bed.) The mercantilists of today m a y not believe any longer in h o a r d i n g gold, but they do retain a deep suspicion of money and credit that isn't nationally controllable and controlled. Those w h o have historically a r g u e d against mercantilism have tried to show how countries that hoard precious metals and that r u n

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a balance-of-trade surplus as a way of not depleting their hoard (exporting more, that is, than they import) act in self-defeating ways. Adam Smith's close friend, David Hume, was one such antagonist. In his discussion "Of Money," for example, he declared "the absolute quantity of . . . precious metals" to be a matter of "great indifference." "There are," he said, "only two circumstances of any importance [with regard to precious metals], namely, their gradual increase, and their thorough . . . circulation" (Hume 1955:46). Hume's liberalism was also apparent in his trade theory, where, as in his analysis "Of the Jealousy of Trade," he argued that interstate commercial rivalries were understandable but wrong. We "daily adopt," he said, in e v e r y art, the inventions and i m p r o v e m e n t s of o u r neighbours. The c o m m o d i t y is first i m p o r t e d from abroad, to our great discontent, while w e imagine that it drains us of o u r money. A f t e r w a r d s , the art itself is g r a d u a l l y i m p o r t e d , to o u r visible a d v a n t a g e . Yet w e continue still to repine, that one n e i g h b o u r should possess any art, industry, and invention; forgetting that, had they not first instructed us, w e should h a v e been at present barbarians.

Thus did he, "as a BRITISH subject," pray for the "flourishing commerce" of " G E R M A N Y , SPAIN, ITALY, and even F R A N C E " (Hume 1955: 78-79). State makers persuaded of the benefits of liberal doctrine aren't about to surrender all control over the material practices that make them powerful, however. So those who endorse the idea of free trade still keep control of money and credit. Indeed, they keep too much control of it, the more extremist liberals say. Because state makers can print notes and mint coin, they can physically make more money and extend more credit than there are goods and services for the buying. Too much money chasing too few goods is inflation, and this has, indeed, been the general effect, liberals say, of having state makers controlling money supply. It's too tempting to print and mint what you want when it's your main medium of exchange and your main store of value. It's too tempting, for example, to "money" your way out of debt. For this reason liberals have historically argued for limiting governmental controls over market activity, including the monetary flows used to facilitate market activity. Liberals, and particularly classical liberals, prefer money policies that operate with minimal governmental intervention and with maximal regard to supply and demand. The laissez-faire system of the nineteenth century was based on gold. Gold was bought and sold freely, though the main national banks did so at a set price in sterling. This was supposed to make for stable national currencies and steady flows of money that, in the

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absence of a w o r l d b a n k or a w o r l d g o v e r n m e n t , allowed m a r k e t e e r s to g e n e r a t e a n d utilize credit in a balanced way. In practice it did d o this, b u t as Marxists h a v e long p o i n t e d out, it did so only by skewing the s y s t e m as a w h o l e . The state m a k e r s of rich c o u n t r i e s like Great Britain were able to rely on their capitalist m a r k e t e e r s to w o r k the system to the national a d v a n t a g e . As the l e a d i n g imperialists of the day, British state m a k e r s a n d w e a l t h m a k e r s w e r e able to e n s u r e that " f r e e t r a d e " took place in the context of m o n o p o l i s t i c m o n e y m a r k e t s , controlled in t u r n b y the City of L o n d o n . So w h e n t h e r e w e r e problems, then as now, "the p o o r e r n a t i o n s a n d poorer classes w i t h i n societies . . . p a i d the price of a d j u s t m e n t t h r o u g h higher rates of u n e m p l o y m e n t and decreased w e l f a r e " (Gilpin 1987:126). A g o o d deal of h u m a n s u f f e r i n g is s u m m a r i z e d by the concept of a "price of a d j u s t m e n t . " Stable d e a l i n g s f o r capitalists w e r e possible, it seems, b u t only b e c a u s e the m a s s e s d i d n ' t k n o w their Marx, a n d accepted as inevitable or o r d a i n e d their collective d e g r a d a t i o n . W i t h the a d v e n t of World War I the global m o n e t a r y s y s t e m , s u c h as it w a s , fell a p a r t . A f t e r that w a r w a s o v e r an a t t e m p t w a s m a d e to rebuild a system b a s e d on g o l d - b a c k e d currencies like sterling, b u t Britain w a s in debt and decline. The U n i t e d States w a s not yet i n t e r e s t e d in r u n n i n g the w o r l d capitalist s y s t e m b y itself. So state m a k e r s r e v e r t e d to mercantilism. The British h a d their sterling bloc. The U n i t e d States m a d e a dollar bloc. The French m a d e a gold one. M e a n w h i l e , the G e r m a n , Italian, a n d J a p a n e s e state m a k e r s w e n t f o r " a u t a r k i c e m p i r e s , " that is, for self-sufficiency by imperial means. Another war ensued. Debt The d e c a d e s of h i g h g r o w t h in f i n a n c e capital f l o w s that f o l l o w e d World War II w e r e also d e c a d e s of g r o w i n g d e b t . By the 1980s the most i n d e b t e d c o u n t r y w a s the United States. Because the U.S. dollar w a s u s e d as the w o r l d currency, h o w e v e r , U.S. state m a k e r s w e r e able to m a i n t a i n a s t a n d a r d of living h i g h e r t h a n U.S. p r o d u c t i v i t y w a r r a n t e d b y the simple device of p r i n t i n g money. This r e d u c e d the v a l u e of each unit of currency, b u t as l o n g as the c o u n t r y r e m a i n e d p r o d u c t i v e , t h e d o l l a r r e m a i n e d s u f f i c i e n t l y v a l u e d to be in dem a n d . T h o s e h o l d i n g U.S. dollars in r e s e r v e s o u g h t to p r o t e c t the value of their reserves by investing in U.S. p r o d u c t i o n a n d property, b u t t h e y n e v e r seriously c o n t e s t e d the c o n t i n u e d use of U.S. c u r rency as the d e facto w o r l d one. N o other i n d e b t e d c o u n t r y could d o w h a t the United States did, h o w e v e r . The crunch for m a n y of the o t h e r s c a m e in the early 1980s.

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By the end of 1981, for example, "of the total debt of $271 billion owed to commercial banks by twenty-one major LDCs [less developed countries], almost one-half . . . was d u e to be repaid in a year or less" ( E d w a r d s 1985:188). Declining prices for LDC exports, caused in t u r n by decreased d e m a n d on the p a r t of " d e v e l o p e d " countries (because of recession and rising interest rates) caught most debtors without the capacity to pay. In A u g u s t 1982 Mexican state m a k e r s were forced to s u s p e n d their c o u n t r y ' s foreign exchange dealings, signaling thereby an incapacity to meet the nation's debt repayments. Other countries' leaders followed suit, calling for debt rescheduling and the deferral of repayments. Rising interest rates were the i m m e d i a t e trigger. In the early 1970s the oil-producing (OPEC) countries q u a d r u p l e d the price of oil. This not only caused severe adjustment problems (including recession) t h r o u g h o u t the world, b u t the w i n d f a l l profits the OPEC countries m a d e were put back into the w o r l d ' s b a n k s and used to p r o v i d e cheap credit for d e v e l o p i n g countries in Latin America, Africa, a n d Eastern Europe. These were largely short-term loans and they were mostly m a d e by commercial banks, w h o in their desire for profits had built for themselves h u g e capital overhangs. In 1981, for example, the nine largest U.S. b a n k s h a d "nearly 300 per cent of their capital exposed in loans to d e v e l o p i n g and east European countries" (Edwards 1985:190), and "the ratio of the banks' own capital to total assets was around 4 per cent. . . . [By comparison] in the early nineteenth century the ratio had been about 40 per cent." In Marxist terms, what had h a p p e n e d was only to be expected. Rates of profit were declining, an effect Marx had anticipated and one he considered a definitive feature of capitalism. Since rescue could only entail f u r t h e r exploitation, classical Marxists saw the situation as potentially revolutionary. Reformist Marxists were not so sure. The whole picture they f o u n d depressing in the extreme. Living s t a n d a r d s for m u c h of Latin America and sub-Saharan Africa were falling to those of the 1970s and 1960s. Debt r e s t r u c t u r i n g seemed mostly to involve a massive transfer of wealth from the poor in poor countries to the rich in the poor and the rich ones. And there seemed nary a revolution in sight. The basic cause of the debt crisis in classical liberal terms could only be a distorted market. The cure was to allow self-equilibrating responses on the part of the buyers and sellers of credit themselves. Bank stockholders, managers, and d e b t - b u r d e n e d regimes should all pay the price of their inefficiency and go to the wall. To reformist liberals, it was not so much a matter of market distortion as market "mismanagement," both on the part of the creditors and on the part of the state makers of the countries in debt.

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A n d in the event it w a s r e f o r m liberalism that p r e v a i l e d . The d e b t s w e r e r e s t r u c t u r e d and the b a n k e r s w e r e saved. M a n y p e o p l e , living at a c o n s i d e r a b l e sociological d i s t a n c e f r o m t h o s e w h o h a d originally m a d e the contracts, w e r e not. In the longer term the debt crisis d e p r e s s e d p r o d u c t i v e activity, e m p l o y m e n t capacity, a n d l i v i n g s t a n d a r d s in a large n u m b e r of c o u n t r i e s that could not p a y interest. N o n e d e f a u l t e d , h o w e v e r , because of t h e costs that d e l i n k i n g f r o m the w o r l d m a r k e t w e r e s u p p o s e d to carry. Since m a n y in a p o s i t i o n to a u t h o r i z e d e f a u l t w e r e c o r r u p t , w i t h a p r o f o u n d c o m m i t m e n t to their o w n privileged lifestyles a n d w i t h foreign b a n k a c o u n t s to feed, they w e r e not a b o u t to bite the h a n d s that u l t i m a t e l y fed t h e m . D e s p i t e o d d noises to this effect, they w e r e more interested in c o m p l y i n g w i t h the IMF's classical liberal d e r e g u l a t i o n r e q u i r e m e n t s for d e b t r e s c h e d u l i n g t h a n trying a n y t h i n g more radical, like d e f a u l t . " N e v e r b e f o r e , " o b s e r v e d o n e a n a l y s t ( G e o r g e 1988:44), " h a v e so f e w b e e n so w r o n g w i t h such a d e v a s t a t i n g effect on so m a n y . " Just h o w d e v a s t a t i n g can b e j u d g e d f r o m the fact that "in spite of total d e b t service . . . of m o r e t h a n 1.3 trillion dollars f r o m 1982-90, the d e b t o r c o u n t r i e s as a g r o u p b e g a n the 1990's f u l l y 61 p e r c e n t m o r e in d e b t t h a n they w e r e in 1982." M o r e o v e r , " t h e d e b t b u r d e n of the v e r y p o o r e s t . . . w a s u p b y 110 p e r cent [and in these s a m e eight y e a r s ] the p o o r [had] f i n a n c e d [the e q u i v a l e n t of] six Marshall Plans" (George 1992:xvi). In Marxist terms, the elite f e w h a d m e r e l y b e e n p r o m o t i n g their class interests. It w a s only to be expected. This w a s at the w o r k e r s ' expense, b u t this too w a s only to be e x p e c t e d . C a p i t a l i s m is a b o u t the creative u s e of credit. Credit is an incentive to capitalists to expand production. Expanding production means further exploiting the labor p o w e r of the w o r k e r s , m a k i n g credit, in M a r x ' s w o r d s , the " p u r e s t a n d most colossal f o r m of g a m b l i n g a n d s w i n d l i n g . " Bretton Woods: Currency Convertibility O u t of World War II the U.S. state m a k e r s e m e r g e d t r i u m p h a n t , det e r m i n e d to m a k e the w o r l d " s a f e f o r d e m o c r a c y " a n d d e t e r m i n e d to capitalize on their p r o d u c t i v e edge. At the s a m e time E u r o p e a n d J a p a n , t w o centers of the p r e w a r i n d u s t r i a l w o r l d , w e r e in r u i n s . "Millions of p e o p l e w e r e on the m o v e ; o c c u p y i n g troops, d e f e a t e d t r o o p s , e v a c u e e s , slave laborers, t h o s e e x p e l l e d as b o r d e r s w e r e r e d r a w n ; r e f u g e e s of e v e r y d e s c r i p t i o n . F o o d w a s h o p e l e s s l y insufficient. The m i l i t a r y a d m i n i s t r a t i o n s w e r e i l l - e q u i p p e d to deal w i t h h u g e civilian p r o b l e m s . Civilian a d m i n i s t r a t i o n s w e r e . . .

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disorganized and often without much authority" (Armstrong 1991:3). These once highly productive regions were a mess. And yet out of their ashes was built "the greatest b o o m in the history of capitalism" (Armstrong 1991:6). The question is, how? The postwar situation was not as bad as it might have first appeared. The w i d e s p r e a d destruction of the m e a n s of p r o d u c t i o n brought about by the w a r was not as great as the chaos at the time seemed to suggest. Indeed, most capitalist countries w e r e p r o d u c ing as m u c h or more by the end of the w a r as they had been at the beginning (Armstrong 1991:7). Moreover, m a n y capitalists like war. Wars present all kinds of profitable opportunities. World War II was no exception, and at the end of it the same capitalists were just as keen to make profits out of postwar reconstruction as they had been out of wartime destruction. State makers were quick to curb the potentially assertive p o w e r of organized labor as well. Capitalists saw a potential threat to their profits and feared that in having to pay for too m a n y concessions a s l u m p w o u l d ensue, even perhaps one serious enough to cause revolts. With the advent of the Cold War the state makers of the major democracies concurred, and they m o v e d to contain the strength of labor and to a u g m e n t that of capitalists. In the United States, for example, a p o s t w a r law designed to e n d o r s e the right to w o r k w a s m a d e into one enjoining the federal g o v e r n m e n t "to . . . p r o m o t e free enterprise . . . u n d e r which there will be a f f o r d e d u s e f u l employment for those w h o are willing and seeking to work"; a law, in other words, that promised "anyone needing a job" the right to "go out and look" for one (Armstrong 1991:14). Since capitalists do, on balance, prefer an orderly international e n v i r o n m e n t , free-flowing trade, and an organized p a y m e n t s system, there is a need for a p p r o p r i a t e m e c h a n i s m s to help e n s u r e them. As representatives of the major capitalist postwar power, and as point riders for a country bursting with individuals with a basic interest in "the largest possible markets for . . . exports and f r e e d o m to invest abroad w h e r e v e r [it] w a s most profitable" ( A r m s t r o n g 1991:27), U.S. state m a k e r s w e r e well placed and very willing to oblige. The reconstruction of the postwar world, and the installation of the appropriate mechanisms, began at Bretton Woods, N e w H a m p shire, in 1944. At a meeting there of forty-four different countries— the United Nations Monetary and Financial Conference—arrangements were m a d e for a postwar monetary and trading order that not only allowed for sovereign autonomy, but also fixed exchange rates, that is, a m e a n s w h e r e b y one currency could be reliably converted into another. It was an order articulating comparative advantage.

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The first twenty-five postwar years were boom years. The availability of large pools of credit made possible rapid growth in production and trade, particularly for the wealthier states, w h o quickly assembled themselves into an Organization for Economic Cooperation and Development (the OECD). Global firms were established in growing n u m b e r s to take advantage of the new opportunities. Capital, moving from one country to another, incorporated labor into globally integrated structures of mass production. Growth rates soared. It is interesting to note in retrospect h o w U.S. greediness in the i m m e d i a t e p o s t w a r period nearly scuttled the w h o l e recovery process. The disabled production systems of Europe and Japan were still prostrate, and yet they needed commodities, which Americans were only too pleased to provide. In m a k i n g such provision, h o w ever, the Americans took in exchange w h a t little foreign currency Europeans and Japanese had left. The point was ultimately reached where the countries concerned had no more money. Not only did this portend the potential d i s a p p e a r a n c e of what were major markets, posing a serious threat to U.S. exports and industries; there were also plenty of European and Japanese—workers in p a r t i c u l a r — w h o were p r e p a r e d to strike out on their o w n on a p e r m a n e n t basis, and they were not talking of doing so along capitalist lines. The need to kick-start E u r o p e a n and Japanese p r o d u c tion systems b e c a m e acute, not only to p r e e m p t a disaster for the U.S. one, b u t also, as the Cold War confrontation with Soviet state makers grew more acute, to keep the capitalist world "safe." So the Americans a b a n d o n e d classical liberalism a n d actively e m b r a c e d the need for reformist liberal intervention instead, instituting as a consequence the Marshall Plan for Europe and the D o d g e Plan for the Far East to f u n d the respective attempts at recovery . With the U.S. Federal Reserve as the " w o r l d ' s banker," and the dollar the de facto currency internationally, it w a s U.S. state makers w h o determined h o w many dollars came out of that country to invest in p r o d u c t i o n a r o u n d the world. And come out they did, in a seemingly never-ending stream. The U.S. state makers were seeking to contain w h a t they construed as c o m m u n i s t e x p a n s i o n i s m w o r l d w i d e , and they were prepared to pay h a n d s o m e l y in Europe and Japan to construct b u l w a r k s against the Soviets. They f o u g h t two major proxy wars, one in Korea a n d one in Vietnam, in the process, to the considerable material benefit of countries like South Korea and Japan. U.S. s p e n d i n g overseas was not U.S. saving at home, however. A United States providing dollars for global use was a United States r u n n i n g a chronic balance-of-payments deficit, which is not something that can be done indefinitely, as anyone k n o w s w h o has spent

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all they have a n d all they can borrow, and then looks a r o u n d for s o m e o n e to express confidence in the value of their IOUs. The United States w a s able to live beyond its means longer than most by the time-honored expedient, already mentioned, of printing money, and paying for imports in depreciated "greenbacks." Since the dollar was the key currency in the capitalist world market and the one that other countries saved their m o n e y in, the U.S. state m a k e r s were able in this w a y to pass on the cost of these wars and the country's domestic living standards to the rest of the world. Because the increase in U.S. currency was not matched by an increase in U.S. production, however, the Americans were in effect exporting inflation. Their alternative was a less expensive foreign policy and standard of living, neither of which they wanted or were prepared to implement. Under the Bretton Woods agreements the dollar w a s backed by gold at $35 an ounce. Over time, however, no one believed that U.S. state makers h a d the requisite gold to cover all the dollars they had printed. Lack of confidence in the dollar became acute. The French w e r e the first to ask for gold and the first to be refused. Indeed, the United States had not had the requisite gold for some time. To deal with the growing lack of confidence in the U.S. dollar, U.S. state makers had either to slow the flow of their dollars into the world pool, and with it the g r o w t h of the w o r l d political economy, or find a new w a y of p u t t i n g money into the global system. In the event it did neither. Japanese and German state makers decided to b u y the U.S. deficit instead, allowing U.S. state m a k e r s to repudiate the original Bretton Woods agreement outright. The rescue of the U.S. dollar by the Japanese and the Germans was seen by liberals as a kind of s w a p . U.S. state m a k e r s printed dollars. They and their capitalists spent them on w a r s on behalf of "world security" and in productive global enterprises. Each year the Japanese and the G e r m a n s b o u g h t large a m o u n t s of U.S. government securities to cover the national budgetary shortfall. In liberal terms, the G e r m a n s and the Japanese w e r e in effect making the United States loans, albeit depreciating ones, since they held the securities they b o u g h t f r o m the United States in dollars, and these securities were quickly w o r t h less than their face value. (This wasn't all bad since dollars worth less than their face value are also, from a foreign perspective, overvalued dollars, and this m a d e the United States easier to sell against.) In return the United States didn't oppose Japanese and German tariffs on U.S. goods, or oppose as much as it might have done growing Japanese or German export competitiveness. Marxists, by contrast, saw all this in terms of U.S. hegemony, that is, in terms of U.S. state makers, as the w o r l d ' s bankers, indirectly

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taxing the world, enabling the U.S. well-to-do to live b e y o n d their means. To Marxists, the whole project was highly exploitative, since the ones ultimately p a y i n g w e r e those e a r n i n g less because of the decline in the real value of their wages, or those earning nothing at all because they had been m a d e r e d u n d a n t . In 1971 U.S. President Richard Nixon cut the link b e t w e e n the dollar and gold. He a b a n d o n e d the gold s t a n d a r d , that is, and ann o u n c e d at the same time t e m p o r a r y controls on imports. In 1973 the decision w a s taken to "float" exchange rates altogether. Rather than a d a p t to the changes that h a d occurred in the w o r l d political economy, in other words, and accept a shift in the w o r l d ' s center of gravity f r o m the Euro-Atlantic rim to the Asia-Pacific; rather t h a n share control over the central institutions of global m o n e t a r y control; U.S. state m a k e r s and w e a l t h m a k e r s chose to a b a n d o n the principles on which the whole system was based. The dollar continued as the world currency, for lack of a globally acceptable alternative, but major currencies were no longer tied to each other in any kind of predictable relationship. State m a k e r s and wealth makers, u n d e r pressure to earn more to p a y for rising oil prices, started "dirty" floating, that is, deliberately u n d e r v a l u i n g their currencies to m a k e their exports more competitively priced abroad, or overv a l u i n g t h e m to control inflation at home. G r o u p s of states, like those in Europe, started setting u p their o w n m o n e t a r y arrangements. It w a s the beginning of a sustained recession. The instability of the 1970s continued t h r o u g h the 1980s a n d into the 1990s. The Soviet e m p i r e collapsed. Oil profits from the price hikes of the 1970s, recycled through the w o r l d ' s banks to poor state regimes h u n g r y for credit, a g g r a v a t e d a massive debt crisis that had b e g u n well before b u t came to a h e a d w h e n interest rates soared. Though a range of rescheduling a r r a n g e m e n t s were made, it was estimated by 1991 that the poorer states, t h r o u g h their debt rep a y m e n t commitments, were subsidizing the richer ones at a rate of $60 billion a year (Vickers 1991:4). A new equilibrium w a s being established, to use liberalist l a n g u a g e , t h o u g h it w a s not one w h e r e the costs and benefits were equally shared. In the richer countries, for example, there w a s u n e m p l o y m e n t , a concerted attack on the value of working wages, cutbacks on government spending, and the wholesale " a b a n d o n m e n t " of regions and peoples that did not fit the " n e w patterns of international production" (Walker 1988:40). Despite its d o w n s i d e , the current m o n e t a r y system is considered by liberals to be basically beneficial. A more global political economy needs constant fine-tuning anyway, the reformists a m o n g them say. The "trickle d o w n " of n e w wealth does continue, they argue, despite inequalities a n d disparities. And this still p r o v i d e s

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the m o s t " n a t u r a l " solution, in their o p i n i o n , to p r o b l e m s of "adjustment." To Marxists it is m o r e a m a t t e r of "flood u p , " not trickle d o w n . N o t only does the c u r r e n t system create p o v e r t y as well as wealth; it also carries w i t h it the p r o m i s e of " c o m p l e t e exclusion" for those m a d e " d i s p e n s a b l e " to the " f u n c t i o n a l n e e d s of the w o r l d [political] e c o n o m y as a w h o l e " (Walker 1988:42). The m o r e a m b i t i o u s of the p o o r e r state w e a l t h m a k e r s , d r i v e n into m o r e capital- a n d technology-intensive p r o d u c t i o n , have f o u n d richer states c o m p l a i n i n g that their u n e m p l o y m e n t is b e i n g c a u s e d b y the export of jobs to cheap labor states. Some rich w o r l d state m a k e r s h a v e e v e n staged their o w n revolt by " d e r e g u l a t i n g , " w h i c h in Marxist t e r m s is a p r e e m p tive ploy by state m a k e r s d e s p e r a t e to protect t h e m s e l v e s f r o m the electoral consequences of recurrent m a r k e t crises. Classically liberalist d e r e g u l a t i o n policies allow state m a k e r s to p u t at an electoral d i s t a n c e a w h o l e p r o c e s s t h e y h a v e failed to control. This, t h e y hope, will allow t h e m to escape b l a m e . The basic problem, in Marxist terms, is that the capitalist system is o r g a n i z e d only indirectly to meet h u m a n n e e d s . It is s i m p l y not planned. If it w e r e p l a n n e d , liberals say, p e o p l e w o u l d n ' t be so entrepreneurial, since t h e r e ' d be no incentive for t h e m to p r o d u c e . Capitalism p r o v i d e s incentives in t h e f o r m of p r o f i t s for capitalists a n d m o n e y to live on for w o r k e r s . It's a very d y n a m i c system b e c a u s e it's built u p o n strong h u m a n predilections. These are not necessarily o u r highest predilections. This is w h y Marxists say that while a lot gets d o n e by capitalist m e a n s , b e c a u s e it gets d o n e for largely selfish r e a s o n s a lot of p e o p l e d o n ' t get a lot. After Bretton Woods A f t e r t h e U.S. r e p u d i a t i o n of the Bretton W o o d s a r r a n g e m e n t s the global m o n e t a r y system c a m e to be d o m i n a t e d b y three m a r k e t g r o u p s — i n t e r n a t i o n a l b a n k e r s , foreign e x c h a n g e dealers, and international portfolio dealers. I n t e r n a t i o n a l b a n k e r s s e r v i c e d the n e e d s of foreign direct investors, m o v i n g a r o u n d the w o r l d as i n v e s t o r s did, striving all the w h i l e to m i n i m i z e the effects of local financial r e g u l a t i o n s . It w a s the b a n k e r s w h o d e c i d e d , in effect, w h a t w a s to b e d e v e l o p e d a n d h o w it w a s to be d e v e l o p e d , b o t h decisions w i t h i m p o r t a n t social consequences. They did very large deals in a relatively limited way, h o w e v e r . This h a d e v e r y t h i n g to d o w i t h p r o f i t a b l e r e t u r n s in the m e d i u m to long term. It h a d m u c h less to d o w i t h the kind of p l a n n i n g that d e v e l o p m e n t often requires.

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Foreign exchange and international portfolio dealers were even freer agents. Their activities were even shorter-term and less institutionalized than those of the bankers. Their speculative use of "footloose money," for example, their use of special havens a r o u n d the w o r l d designed to "shelter" m o n e y as capital, bore witness to both the regulated and deregulated nature of the world money market. Again, the s u m s were very large. "In April 1989," for example, "foreign exchange trading in the w o r l d ' s financial centers averaged about $650 billion a day, equivalent to nearly $500 million a m i n u t e and to forty times the a m o u n t of w o r l d t r a d e a day" (Frieden 1991:427). This was not what was envisaged at Bretton Woods. More accurately, it w a s envisaged with some a p p r e h e n s i o n , and deliberately o p p o s e d (Helleiner 1994:163). The agreement at Bretton Woods was designed to make for world trade in commodities, but not for world trade in money. In c o m m o d i t y terms, in o t h e r words, the p o s t w a r order w a s meant to be a classically liberal one. In monetary terms, however, the Bretton Woods planners w a n t e d (liberally speaking) a much more reformist one, with state controls on m o n e y flows, that is, fixed exchange rates. Speculators m o v i n g large a m o u n t s of capital f r o m country to country were likely, it w a s felt, to cause "adjustment" problems, such as u n e m p l o y m e n t , loss of social morale, and crime. In a bid to minimize these effects state makers were likely to b e c o m e protectionist, which w a s not s o m e t h i n g those with vivid memories of both the Great Depression of the 1930s and the subsequent world w a r were about to countenance. Hence their emphasis on the need for capital controls, in the first place on legal transactions (with state makers taking "cooperative initiatives" to this effect) and in the second place on illegal ones (with state makers keeping a very close check on currency dealing) (Helleiner 1994:166). In the event capital controls were not i m p l e m e n t e d . The state m a k e r s of the United States, to maintain their country's p o s t w a r dominance, vetoed suggestions that w o u l d have provided cooperative w a y s of doing so. A strong putsch by capitalists also frustrated moves to implement controls over currency exchange. As part of the putsch a Eurodollar market was established in London. This was a "kind of ' a d v e n t u r e p l a y g r o u n d ' " for b a n k e r s (Helleiner 1994:169). It also b r o u g h t some prestige to the hard-pressed British, w h o had decided by this stage to opt for the chance to maximize their o w n share of what was h a p p e n i n g rather than fight for any preeminence themselves. Competitive deregulations quickly followed t h r o u g h out the capitalist industrial world. Classical liberals a p p r o v e of deregulation because it gives free rein to entrepreneurial opportunists, w h o can then test the limits of state m a k e r s ' controls and p u s h b e y o n d them to look for creative

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ways to make profits that, quite fortuitously, benefit us all. Money, Hayek says, is "indispensable for extending reciprocal cooperation beyond the limits of h u m a n awareness." And while p r o d u c e r s , traders, a n d f i n a n c i e r s are not c o n c e r n e d w i t h the c o n crete n e e d s of k n o w n p e o p l e but w i t h abstract calculation of c o s t s a n d p r o f i t . . . c o n c e r n for profit is just w h a t m a k e s p o s s i b l e the m o r e e f f e c t i v e u s e of resources. . . . [ H e n c e ] d i s d a i n of profit is d u e to i g n o r a n c e , and to an attitude that w e m a y if w e w i s h a d m i r e in the ascetic . . . b u t . . . is s e l f i s h to the extent that it i m p o s e s ascetic i s m and i n d e e d d e p r i v a t i o n s . . . o n o t h e r s ( H a y e k 1988:104-105).

Issues like capital strike, capital flight, tax evasion, the social costs of reductions in "welfarism," and diminished capacities for politicoeconomic planning are all brushed aside by liberals u n d e r the heading of "adjustment." All of which is highly desirable as far as classical Marxists are concerned as well, since the " s p o n t a n e o u s e x t e n d e d h u m a n order created by a competitive market," which liberal Utopians like H a y e k envisage, is not, classical Marxists say, w h a t we get in practice. What we do get is m u c h less fortuitous and m u c h more exploitative and therefore m u c h more likely to result in revolution. They observe h o w the " w o r l d m o n e t a r y system has always c o r r e s p o n d e d strictly to the organizing structure of the world order: to each p h a s e of the history of capitalism there has been a particular m o n e t a r y counterpart" (Amin 1993:2). And out of the current phase they envisage capitalism's collapse. We must anticipate that day, they say, because it is only then that we will be able to p r o v i d e s o m e t h i n g more sensibly designed; something more explicitly concerned with moral principles; s o m e t h i n g more explicitly democratic and conscious of basic h u m a n needs. Reformist liberals, w h o are more w a r y than classical liberals of the dangers of unsupervised speculation, along with reformist Marxists, w h o are more concerned than classical Marxists to do something now rather than wait for capitalism to collapse, recommend regulation. Both are a d a m a n t that world m o v e m e n t s of money are well within the power of state makers to control, and what is more, that state makers should control them. That state makers have not chosen to exercise such controls, they say, has more to do with either the degree of their acceptance of classical liberalism or the degree of their collusion with their capitalist classmates. Members of social m o v e m e n t s articulate their o w n accounts of the w o r l d ' s financial vagaries. Bolivian housewives, for example, are reported as asking: " W h a t have we d o n e to incur . . . foreign debt? Is it possible that our children have eaten too m u c h ? Is it

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possible that our children have studied in the best colleges? Or do they w e a r the best clothes? Have we i m p r o v e d our standard of living? H a v e our w a g e s become so great?" (Vickers 1991:9). Even the Marxist concern for the w a y that m o n e y m a d e from credit or currency is money m a d e by exploiting people's labor power, fails to account, m a n y feminists say, for the fact that the "people" in question are m o r e male than female, for the extent of w o m e n ' s contribution to the w o r l d ' s finances, or the extent of the plight, especially, of p o o r state w o m e n . One of the strengths of postmodernist political economics is the w a y in which it d e m o n s t r a t e s h o w issues like these are r e n d e r e d largely invisible; h o w the invisibility is m a d e to seem a normal, n a t u r a l , and therefore uncontroversial state of w o r l d affairs; and h o w skewed a p u r p o s e is served in the process.

The IMF Unlike the Bretton Woods plan for the overall control of w o r l d credit a n d currency exchange, the International Monetary Fund, w h i c h was also a child of this key conference, has survived. With the radical changes in the world monetary system since 1944, however, w h a t the IMF does has also c h a n g e d , as has its systemic significance. Originally m a d e up of only thirty-nine countries, for exa m p l e , it now has a m e m b e r s h i p of 180. Along with the g r o w t h in m e m b e r s h i p has g o n e e x p a n d e d responsibilities. Originally designed as h a v i n g a supervisory role, it has taken on a more interventionist one, and it n o w directs m o n e y f l o w s to p u r p o s e s never envisaged by those at Bretton Woods. The Articles of Agreement at Bretton Words established "fixed b u t adjustable" exchange rates between national currencies. It also established the IMF to promote the stability of the global currency exchange system. In d o i n g so it p r o v i d e d m o n e y to countries suffering short-term balance-of-payments problems. Promoting stability m e a n t constantly surveying what was h a p p e n i n g in the system, identifying problems in this regard, and s u p p l y i n g temporary loans a n d advice to countries trying to reduce b u d g e t imbalances. The m o n e y for such loans came from "quota" contributions from member countries. Countries granted loans d r e w them d o w n in other currencies and m a d e repayments in their own. This m a d e it possible not to default on debts they lacked the currency to pay. The voting rights of members in the IMF are proportional to the size of their quota contributions. Since the largest contributors are capitalist industrial countries, like those of Europe and the United

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States, the IMF is controlled by these countries. Its concerns are accordingly those of the capitalist industrial world. In the 1950s and 1960s these concerns were reformist liberal ones, with the IMF intervening to mediate and to help preserve the integrity of a "liberal internationalist" order (Pauly 1994:294). With the m o n e t a r y troubles of the 1970s and the expansion of private credit flows the IMF began to lose its capacity to control currency exchange and correct m e m b e r state imbalances. It retained a role, however, as a lender to poorer states in serious debt, a n d in the 1980s it f o u n d m u c h to do m a n a g i n g and h e l p i n g f u n d the debt reschedules negotiated b e t w e e n countries on the b r i n k of default and private banks. Special Drawing Rights were created in the process as a "minor" kind of "international monetary issue" (Amin 1993:7). When the Soviet Union collapsed, the IMF was d r a w n into the process of integrating the n e w states that f o r m e d into the capitalist world political economy. Indeed, the IMF has lasted so long by n o w that it has become "the only nearly universal f o r u m for the discussion of global monetary issues" (Pauly 1994:207). The reformist liberals of the capitalist industrial world, in particular, see it continuing to serve a useful p u r p o s e in this regard. Today's IMF p r o m o t e s a r a n g e of highly specific prescriptions for sustainable development, prescriptions that reflect "decades of debate on the normative core of m o d e r n capitalism" and that include a " n u m b e r of ' o u g h t ' statements of s w e e p i n g character: national policies ought to encourage expanding volumes of trade on a non-discriminatory basis; p a y m e n t s balances ought to tend t o w a r d s equilibrium; stability o u g h t to be the n o r m in exchange markets; policies ought to p r o m o t e economic growth; . . . price stability ought to be achieved"; and "economic policies" ought to be " s o u n d " (Pauly 1994:211). For " s o u n d , " of course, read "reformist liberal," since this is the ideology such prescriptions serve. Classical liberals see no reason for any of this, of course. The recent revival of classical liberalism a m o n g the state m a k e r s and wealth makers of the industrial capitalist world has seen, as a consequence, a new emphasis on market "efficiency" and market "discipline" as the preferred m e a n s of dealing with m o n e t a r y imbalances, and a new acceptance of the idea that free currency exchange, and free trade and investment, are compatible practices, not contradictory ones. There is nothing that the IMF can do, they argue, that private entrepreneurs and the " h i d d e n h a n d " cannot. Classical Marxists concur, t h o u g h for very different reasons. Capitalism must rot, in classical Marxist parlance, before it is likely to be replaced. M e d d l i n g in national m o n e t a r y concerns, the w a y the IMF does, can only delay matters. Classical Marxists, in other

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words, like all Marxists, see the IMF in terms of the accumulation of capital on a world scale and the globalization of production. Foreign exchange crises appear, to them, to be a matter of bringing the state makers into line with what global producers want. The IMF appears as villainous; as a capitalist plot; and w h a t is more, given the preeminence of the United States as the dominant fraction of world capital, as a U.S. capitalist plot. Part of the plot is to get the makers of indebted states to impose "wage freezes, devaluations, public sector cut-backs, strike bans, privatisation and de-regulation" policies, rather than provide social welfare support. The point is to renationalize monetary risks and to protect the ruling-class interests of state makers and international bank managers. Reformist Marxists prescribe other sorts of intervention, ones that they see as being more conducive to social justice and equity. They urge debtor governments to default, for example, rather than "structurally adjust"; to use their labor policies and their power to regulate money flows to foster local markets and local mixtures of factors of production; to legislate redistribution; and to protect the environment regardless—all initiatives the IMF, as currently constituted, is never likely to take (Pauly 1994:211). Mercantilists, meanwhile, seem to be reconstituting themselves at the regional level, arguing for monetary arrangements and exchange rate coordination among blocs of states. It is at this intermediate level, rather than a global or a local one, they say, that states can now best promote their production and trade and best protect themselves from the "monetary terrorism" of global speculators. This, too, is a retrograde step in IMF terms. The liberal internationalism of the IMF is still " m a s k e d " by the "technical mysticism of Fund economists" but it is one that articulates deep liberal ideals (Pauly 1994:212). The World Bank and Regional Banks The other institutional child of the Articles of Agreement at Bretton Woods was the International Bank for Reconstruction and Development (the IBRD), later to be known as the World Bank. While plans for the IMF were well in hand long before the Bretton Woods meeting, those for a world bank were not. Indeed, it was only the persistence of the British political economist John Maynard Keynes that ensured a world bank was discussed there and finally accepted as such. In principle, Keynes wanted a world bank that could issue world money. In practice he was trying to defend the interests of the British, the by-then-defunct imperial hegemon. In the event he got

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only what the United States, as the new d o m i n a n t power, was prepared to accept. The World Bank w a s set u p as a source of d e v e l o p m e n t f u n d s for member states. Over time the Bank's focus shifted from the postw a r reconstruction of Europe (a task p e r f o r m e d by the Marshall Plan rather than the Bretton Woods agreements) to the development of the world as a whole. This meant in practice a major emphasis on North-South relations, a role the World Bank n o w plays largely alone, given the gap left by the "near-total absence of [a] coherent North-South strategy formulated by anybody else" (George 1994:1). While largely alone at the global level, the World Bank is not alone at the regional level. It is only one now of a global consortium of public international financial institutions that includes the InterAmerican D e v e l o p m e n t Bank, the Asian D e v e l o p m e n t Bank, the African Development Bank, and the European Bank for Reconstruction and D e v e l o p m e n t . These institutions are all m o d e l e d on the World Bank. The first three w e r e set u p in the 1960s to m a k e m e d i u m - to long-term loans to f u n d large-scale d e v e l o p m e n t projects in their respective regions. The last w a s set u p in the 1990s to p r o v i d e loans to the n e w nations of the f o r m e r Soviet Union and Warsaw Pact. The World Bank was originally established to provide f u n d s at market rates to m e m b e r countries, to allow them to implement infrastructural schemes and projects that had some promise of a nationally significant yield. Over time, however, and particularly after the "lending crisis" of the 1980s, private b a n k s became reluctant to make long-maturing loans to South-world states for developmental p u r p o s e s . The World Bank then began to use its a u t h o r i t y to coax such b a n k s into cofinancing deals. By offering loans itself, it was able to encourage private banks and North-world governmental aid agencies to provide monies, too. Like the IMF, the World Bank also became involved in nonproject loans to countries with serious deficits in their balance of payments. These loans were m a d e on the same sort of conditions as the IMF ones, obliging b o r r o w e r s to make the same sort of "structural adjustments" and d r a w i n g the same charges of neoimperialism (for having forced states to accept global firms, for example, or to accept cheap prices for their raw materials) as those leveled at the IMF. The World Bank borrows the capital that it lends on the w o r l d ' s private money markets. As security it offers the subscriptions m a d e to the Bank by its m e m b e r states. Because security of this sort is considered to be extremely s o u n d , it has no trouble raising the money it w a n t s . The confidence of those l e n d i n g to the Bank is raised even f u r t h e r by the Bank's highly conservative policy of only

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lending what it borrows. The Bank's capital/loans ratio of 1:1 is in marked contrast to the same ratio commercial banks use, which is usually more like 1:10. The Bank also earns interest on what it lends, and these profits become part of its capital stock, too. High market confidence also accrues from the fact that, like the IMF, the World Bank is governed by its members; that large subscribers have a proportionately large say in how the Bank is run; and that the United States, as the dominant country in subscription terms, has a dominant role in Bank governance as well. The president of the Bank, for example, has always been an American, and in the case of the Banks's fifth president, Robert McNamara, a highly proactive one. The Bank also provides technical advice to countries preparing loan applications, and it assists client states to use the loans that they receive to best effect. In the process of providing such advice the Bank has cultivated a development discourse characterized by one critic as "strangely featureless" in its account of the world. The Bank talks of "disembodied forces" such as "debt, adjustment, poverty, and the environment." Where something " b a d " happens, the Bank calls it a "trade-off." The "fundamental solution to nearly every problem," the Bank says, is " g r o w t h , " and growth has to be "sustainable" (Rich 1994:18). Language like this is meant, in part, to allow Bank members to talk about painful human problems without wincing. Its critics say such language impoverishes even further those the Bank would assist. The Bank remains a highly controversial institution. Defenders like Steer point to what has been achieved in developmental terms in the last twenty-five years, and by implication, they laud the Bank's beneficial effects. They highlight, for example, a "doubling of food production, a halving of infant mortality, a doubling of secondary school enrollment rates, a doubling of real incomes, and a sharp move toward democracy in developing countries" (Steer 1994:49). Admittedly, they say, structural adjustment has created problems, but those countries that do not adjust, that do not make a meaningful attempt to live within their means, have fared worse than those that have. Moreover, World Bank help must be seen in the context of the fact that in poorer states the Bank accounts for only " 2 percent of total investment" (Steer 1994:49). Critics like George and Sabelli see Bank-promoted development in a very different light. The word development itself they define as "programmed and violent change through outside intervention"; change that marginalizes people on a scale "previously unheard of, while simultaneously undermining their political capacity to fight back" (George and Sabelli 1994:56). Furthermore, any statistical summary of developmental success has to be seen, they suggest, in

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the context of an absolute increase in the n u m b e r s of the povertystricken w o r l d w i d e . It must also be seen in the context of the Bank's o w n W a p e n h a n s Report, m a d e in 1992, that f o u n d that a "large and increasing n u m b e r of Bank projects are failing, even w h e n assessed only on n a r r o w economic criteria." One in five of nearly two thousand projects in more than one h u n d r e d countries, the report said, " p r e s e n t e d major problems," a proportion that in the early 1980s was only one-tenth overall, but in some sectors was u p to two-fifths of the total by the time the report was compiled. Only two-fifths of the Bank's borrowers, furthermore, complied with their loan agreements, and against those three-fifths that didn't, there were "no discernible sanctions" (George and Sabelli 1994:223-224). Is the Bank the "cornerstone of the house of d e v e l o p m e n t " or the "visible h a n d " of free market capitalism? Is it the leading advocate of a free global m a r k e t or the interventionist p r o m o t e r of p r e d e t e r m i n e d change? Is it the secular d e f e n d e r of rationalistic m o d e r n i s m or the high priest of liberal r e d e m p t i o n ? To a n s w e r questions like these we need a better idea of w h a t " d e v e l o p m e n t " means, and I turn to this topic next. R a d f o r d observes at the end of his essay on m o n e y in prison that where there are "infinite means economic organisation and activity" b e c o m e " r e d u n d a n t . " By his reckoning, plenty w o u l d dispense with any need for trade flows or financing. With "every want . . . satisfied without effort," there would be no IMF or World Bank. World t r a d e and finance flows are indicative, then, of a world where goods and services are notably less than infinite. O u r world is one w h e r e strictly limited means must still be distributed a m o n g "unlimited and competing ends," and where opulence is to be found only in p l a n e t a r y pockets. Why, then, with the p r o d u c t i v e p o w e r s now at the disposal of our species, are we not closer than we are to having something like general largesse? That is the question.

7 World Development? •

M. Atterbury (1964) "Depression Hits Robinson Crusoe's Island"

" F r i d a y , " said R o b i n s o n C r u s o e , " I ' m sorry, I f e a r I m u s t lay y o u o f f . " "What do you mean, Master?" " W h y , y o u k n o w t h e r e ' s a b i g s u r p l u s of last y e a r ' s c r o p . I d o n ' t n e e d y o u to p l a n t a n o t h e r t h i s year. I ' v e g o t e n o u g h g o a t s k i n c o a t s to last m e a lifetime. My house needs no repairs. I can gather turtle eggs myself. T h e r e ' s an o v e r p r o d u c t i o n . W h e n I n e e d y o u I will s e n d f o r y o u . You n e e d n ' t w a i t around here." " T h a t ' s all r i g h t , M a s t e r , I'll plant m y o w n c r o p , b u i l d u p m y o w n hut and g a t h e r all t h e e g g s a n d n u t s I w a n t m y s e l f . I'll get a l o n g f i n e . " " W h e r e will y o u d o all this, F r i d a y ? " " H e r e on t h i s i s l a n d . " " T h i s i s l a n d b e l o n g s to m e , you k n o w . I c a n ' t a l l o w y o u t o d o that. W h e n y o u c a n ' t p a y m e a n y t h i n g I n e e d 1 m i g h t as w e l l n o t o w n it." " T h e n I'll b u i l d a c a n o e a n d f i s h in t h e o c e a n . You d o n ' t o w n t h a t . " " T h a t ' s a l r i g h t , p r o v i d e d y o u d o n ' t u s e a n y of m y t r e e s f o r y o u r c a n o e , or b u i l d it o n m y l a n d , or u s e my b e a c h f o r a l a n d i n g p l a c e , a n d d o y o u r f i s h i n g f a r e n o u g h a w a y so y o u d o n ' t i n t e r f e r e w i t h m y riparian rights." "I n e v e r t h o u g h t of t h a t , M a s t e r . I c a n d o w i t h o u t a b o a t , t h o u g h . 1 c a n swim over to that rock and fish there and gather sea-gull e g g s . " " N o y o u w o n ' t , Friday. T h e r o c k is m i n e . I o w n r i p a r i a n r i g h t s . " " W h a t shall I d o , M a s t e r ? " " T h a t ' s y o u r p r o b l e m , Friday. Y o u ' r e a f r e e m a n , a n d y o u k n o w a b o u t rugged individualism being maintained here." " I g u e s s I'll s t a r v e , M a s t e r . M a y I s t a y h e r e until I d o ? O r shall I s w i m b e y o n d y o u r r i p a r i a n r i g h t s and d r o w n or s t a r v e t h e r e ? " " I ' v e t h o u g h t of s o m e t h i n g , Friday. I d o n ' t like to c a r r y m y g a r b a g e d o w n to t h e s h o r e e a c h day. You m a y stay a n d d o that. T h e n w h a t e v e r is left of it, a f t e r m y d o g a n d c a t h a v e f e d , you m a y eat. Y o u ' r e in l u c k . " " T h a n k y o u , M a s t e r . T h a t is t r u e c h a r i t y . " " O n e m o r e t h i n g , Friday. T h i s i s l a n d is o v e r - p o p u l a t e d . F i f t y p e r c e n t of t h e p e o p l e a r e u n e m p l o y e d . W e a r e u n d e r g o i n g a s e v e r e d e p r e s s i o n , a n d t h e r e is n o w a y t h a t I c a n s e e to e n d it. N o o n e b u t a c h a r l a t a n w o u l d say that he c o u l d . S o k e e p a l o o k o u t a n d let n o o n e land h e r e to s e t t l e . A n d if any s h i p c o m e s d o n ' t let t h e m land a n y g o o d s of a n y k i n d . You m u s t b e p r o t e c t e d

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against foreign labour. C o n d i t i o n s are fundamentally sound, though. A n d prosperity is just around the c o r n e r . "

Whatever else " d e v e l o p m e n t " might mean, the growing disparities in the w o r l d ' s wealth suggest that it is a " m o r e or less" concept. Even in the two-man case Atterbury describes, there is overproduction and mass u n e m p l o y m e n t , great wealth and absolute poverty, overpopulation and severe depression. These disparities are so deeply entrenched that the concept of development alone cannot explain them. Something more radical and structural is needed that can account for them. Hence the concept of imperialism with its connotations of oppression and exploitation. It's clear that on Atterbury's version of C r u s o e ' s island, for example, Friday is free, but that his freedom allows him only to beg or starve. Any attempt to do more than that, to provide for himself, for example, is inadmissible. He can carry Crusoe's garbage but he can't fish or farm. He can provide Crusoe with labor, however. He can even be recruited to help hold off those w h o w o u l d want to come and share Crusoe's bounty, to trade with Crusoe or to w o r k as garbage carriers, too. But he can't copy Crusoe. Were he to try we can be certain he'd be imprisoned or killed, since Crusoe has not only wealth, he has coercive power.

MEASURE FOR MEASURE How are we to assess the c o m p a r a t i v e well-being of earth's peoples? What measure will show us most clearly, concisely, and comprehensively the distribution of wealth in the world? The most common measure of comparative well-being is a statecentric one. "States" loom large in world political economy, which is why it still makes sense to talk of an international political economy as well. The state is not all that looms large in the world political economy, which is why so much attention gets paid today to transnational firms, global nongovernmental organizations, and various social movements. The c o m m o n choice of a statecentric measure of development, however, does directly reflect the ongoing significance of "the state." This measure is made by dividing what each country earns as a whole, that is, its gross national product ( G N P ) by the n u m b e r of people the latest census shows to be living there. This provides a single figure for each country, which can be readily compared with that of others, allowing us to assess which countries in the world

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are more developed, that is, earn more per head; and which are less developed, that is, earn less per head. G N P p e r capita figures can also be assessed over time to provide a quantitative measure of any particular country's "progress." An u p w a r d trend in this line is considered to be progressive. A d o w n w a r d trend denotes "de-development." The steeper the trend line, the more or less progress we are supposed to see. While G N P per capita figures p r o v i d e a simple, s u p p o s e d l y highly effective measure of one kind of developmental change, it is also very crude. It reduces progress to a single material dimension. It p r o v i d e s an average figure only, which says n o t h i n g about the distribution of earnings within any particular country. And it paints the whole picture in statecentric terms. In an a t t e m p t to p r o v i d e a more n u a n c e d m e a s u r e of development t h a n just G N P per capita, analysts at the United Nations Development P r o g r a m m e (UNDP) have been trying, since 1990, to devise w h a t they call a " h u m a n d e v e l o p m e n t " index (HDI). The HDI is a composite m e a s u r e of "longevity" (life expectancy), " k n o w l edge" (adult literacy plus mean years of schooling, weighted two to one), and " s t a n d a r d of living" (that is, p u r c h a s i n g power, or gross domestic p r o d u c t per head, a d j u s t e d to allow for the local cost of living) (UNDP 1994:91). U N D P analysts say that the lack of reliable statistics makes any more c o m p r e h e n s i v e index impossible to construct. A d d i n g more indices to the list w o u l d not necessarily m a k e the index a n y more accurate either, given the overlap b e t w e e n the v a r i o u s indicators. U N D P analysts are also aware that an HDI score can still hide other disparities not included. Switzerland, for example, is second on the HDI list of countries, but is twenty-first w h e n it comes to r a n k i n g countries in terms of tertiary enrollments. Those countries with a high G N P per capita do, as one might expect, h a v e a high HDI as well. The most notable feature of the HDI, however, is the n u m b e r of countries w h e r e this correlation does not hold. Some countries like Angola, Gabon, Guinea, Namibia, Saudi Arabia, and the United Arab Emirates have a m u c h higher G N P p e r capita than their HDI one. Gabon is the most conspicuous in this regard. For other countries it is the opposite: their relative HDI ranking places them well above their relative G N P per capita. Examples here are China, Colombia, Costa Rica, Cuba, Guyana, Madagascar, and Sri Lanka, with China the most conspicuous in this regard. Also notable is the w a y over time all the countries for which d a t a exist h a v e m a d e "substantial progress" in h u m a n development. Moreover, while G N P per capita may go d o w n , the HDI for a country never does, indicating, U N D P analysts claim, that " h u m a n

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capital, once it is built up, is more likely to be sustainable" (UNDP 1994:96). Data exist for the U N D P time f r a m e (1960-1992) for only 114 countries. Given that there are currently more than 185 countries in the world and that the missing seventy or so are presumably a m o n g the less well-organized and well-to-do ones, the fact that these missing countries do not a n d cannot appear in the U N D P ' s tables does rather compromise the general picture they provide. C o m i n g to broad conclusions about the "progress" and " d e v e l o p m e n t " of the world, w h e n more than a third of the countries in it are not part of the analysis on which such statements are m a d e , would seem premature at best and misleading at worst. This is particularly so w h e n the missing countries are ones that are highly likely to pull the progressive trend line d o w n . They might conceivably even reverse it. If we were able to include these missing countries we might well find not global improvement overall, as UNDP analysts currently claim, but global de-development and decline. We might also find that the g r o w i n g disparity b e t w e e n countries might be m u c h greater t h a n the HDI suggests. While seemingly oblivious to the limits set by their overall data, the analysts at the U N D P are aware that average figures do conceal disparities within countries as well as revealing disparities between them. Their calculations show, for example, how "different p o p u l a tion g r o u p s in the same country seem to be living in different w o r l d s " (UNDP 1994:90), and they nominate ethnic groups, regional groups, social classes, and w o m e n and men, in this regard. Ideally, they argue, different indices should be devised for each major subnational group. They have begun as a consequence to disaggregate the HDI, and by using specific HDIs for " g e n d e r " a n d "income distribution" they have been able to adjust the overall HDI to get a more accurate comparative picture. The data collection exercise is even harder here, since the statistics that state makers collect do not usually include such categories as " m e n " and " w o m e n . " From the statistics they have been able to collate, however, U N D P analysts have read a "startling" picture of discrimination, and particularly g e n d e r discrimination. For example, in the fortythree cases where there are data (twenty-four industrial; n i n e t e e n not) "all countries" a p p a r e n t l y "treat w o m e n worse than men." In the industrial ones this is most notable in terms of employment and wages. In the nonindustrial ones this is most notable everywhere, that is, in employment, wages, education, nutrition, and health. The U N D P analysts say this is simply "unconscionable," particularly after "so m a n y years of debate on g e n d e r equality, so m a n y changes in national legislation and so m a n y years of struggle" (UNDP 1994:97). And so it is, t h o u g h the picture is not all one of

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g l o o m . Brighter spots d o appear. A d j u s t i n g the H D I scores for gend e r disparity, for e x a m p l e , w e find C a n a d a g o i n g f r o m first to n i n t h a n d J a p a n g o i n g f r o m third to n i n e t e e n t h in the overall r a n k i n g s . F i n l a n d , h o w e v e r , g o e s f r o m s i x t e e n t h to third a n d N e w Z e a l a n d f r o m eighteenth to eighth. This is evidence of very different national projects at w o r k , and a p r i m a facie a r g u m e n t for policies that specifically try a n d redress g e n d e r imbalances. A d j u s t i n g for the extent of i n c o m e d i s p a r i t i e s also affects H D I scores. W h e n egalitarian as o p p o s e d to n o n e g a l i t a r i a n income structures are a c c o u n t e d for, countries like Brazil a n d B o t s w a n a go d o w n t h e ladder, w h i l e C h i n a a n d Sri L a n k a a n d Jamaica go u p . This s u g g e s t s that policies can m a k e for m o r e f a i r n e s s in t e r m s of income, too. In-country disparities h a v e been the focus of a n u m b e r of U N D P s t u d i e s , a n d the results f u r t h e r c o n f i r m t h e c o m m o n s e n s e expectation that d e v e l o p m e n t a l p r o g r e s s w i t h i n a state can be m o r e p r o b lematic than d e v e l o p m e n t a l progress b e t w e e n one state a n d another. Of the nineteen provinces in Nigeria, for example, the one w i t h the h i g h e s t H D I is on a p a r w i t h Sri L a n k a . The lowest, on the o t h e r h a n d , has an H D I b e l o w Guinea, w h i c h is the w o r s t of all the listed states. Within these regions are f u r t h e r disparities, of course. These s h o w u p in g e n d e r terms, most notably, a n d in terms of income, too. The U N D P is n o t alone in t r y i n g to p r o v i d e a m o r e n u a n c e d m e a s u r e of d e v e l o p m e n t , t h o u g h its efforts in this regard h a v e b e e n the most influential so far. Since 1993 t h e U n i t e d N a t i o n s C h i l d r e n ' s F u n d , for example, has been d e v e l o p i n g a n a n n u a l " p r o g r e s s of nat i o n s " r e p o r t in its b i d to m e a s u r e h o w well c o u n t r i e s h a v e c o m plied w i t h the goals agreed to in 1990 at the United N a t i o n s ' World S u m m i t for Children. "National p e r f o r m a n c e g a p s " h a v e been identified b e t w e e n the actual level of progress in child survival, nutrition, a n d p r i m a r y e d u c a t i o n statistics, a n d the level one w o u l d "expect" given a c o u n t r y ' s G N P per capita (UNICEF 1995a). W h y is it t h a t all of the a b o v e h a s a v a g u e l y d e n i g r a t o r y air a b o u t it, h o w e v e r ? Despite the clear concern b e i n g s h o w n for global u n d e r d o g s , the U N D P ' s H D I a n d U N I C E F ' s p r o g r e s s of n a t i o n s m e a s u r e share w i t h their G N P p e r capita cousin a sense of r e m o t e ness f r o m the w o r l d . The q u a n t i t i e s seem disconcerting. The qualit a t i v e e x p e r i e n c e of w h a t is b e i n g d e s c r i b e d has b e e n filtered o u t . This serves U N D P ' s a n d U N I C E F ' s research p u r p o s e s well e n o u g h , b u t it's h a r d not to b e s o m e w h a t cynical a b o u t h o w well the result r e p r e s e n t s reality. C o m p a r e m y account of U N D P ' s HDI, for example, with A t t e r b u r y ' s account of C r u s o e ' s island. The point b e c o m e s plain. One reason for the feeling of distance has been a t t r i b u t e d to U.S. state m a k e r s . A f t e r World War II, the U n i t e d States w a s s e e k i n g to

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cement the capitalist world's sense of U.S. preponderance. A part of the process is the appropriation of the concept of underdevelopment, which created a two-part model of the world—one of haves and have-nots, with nothing in between and nothing of each in the other. U.S. state makers were not, as they saw it, creating world poverty where none had been before. Rather, they were putting themselves at the apex of the postwar world. Thus when Truman chose to label "underdeveloped" people as such, in his inaugural speech on January 20, 1949, "two billion people," Esteva argues, "became underdeveloped." They stopped, in effect, "being what they were, in all their diversity" and became an "inverted mirror of others' reality: a mirror that belittle[d] them and sen[t] them off to the end of the queue. . . . Today, for two-thirds of the peoples of the world, underdevelopment is a threat that has already been carried out; a life experience of subordination and of being led astray, of discrimination and subjugation" (Esteva 1992:7). By posting development as a goal, Esteva says, U.S. state makers and U.S. "development specialists" were making a radical assault on the self-confidence of the poor. For those less well-off in the world, Esteva argues, using the language of development itself "impedes thinking of one's own objectives, . . . undermines confidence in oneself and one's own culture, . . . clamours for management from the top down [and] converts participation into a manipulative trick to involve people in struggles for getting what the powerful want to impose on them" (Esteva 1992:8). To be "developed" is not, in this light, to cease being "underdeveloped." It is to accept the ideologies of the West and to copy the ways of living that these ideologies prescribe. It is to accept as definitive such concepts as economic growth and the universality of scarcity. It is to emulate the desire to evolve toward the "ever more perfect forms" of the mercantilist, the socialist, and especially the liberal dream (Esteva 1992:10, 23). In every case these are borrowed dreams and they are contested from the margins. They remain the dominant dreams of the day, however, and if it can be said, as Lewis Mumford once did, that every culture lives within its dream, then this fact about the world political economy deserves the closest possible attention.

IMPERIALISM How did such dreams become hegemonic? The first step in defining what the world deems worth doing was the assertion, by European

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princes in the seventeeth century, of the p r i m a c y of the sovereign state. The curious construct these princes m a d e is n o w universal, and h o w it became so is a story in itself. Though they started c o m m a n d e e r i n g other people's resources from the start, European capitalists and European state makers became involved, in the nineteenth century, in an extraordinary grab for land. For example, in 1800 European countries controlled 30 percent of the earth's surface. By 1914, however, this figure was nearly 85 percent. This was imperialism at its most naked. Europeans present on such a scale in the world meant the unprecendented presence of their thought forms as well. These included the ideology of statism itself, that is, the idea that people should live in territorially bounded, centrally governed, nominally equal jurisdictions called states. The E u r o p e a n empires of the nineteenth century were mostly destroyed by two twentieth-century wars b e t w e e n lesser but highly ambitious p o w e r s and greater, dominant ones. After these wars, the a d m i n i s t r a t i v e territories that m a d e u p the E u r o p e a n empires, or more exactly, key elites within them, were inspired to claim "state" status themselves. "States" subsequently proliferated, and as the leaders of n e w states, these elites were all keen to demonstrate how i n d e p e n d e n t they had become. The suggestion that imperialism (in the sense of one country overtly dominating another) should still be prevalent became highly provocative u n d e r such circumstances. Moreover, it didn't seem to fit the facts. As a consequence those w h o w a n t e d to talk about the p h e n o m e n o n f o u n d a very small audience. Michael Barratt Brown (1974:17) notes, for example, h o w an a t t e m p t to hold a seminar on "imperialism" at Oxford University in the late 1950s drew only four participants. The success of U.S. state makers in b u i l d i n g a postwar order to their o w n design did not go entirely u n r e m a r k e d , however, since their design did seem to have some notable imperial features, and particularly w h e n U.S. state makers became engaged, in the 1960s, in an expensive land w a r in Vietnam. This had a politicostrategic c o m p o n e n t to it, as manifest in the land w a r part. But it also had politicoeconomic and politicocultural c o m p o n e n t s . It became less and less clear at this time, for example, w h e t h e r the ideas Americans h a d a b o u t " d e v e l o p m e n t " did m u c h m o r e than act as a gloss on the U.S. drive to stay at the top. M e a n w h i l e , the Soviets were i n t e r v e n i n g in H u n g a r y and Czechoslovakia. A conference by Barratt Brown, held at this somewhat later date and on the same theme of imperialism, drew over a h u n d r e d participants, all of w h o m seemed quite keen to dust off the concept and to retest its explanatory value.

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In the 1990s imperialism is once again in eclipse, and a n o t h e r conference on it w o u l d probably be d o w n to four people again. So w h y discuss it here? Simply because it is still w o r t h asking, as Atterbury suggests, w h e t h e r the c o n t e m p o r a r y eclipse of the concept of imperialism is d u e to imperialism itself h a v i n g come to an end, or w h e t h e r it is more a matter of the w i d e s p r e a d perception of imperialism as having come to an end. Or both. It might be that the old, territorially tangible, politicostrategic form of imperialism is indeed no longer m u c h a p p a r e n t , b u t that imperialism does exist in the form of politicoeconomic and politicocultural practices. The lack of tangibility of these other w a y s of imposing the h u m a n will m a y make it harder to appreciate their cont e m p o r a r y significance. That doesn't m e a n they d o n ' t matter, t h o u g h . There m a y well, in other w o r d s , still be d o m i n a n c e and subordinance in the world of an imperialistic kind, b u t we d o n ' t see it as such because we still expect to see it in terms of held g r o u n d , directly governed, r a t h e r than in material a n d mental terms that allow for much more indirect and diffuse chains of c o m m a n d . To a mercantilist in particular, preoccupied with state autonomy, imperialism retains strong, traditional, territorial associations. Mercantilism is a strategy that makes for statist a u t o n o m y and self-reliance. In all f o r m s of mercantilism, this is d o n e by p r o m o t i n g a clear version of w h a t is "outside" and "inside" the state. In the inw a r d - l o o k i n g form, a u t a r k y is preferred. In the o u t w a r d - l o o k i n g form, mercantilists try to make others subordinate to themselves. Historically, Brown says, mercantilists saw " t r a d e and the flag moving together" as far as this could be arranged. " M o d e r n states, [however, fight] for control over shares in total w o r l d economic activity" (Brown 1974:27). Finance is directed toward h o m e investments and to foreign investments that p r o m o t e statist selfsufficiency. In terms of the capitalist world system, this means d o m inating markets. For liberals, nationalistic/imperialistic b e h a v i o r of this sort is an u n w e l c o m e rock in the road t o w a r d the liberal free m a r k e t Utopia. Since liberals m a k e an ideological distinction between "economics" and "politics" as well, an "imperialistic" rock is going to be construed by liberals in terms of either "political" imperialism or "economic" imperialism, or both. Political imperialism is usually attributed to a "general impulse to dominate," that is, to the " p o w e r - h u n g r y or . . . irrational g r o u p psychology" people s u p p o s e d l y manifest, a n d more particularly "the cultivation of nationalism which combines b o t h " (Brown 1974:23). Joseph Schumpeter, for example, saw imperialism largely in this light. He called it the "objectless disposition on the part of a

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state to unlimited forcible expansion." In a capitalist world system like that of today, "imperialism" seemed to him to be an "atavism"— a relic f r o m the past (Schumpeter 1951:85). It w a s a precapitalist p h e n o m e n o n of little relevance to c o n t e m p o r a r y times. A completely capitalistic world w o u l d be one, he believed, that had no imperialism in it. Since capitalism relies on free exchange, and since any attempt to e x p a n d territory by force will disrupt that f r e e d o m and be bad for business, capitalists will eschew it. They will be m u c h more likely to set u p d i s a r m a m e n t and arbitration systems rather than imperial ones. Economic imperialism, in liberal language, is imperialism that occurs for economic reasons. In classical liberal terms, the movement of goods, capital, and labor should be unrestricted, and state controls over such movements should be abolished. In practice economic nationalists (mercantilists) find myriad w a y s to frustrate what is seen to be an otherwise straightforward, developmentally advantageous, and universalizing process. Free marketeering can even be frustrated by the workings of capitalism itself. John Hobson argued as much at the turn of the century, maintaining that capitalists save in the good times, investing their savings in e x p a n d e d production, thereby flooding the market with too m a n y goods (Hobson 1988). Rather than lower prices or raise wages, capitalists then look for markets for their s u r p l u s goods elsewhere. If need be, they call on their h o m e state armies to force these markets open. Which is why, Hobson believed, you get imperialism u n d e r capitalism. It has n o t h i n g to do with feudal "hangovers," he argued. It has everything to do instead with the policies state makers p u r s u e in capitalism's defense. To a Marxist, it is capitalists w h o are responsible for imperialism in the industrial capitalist era. Capitalists compete to increase productivity and create new markets, and this has imperializing effects. They also compete to r e d u c e their labor costs, and the most cursory r e a d i n g of the w o r l d labor m a r k e t quickly d e m o n s t r a t e s how imperialistic this process has been as well. The primitive accumulating that European protocapitalists did in the fifteenth and sixteenth centuries not only m e a n t developing trade, for example. It also m e a n t d r i v i n g E u r o p e a n p e a s a n t s f r o m the land and a p p r o p r i a t i n g by violent m e a n s the precious metals and the labor p o w e r of the Americas (Potts 1990:9). After an initial period of p l u n d e r (estimated by Las Casas to h a v e cost, in the Caribbean alone, 15 million lives) the c o n q u i s t a d o r s realized the value of Indian labor power and turned to slavery as well. Indeed, "Indian slavery was the first large-scale system in the history of capitalism to exploit the w o r k e r s of c o n q u e r e d territories outside Europe to any great extent" (Potts 1990:16).

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The more advanced accumulating that E u r o p e a n capitalists did in the nineteenth and twentieth centuries also required labor power. Luxemburg, following Marx, specifically notes this point, a r g u i n g that "capitalist production . . . can[not] m a n a g e w i t h white labour alone. . . . It must be able to mobilise world labour p o w e r w i t h o u t restriction in order to utilise all the productive forces of the globe" (Luxemburg 1951:362). Which is why, especially to an early Marxist like L u x e m b u r g , imperialism was not a matter of political or nationalistic p u r p o s e of the sort Hitler, for example, w a s to indulge in. It was m u c h more a matter of the "extension by industrial capitalists of that form of commodity production in which labour becomes itself a c o m m o d i t y " (Brown 1974:50-51). That's clearly a very different view of imperialism from either of the liberalist ones. Driven by the need to compete, that is, to "exp a n d or die," capitalists create a system w h o s e logic allows only f o r w a r d m o m e n t u m . Like r u n n e r s leaning f o r w a r d and h a v i n g to run faster and faster so as not to fall flat on their faces, successful capitalists have to beat the competition or s u r r e n d e r the field. Imperialism, in this respect, is simply w h a t capitalists do w h e n they try to beat the competition, or not have it beat them. It involves the (extremely profitable) use of colonized a n d neocolonized labor power. Thus Potts (1990:223-224) concludes that "in the final analysis it is debatable w h e t h e r the w o r l d market for labour p o w e r has contributed more to the development of the metropole or to the und e r d e v e l o p m e n t of the colonised territories," since the "losses incurred by the colonies and countries still today not permitted to develop as a result of slavery, coolieism, colonial forced and migrant labor, the brain drain and labour migration . . . must surely be many times greater than the huge profits which the metropole drew from these forms of exploitation" and which, as a " p e r m a n e n t and integral part" of Western European and North American development, she considers to have been the basis for the d e v e l o p m e n t of those parts of the world to date. To Lenin, imperialism was not so much about exploiting foreign workers, t h o u g h he did note that imperialists did this, but about capitalists exporting capital. "Typical of the old capitalism," Lenin (1973:72) said, "when free competition had u n d i v i d e d sway, was the export of goods. Typical of the latest stage of capitalism, w h e n monopolies rule, is the export of capital." Imperialism, in this regard, is the capitalism of countries that have become "overripe" (Lenin 1973:73). It f e a t u r e s large global firms, the m e r g i n g of b a n k and industrial capital to create finance capital, the export of that capital in the form of loans to governments, direct investment in p r o d u c t i o n in a m o u n t s greater than

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t r a d e in c o m m o d i t i e s , a n d t h e t e r r i t o r i a l d i v i s i o n of m o s t of t h e w o r l d a m o n g t h e b i g g e s t capitalist p o w e r s . This t e r r i t o r a l d i v i s i o n c a m e to a n e n d w h e n t h e g r e a t E u r o p e a n e m p i r e s c o l l a p s e d . T h e last of t h e s e e m p i r e s w a s t h e Soviet one. T h e o t h e r f e a t u r e s of i m p e r i a l i s m t h a t L e n i n i d e n t i f i e d d o not d i s a p p e a r j u s t b e c a u s e t h e territorial o n e s do, h o w e v e r . All of t h e m , in r e f o r m i s t M a r x i s t p a r lance, r e m a i n key f e a t u r e s of the global political e c o n o m y . M o s t colonies b e c a m e territorially i n d e p e n d e n t in the t w e n t i e t h century. T h o u g h a r m e d i n t e r v e n t i o n in these n e w states in s u p p o r t of capitalist c o n c e r n s w a s h a r d to j u s t i f y b e c a u s e of t h e i m p o r t a n c e all state m a k e r s p l a c e d u p o n s o v e r e i g n t y as s u c h , a r m e d i n t e r v e n tion d i d n o t cease; n o r d i d n o n a r m e d i n t e r v e n t i o n . W h a t can selfd e t e r m i n a t i o n m e a n , for e x a m p l e , w h e n state m a k e r s are sold c h e a p i n t e r n a t i o n a l credit t h a t e n d s u p c o s t i n g t h e m d e a r , a n d w h e n t h e IMF t h e n tells g o v e r n m e n t s to s t r u c t u r a l l y a d j u s t , t h a t is, to p r i v a tize their e n t e r p r i s e s , r e d u c e their b u d g e t deficits, d e v a l u e their currencies, e l i m i n a t e their s u b s i d i e s a n d price controls, d i s m a n t l e t h e i r t r a d e a n d i n v e s t m e n t b a r r i e r s , a n d cut or r e s t r a i n w a g e s , or t h e y c a n ' t q u a l i f y f o r b a l a n c e - o f - p a y m e n t s relief? H o w r e l e v a n t is territorial s o v e r e i g n t y w h e n b e h i n d t h e m a p of h i g h politics lies t h e m a p of w o r l d c a p i t a l i s m — a m a p t h a t is b e c o m i n g p r o g r e s s i v e l y h a r d e r to o b s c u r e . F r o m the a b o v e w e can see t h a t M a r x i s t i d e a s a b o u t the d e v e l o p m e n t of c a p i t a l i s m , a n d of i m p e r i a l i s m as w e l l if w e a c c e p t t h e c o n n e c t i o n M a r x i s t s see b e t w e e n the t w o , g e n e r a l l y e m p h a s i z e t h e w a y c a p i t a l i s t s e x p l o i t s o m e a r e a s of t h e w o r l d at t h e e x p e n s e of o t h e r s . Critics of the M a r x i s t a p p r o a c h h i g h l i g h t the fact t h a t t h e s e e x p l o i t e d a r e a s are m a r g i n a l to m o d e r n c a p i t a l i s m . M o s t c a p i t a l i s t t r a d e a n d i n v e s t m e n t , t h e y say, is a m o n g the h i g h l y c a p i t a l i z e d a n d i n d u s t r i a l i z e d a r e a s of t h e w o r l d . It is not b e t w e e n t h e s e a r e a s a n d those less " d e v e l o p e d " in this r e g a r d ( R e y n o l d s 1981:105). A n d this is so. The relative insignificance of m a r g i n a l d o m a i n s d o e s not m e a n , t h o u g h , t h a t they are n o t e x p l o i t e d . It is not e n o u g h , Marxists reply, to cite lack of centrality as proof of the absence of i m p e r i a l i s m . W h i l e M a r x i s t s like L e n i n a n d B u k h a r i n s a w the w o r l d in t e r m s of i m p e r i a l c e n t e r s a n d i m p e r i a l i z e d p e r i p h e r i e s , t h e y also s a w t h e n a t i o n a l i d e n t i t y of capitalists as b e i n g of p a r a m o u n t concern. K a u t sky (1988) d i s a g r e e d , since h e s a w the i n t e r n a t i o n a l c o h e r e n c e of the capitalist class as b e i n g greater, a n d he s a w this c o h e r e n c e as b e i n g m o r e s i g n i f i c a n t t h a n t h e s t a t e c e n t r i c i n c o h e r e n c e of the w o r l d . K a u t s k y w a s m o r e i n t e r e s t e d in w h a t h e called " u l t r a - i m p e r i a l i s m , " w h i c h w a s , as h e s a w it, a n e w p h a s e of c a p i t a l i s m , d o m i n a t e d b y a singular, unitary, global b o u r g e o i s i e . Lenin a n d B u k h a r i n , h o w e v e r , s a w t h e i n t e r n a t i o n a l i z a t i o n of c a p i t a l i s m n o t o n l y as n e c e s s a r y to

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its sustained g r o w t h b u t as heightening the competition b e t w e e n national fractions of capital; b e t w e e n state-based traders a n d investors, that is (Bukharin 1925). While Kautsky and his concept of a w o r l d class of capitalists that rules the world is at o d d s with those w h o believe in the continuing sovereign significance of states, Kautsky's concept may not be so controversial w h e n we think of that superimperialist class in more cultural terms—as one sharing a c o m m o n "consciousness," that is, and as one that shapes " p o p u l a r " consciousness w o r l d w i d e (Petras 1993:139). This class would be doing m u c h more than maximizing its market shares. They would be p u r s u i n g their profits and a c c u m u l a t i n g their capital by exporting "culture," that is, by exp o r t i n g such cultural commodities as p a c k a g e tours, educational services, computer software, or movies. This is partly what Marx meant, no doubt, w h e n he said that the ruling ideas in the world were likely to be those of the ruling class. Exporting culture is highly profitable. "The export of entertainment commodities," as Petras points out, "is one of the most i m p o r t a n t sources of capital accumulation and global profits," with an increasing proportion (currently about 20 percent) of North America's richest capitalists getting their wealth f r o m mass m e d i a (Petras 1993:139, 141). The reformist Marxist, Antonio Gramsci, also m a d e m u c h of the notion that r u l i n g ideas have a life of their o w n (Gill 1993). They play a "major role," such reformist Marxists say, in "dissociating people from their cultural roots and traditions of solidarity, replacing them with media-created ' n e e d s . ' " Thus w o r k e r s are encouraged to make invidious comparisons between each other and those " b e l o w " them in "life style . . . race and g e n d e r " terms. The gap between workers and those "above" them is then m a d e to seem innocuous and even necessary (Petras 1993:139). Thus while the corporations p u r v e y i n g "Hollywood, CNN, and Disneyland" may have taken over today f r o m the state and church missionaries of old, the imperialistic intention, in Marxist terms, is exactly the same. This includes the silencing of dissent by the provision of escapist fantasies (Petras 1993:141). And it involves blaming victims for their o w n poverty, and m a k i n g change seem a personal rather than a collective affair. Exporting culture, in other words, is part and parcel, in Marxist terms, of coordinating and consolidating global market capitalism. Gill (1990:296) identifies not so m u c h a global capitalist class at w o r k here as an "intersecting set of establishments." He cites in this regard the Trilateral Commission, which w a s a reformist liberalist g r o u p of Americans, Europeans, and Japanese w h o in the w a k e of President Nixon's classical liberal solutions to the United States'

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f i n a n c i a l p r o b l e m s of the 1970s s o u g h t to l e g i t i m i z e a m o r e ref o r m i s t liberal alternative of the sort Bretton W o o d s w a s s u p p o s e d to p r o v i d e . There is a rich selection of liberal fora of this sort, sharing a n d s e e k i n g to d i s s e m i n a t e t h e s a m e liberalist v o c a b u l a r y that Marxists c o n s i d e r culturally imperialistic.

THE "ASIAN ALTERNATIVE" If i m p e r i a l i s m persists, albeit in n o n t e r r i t o r i a l f o r m s , t h e n h o w c o m e c o u n t r i e s not a l r e a d y i n d u s t r i a l i z e d , " m o d e r n i z e d , " a n d dev e l o p e d h a v e b e c o m e so? H o w c o m e Taiwan, H o n g Kong, Singapore, a n d South Korea (the n e w l y i n d u s t r i a l i z e d countries, or NICs) h a v e b e c o m e so successful in G N P per capita t e r m s ? A n d h o w come o t h e r Asian countries, like I n d o n e s i a , T h a i l a n d , a n d M a l a y s i a (the n e w l y i n d u s t r i a l i z i n g economies, or NIEs), as well as p a r t s of C h i n a a n d I n d i a , are j o i n i n g t h e m n o w ? S h o u l d w e p r o c l a i m as a consequence, as Tsuru (1993:219) does in his discussion of Japanese capitalism, t h a t the "era of i m p e r i a l i s m is n o w a t h i n g of the p a s t " ? M i g h t it n o t seem c h u r l i s h to ask if s u c h a t t e m p t s to get out f r o m u n d e r the i m p e r i a l w e i g h t of the West, especially such s e e m i n g l y successful ones as these, are less t h a n proof of T s u r u ' s assertion? What, by contrast, of most of the countries of Africa and Latin A m e r ica? W h a t if the end of i m p e r i a l d e p e n d e n c y actually m e a n s w h a t Marx t h o u g h t it w o u l d , namely, m o r e capitalism, not less? And w h a t if m o r e capitalism a n d m o r e capitalists m e a n s m o r e social distress, not less; that is, greater wealth b u t greater poverty, too, a planet gutted a n d p o i s o n e d in the drive to industrialize, a n d a kind of imperialism less territorially g r o u n d e d a n d statecentric b u t still p e r v a s i v e and exploitative in politicoeconomic a n d politicocultural terms? Liberals w o u l d say that marketeering, even g o v e r n m e n t a l l y regulated marketeering, has made for genuine progress by any measure except p e r h a p s those of e n v i r o n m e n t a l w e l l - b e i n g a n d f e m a l e liberation. Certainly s o m e t h i n g h a s b e e n h a p p e n i n g in these countries, a n d s o m e t h i n g notable, too, b u t w h a t is it? A n d is it " d e v e l opment" and "anti-imperialism"? The regional model w a s Japan, w h o s e state m a k e r s b e g a n w h a t t h e y called the " c a t c h - u p " process a f t e r the Meiji R e s t o r a t i o n in 1868. Their motives w e r e clearly mercantilist, a n d they c a u g h t u p so well t h a t they w e r e able to e m u l a t e in the East the i m p e r i a l l a n d g r a b of t h e E u r o p e a n p o w e r s in the West. Decisively d e f e a t e d in World War II, their territorial e m p i r e at an e n d , t h e y r e s o l v e d to catch u p a second time. H a v i n g lost World War II, they resolved to

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win the second world peace. This they d u t i f u l l y did, by b l e n d i n g g o v e r n m e n t a l p l a n n i n g and highly disciplined m a r k e t e e r i n g in a kind of corporate capitalism peculiarly their own. This was not a particularly liberal model (Sharma 1995). It was very far from Adam Smith's laissez-faire notion that "little else" is required to become p r o s p e r o u s as a nation other than order, low taxes, and the "tolerable a d m i n i s t r a t i o n of justice." For the Japanese, d e v e l o p m e n t required a "governed market," a system of private enterprises " c o o p e r a t i n g a n d c o m p e t i n g u n d e r state supervision," and a " h e a v y i n v e s t m e n t in e d u c a t i o n " (Wade 1992:315). There w a s a strong element of necessity in all of this, since Japan had no a p p a r e n t c o m p a r a t i v e a d v a n t a g e except the will to m a k e one. They m a d e many, a n d as a consequence were able to sustain for more than a decade g r o w t h rates in the order of 10 percent. The Japanese model, t h o u g h notably illiberal, w a s extraordinarily successful and one that other capitalists and state makers in the region w a n t e d to be able to copy. Four countries did. These countries not only had the will to industrialize, a n d the Japanese e x a m p l e to follow, they h a d U.S. capital and a lot of cheap labor power. To these " s i t u a t i o n a l " factors some a d d a cultural comp o n e n t , namely, " i n d u s t r i a l n e o - C o n f u c i a n i s m . " Vogel says this m e a n s meritocratic elites selected by rigorous examination procedures, g r o u p loyalty used to foster w o r k e r fidelity to their employers, a n d a culture of self-cultivation used to i m p r o v e w o r k skills (Vogel 1991:101). All these factors, plus large internal markets, intense competitiveness, and close attention to quality control, ultimately m a d e it possible to o u t p r o d u c e and outsell those w h o had built the system in the first place. This list of factors is not exhaustive, however. Others w o u l d a d d to it the a u t h o r i t a r i a n n a t u r e of the national governments concerned, high domestic savings (which h e l p e d to generate capital at home), a consistent focus on valuea d d e d m a n u f a c t u r e for export, familial coherence, and cultural homogeneity. "It is hard to remember," as Schlossstein (1991:9) points out, that in the 1960s "nobody expected Asia to do well." And yet by the end of the 1980s four seemingly insignificant Asian states were able to account for two-thirds of the export of all m a n u f a c t u r e d goods, and t w o of them, together w i t h Japan, held half of all the w o r l d ' s foreign exchange reserves. In the light of the a r g u m e n t s above about cultural imperialism it is interesting to note h o w some in the NICs now claim that their high rate of development has been d u e not to their embrace of the Western idea of rationalistic, individualistic progress but to their own "affective" model of change. This model emphasizes, they say,

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" h u m a n emotional b o n d s , g r o u p orientation, and h a r m o n y " (Tai 1989:7). It consciously rejects liberalist rhetoric. And it is fair to say that NIC cultures do not place as high a priority on self-interest as N o r t h American or European ones do, t h o u g h this is notably changing as more people in the NICs "develop." What, if anything, is "Asian" about Asian capitalism, then? Are there differences between the Japanese, for example, and the Americans that matter in this regard? Are there differences between their capitalist practices that reveal different w a y s of doing capitalist industrialism in practice? Japanese state makers, wealth makers, and m i n d makers certainly took from the m o d e r n i z i n g West in a highly selective way, retaining m a n y p r e m o d e r n i s t characteristics in the process. As an island culture, which cut itself off from the rest of the world for four h u n d r e d years, this is hardly surprising. Are the prem o d e r n i s t elements they retain of any great significance, however, given the p o w e r of the m o d e r n i s t capitalist ones to p r o d u c e not only industrial change but intellectual change as well? One element of premodernist Asianism that has remained relatively strong is the concern for family. A sense of family is still clear t h r o u g h o u t Pacific Asia, with the possible exception now of Singapore. It is part of the w a y East Asian w o r k e r s are s u p p o s e d to feel a b o u t the c o m p a n i e s that e m p l o y them. The ethos still requires w o r k e r s to sell not just their labor for a wage. It requires active participation in a paternalistic community, that expects long h o u r s and loyalty. In Marxist language this only masks the underlying process of exploitation. Asianists generally accord it greater cultural significance than that, however. Apart from the pervasiveness of familial feeling, we also find a p r o f o u n d respect for education. This has d e e p roots in the Chinese m a n d a r i n tradition, and has proved an i m p o r t a n t cultural asset. A respect for education makes easier the task of acquiring the knowledge-intensive base that c o n t e m p o r a r y d e v e l o p m e n t is built u p o n . Societies that value learning school their y o u n g to the s t a n d a r d s that capitalist industrialism requires. While k n o w l e d g e alone will not result in development, knowledge is a key factor of production. D e v e l o p e d countries are technologically complex countries, and such complexity cannot be sustained w i t h o u t skilled people to sustain it. Skilled people can be imported if a country has the m e a n s to pay. Oil-rich countries in the Middle East do just that. Poorer societies have to train their own, and those with a cultural inclination t o w a r d doing so clearly have an a d v a n t a g e in this regard. There seems little else that can m e a n i n g f u l l y be said a b o u t Asian capitalism b e y o n d the above. Saying any more starts argum e n t s that are impossible to finish, anyway. Westerners have been

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criticized for having assumed that they are rational and therefore virtuous and mature, while Orientals (those born east of Suez) are irrational, lazy, and corrupt (Said 1978). The notion of an Asian capitalism sometimes comes close to turning this old prejudice on its head, replacing former "bads" with contemporary "goods." In resisting such a move, we must be wary, nonetheless, of not excluding an important aspect of the Pacific Asian political economy from analysis, just because it is a relatively contentious and intangible one. Is the success of the NICs likely to continue? While liberals will concede that the NICs have succeeded in mobilizing their resources, liberals can be pretty g r u d g i n g in this regard. Krugman, for example, claims that this extraordinary mobilization effort was "no more than what the most boringly conventional economic theory w o u l d lead us to expect" ( K r u g m a n 1994:78). He is p r e p a r e d to see such g r o w t h continuing in the f u t u r e , b u t only if priority is placed on marketeering, not state intervention. If this is not done, he says, then the NICs can anticipate " d i m i n i s h i n g returns." Mercantilists, on the other h a n d , see intervention as essential to c o n t i n u i n g success. Classical Marxists, meanwhile, discern the seeds of class conflict in what has been h a p p e n i n g and hold out for revolution. Reformist Marxists focus on the Asian embrace of capitalism, b u t are less convinced revolution will or even can be the historical result. Social movements mobilize on the margins. Is the success of the NICs likely to be repeated t h r o u g h o u t the rest of the nonindustrialized world? Even if it is, t h o u g h ecological limits alone will probably preclude it, h o w are we to explain such success, at the same time as explaining the w a y the poorest quarter of the w o r l d ' s countries have seen their share of world income decline? One-fifth of the w o r l d ' s p o p u l a t i o n , w e should remember, currently shares less than 1.5 percent of it (UNDP 1994:64). For some time analysts have wondered w h e t h e r the "absorptive capacity of industrial c o u n t r y m a r k e t s " was "infinite" or not, and some have concluded that it probably is not. As a result, a sharpening of "protective resistance" is anticipated, as state m a k e r s seek ways of dealing with surges of exports from the NICs and the NIEs (Cline 1982:81-82). To liberals, protectionism can only p u n i s h the aspiring poor by blighting their developmental prospects. They see the plight of the destitute fifth of the global population in this light. To mercantilists, this kind of protectionism w o u l d still be w a r ranted, however, since it's always a matter, in their view, of "every state for itself." Marxists, and particularly reformist Marxists, w o u l d say that development and u n d e r d e v e l o p m e n t can and do occur at the same time. Indeed, most w o u l d argue they are causally linked. Certainly

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a n y facts a b o u t t h e g r o w i n g d i s p a r i t i e s of w e a l t h in the w o r l d — l i k e t h e o n e cited a b o v e , or t h e f a c t t h a t t h e p o o r e s t f i f t h of t h o s e w h o live in the 44 p o o r a n d t h e 20 rich c o u n t r i e s f o r w h i c h t h e W o r l d B a n k c o u l d f i n d statistics s h a r e o n l y 5 p e r c e n t n o w of the n a t i o n a l i n c o m e , w h i l e t h e richest f i f t h in t h o s e c o u n t r i e s s h a r e 40 p e r c e n t to 60 p e r c e n t — w o u l d c o m e as n o s u r p r i s e to t h e m w h a t s o e v e r (World B a n k 1994b:220).

REGIONALIZATION D e v e l o p m e n t in c o n v e n t i o n a l t e r m s (high G N P p e r capita; h i g h H D I r a n k i n g ) is n o t s o m e t h i n g t h a t can b e t a k e n for g r a n t e d , in o t h e r w o r d s . A t t e r b u r y ' s C r u s o e is a c u t e l y a w a r e of this fact, w h i c h is w h y h e tells F r i d a y to " k e e p a l o o k o u t a n d let n o o n e l a n d . " O n c e w o n , d e v e l o p m e n t can also b e lost, a n d m u c h of t h e s t o r y of p o s t w a r d e v e l o p m e n t is just that. It is as m u c h a tale, in o t h e r w o r d s , of the rich s t r i v i n g to m a i n t a i n t h e i r s t a t u s , as it is of the p o o r s e e k i n g to e l e v a t e theirs. T h e a g r e e m e n t at B r e t t o n W o o d s w a s d e s i g n e d to r e c o n s t r u c t t h e West a n d to a f f i r m t h e role of U.S. s t a t e m a k e r s as g l o b a l g u a r d i a n s , U.S. w e a l t h m a k e r s as global rent takers, a n d U.S. m i n d m a k e r s as a r b i t e r s of g l o b a l liberal belief. T h e m o r e of a m a t e r i a l success t h e y m a d e of the r e c o n s t r u c t i o n of the West, h o w e v e r , a cate g o r y t h a t d i d h a v e o n e h o n o r a r y m e m b e r in t h e East, n a m e l y J a p a n , t h e m o r e d i f f i c u l t it p r o v e d f o r the U n i t e d States to s u s t a i n a n y sort of g l o b a l p r i m a c y as p o l i c e m a n , p r o f i t m a k e r , a n d p a r a d i g m sheriff. T h e r e c o n s t r u c t i o n of E u r o p e d i d r e s u l t in m a t e r i a l success. W i t h it w e n t a r e g i o n a l a t t e m p t to c o n s t r u c t a E u r o p e a n c o m m o n market, and more. The most forward-thinking Europeans, harboring f o n d m e m o r i e s of f o r m e r glories b u t fully a w a r e t h a t t h e s e w e r e not to b e h a d a g a i n in t h e s a m e w a y — a n d c e r t a i n l y n o t in singlen a t i o n t e r m s — s o u g h t a collective b a s e o n w h i c h to r e b u i l d t h e i r p r e s e n c e in t h e w o r l d . T h e y c r e a t e d first a E u r o p e a n E c o n o m i c C o m m u n i t y (the EEC). T h e y t h e n t r i e d to t u r n this i n t o s o m e t h i n g m o r e i n t e g r a t e d , t h a t is, a E u r o p e a n U n i o n . The latter c u l m i n a t e d in a n a t t e m p t u n d e r the M a a s t r i c h t Treaty to p r o v i d e f o r a single Eur o p e a n c u r r e n c y a n d a m o r e c o l l a b o r a t i v e foreign policy. T h e q u e u e of c o u n t r i e s w a n t i n g to join the EU w a s seen as e v i d e n c e of the p o p u l a r i t y of t h e o v e r a l l a p p r o a c h , w i t h r e g i o n a l s t a t e m a k e r s w h o w e r e n o t a l r e a d y m e m b e r s f e a r i n g t h e c o n s e q u e n c e s if t h e y failed to join.

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An ambitious attempt w a s also m a d e to pool state sovereignty. Since sovereignty w a s b e i n g pooled to a sovereign p u r p o s e , the principle w a s generally acceptable, though the British in particular f o u n d it hard to think of using non-British money, and getting, a c o m m o n foreign and d e f e n s e policy continued to present difficulties. The "willingness a m o n g most m e m b e r states to deepen integration" (Murray 1993:2) in Europe w a s relatively high from the start, however, if only because what member states stood to lose in h a v i n g to conform to EU agreements, they saw b r i n g i n g gains in terms of other national interests. The EU is very curious. It is a paradoxical mixture of intergovernmentalism and supranationalism, of interdependence and stubborn difference, that is u n i q u e to this association and reflects the fact "that it was not f o u n d e d exclusively to provide a higher level of p r o d u c t i o n , industrialisation and prosperity a m o n g the m e m b e r states. It also had the aim of the creation of a high authority above the nation state" (Murray 1993:11). Analysts differ in their assessments of h o w far the process of creating such a "high a u t h o r i t y " has gone. Some see E u r o p e a n states as still largely u n t o u c h e d by the confederal initiatives of the last forty years. Others see European state sovereignty as u n d e r siege. It is still of significance, they say, that state makers talk of national commitments abroad, on a single-state basis. Others again believe that a European "overstate" is already extant, and they complain about its bureaucratic and undemocratic character. In practice we find a European-level no-man's-land, with state m a k e r s continuing to a r g u e about h o w far to s u r r e n d e r w h a t a n d h o w m u c h sovereign power. Meanwhile, capitalists seem to be using every opportunity the EU f r a m e w o r k provides to cash in. At the same time they seek to c o n f o u n d the construction of a more fully developed version of a "social Europe" with a European mini m u m wage, e m p l o y m e n t protection, c o m m o n ecological policies, and living and w o r k i n g s t a n d a r d s leveled u p rather than d o w n (Lambert 1991:12-15). In practice we find a " t w o - s p e e d Europe" with "rich and p o o r regions, and poor people (Turks, North Africans . . . women) in the rich regions to serve the rich." We find, critics claim, a "soulless hypermarket," and liberal productivism at an "impasse" (Lipietz 1992: 135, 143). This is a far cry f r o m a Europe able to offer creative developmental alternatives. But then, what ought we reasonably to expect f r o m that part of the w o r l d that gave us the nation-state and capitalism in the first place? Should we anticipate the active repudiation of state making and wealth m a k i n g in either of these forms? Do we

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d a r e h o p e for a l u m i n o u s e x a m p l e of h u m a n c o m m u n i t y a n d p l a n e t a r y c a r e i n s t e a d ? E v e n E u r o t o p i a n s d o n ' t t h i n k so. So far, in fact, it h a s b e e n a r g u a b l y the o p p o s i t e . E u r o p e a n s in t h e E U h a v e c o n t i n u e d to s h o w us h o w n o t to p r o v i d e a " l i g h t h o u s e for n a t i o n s a n d a h o p e f o r p e a c e " ( L i p i e t z 1 9 9 2 : 1 4 3 ) . E u r o p e a n s h a v e , of c o u r s e , g i v e n t h e w o r l d a lot o v e r t h e last f e w h u n d r e d y e a r s . T h e y a l s o h a v e a " l o t to a n s w e r f o r " ( L a m b e r t 1991:9). W i t h all this a n d w i t h t h e c o l l a p s e of the S o v i e t U n i o n , w h i c h b r o u g h t to an e n d the U . S . r a t i o n a l e for m a i n t a i n i n g a s i g n i f i c a n t m i l i t a r y p r e s e n c e in E u r o p e , the U n i t e d S t a t e s f o u n d itself c o m pletely e c l i p s e d there. It h u n g on, t h o u g h , s e e k i n g to use its p o s t w a r politicostrategic alliance, N A T O (the N o r t h Atlantic Treaty O r g a n i z a tion), p l u s a w e b of c o r p o r a t e c o n n e c t i o n s , as the basis for d o i n g so. In their o w n h e m i s p h e r e U.S. state m a k e r s , in 1987, n e g o t i a t e d a liberal trade and investment a r r a n g e m e n t with their C a n a d i a n c o u n t e r p a r t s . T h e U.S. s t a t e m a k e r s w e r e s e e k i n g g r e a t e r a c c e s s to t h e C a n a d i a n m a r k e t , a n d C a n a d i a n state m a k e r s w e r e a f r a i d of t h e c o n s e q u e n c e s of b e i n g d e n i e d g r e a t e r a c c e s s to t h e U . S . o n e . C h a n g e s in p r o d u c t i o n m e t h o d s , f r o m F o r d i s t to p o s t - F o r d i s t o n e s , a l s o m a d e U . S . a n d C a n a d i a n s t a t e m a k e r s d i s p o s e d to a c c e p t a M e x i c a n p r o p o s a l for a N o r t h A m e r i c a n free t r a d e z o n e . T h e M e x i can s t a t e m a k e r s p r o m i s e d a large p o o l of c h e a p l a b o r for t h e l o w skill, m a n u f a c t u r i n g p a r t of N o r t h A m e r i c a ' s p r o g r e s s i v e l y m o r e d i s a g g r e g a t e d f a c t o r y l i n e s . T h e f r a m e w o r k f o r a free t r a d e z o n e w a s f o r m u l a t e d in t e r m s of a N o r t h A m e r i c a n F r e e T r a d e A s s o c i a tion ( N A F T A ) . T h i s w a s t h e first step in a l a r g e r s t r a t e g y d e s i g n e d to i n c l u d e m a n y m o r e C e n t r a l a n d S o u t h A m e r i c a n c o u n t r i e s in a U . S . - d o m i n a t e d r e g i o n a l a s s o c i a t i o n c a p a b l e of r i v a l i n g t h a t of E u r o p e , a n d m o r e lately, that of Asia, too. N A F T A c l e a r l y h a d c o r p o r a t e s a n c t i o n as w e l l . S e v e r a l t h o u s a n d c o r p o r a t i o n s m o u n t e d a m u l t i m i l l i o n - d o l l a r c a m p a i g n to l o b b y on N A F T A ' s b e h a l f ( C y p h e r 1 9 9 3 ) . C o r p o r a t e p u b l i c i s t s arg u e d that tariff-free e x p o r t s to the n e w c o n s u m e r m a r k e t s in M e x i c o w o u l d c r e a t e j o b s for U . S . w o r k e r s a n d that the i n f l u x of c o m p e t i n g f i r m s t h e r e w o u l d b e t h e k e y to M e x i c a n d e v e l o p m e n t . T h e h i d d e n a g e n d a w a s a c c e s s to M e x i c a n oil. T h e c a m p a i g n b u d g e t of the U . S . c o r p o r a t i o n s w a s m a t c h e d b y that of the S a l i n a s g o v e r n m e n t in M e x i c o City, w h i c h had s t a k e d its p o l i t i c a l c r e d i b i l i t y on g e t t i n g N A F T A a g r e e d to. N o t t h a t the S a l i n a s g o v e r n m e n t w a s r e n o w n e d for l e t t i n g c r i t i c s u n d e r m i n e its " c r e d i b i l i t y , " g i v e n its local r e p u t a t i o n for b r e a k i n g strikes, a b o l i s h i n g u n i o n s , a n d m u r d e r i n g m e m b e r s of t h e o p p o s i t i o n P a r t i d o R e v o l u c i o n a r i o D e m o c r á t i c a ( L a t i n America Report, J a n u a r y / M a r c h 1994:1-2).

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In a campaign with such high stakes it is "not s u r p r i s i n g / ' h o w ever, "that the corporate sector a n d g o v e r n m e n t s in each country . . . used their e n o r m o u s financial resources and influence to shape the public policy, and academic debates" (Grinspun a n d C a m e r o n 1993:15). Signed in December 1992, NAFTA is the w o r l d ' s largest free trade zone. It has an estimated 370 million consumers and provides for the elimination of tariffs between Canada, the United States, and Mexico over a period of fifteen years, a free flow of i n v e s t m e n t across NAFTA-state b o r d e r s — b u t not, predictably, a free flow of labor—an $8 billion N o r t h American D e v e l o p m e n t Bank, and tripartite e n v i r o n m e n t a l and labor commissions. It is also the "first comprehensive trade agreement between developing and industrialised countries on essentially equal terms" (Thakur 1994:9). Equal terms between unequals is not a recipe for fair outcomes, however, a point not lost u p o n Mexican workers. Despite predictions that NAFTA w o u l d create h u n d r e d s of t h o u s a n d s of jobs, they actively resisted it. So did small farmers w h o saw their livelihoods being eliminated by corn imports f r o m the United States. The Zapatistas, for example, w h o subsequently took arms against the Mexican g o v e r n m e n t in the southern state of Chiapas, specifically cited NAFTA as a key reason for their revolt. Resistance came also from U.S. workers, especially those destined to lose their jobs in i n d u s tries where plants were transferred to labor-cheap, environmentally m o r e lax Mexico. U.S. unions claimed that h u n d r e d s of t h o u s a n d s of jobs had been transferred to Mexico even before the a g r e e m e n t w a s signed. U n d a u n t e d , liberals continued to anticipate enhanced development for all. The basic promise was always greater productivity and rising wages. Marxists, w h o saw NAFTA as merely providing an "additional p a t h w a y . . . to capital mobility on the part of TNC's [transnational corporations]" and as part of a process—in train since the mid1970s—of "global structural a d j u s t m e n t " (Ranney 1993:8, 11), anticipated its collapse. Under the gloss of free trade, they said, associations like NAFTA actively eschew social democracy. They p r o m o t e the global reach of private companies a n d transnational capitalists; help u n d e r m i n e state capacities to intervene to public p u r p o s e ; p u s h monetarist macroeconomics, privatization, and deregulation; u n d e r w r i t e reduced s t a n d a r d s of occupational and environmental care; marginalize unions; exploit labor; and drive development along "outward-oriented, natural resource-based, and TNC-driven" lines. The negative effects of the d e v e l o p m e n t a l model that NAFTA represented were felt, Marxists said, not only by Mexicans b u t by

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Americans and Canadians, too. The "de-industrialization" that followed the relocation of plants in the export-processing (maquiladora) zones along the U.S.-Mexican border resulted in regional U.S. and Canadian unemployment. In liberal terms, this was not supposed to matter. National growth was supposed to create more jobs for the unemployed to take. In practice, the "adjustment" process for the more developed United States and Canada was painful, too, and particularly so for the underdeveloped peoples within those countries, namely, women, African-Americans, and Latinos. None of this deterred countries in East and Southeast Asia, who as they grew began to make efforts to explore regional free trade associations as well. There was a distinctly protectionist feel about these efforts. While successive GATT negotiations had succeeded in sustaining the growth in world trade at a higher rate than regional ones, the end of the boom of the 1950s and 1960s led to a regional defensiveness in Asia that struck analysts as mercantilistic (Dolan 1991:14). These efforts were also fostered by U.S. state makers, who were eager not to be eclipsed in Asia as they had been in Europe. U.S. state makers began to play up the need for regional free trade cooperation, and a fledgling Asia-Pacific Economic Cooperation (APEC) association was formed. However it is defined, the Asian region is the most dynamic of the world's politicoeconomic zones. Since the end of World War II a number of its most successful members have been moving from the global margins into the global core, where they now account collectively for more than half of the global GNP (Bollard and Mayes 1992). Industrialization seemed to spread in a wave from Japan, first to the NICs and later to the NIEs and beyond. The region became a major manufacturing one. Instead of exporting primary commodities and importing finished goods, it began to export finished goods. Even the oil price hikes of the 1970s, the consequent downturn of the 1980s, and the combined effects of appreciating currencies and Western protectionism were not enough to stop the growth process. As they grew in volume, Asia's manufacturing exports began to diversify. The United States, for example, became progressively less important as an Asian export market. Asia, for example, became Japan's largest export market. One-third of its exports went there as opposed to just over one-quarter to the United States. Japan also replaced the United States as Asia's most important source of foreign direct investment, and the Asian NICs and NIEs became major investors in their own region (Kwan 1993:1-6). Over the same time Asia became more important for the United States, absorbing a third of its exports and employing in the process

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2.6 million U.S. workers. Since a 1 percent increase in the United States' market share in Asia was equivalent to several h u n d r e d t h o u s a n d more U.S. jobs, there was clearly an incentive for the United States to stay e n g a g e d with the region. And engage it did, aggressively a d v o c a t i n g open markets, p r o m o t i n g the presence of U.S. companies, and p u r s u i n g the sort of policies one w o u l d expect from a state that saw itself as an Asian as well as a European and an American power. From the NICs and NIEs, the developmental frontier m o v e d on to s o u t h e r n China. In October 1992, at its f o u r t e e n t h national congress, the Chinese c o m m u n i s t party a u t h o r i z e d the idea of a "socialist market e c o n o m y " and an " o p e n - d o o r " policy for trade a n d investment. After China, Asian analysts b e g a n seeing commercial success stories e v e r y w h e r e . A N o r t h e a s t Asian zone (northern China, Japan, South Korea, and the Russian Far East), a South China zone (Hong Kong, southern China, and Taiwan), a Greater ASEAN zone (the Association of Southeast Asian Nations—Indonesia, Malaysia, Singapore, Brunei, Thailand—plus the socialist countries of Indochina), two growth triangles—Singapore and its neighboring provinces in Indonesia and Malaysia, and a n o r t h e r n triangle that included those provinces of Thailand, Malaysia, and Indonesia that b o r d e r the Straits of Malacca, the overseas Chinese—there seemed no end to the list. These zones were also pictured as forming interlocking "networks of cooperation," arrayed along a Western Pacific corridor. Since each had its own extraregional connections, any notion of the Asian region as closed off f r o m the world, or subordinated to some regional hegemon like Japan, seemed singularly farfetched (Elek 1993:5). Formal attempts to integrate new frontiers into the region have always been relatively limited. The longest-standing local organization is ASEAN, though not until recently w a s it thought o p p o r t u n e to use it to foster politicoeconomic cooperation. Fears that the EU or NAFTA might start closing off m a r k e t s or diverting i n v e s t m e n t f u n d s elsewhere, to Eastern Europe and to South America, for example, p r o m p t e d such thinking. An ASEAN Free Trade Area (AFTA) was proposed to provide for a C o m m o n Effective Preferential Tariff (CEPT) scheme between ASEAN nations, capable of progressively reducing tariffs. An East Asia Economic Caucus (EAEC), which included Japan but excluded the United States, was proposed by Malaysian Prime Minister Mahathir M o h a m a d in an unsuccessful bid to head off a m u c h more significant a t t e m p t to m a k e regional arrangements for trading and investment purposes, namely, the Asia-Pacific Economic Cooperation association (APEC).

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Initiated in 1989 by the ASEAN countries, plus Australia, N e w Zealand, China, Japan, Canada, and the United States, this w a s the first major a t t e m p t formally to a r r a n g e the flow of g o o d s and m o n e y in the region. More of an A s i a n / P a c i f i c Rim organization than one confined to Asian countries only, APEC was the "governmental arm" of the Pacific Economic Cooperation Council (PECC)— the two other a r m s being the Pacific Basin Economic Council (PBEC—the b u s i n e s s organization) and the Pacific Trade a n d Development Conference (PAFTAD—the academic arm). The pattern a p p a r e n t from all the regional initiatives discussed above is claimed by analysts like Dolan to s u p p o r t the idea that the w o r l d political e c o n o m y is regionalizing. Over the d e c a d e of the 1980s, Dolan says, trade within the E u r o p e a n and N o r t h American areas grew more quickly than trade between them, and trade within North America and Asia did likewise. The exceptions were Asia and Europe, w h e r e t r a d e b e t w e e n these d o m a i n s grew more quickly than trade within t h e m — t h o u g h Dolan sees this as d u e "in part to the low a m o u n t of trade at the outset of the 1980s" and also (though he doesn't provide a figure) as d u e to the very high rate of growth of intra-Asian trade (Dolan 1991:15). All this w o u l d seem to s u p p o r t the idea of "three blocs, centred a r o u n d the l e a d i n g economies, U.S., Japan, and Germany," using "intraregional trade as a source of p o w e r and interregional exports as a w e a p o n against external c o m p e t i t o r s " (Hessler 1994:3). It would seem to suggest, in other words, that regionalization is being used by the main developed states as one w a y to stay developed. There is a counterposition here, however. Hessler, for example, w h o takes a three-decade rather t h a n a one-decade time f r a m e (1960-1988), a m u c h more comprehensive set of "regions," "subregional clusters," and "mega-regions," and a m u c h bigger data base, concludes that the " ' n e w regionalism' of the 1980s is a fiction" (Hessler 1994:10). According to him, the empirical evidence suggests that "regionalization in international t r a d e p a t t e r n s was stronger d u r i n g the 60s, followed [because of the oil price hikes] by a decade of stagnation and de-regionalization," and then a decade of reintegration u p to the level of 1970 (Hessler 1994:9). What seems to be regionalization, in other words, is only a process of "normalization" after the slow years of the 1970s. Hessler notes a growing integration of "various Pacific clusters" d u r i n g the 1980s, a result roughly comparable with Dolan's, t h o u g h this w a s not, he says, of significance compared to the trade between the countries of the Pacific Rim as a whole. It w a s this that grew most m a r k e d l y over the period, particularly as c o m p a r e d to the

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integration process in Europe—which was a comparatively "indifferent" one—and the integration process in the Western Hemisphere as a whole, which was falling apart rather than coming together. As a consequence Hessler (1994:1) sees "American a t t e m p t s to reinforce intraregional trade" as offering "no practicable alternative to the multilateral perspective in trade policy." The c o m p a r i s o n with the 1930s, he argues, simply does not hold. Not only does the c o n t e m p o r a r y p a t t e r n of regionalization fail to p r o v i d e the appropriate parallels, b u t the pattern of trade is no longer m a t c h e d (unlike that of the 1930s) by the pattern of long- and short-term capital m o v e m e n t s . The w o r l d ' s currency regions are not the same as the w o r l d ' s t r a d i n g regions any more, and given the size and reach of the c o n t e m p o r a r y flows of global finance, trade regions have become less significant anyway. "Financial markets do not follow the rules of regional trade patterns," Hessler concludes. Indeed, "normally," he says, "they w o r k against regional m a r k e t s " (Hessler 1994:1). They favor globalizing ones, which does not b o d e well for developed states trying to stay that way. Unless they can keep their currencies f r o m pricing their t r a d e goods too high a n d can m a k e their o w n share of profits f r o m speculative capital flows, they are likely to see corporations trading intrafirm to escape tariffs, m o v i n g capital to escape taxes, and leaving them the poorer for it. Like Atterbury's Crusoe, it's always a struggle to stay ahead.

8 World Development: Unmaking the Environment •

Jonathan Swift (1729) "A Modest Proposal for Preventing the Children of Ireland from Being a Burden to their Parents and Country"

It is a melancholy Object to those, w h o walk through this great Town or travel in the Country, when they see the Streets, the Roads and C a b b i n - d o o r s c r o w d e d with Beggars of the Female Sex, f o l l o w e d by three, four, or six Children, all in Rags, and importuning every Passenger for Alms. T h e s e M o t h e r s instead of being able to work for their honest livelyhood, are forced to employ all their time in Strolling to beg S u s t e n a n c e for their helpless Infants, who, as they grow up, either turn T h i e v e s for want of Work, or leave their dear Native Country, to fight for the Pretender in Spain, or sell t h e m s e l v e s to the Barbadoes. I think it is agreed by all Parties, that this prodigious number of Children in the Arms, or on the Backs, or at the Heels of their Mothers, and frequently of their Fathers, is in the present deplorable state of the K i n g d o m , a very great additional grievance; and therefore w h o e v e r could find out a fair, cheap and easy method of m a k i n g these Children sound and useful M e m b e r s of the C o m m o n w e a l t h , would deserve so well of the publick, as to have his Statue set up for a Preserver of the Nation. But my intention is very far f r o m being c o n f i n e d to provide only for the Children of professed Beggars, it is of a much greater Extent, and shall take in the whole Number of Infants at a certain Age, w h o are born of Parents in e f f e c t as little able to support them, as those w h o d e m a n d our Charity in the Streets. A s to my own part, having turned my T h o u g h t s , for many Years, upon this important Subject, and maturely weighed the several S c h e m e s of other Projectors, I have always found them grossly mistaken in their computation. It is true, a Child just dropt f r o m its D a m , may be supported by her milk, for a Solar Year with little other Nourishment, at most not above the Value of two Shillings, which the Mother may certainly get, or the Value in scraps, by her lawful Occupation of Begging; and it is exactly at one Year Old that I propose to provide for them in such a manner, as, instead of being a Charge upon their Parents, or the Parish, or wanting Food and Raiment for the rest of their Lives, they shall, on the Contrary, contribute to the Feeding and partly to the Cloathing of many T h o u s a n d s .

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Unmaking the Environment T h e r e is l i k e w i s e a n o t h e r great A d v a n t a g e in my S c h e m e , that it will

p r e v e n t t h o s e v o l u n t a r y A b o r t i o n s , and that horrid p r a c t i c e o f W o m e n m u r d e r i n g their B a s t a r d C h i l d r e n , a l a s ! t o o f r e q u e n t a m o n g us, S a c r i f i c i n g the poor i n n o c e n t B a b e s , I doubt, m o r e to a v o i d the e x p e n c e than the S h a m e , w h i c h w o u l d m o v e T e a r s and Pity in the m o s t S a v a g e and i n h u m a n b r e a s t . T h e n u m b e r o f S o u l s in this K i n g d o m b e i n g usually r e c k o n e d o n e M i l l i o n and a h a l f , o f t h e s e 1 c a l c u l a t e t h e r e m a y b e about t w o hundred t h o u s a n d C o u p l e w h o s e W i v e s are B r e e d e r s ; f r o m w h i c h n u m b e r 1 s u b s t r a c t thirty T h o u s a n d C o u p l e s , w h o are a b l e to m a i n t a i n their o w n C h i l d r e n , a l t h o u g h 1 a p p r e h e n d t h e r e c a n n o t b e s o m a n y , under the present D i s t r e s s e s o f the K i n g d o m ; but this b e i n g g r a n t e d , t h e r e will r e m a i n an hundred and s e v e n t y thousand B r e e d e r s . 1 again S u b s t r a c t f i f t y T h o u s a n d , for t h o s e W o m e n w h o m i s c a r r y , or w h o s e C h i l d r e n die b y a c c i d e n t , or d i s e a s e within the Year. T h e r e o n l y r e m a i n an hundred and t w e n t y thousand C h i l d r e n o f poor P a r e n t s a n n u a l l y b o r n . T h e q u e s t i o n t h e r e f o r e is, H o w this n u m b e r shall b e r e a r e d , and provided f o r ? w h i c h , as I h a v e already said, under the present S i t u a t i o n o f A f f a i r s , is utterly i m p o s s i b l e by all the M e t h o d s hitherto p r o p o s e d ; f o r w e can neither e m p l o y t h e m in H a n d i c r a f t or A g r i c u l t u r e ; w e neither build H o u s e s , (1 m e a n in the C o u n t r y ) nor c u l t i v a t e L a n d : T h e y c a n v e r y s e l d o m p i c k up a L i v e l y h o o d b y S t e a l i n g till t h e y arrive at six y e a r s O l d ; e x c e p t w h e r e they are o f t o w a r d l y parts; a l t h o u g h , I c o n f e s s , they learn the R u d i m e n t s m u c h e a r l i e r ; d u r i n g w h i c h t i m e they c a n h o w e v e r be p r o p e r l y l o o k e d upon o n l y as P r o b a t i o n e r s ; as 1 h a v e b e e n i n f o r m e d by a p r i n c i p a l G e n t l e m a n in the C o u n t y o f C a v a n , w h o p r o t e s t e d to m e , that he n e v e r k n e w a b o v e o n e or t w o I n s t a n c e s under the A g e o f s i x , e v e n in a part o f the K i n g d o m so r e n o w n e d for the q u i c k e s t p r o f i c i e n c y in that A r t . 1 am a s s u r e d by our M e r c h a n t s , that a B o y or a Girl b e f o r e t w e l v e years O l d , is no s a l e a b l e C o m m o d i t y , and e v e n w h e n they c o m e to this A g e , they will not y i e l d a b o v e t h r e e P o u n d s , or three P o u n d s and h a l f a C r o w n at m o s t , on the E x c h a n g e ; w h i c h c a n n o t turn to A c c o u n t e i t h e r to the P a r e n t s or K i n g d o m , the C h a r g e o f N u t r i m e n t and R a g s h a v i n g b e e n at least f o u r t i m e s that V a l u e . I shall now t h e r e f o r e h u m b l y p r o p o s e m y o w n T h o u g h t s w h i c h I hope will not be l i a b l e to the least O b j e c t i o n . I h a v e b e e n a s s u r e d by a very k n o w i n g A m e r i c a n o f my a c q u a i n t a n c e in L o n d o n , that a y o u n g healthy C h i l d well Nursed is at a y e a r O l d a m o s t d e l i c i o u s n o u r i s h i n g and w h o l e s o m e F o o d , w h e t h e r S t e w e d , R o a s t e d , B a k e d , or B o i l e d ; and I m a k e no doubt that it will e q u a l l y s e r v e in a F r i c a s i e , or a Ragoust. I do t h e r e f o r e h u m b l y o f f e r it to p u b l i c k c o n s i d e r a t i o n , that o f the Hundred and t w e n t y t h o u s a n d C h i l d r e n , a l r e a d y c o m p u t e d , t w e n t y t h o u s a n d m a y b e r e s e r v e d f o r B r e e d , w h e r e o f o n l y o n e fourth part to b e M a l e s ; w h i c h is m o r e than w e a l l o w to S h e e p , b l a c k C a t t l e , or S w i n e , and my R e a s o n is,

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that t h e s e C h i l d r e n are s e l d o m t h e Fruits of M a r r i a g e , a C i r c u m s t a n c e not m u c h r e g a r d e d by our S a v a g e s , t h e r e f o r e , o n e M a l e will be s u f f i c i e n t to s e r v e f o u r F e m a l e s . T h a t t h e r e m a i n i n g H u n d r e d t h o u s a n d m a y at a year O l d be o f f e r e d in Sale to the P e r s o n s of Q u a l i t y and F o r t u n e , t h r o u g h the K i n g d o m , a l w a y s a d v i s i n g t h e M o t h e r to let t h e m S u c k p l e n t i f u l l y in t h e last M o n t h , s o as to r e n d e r t h e m P l u m p , and Fat f o r a g o o d T a b l e . A C h i l d will m a k e t w o D i s h e s at an E n t e r t a i n m e n t for F r i e n d s , and w h e n the F a m i l y d i n e s alone, t h e f o r e or hind Q u a r t e r will m a k e a r e a s o n a b l e D i s h , and s e a s o n e d with a little P e p p e r or Salt will be very g o o d B o i l e d on the f o u r t h Day, e s p e c i a l l y in Winter. 1 h a v e r e c k o n e d u p o n a M e d i u m , that a C h i l d j u s t b o r n will w e i g h 12 p o u n d s , and in a solar Year, if t o l e r a b l y n u r s e d , e n c r e a s e t h to 2 8 P o u n d s . 1 g r a n t this f o o d will b e s o m e w h a t dear, and t h e r e f o r e v e r y p r o p e r f o r L a n d l o r d s , w h o , as they h a v e a l r e a d y d e v o u r e d m o s t of the P a r e n t s s e e m to h a v e the best Title to the C h i l d r e n . I n f a n t ' s flesh will b e in S e a s o n t h r o u g h o u t the Year, but m o r e p l e n t i f u l in M a r c h , and a little b e f o r e and a f t e r ; f o r w e are told by a g r a v e A u t h o r , an e m i n e n t F r e n c h P h y s i c i a n , that Fish b e i n g a p r o l i f i c k D y e t , there are m o r e C h i l d r e n b o r n in R o m a n C a t h o l i c k C o u n t r i e s a b o u t nine M o n t h s a f t e r L e n t , than at a n y o t h e r S e a s o n ; t h e r e f o r e r e c k o n i n g a Year a f t e r Lent, the M a r k e t s will b e m o r e glutted than u s u a l , b e c a u s e t h e N u m b e r of P o p i s h I n f a n t s , is at least t h r e e to o n e in this K i n g d o m , and t h e r e f o r e it will h a v e one o t h e r Collateral a d v a n t a g e by l e s s e n i n g the N u m b e r of P a p i s t s a m o n g us. I h a v e a l r e a d y c o m p u t e d the C h a r g e of n u r s i n g a B e g g a r ' s C h i l d (in w h i c h List I r e c k o n all C o t t a g e r s , L a b o u r e r s , a n d f o u r f i f t h s of t h e F a r m e r s ) to be a b o u t t w o S h i l l i n g s per A n n u m , R a g s i n c l u d e d ; and 1 b e l i e v e no G e n t l e m a n w o u l d r e p i n e to g i v e Ten S h i l l i n g s f o r t h e C a r c a s s of a g o o d f a t Child, w h i c h as I h a v e said will m a k e f o u r D i s h e s of e x c e l l e n t N u t r i t i v e M e a t , w h e n he hath only s o m e p a r t i c u l a r F r i e n d , or his o w n F a m i l y to d i n e with h i m . T h u s the S q u i r e will learn to b e a g o o d L a n d l o r d , and g r o w p o p u l a r a m o n g his T e n a n t s , t h e M o t h e r will h a v e Eight S h i l l i n g s neat P r o f i t , and be fit for Work till s h e p r o d u c e s a n o t h e r C h i l d . T h o s e w h o are m o r e t h r i f t y (as I m u s t c o n f e s s the T i m e s r e q u i r e ) m a y flay t h e C a r c a s s ; the Skin of w h i c h , A r t i f i c i a l l y d r e s s e d , will m a k e a d m i r a b l e G l o v e s f o r L a d i e s , and S u m m e r B o o t s f o r f i n e G e n t l e m e n . A s t o o u r City of D u b l i n , S h a m b l e s m a y be a p p o i n t e d f o r this p u r p o s e in the most c o n v e n i e n t parts of it, and B u t c h e r s w e m a y be a s s u r e d will not be w a n t i n g ; a l t h o u g h I rather r e c o m m e n d b u y i n g t h e C h i l d r e n alive, and d r e s s ing t h e m hot f r o m t h e K n i f e , as w e do r o a s t i n g P i g s . A v e r y w o r t h y P e r s o n , a t r u e L o v e r of his C o u n t r y , and w h o s e V i r t u e s I highly e s t e e m , w a s lately p l e a s e d , in d i s c o u r s i n g on this matter, to o f f e r a r e f i n e m e n t u p o n my S c h e m e . H e said, that m a n y G e n t l e m e n of this K i n g d o m , h a v i n g of late d e s t r o y e d their D e e r , he c o n c e i v e d that the Want of Venison m i g h t b e well s u p p l y ' d by the B o d i e s of y o u n g L a d s and M a i d e n s ,

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not exceeding fourteen Years of Age, nor under twelve; so great a N u m b e r of both sexes in every Country being now ready to Starve, for want of Work and Service: And these to be disposed of by their Parents if alive, or otherwise by their nearest Relations. But with due reference to so excellent a Friend, and so deserving a Patriot, I cannot be altogether in his Sentiments; for as to the Males, my American acquaintance assured me f r o m f r e q u e n t Experience, that their Flesh was generally Tough and Lean, like that of our S c h o o l b o y s , by continual exercise, and their Taste disagreeable, and to fatten them would not answer the Charge. Then as to the Females, it would, I think with humble Submission, be a Loss to the Publick, because they soon would b e c o m e Breeders themselves: and besides it is not improbable that s o m e scrupulous People might be apt to Censure such a Practice, (although indeed very unjustly) as a little bordering upon Cruelty, which, I confess, hath always been with me the strongest Objection against any Project, how well soever intended. But in order to justify my Friend, he c o n f e s s e d , that this expedient was put into his Head by the f a m o u s Sallmanaazor, a Native of the Island F o r m o s a , who c a m e f r o m thence to London, a b o v e twenty Years ago, and in Conversation told my Friend, that in his Country when any young Person happened to be put to Death, the Executioner sold the Carcass to Persons of Quality, as a prime Dainty, and that, in his Time, the Body of a p l u m p Girl of f i f t e e n , w h o was crucified for an attempt to poison the Emperor, was sold to his Imperial M a j e s t y ' s prime Minister of State, and other great M a n d a r i n s of the Court, in Joints f r o m the Gibbet, at four hundred Crowns. Neither indeed can I deny, that if the same Use were made of several p l u m p young Girls in this T o w n , who, without one single Groat to their Fortunes, cannot stir abroad without a Chair, and appear at a Play-house, and Assemblies in Foreign fineries, which they never will pay for; the Kingdom would not be the worse. S o m e Persons of a d e s p o n d i n g Spirit are in great concern about that vast N u m b e r of poor People, w h o are Aged, Diseased, or M a i m e d , and I have been desired to imploy my T h o u g h t s what Course may be taken, to ease the Nation of so grievous an Incumbrance. But 1 am not in the least Pain upon that matter, because it is very well known, that they are every Day dying, and rotting, by cold and f a m i n e , and filth, and v e r m i n , as fast as can be reasonably expected. And as to the younger Labourers, they are now in almost as hopeful a Condition. They cannot get Work, and consequently pine away for want of Nourishment, to a degree, that if at any Time they are accidentally hired to c o m m o n Labour, they have not strength to perform it, and thus the Country and themselves are happily delivered f r o m the Evils to c o m e . I have too long digressed, and therefore shall return to my Subject. I think the A d v a n t a g e s by the Proposal which I have made are obvious and many, as well as of the highest Importance.

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For First, as I have already observed, it would greatly lessen the N u m b e r of Papists, with w h o m we are Yearly over-run, being the principal b r e e d e r s of the Nation, as well as our most d a n g e r o u s Enemies, and w h o stay at h o m e on purpose with a Design to deliver the K i n g d o m to the Pretender, hoping to take their A d v a n t a g e by the A b s e n c e of so many good Protestants, w h o have chosen rather to leave their Country, than stay at home, and pay Tithes against their Conscience, to an Episcopal Curate. Secondly, T h e poorer Tenants will have s o m e t h i n g valuable of their own which by Law may be m a d e lyable to Distress, and help to pay their L a n d l o r d ' s Rent, their Corn and Cattle being already seized, and Money a Thing unknown. Thirdly, W h e r e a s the Maintenance of an hundred thousand Children, f r o m t w o Years old, and upwards, cannot be c o m p u t e d at less than Ten Shillings a Piece per A n n u m , the N a t i o n ' s Stock will be thereby increased fifty t h o u s a n d P o u n d s per A n n u m , besides the Profit of a new Dish, introduced to the Tables of all Gentlemen of Fortune in the K i n g d o m , w h o have any R e f i n e m e n t in Taste, and Money will circulate a m o n g our Slaves, the G o o d s being entirely of our own Growth and M a n u f a c t u r e . Fourthly, T h e constant Breeders, besides the gain of eight Shillings Sterling per A n n u m , by the Sale of their Children, will be rid of the Charge of m a i n t a i n i n g them after the first Year. Fifthly, T h i s Food would likewise bring great C u s t o m to Taverns, where the Vintners will certainly be so prudent as to procure the best Receipts for dressing it to Perfection; and consequently have their H o u s e s frequented by all the f i n e Gentlemen, w h o justly value themselves upon their K n o w l e d g e in good Eating; and a skilful C o o k , w h o understands how to oblige his Guests, will contrive to make it as expensive as they please. Sixthly, This would be a great Inducement to Marriage, which all wise Nations have either encouraged by R e w a r d s , or e n f o r c e d by Laws and Penalties. It would encrease the Care and Tenderness of Mothers towards their Children, when they were sure of a Settlement for Life, to the poor Babes, provided in s o m e Sort by the Publick, to their annual Profit instead of E x p e n s e ; we should soon see an honest Emulation a m o n g the married W o m e n , which of them could bring the fattest Child to the Market. Men would b e c o m e as fond of their Wives, during their T i m e of their Pregnancy, as they are now of their M a r e s in Foal, their C o w s in Calf, or Sows when they are ready to farrow, nor offer to beat or kick them (as is too frequent a Practice) for fear of a Miscarriage. Many other Advantages might be e n u m e r a t e d . For Instance, the Addition of s o m e thousand Carcasses in our Exportation of B e r e l ' d Beef: T h e Propagation of S w i n e ' s Flesh, and I m p r o v e m e n t in Art of m a k i n g good Bacon, so much w a n t e d a m o n g us by the great Destruction of Pigs, too f r e q u e n t at our Tables, w h i c h are no way c o m p a r a b l e in Taste, or M a g n i f i c e n c e to a well grown, fat yearling Child, which roasted whole will m a k e a considerable

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Figure at a Lord M a y o r ' s Feast, or any other P u b l i c k E n t e r t a i n m e n t . But this, and m a n y o t h e r s , I omit, b e i n g s t u d i o u s of Brevity. S u p p o s i n g that one t h o u s a n d F a m i l i e s in this City, w o u l d be c o n s t a n t C u s t o m e r s f o r I n f a n t ' s Flesh, b e s i d e s o t h e r s w h o m i g h t h a v e it at m e r r y M e e t i n g s , p a r t i c u l a r l y at W e d d i n g s and C h r i s t e n i n g s , 1 c o m p u t e that D u b l i n w o u l d take off A n n u a l l y a b o u t t w e n t y t h o u s a n d C a r c a s s e s , and the rest of t h e K i n g d o m ( w h e r e p r o b a b l y they will be sold s o m e w h a t c h e a p e r ) the remaining eight Thousand. 1 can t h i n k of no o n e O b j e c t i o n , that will p o s s i b l y b e raised a g a i n s t this P r o p o s a l , u n l e s s it should b e u r g e d , that the N u m b e r of P e o p l e will be t h e r e b y m u c h l e s s e n e d in t h e K i n g d o m . T h i s 1 f r e e l y o w n , and ' t w a s i n d e e d o n e principal D e s i g n in o f f e r i n g it to the World. I d e s i r e t h e R e a d e r will o b s e r v e , that I c a l c u l a t e my R e m e d y for this o n e individual K i n g d o m of Ireland, and for no O t h e r that e v e r w a s , is, or, I t h i n k , ever can be u p o n Earth. T h e r e f o r e let no m a n talk to m e of other E x p e d i e n t s : Of t a x i n g our A b s e n t e e s at f i v e S h i l l i n g s a P o u n d : Of using neither C l o a t h s , nor H o u s e h o l d F u r n i t u r e , e x c e p t w h a t is of our o w n G r o w t h and M a n u f a c t u r e : Of utterly r e j e c t i n g t h e M a t e r i a l s and I n s t r u m e n t s that p r o m o t e F o r e i g n L u x u r y : Of c u r i n g t h e E x p e n s i v e n e s s of P r i d e , Vanity, Idleness, and G a m i n g in our W o m e n : Of i n t r o d u c i n g a Vein of P a r c i m o n y , P r u d e n c e and T e m p e r a n c e : Of learning to love our C o u n t r y , w h e r e i n w e d i f f e r even f r o m L a p l a n d e r s , and the I n h a b i t a n t s of T o p i n a m b o o : Of quitting our A n i m o s i t i e s , and F a c t i o n s , nor act a n y longer like t h e J e w s , w h o w e r e m u r d e r i n g o n e a n o t h e r at the very M o m e n t their City w a s t a k e n : Of b e i n g a little c a u t i o u s not to sell our C o u n t r y and C o n s c i e n c e s f o r n o t h i n g : Of t e a c h i n g L a n d l o r d s to h a v e at least o n e D e g r e e of M e r c y t o w a r d s their T e n a n t s . Lastly, Of p u t t i n g a Spirit of Honesty, Industry, and Skill into our S h o p - k e e p e r s , w h o , if a R e s o l u t i o n c o u l d n o w b e taken to buy o n l y o u r N a t i v e G o o d s , w o u l d i m m e d i a t e l y unite to cheat and exact u p o n us in t h e Price, the M e a s u r e , and the G o o d n e s s , n o r c o u l d e v e r yet b e b r o u g h t to m a k e o n e fair P r o p o s a l of j u s t D e a l i n g , t h o u g h o f t e n and e a r n e s t l y invited to it. T h e r e f o r e 1 repeat, let no M a n talk to m e of these and the like E x p e d i ents, till he hath at least s o m e G l i m p s e of H o p e , that t h e r e will e v e r b e s o m e hearty and s i n c e r e A t t e m p t to put t h e m in Practice. But as to my self, h a v i n g b e e n w e a r i e d out for m a n y Years w i t h o f f e r i n g v a i n , idle, v i s i o n a r y T h o u g h t s , and at length utterly d e s p a i r i n g of S u c c e s s , I f o r t u n a t e l y fell u p o n this P r o p o s a l , w h i c h as it is w h o l l y new, s o it hath s o m e t h i n g Solid and R e a l , of no E x p e n c e and little T r o u b l e , full in our o w n P o w e r , and w h e r e b y w e can incur n o D a n g e r in d i s o b l i g i n g E n g l a n d . For this kind of C o m m o d i t y will not b e a r E x p o r t a t i o n , the Flesh b e i n g of t o o t e n d e r a C o n s i s t e n c e , to admit a l o n g C o n t i n u a n c e in Salt, a l t h o u g h p e r h a p s I c o u ' d n a m e a C o u n t r y , w h i c h w o u ' d be glad to eat u p o u r w h o l e N a t i o n w i t h o u t it. A f t e r all, I am not s o v i o l e n t l y bent upon m y o w n O p i n i o n , as to reject any o f f e r , p r o p o s e d by w i s e M e n , w h i c h shall be f o u n d e q u a l l y I n n o c e n t ,

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C h e a p , Easy and Effectual. But before s o m e t h i n g of that Kind shall be a d v a n c e d in Contradiction to my S c h e m e , and o f f e r i n g a better, I desire the A u t h o r or Authors, will be pleased maturely to consider two Points. First, as T h i n g s now stand, how they will be able to find Food and Raiment for a hundred Thousand useless M o u t h s and Backs. And Secondly, There being a round Million of Creatures in H u m a n Figure, throughout this K i n g d o m , w h o s e whole Subsistence put into a c o m m o n Stock, would leave them in Debt two Millions of P o u n d s Sterling, adding those, w h o are Beggers by Profession, to the Bulk of Farmers, Cottagers and Labourers, with their Wives and Children, w h o are Beggers in Effect; I desire those Politicians, w h o dislike my Overture, and may perhaps be so bold to attempt an A n s w e r , that they will first ask the Parents of these Mortals, Whether they would not at this Day think it a great Happiness to have been sold for Food at a Year Old, in the manner 1 prescribe, and thereby have avoided such a perpetual S c e n e of Misfortunes, as they have since gone through, by the Oppression of Landlords, the Impossibility of paying Rent without Money or Trade, the Want of c o m m o n Sustenance, with neither House nor Cloaths to cover them f r o m the Inclemencies of the Weather, and the most inevitable Prospect of intailing the like, or greater Miseries, upon their Breed for ever. I profess in the Sincerity of my Heart, that I have not the least Personal Interest in endeavouring to promote this necessary Work, having no other Motive than the Publick Good of my Country, by advancing our Trade, providing for Infants, relieving the Poor, and giving s o m e Pleasure to the Rich. I have no Children, by which I can propose to get a single Penny; the youngest being nine Years Old, and my W i f e past Child-bearing.

ENVIRONMENTAL RESPONSIBILITY The theme of overpopulation, along with that of pollution and resource depletion, has long haunted development analysts. While we have pushed on making more of everything, including ourselves, we have also been unmaking the environment. In this sense, world development strategies may have been almost too successful. We may now be too good at using natural resources. We may now be too industrious, since our impact on the world's land, forests, rivers, lakes, oceans, and atmosphere has rapidly become severe. Having learned how to control disease epidemics as well, we have also deprived ourselves of one of the main ways in which, historically, our numbers have been culled. The human population has grown as a consequence, and as the numbers of the living have outstripped the current ways of providing for them, mass poverty has

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ensued, and that has only m a d e environmental d e g r a d a t i o n worse and more widespread. To the problem of o v e r p o p u l a t i o n , Swift suggests a g r u e s o m e solution. The w a y to prevent the poor of Ireland littering the nation's streets and d e g r a d i n g the environment, he says, is to eat their babies. This is considerably more radical than Crusoe's solution, at least in A t t e r b u r y ' s account of Crusoe. Both Swift and Atterbury, h o w ever, pose the same problem and in a similar way. In Swift's Ireland and on C r u s o e ' s island there are just too m a n y people, at least in terms of w h a t can be sustained by the d e v e l o p m e n t policies their ruling classes use. The question of d e v e l o p m e n t policy is unstated in each case and deliberately so, since it is the point of the irony in each case, too. With such prodigious numbers, that is, with such unfortunate policies, charity becomes a problem. Atterbury's Crusoe is p r e p a r e d to offer the f o r t u n a t e Friday the g a r b a g e scraps his d o g and cat d o n ' t want. Swift has a n o t h e r plan. Moreover, it is one he feels sure will a d v a n c e trade, provide for the y o u n g , relieve the poor, a n d give pleasure to the rich. Could redistribution of each country's wealth and a more egalitarian a p p r o a c h to development be another, p e r h a p s preferred solution? Swift and Atterbury don't say. Though it is rarely posed in such stark, and in Swift's case, such disturbing terms, the whole process of world development does raise the question of whether economic growth is possible without severe ecological stress. If we try to protect the environment, however, will we u n d e r m i n e economic growth and stop all development? Indeed, may we not be developing ourselves to death right now, and should we not stop all growth-based development forthwith? These are not questions that come readily to the classically inclined Marxist mind. While those w h o think in these analytic terms talk of transfers of value from wage-slaves to owners and managers, and of the need to explain the prevalence of c o n t e m p o r a r y alienation and exploitation, they have little to say a b o u t p o p u l a t i o n growth, shortage of resources, or holes in the ozone layer. The classical Marxist description in the C o m m u n i s t Manifesto, for example, of capitalists restlessly scouring the globe, clearing whole continents for cultivation and conjuring whole populations out of the ground, gives a clear account of the environmental impact of capitalism on the march. It doesn't dwell on that impact, t h o u g h . It prefers to privilege a concern for class conflict instead. Q u e s t i o n s about the limits to g r o w t h are not ones that come readily to the liberal mind, either. The global division of labor, plus c o m p a r a t i v e advantage, m a y m a k e for p r o d u c t i o n on a m u c h e x p a n d e d scale. They d o n ' t m a k e for environmental responsibility,

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however. Liberal capitalist systems are predicated u p o n n o n s t o p economic growth, and unless we a s s u m e that such g r o w t h is basically ecologically benign, n o n s t o p g r o w t h is generally a cause for concern—not for liberals, though. In her review of "our c o m m o n future" for the United Nations' World C o m m i s s i o n on E n v i r o n m e n t and D e v e l o p m e n t , for example, Gro H a r l e m B r u n d t l a n d (1987:1) notes "ever increasing environmental decay, poverty, and h a r d s h i p in an ever more polluted world a m o n g ever decreasing resources." At the same time she approves what she sees as a " n e w era of economic g r o w t h . " It seems that g r o w t h is not a p r o b l e m in environmental terms. Not only is growth not a problem, but Brundtland welcomes it as a w a y of protecting the environment. G r o w t h is necessary, she says, if w e are to be able to provide for a world population twice the size of that today, which is the level at which the w o r l d ' s population is expected to stabilize. The negative effects of growth are best dealt with by allowing it to continue. "We have in the past," Brundtland says, "been concerned about the impacts of economic growth u p o n the environment. We are n o w forced to concern ourselves with the impacts of ecological stress—degradation of soils, water regimes, atmosphere, and forests—upon our economic prospects." Armed with such concern, we accuse the industrial w o r l d of having used u p already " m u c h of the planet's ecological capital." We attribute the plight of the African poor, for example, not only to national policies that gave "too little attention, too late, to the needs of smallholder agriculture and to . . . rapidly rising p o p u l a t i o n s " b u t to a "global economic system that takes more out of a p o o r continent than it puts in." Is the solution a radical reversal of this extraction process, however? Is it a questioning of the sustainability of industrialism itself? Apparently not, for if Brundtland is to be believed, the solution requires more of the same (Brundtland 1987:5-6). To the radical environmentalist—the deep green—this is liberal u t o p i a n i s m . The radical environmentalist is a conserver. She or he will depict the Brundtland a r g u m e n t as a defense of the market and of free enterprise and as such, as a d e f e n s e of the affluence and greed of the machine-rich, resource-hungry global well-to-do. While liberals m a y gild their defense with a reformist concern for greater state control and greater concern for the " q u a l i t y " of g r o w t h (Brundtland 1987:49), they have no desire, the radicals say, to question the w i s d o m of the growth approach itself, or to ask w h e t h e r it really can meet the needs of the majority of earth's people, w h o are clearly not well-to-do. In w h a t sense, they say, can a system like this, w h o s e advocates readily concede that it provides well for one g r o u p of people and m u c h less well for others, actually be said to " w o r k " (Trainer 1985)?

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To the radical environmentalist, conservation applies to the h u m a n population as well. It is thus that Abernethy (1994:85-86) argues that "economic expansion, especially if it is introduced f r o m outside the society a n d is also b r o a d - b a s e d , encourages the belief that formerly recognized limits can be discounted. . . . Extra births and consequent p o p u l a t i o n g r o w t h . . . overshoot actual o p p o r t u nity." It is noteworthy, she says, that I n d i a n society was stable for two t h o u s a n d years. It only became o v e r p o p u l a t e d in response to the sense that "times are good and getting better." When it appeared to the people that "wealth and o p p o r t u n i t y " could grow " w i t h o u t effort and w i t h o u t limit," then they started r e p r o d u c i n g more. If wealth and opportunity had become widespread, this may not h a v e mattered, at least in the shorter term. One of the most o v e r p o p u l a t e d countries on earth is the N e t h e r l a n d s , but it is not usually regarded as overpopulated because it is developed. Because wealth and o p p o r t u n i t y remain scarce, however, then it is the very effort to alleviate poverty, Abernethy argues, that spurs population g r o w t h . This is w h y we m u s t welcome, she says, the fact that development is now seen as a problem as well as a solution. This s o u n d s uncomfortably like an a r g u m e n t by haves against have-nots. It does raise an important question, however, about the extent to which d e v e l o p m e n t is only ever " a p p r o p r i a t e development," that is, a form of development that sends local signals about the most sustainable move to make next (Abernethy 1994:86-88). The people to send such signals are not state makers, radical environmentalists say, since they are c o m p r o m i s e d by their commitment to markets and growth, or by their proximity to the capitalist class. The people to turn to are members of environmentally active social movements. They are not in it for short-term profits. They are thinking about the longer run. In the long run we will be dead, of course, and it is our descend a n t s and their d e s c e n d a n t s w h o will h a v e to live with the consequences of what we do today (Lipietz 1992:54). It is on their behalf that w e ask about liberal capitalism in terms of its sustainability. W h a t are we to make of a system like this that damages the env i r o n m e n t as a matter of course and only a t t e m p t s to repair it if there seems to be money in it (Lipietz 1992:55)? The hope seems to be that the w o r l d ' s major ecological systems are not ones that continue to cope and then collapse irretrievably. If liberal capitalism m a k e s this assumption, as radical e n v i r o n m e n t a l i s t s say it does, then we must all hope that the planet's basic ecological systems do not pass in this way beyond repair. We must all hope that the liberal capitalist a s s u m p t i o n is correct, for if it is not, then the last lesson our entire species will learn will be the m e a n i n g of environmental responsibility.

9 World Development: Making Margins •

Pura Velasco (1994) "I Am a Global Commodity"

P u r a V e l a s c o g r e w u p in a rural c o m m u n i t y in t h e P h i l i p p i n e s . S h e h a s w o r k e d a s a h e a l t h c a r e w o r k e r in S a u d i A r a b i a a n d as a d o m e s t i c w o r k e r in V i e n n a a n d in C a n a d a . Q . C o u l d y o u b e g i n by t e l l i n g m e a b o u t t h e c o n d i t i o n s in t h e P h i l i p p i n e s that led t o y o u r d e c i s i o n to l e a v e y o u r h o m e a n d g o t o a n o t h e r c o u n t r y to w o r k as a d o m e s t i c w o r k e r ? A . I c a m e f r o m a rural a r e a . T h e r e w a s f i g h t i n g b e t w e e n t h e m i l i t a r y a n d t h e M P A — t h i s is t h e u n d e r g r o u n d m o v e m e n t of t h e r e v o l u t i o n a r y f a c t i o n in t h e P h i l i p p i n e s — a n d I w a s a s i n g l e m o t h e r a n d it w a s v e r y d i f f i c u l t f o r m e to f i n d a j o b . 1 d e c i d e d to g o to t h e city. T h e c i t y — i t ' s o v e r c r o w d e d a n d i t ' s t h e s a m e k i n d of s i t u a t i o n w i t h t h e u n e m p l o y m e n t a n d t h e p o v e r t y . B a s i c a l l y , t h i s k i n d of s i t u a t i o n d r o v e m e to g o o u t a n d s e a r c h f o r b e t t e r o p p o r t u n i t i e s o u t s i d e of t h e c o u n t r y . W e l l , 1 t h o u g h t t h e r e w e r e b e t t e r o p p o r t u n i t i e s o u t s i d e the country. I w e n t to S a u d i A r a b i a as a c l e r k in a h o s p i t a l . A g a i n , in S a u d i A r a b i a it w a s b a s i c a l l y t h e s a m e . I w a s f a c e d w i t h t h e i s s u e of b e i n g d i s c r i m i n a t e d a g a i n s t in c o n n e c t i o n w i t h t h e o t h e r w o r k e r s c o m i n g f r o m t h e f i r s t w o r l d c o u n t r i e s . W e w e r e b a d l y t r e a t e d , t h e s a l a r i e s w e r e not g o o d a n d t h e l i v i n g c o n d i t i o n s w e r e not g o o d . W e w e r e t r e a t e d like c h i l d r e n , s o m e t i m e s w e w e r e treated like animals. . . . Q . Y o u ' v e m e n t i o n e d that w o r k e r s learn f r o m t h e e x p e r i e n c e of e x p l o i t a t i o n . . . . It s e e m s that t h e r e ' s a d i f f e r e n c e in h o w y o u v i e w e d y o u r w o r k e x p e r i e n c e n o w f r o m w h e n y o u s t a r t e d . W h a t led to t h e d e v e l o p m e n t of your analysis? A . 1 w o u l d say that w h e n 1 w a s still a s t u d e n t , b e f o r e I got m a r r i e d , I had a m i d d l e c l a s s kind of c o n s c i o u s n e s s . B u t f r o m t h e t i m e that 1 s t a r t e d w o r k i n g a s a m i g r a n t w o r k e r in S a u d i A r a b i a a n d in V i e n n a a n d h e r e [ T o r o n t o ] , it sort of c r y s t a l l i z e d m y t h o u g h t t h a t I a m a w o r k e r a n d I r e a l l y s e e t h e d i f f e r e n c e s in c l a s s , r a c e t o o , a n d s e x . A l t h o u g h I w a s e d u c a t e d a n d 1 w a s v e r y a c t i v e in t h e n a t i o n a l i s t m o v e m e n t in my c o u n t r y , m y u n d e r s t a n d i n g of c l a s s s t r u g g l e w a s v e r y l i m i t e d . It w a s d i f f e r e n t in t h e s e n s e t h a t m y e x p e r i e n c e w a s d i f f e r e n t f r o m

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being working class. My background was m i d d l e class and I see it as a privilege being educated. But going to another country and servicing other people, it really crystallized my consciousness of w h o I am, of being a worker. I know that there really is a d i f f e r e n c e between s o m e o n e w h o is middle class, s o m e o n e w h o is a worker and s o m e o n e w h o is rich. T h a t ' s the reason 1 cannot be blinded. I know some people probably think I ' m too idealistic, but I cannot be blinded because of my experience. W h e n 1 first applied to work as a domestic worker for an a m b a s s a d o r [in Vienna], he asked me not to sit at the table in the kitchen to eat. I knew right away I was different and he was different. B e f o r e that, that w a s difficult for me to understand or see because before my experience was of being on the side of privilege. It is the experience of being a w o r k e r that has taught me, that has made me point to the fact of w h o I really am, it really showed me what identity I have. . . . Q. W h e n we first met, we met at a f o r u m which you were involved in organizing around the 50th anniversary of the IMF, the World Bank and the Bretton Woods system. T h e event was protesting the I M F and World Bank Structural A d j u s t m e n t P r o g r a m s . Can you talk about the connection between these programs and your life? A. As 1 said earlier, I w a s under no illusion when 1 m a d e the decision to leave the country. 1 was the victim of the political and e c o n o m i c situation at h o m e which was created by the structural a d j u s t m e n t policies of the International Monetary Fund and the World Bank. That w a s part of their manipulation, an individual's decision to leave her own family to m o v e to another part of the world to take care of another family. I have no illusion about that. T h e connection is great. . . . Q. It's clear f r o m the e c o n o m i c restructuring policies of the World Bank and IMF, and the various trade agreements being negotiated in such fora as the General A g r e e m e n t on Tariffs and Trade or the North A m e r i c a n Free Trade Agreement, that transnational corporations are w o r k i n g t o w a r d s an even more globalized e c o n o m y and that such organizations and a g r e e m e n t s are intended to facilitate the smooth operations of international business. W h a t would you say this m e a n s in terms of organizing workers? D o e s organization have to be international in order to be effective? And in the case of Filipina migrant domestic workers is this organizing inherently international? A. Yes, I would say that there is an international organizing that should happen. . . . You see, if the multinational corporations see their world as one, then the workers should also start to see the world as one. If the corporations are able to draw a big picture, the workers should also be taught how to paint the world as a big picture. Like connecting the struggle f r o m the Philippines to what is happening here, not only with the struggle of Filipina w o m e n w o r k e r s here, but . . . with all workers.

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Q. The money made through the labour of migrant domestic w o r k e r s and w o m e n who leave the Philippines to work as entertainers [an estimated 7 0 , 0 0 0 Filipinas go to Japan each year to work in the sex trade] is central to the Philippines debt repayment scheme which is being enforced by the I M F and World Bank. D o e s this make these w o m e n central to the e c o n o m y and isn't this a strategically p o w e r f u l position f r o m which to organize? A. Yeah, that's why we are having workshops on structural adjustment. Because it is important for workers to link the debt to what is happening in the Philippines and to what is happening here. And also to link the remittances of w o m e n w h o are sending money to their family back home and connect it with the money that is going out f r o m the Philippines which is being used to service our debts to the IMF and World Bank. So that's the kind of work that we are doing, making the workers understand that kind of situation. S o m e of the w o m e n fantasized about boycotting sending money to the Philippine g o v e r n m e n t . We thought even of declaring a one day d o m e s t i c w o r k e r s ' strike, for the w o m e n to stop working even just for an hour, just to show that w e ' r e doing this in protest of the I M F and the discrimination that domestic w o r k e r s face, in protest of all the exploitation of poor people that is taking place in the w h o l e world.

MAKING GENDERED MARGINS W h e n Pura w a s sent from the table to eat, a line w a s drawn, a border w a s policed, a margin w a s made. It w a s a painful m o m e n t for her. As a middle-class Filipina, Pura had had a middle-class education and middle-class experiences. As a domestic worker in Austria, however, a clear social perimeter excluded rather than included her. Her status changed. World d e v e l o p m e n t does this. It changes people's status, and it creates in the process n e w hierarchies and n e w categories of inclusion and exclusion. This is a highly political process, since hierarchies of this sort are a l w a y s about p o w e r — w h o s u p p o s e d l y has it, and w h o s u p p o s e d l y has not. World d e v e l o p m e n t creates and helps sustain a number of important core-periphery relationships. The notion of states themselves as being arranged in this w a y is familiar to political economists from reformist Marxist analyses of global affairs. They tend to be less familiar, however, with core-periphery relationships of other kinds. There are a number of significant e d g e s and shores that d o not correspond to the margins state makers try to privilege. Subsistence

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d w e l l e r s , for e x a m p l e , w h e t h e r t h e y are f o u n d in M a n h a t t a n ' s C e n tral Park, the streets of B o m b a y , or the rain forests of A m a z o n i a , live largely o u t s i d e the w o r l d c a p i t a l i s t s y s t e m . T h e y sell t h e i r l a b o r to no o n e . T h e y a c c e p t n o w e l f a r e p a y m e n t s . T h e y d o n ' t v o t e . T h e y d o n ' t shop. T h e y are not p r e o c c u p i e d w i t h a p p e a r i n g or b e i n g m o d ern. T h e y m a y w a n d e r , l i k e s o m e N e w Y o r k b a g lady, d o w n t h e m i d d l e of Wall Street. A n d yet like N e w Y o r k ' s b a g l a d i e s t h e y live as far o u t s i d e t h e p o l i t i c o e c o n o m i c and p o l i t i c o c u l t u r a l p e r i m e t e r s of w h a t Wall S t r e e t m e a n s as d o p i g e o n s on a p a v e m e n t . L i k e pig e o n s t h e y m a y s c a v e n g e for t h e f o o d that t h o s e w h o live in the system t h r o w away. T h e y m a y d r i n k f r o m p u b l i c f o u n t a i n s a n d b e n e f i t , as d o t h e b i r d s , f r o m t h e p u b l i c u t i l i t i e s a n d p u b l i c o r d e r t h a t t h e system provides. But they, and all those like them, are fringe dwellers, of little s e e m i n g r e l e v a n c e to t h e w o r l d c a p i t a l i s t m a r k e t at all. T h e y do h e l p g i v e the w o r l d c a p i t a l i s t m a r k e t a s h a p e t h o u g h , albeit n o t in this c a s e a s t a t e c e n t r i c o n e . T h e y a l s o p r o v i d e d e v e l o p m e n t a l b a s e l i n e s . T h e y m a k e it e a s i e r to see h o w t h e v a r i o u s p a r t s of t h e s y s t e m w o r k to s u s t a i n t h e i n t e g r i t y of t h e w h o l e . A n d t h e y tell v e r y d i f f e r e n t s t o r i e s a b o u t w h e r e t h e s y s t e m c a m e f r o m a n d w h e r e it m i g h t b e g o i n g to. T h o s e w o m e n in t h e w o r l d p o l i t i c a l e c o n o m y w h o are n o t e m p l o y e d for a w a g e m o s t l y live in p r i v a t e d o m a i n s w h e r e t h e y l a b o r " i n f o r m a l l y " for families. M a n y do both. Women do have another a l t e r n a t i v e , h o w e v e r , a n d that is to w o r k on the f r i n g e s of t h e c a p i talist w o r l d s y s t e m . F o r e x a m p l e , a w o m a n m a y b e a street v e n d o r , a m i c r o e n t r e p r e n e u r . A s s u c h s h e will not get h e r c a p i t a l f r o m t h e u s u a l s o u r c e s in t h e c a p i t a l i s t w o r l d s y s t e m , a n d t h e m o n e y s h e m a k e s will not be put into c a p i t a l i s t b a n k s , either. S o m e of her t r a d e g o o d s m i g h t c o m e f r o m that s y s t e m , b u t m a n y will not. A s s u c h s h e a l s o w o r k s for h e r s e l f , so s h e will p a y n o w a g e s to e m p l o y e e s , n o r taxes to the state. A s far as the w o r l d ' s capitalists are c o n c e r n e d , s h e t r a d e s b e y o n d their frontiers. S h e is part of the w o r l d political e c o n o m y a n d s h e m a y w e l l s p e n d p a r t s of h e r life, or e v e n p a r t s of h e r day, w i t h i n t h e capitalist c o m p o n e n t of that political e c o n o m y , and yet s h e is not part of it. S h e t r a d e s b e y o n d its m a r g i n s . W o m e n , as d i s c u s s e d a l r e a d y , t a k e p a r t in the c a p i t a l i s t w o r l d m a r k e t at a d i s a d v a n t a g e . W e are f a c e d in t h e c a s e of g e n d e r w i t h e x p l o i t a t i o n so s y s t e m a t i c a n d on s u c h a vast scale that w e are w e l l j u s t i f i e d in t a l k i n g , as s o m e a n a l y s t s d o , of " g e n d e r i m p e r i a l i s m . " W h i l e d e v e l o p m e n t a l d i s p a r i t i e s are a p p a r e n t in t e r m s of t h e different f o r t u n e s of states (the m e r c a n t i l i s t v i e w ) or the v a r y i n g s u c c e s s of m a r k e t e e r s (the l i b e r a l v i e w ) o r the c o m p e t i n g i n t e r e s t s of t h e c l a s s e s t h a t c o n s t i t u t e w o r l d c a p i t a l i s m (the M a r x i s t v i e w ) , d e v e l o p m e n t a l d i s p a r i t i e s are a l s o m a n i f e s t in h o w w e l l w o m e n d o as c o m p a r e d to m e n .

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The "sex-asymmetric" consequences of structural adjustment (Lim 1993:175) and the way that males constitute the ruling gender place a different slant on the world political economy in general and the meaning of "development" in particular. In gender terms, for example, development means the massive transfer of surplus value from one gender to another, a transfer not only apparent in unequal wage rates but in terms of the amount of work that females do that doesn't get paid for at all. It also includes the way that women who do make progress in terms of greater equality with men may get bashed physically by male partners for doing so. This places a rather different construction than the conventional one on the concept of security. After all, "assaults on women by their husbands or male partners are the world's most common form of violence," and the "disturbing . . . possibility" does exist, it seems, of a link between this and development (UNICEF 1995b:26). The unpaid work that females do mostly happens in the home. Where there is a male householder in paid employ, his money is meant to provide for both. Where there's not, and the state makers don't provide "welfare" support, the female is meant to find work (at rates less than a male's) or find a way of making money informally—often on the margins. Having social services performed by women at home for an indirect price or for nothing at all shows up in greater profits for capitalists. Hence the trend toward a global division of labor where males are supposed to sell their labor for wages and females are supposed to be "housewives," consigned to the privatized domain of the family and designated as reproducers. The fact that capitalists also find females a useful source of cheap labor power has not reversed this trend. It has merely compounded the inequities and the iniquities. It is no accident, therefore, that those who defined the goals for the UN Decade of the Advancement of Women (1975-1985) saw unwaged work, and the need to get it recognized and paid for, as one of their primary goals. In an NIC like South Korea, for example, four-fifths of the adult females do not appear in labor market statistics because they are ostensibly in homes making an "invisible" but highly significant contribution to the country's wealth-making activities. Indeed, it is possible to argue that Korea could not have joined the ranks of the newly developed, or joined them so quickly, if the males who dominate the country's wealth-making institutions had not used women's work so unfairly. If they had not, in other words, exploited them so much. Even in Singapore, where females have had access to higher education in all the professions, and formal female employment has increased at a rate notably faster than that of males, the same unfairness is clearly apparent. Females more than males work in

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low-status, low-paying jobs. In every job they are paid less than males, regardless of educational skills. There is clear occupational segregation by sexes, and this persists, as does the social expectation that females have prime responsibility for home care. Singapore's "developmental" miracle, like Korea's, was only made possible, in other words, by overworking and underpaying the female half of its population.

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Hinmatoo Yalkikt, Chief Joseph of the Nez Percé (1877) "Surrender Speech"

Tell General H o w a r d 1 know his heart. W h a t he t o l d . m e b e f o r e 1 h a v e in my heart. 1 am tired o f fighting. Our chiefs are killed. L o o k i n g Glass is dead. It is the y o u n g men who say y e s or no. He w h o led the y o u n g men is dead. It is cold and w e have no blankets. T h e little children are freezing to death. M y people, s o m e o f them have run a w a y to the hills and have no blankets, no food; no o n e k n o w s w h e r e they a r e — p e r h a p s freezing to death. I want to have time to look for my children and see how m a n y I c a n find. M a y b e I shall find them a m o n g the dead. Hear me my chiefs. I a m tired; my heart is sick and sad. F r o m w h e r e the sun now stands, 1 will fight no m o r e forever.

MARGINALIZING INDIGENOUS PEOPLES The story of Chief Joseph and his people is a sad and stirring one. It is characteristic that when he finally surrendered, the chief's first thoughts were for his people and of his desire to find and help those who had fled. The language of social science talks of "developmental marginalization" and "indigenous peoples," and yet what pallid euphemisms these are for human beings who have names for each other and themselves, who are not concepts, and whose collective status as captive nations has been the cause of so much anguish and pain. "Internally colonized by settler peoples" does no justice to this process, and "claims for self-determination" sounds stupid beside the story such human beings tell of their attempts to get back some control over their cultures and their lives. These are peoples without armies and usually without great wealth. What they do have, however, is the force of their own feelings, articulated as moral claims for return of land and other lesstangible cultural assets. The feelings they express are often those of

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desperation, since the issues they face m a y be matters of sheer survival (as borne out by their average longevity, infant mortality, incarceration, unemployment, school retention rates, and health and wealth profiles). They are feelings the language—any language—of world political economy is singularly ill-equipped to express. Indigenous peoples w o u l d prefer to flourish rather than merely survive. They w o u l d claim the right not just to physical existence, b u t to the power to determine their o w n affairs and to exploit their resources as they see fit. These resources extend even as far as their bodily selves, since their genetic material can be of considerable value to biological engineers or pharmaceutical multinationals, w h o "bio-mine" indigenous peoples as part of their research. Flourishing is problematic on the margins, wherever those margins might be. Analytic l a n g u a g e s like liberalism or Marxism or mercantilism are of limited use w h e n it comes to u n d e r s t a n d i n g the issues involved or prescribing a p p r o p r i a t e change. Languages like these are of limited help in expressing the concerns of i n d i g e n o u s peoples. Indeed, they are part of the hegemonic discourse that helps o p p r e s s and exploit such peoples a n d that p r e v e n t s them b e i n g heard. Modern margins have mostly been m a d e by one particular cultural tradition, that of the industrial capitalist West. This tradition values objectivity, rational thought, and the individual. Indigenous peoples, on the other h a n d , tend to value subjectivity, more holistic w a y s of thinking, and c o m m u n a l i s m . Their u n d e r s t a n d i n g of "dev e l o p m e n t " reflects their values. They talk, for example, of ethnodevelopment, not development per se, and in talking like this they are typically talking about the conservation of their culture. Ethnod e v e l o p m e n t d o e s n ' t necessarily m e a n separate d e v e l o p m e n t , t h o u g h . It may m e a n t r y i n g to m o v e f r o m the m a r g i n s to become capitalist marketeers. That decision will d e p e n d u p o n w h o is winn i n g the a r g u m e n t s within i n d i g e n o u s c o m m u n i t i e s themselves a b o u t h o w best to fight " e t h n o c i d e " (Stavenhagen 1989:16). Some will w a n t to stand alone regardless. Others will say, "If you can't beat 'em, join 'em," in a bid to play the capitalist g a m e and with the profits implement programs that conserve their culture. The difference b e t w e e n Western-style discourse and that of ind i g e n o u s peoples is not only of significance to the latter, however. Indigenous peoples' knowledge and perspectives may be an important resource for those seeking alternative models of development; ones that are more sustainable—both socially and environmentally. Sustainability is something m a n y Westerners are coming to realize they need themselves. It is highly ironic that it is f r o m some of those marginalized in the m a k i n g of the capitalist industrial system that the clearest

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a d v i c e c o m e s as to w h a t to v a l u e and w h a t to d o if the w o r l d political e c o n o m y itself is to survive.

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Ernst Schumacher (1973) "Buddhist Economics"

" R i g h t L i v e l i h o o d " is o n e of the r e q u i r e m e n t s of the B u d d h a ' s N o b l e Eightf o l d Path. It is clear, t h e r e f o r e , that there m u s t be such a t h i n g as B u d d h i s t Economics. B u d d h i s t c o u n t r i e s , at the s a m e time, h a v e o f t e n stated that they w i s h to r e m a i n f a i t h f u l to their heritage. So B u r m a : " T h e N e w B u r m a s e e s no c o n f l i c t b e t w e e n r e l i g i o u s v a l u e s and e c o n o m i c p r o g r e s s . Spiritual health and material w e l l - b e i n g a r e not e n e m i e s : they a r e natural a l l i e s . " 1 O r : " W e can b l e n d s u c c e s s f u l l y t h e r e l i g i o u s and spiritual v a l u e s of our h e r i t a g e with the b e n e f i t s of m o d e r n t e c h n o l o g y . " 2 O r : " W e B u r m a n s h a v e a s a c r e d duty to c o n f o r m both o u r d r e a m s and our acts to our f a i t h . T h i s w e shall e v e r d o . " 3 All t h e s a m e , s u c h c o u n t r i e s invariably a s s u m e that they can m o d e l their e c o n o m i c d e v e l o p m e n t p l a n s in a c c o r d a n c e w i t h m o d e r n e c o n o m i c s , and they call u p o n m o d e r n e c o n o m i s t s f r o m s o - c a l l e d a d v a n c e d c o u n t r i e s to a d v i s e t h e m , to f o r m u l a t e the p o l i c i e s to be p u r s u e d , and to c o n s t r u c t t h e grand d e s i g n f o r d e v e l o p m e n t , the Five-Year Plan or w h a t e v e r it m a y b e called. N o o n e s e e m s to think that a B u d d h i s t w a y of life w o u l d call for B u d d h i s t e c o n o m i c s , j u s t as the m o d e r n materialist w a y of life has b r o u g h t forth m o d e r n e c o n o m i c s . E c o n o m i s t s t h e m s e l v e s , like m o s t specialists, n o r m a l l y s u f f e r f r o m a kind of m e t a p h y s i c a l b l i n d n e s s , a s s u m i n g that theirs is a s c i e n c e of a b s o l u t e and i n v a r i a b l e t r u t h s , w i t h o u t any p r e s u p p o s i t i o n s . S o m e g o as f a r as to claim that e c o n o m i c l a w s are as f r e e f r o m " m e t a p h y s i c s " or " v a l u e s " as the law of g r a v i t a t i o n . We need not, h o w e v e r , get i n v o l v e d in a r g u m e n t s of m e t h o d o l o g y . I n s t e a d , let us take s o m e f u n d a m e n t a l s and see w h a t they look like w h e n v i e w e d by a m o d e r n e c o n o m i s t and a B u d d h i s t e c o n o m i s t . T h e r e is u n i v e r s a l a g r e e m e n t that the f u n d a m e n t a l s o u r c e of w e a l t h is h u m a n labour. N o w , t h e m o d e r n e c o n o m i s t has been b r o u g h t u p to c o n s i d e r labour or w o r k as little m o r e than a n e c e s s a r y evil. F r o m t h e point of v i e w of the e m p l o y e r , it is in any case s i m p l y an item of cost, to b e r e d u c e d to a m i n i m u m if it c a n n o t be e l i m i n a t e d altogether, say, by a u t o m a t i o n . From the point of v i e w of t h e w o r k m a n , it is a " d i s u t i l i t y " : to w o r k is to m a k e a sacrif i c e of o n e ' s l e i s u r e and c o m f o r t , and w a g e s are a kind of c o m p e n s a t i o n f o r the s a c r i f i c e . H e n c e t h e ideal f r o m the point of view of the e m p l o y e r is to h a v e o u t p u t w i t h o u t e m p l o y e e s , and the ideal f r o m the point of v i e w of the e m p l o y e e is to h a v e i n c o m e w i t h o u t e m p l o y m e n t . T h e c o n s e q u e n c e s of these attitudes b o t h in theory and in p r a c t i c e are, of c o u r s e , e x t r e m e l y f a r - r e a c h i n g . If the ideal w i t h regard to w o r k is to get

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rid of it, every method that "reduces the work load" is a good thing. The most potent method, short o f automation, is the so-called division of labour and the classical example is the pin factory eulogized in Adam Smith's Wealth of Nations.

Here it is not a matter of ordinary specialisation, which

mankind has practised from time immemorial, but of dividing up every complete process o f production into minute parts, so that the final product can be produced at great speed without anyone having had to contribute more than a totally insignificant and, in most cases, unskilled movement o f his limbs.

Work The Buddhist point of view takes the function of work to be at least threefold: to give a man [sic] a chance to utilise and develop his faculties; to enable him to overcome his ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence. Again, the consequences that flow from this view are endless. To organise work in such a manner that it becomes meaningless, boring, stultifying, or nerve-racking for the worker would be little short of criminal; it would indicate a greater concern with goods than with people, an evil lack o f compassion and a soul-destroying degree of attachment to the most primitive side of this worldly existence. Equally, to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely, that work and leisure are complementary parts o f the same living process and cannot be separated without destroying the j o y of work and the bliss of leisure. From the Buddhist point of view, there are therefore two types o f mechanization which must be clearly distinguished: one that enhances a man's skill and power and one that turns the work of man over to a mechanical slave, leaving man in a position of having to serve the slave. How to tell the one from the other? " T h e craftsman himself," says Ananda Coomaraswamy, a man equally competent to talk about the Modern West as the Ancient East, " T h e craftsman himself can always, if allowed to, draw the delicate distinction between the machine and the tool. The carpet loom is a tool, a contrivance for holding warp threads at a stretch for the pile to be woven round them by the craftsman's fingers; but the power loom is a machine, and its significance as a destroyer of culture lies in the fact that it does the essentially human part o f the work." 4 It is clear, therefore, that Buddhist economics must be very different from the economics of modern materialism, since the Buddhist sees the essence of civilization not in a multiplication of wants but in the purification of human character. Character, at the same time, is formed primarily by a man's work. And work, properly conducted in conditions o f human dignity and freedom, blesses those who do it and equally their products. The Indian philosopher and economist J C Kumarappa sums the matter up as follows:

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If t h e n a t u r e of t h e w o r k is p r o p e r l y a p p r e c i a t e d a n d a p p l i e d , it will s t a n d in t h e s a m e r e l a t i o n to t h e h i g h e r f a c u l t i e s a s f o o d is to t h e p h y s i c a l b o d y . It n o u r i s h e s a n d e n l i v e n s t h e h i g h e r m a n a n d u r g e s h i m t o p r o d u c e t h e best he is c a p a b l e of. It d i r e c t s his f r e e will a l o n g t h e p r o p e r c o u r s e a n d d i s c i p l i n e s t h e a n i m a l in h i m into p r o g r e s s i v e c h a n n e l s . It f u r n i s h e s an e x c e l l e n t b a c k g r o u n d f o r m a n to d i s p l a y h i s s c a l e of v a l u e s a n d d e v e l o p his p e r s o n a l i t y . 5 If a m a n has n o c h a n c e of o b t a i n i n g w o r k he is in a d e s p e r a t e p o s i t i o n , not s i m p l y b e c a u s e he l a c k s an i n c o m e b u t b e c a u s e h e l a c k s this n o u r i s h i n g a n d e n l i v e n i n g f a c t o r of d i s c i p l i n e d w o r k w h i c h n o t h i n g c a n r e p l a c e . A m o d e r n e c o n o m i s t m a y e n g a g e in h i g h l y s o p h i s t i c a t e d c a l c u l a t i o n s on w h e t h e r f u l l e m p l o y m e n t " p a y s " or w h e t h e r it m i g h t b e m o r e " e c o n o m i c " to run an e c o n o m y at less t h a n f u l l e m p l o y m e n t s o a s t o e n s u r e a g r e a t e r m o b i l i t y of labour, a b e t t e r s t a b i l i t y of w a g e s , a n d s o f o r t h . H i s f u n d a m e n t a l c r i t e r i o n of s u c c e s s is s i m p l y t h e total q u a n t i t y of g o o d s p r o d u c e d d u r i n g a g i v e n p e r i o d of t i m e . "If t h e m a r g i n a l u r g e n c y of g o o d s is l o w , " s a y s P r o f e s s o r G a l b r a i t h in The Affluent

Society,

" t h e n s o is t h e u r g e n c y of

e m p l o y i n g t h e last m a n or t h e last m i l l i o n m e n in t h e l a b o u r f o r c e . " A n d a g a i n : " I f . . . w e c a n a f f o r d s o m e u n e m p l o y m e n t in t h e interest of s t a b i l i t y — a p r o p o s i t i o n , i n c i d e n t a l l y , of i m p e c c a b l y c o n s e r v a t i v e a n t e c e d e n t s — t h e n w e c a n a f f o r d to g i v e t h o s e w h o a r e u n e m p l o y e d t h e g o o d s that e n a b l e t h e m to s u s t a i n t h e i r a c c u s t o m e d s t a n d a r d of l i v i n g . " 6 F r o m a B u d d h i s t p o i n t of v i e w , t h i s is s t a n d i n g t h e t r u t h o n its h e a d by c o n s i d e r i n g g o o d s as m o r e i m p o r t a n t t h a n p e o p l e a n d c o n s u m p t i o n as m o r e i m p o r t a n t t h a n c r e a t i v e a c t i v i t y . It m e a n s s h i f t i n g t h e e m p h a s i s f r o m t h e w o r k e r t o t h e p r o d u c t of w o r k , t h a t is, f r o m t h e h u m a n t o t h e s u b h u m a n , a s u r r e n d e r to t h e f o r c e s of e v i l . T h e v e r y start of B u d d h i s t e c o n o m i c p l a n n i n g w o u l d b e a p l a n n i n g f o r f u l l e m p l o y m e n t , a n d t h e p r i m a r y p u r p o s e of t h i s w o u l d in f a c t b e e m p l o y m e n t f o r e v e r y o n e w h o n e e d s a n " o u t s i d e " j o b : it w o u l d not b e the m a x i m i z a t i o n of e m p l o y m e n t n o r t h e m a x i m i z a t i o n of p r o d u c t i o n . W o m e n , on t h e w h o l e , d o not n e e d an o u t s i d e j o b [sic], a n d t h e l a r g e - s c a l e e m p l o y m e n t of w o m e n in o f f i c e s or f a c t o r i e s w o u l d b e c o n s i d e r e d a s i g n of s e r i o u s e c o n o m i c f a i l u r e . In p a r t i c u l a r , t o let m o t h e r s of y o u n g c h i l d r e n w o r k in f a c t o r i e s w h i l e the c h i l d r e n r u n w i l d w o u l d b e as u n e c o n o m i c in t h e e y e s of a B u d d h i s t e c o n o m i s t as t h e e m p l o y m e n t of a s k i l l e d w o r k e r as a s o l d i e r in t h e e y e s of a m o d e r n e c o n o m i s t . W h i l e t h e m a t e r i a l i s t is m a i n l y i n t e r e s t e d in g o o d s , t h e B u d d h i s t is m a i n l y i n t e r e s t e d in l i b e r a t i o n . B u t B u d d h i s m is " T h e M i d d l e W a y " a n d t h e r e f o r e in no w a y a n t a g o n i s t i c to p h y s i c a l w e l l - b e i n g . It is not w e a l t h t h a t s t a n d s in t h e w a y of l i b e r a t i o n b u t t h e a t t a c h m e n t to w e a l t h ; not t h e e n j o y m e n t of p l e a s u r a b l e t h i n g s but t h e c r a v i n g f o r t h e m . T h e k e y n o t e of B u d d h i s t e c o n o m i c s , t h e r e f o r e , is s i m p l i c i t y a n d n o n v i o l e n c e . F r o m an e c o n o m i s t ' s p o i n t of v i e w , t h e m a r v e l of t h e B u d d h i s t w a y of life is t h e

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utter rationality of its p a t t e r n — a m a z i n g l y small m e a n s leading to extraordinarily satisfactory result.

The Standard of Living For the m o d e r n economist this is very difficult to understand. He is used to m e a s u r i n g the standard of living by the amount of annual c o n s u m p t i o n , a s s u m i n g all the time that a man w h o c o n s u m e s more is "better o f f ' than a man w h o c o n s u m e s less. A Buddhist economist would consider this approach excessively irrational: since consumption is merely a m e a n s to human wellbeing, the aim should be to obtain the m a x i m u m of well-being with the m i n i m u m of c o n s u m p t i o n . Thus, if the purpose of clothing is a certain amount of temperature c o m f o r t and an attractive appearance, the task is to attain this purpose with the smallest possible effort, that is, with the smallest annual destruction of cloth and with the help of designs that involve the smallest possible input of toil. T h e less toil there is, the more time and strength is left for artistic creativity. It would be highly u n e c o n o m i c , for instance, to go in for complicated tailoring, like the m o d e r n West, w h e n a much more beautiful effect can be achieved by the skilful draping of uncut material. It would be the height of folly to make material so that it should wear out quickly and the height of barbarity to m a k e anything ugly, shabby or mean. W h a t has just been said about clothing applies equally to all other human r e q u i r e m e n t s . T h e o w n e r s h i p and the c o n s u m p t i o n of goods is a means to an end, and Buddhist e c o n o m i c s is the s y s t e m a t i c study of how to attain given ends with the m i n i m u m means. M o d e r n e c o n o m i c s , on the other hand, considers c o n s u m p t i o n to be the sole end and purpose of all e c o n o m i c activity, taking the factors of product i o n — l a n d , labour, and c a p i t a l — a s the means. T h e f o r m e r , in short, tries to m a x i m i z e h u m a n satisfactions by the optimal pattern of c o n s u m p t i o n , while the latter tries to maximize consumption by the optimal pattern of productive effort. It is easy to see that the effort needed to sustain a way of life which seeks to attain the optimal pattern of consumption is likely to be much smaller than the effort needed to sustain a drive for m a x i m u m c o n s u m p t i o n . We need not be surprised, therefore, that the pressure and strain of living is very much less in, say, B u r m a than it is in the United States, in spite of the fact that the amount of labour-saving machinery used in the f o r m e r country is only a minute fraction of the amount used in the latter.

The Pattern of Consumption Simplicity and nonviolence are obviously closely related. T h e optimal pattern of c o n s u m p t i o n , producing a high degree of h u m a n satisfaction by m e a n s of a relatively low rate of consumption, allows people to live without great pressure and strain and to fulfil the primary injunction of Buddhist teaching: " C e a s e to do evil; try to do g o o d . " A s physical resources are

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everywhere limited, people satisfying their needs by means of a modest use of resources are obviously less likely to be at each other's throats than people depending upon a high rate of use. Equally, people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than people whose existence depends on worldwide systems of trade. From the point of view of Buddhist economics, therefore, production from local resources for local needs is the most rational way of economic life, while dependence on imports f r o m afar and the consequent need to produce for export to unknown and distant peoples is highly uneconomic and justifiable only in exceptional cases and on a small scale. Just as the modern economist would admit that a high rate of consumption of transport services between a man's home and his place of work signifies a misfortune and not a high standard of life, so the Buddhist economist would hold that to satisfy human wants from far-away sources rather than from sources nearby signifies failure rather than success. The former might take statistics showing an increase in the number of ton/miles per head of the population carried by a country's transport system as proof of economic progress, while to the latter—the Buddhist economist—the same statistics would indicate a highly undesirable deterioration in the pattern of consumption. Natural Resources Another striking difference between modern economics and Buddhist economics arises over the use of natural resources. Bertrand de Jouvenel, the eminent French political philosopher, has characterised "Western m a n " in words which may be taken as a fair description of the modern economist: He tends to count nothing as an expenditure, other than human effort; he does not seem to mind how much mineral matter he wastes and, far worse, how much living matter he destroys. He does not seem to realise at all that human life is a dependent part of an ecosystem of many different forms of life. As the world is ruled from towns where men are cut off from any form of life other than human, the feeling of belonging to an ecosystem is not revived. This results in a harsh and improvident treatment of things upon which we ultimately depend, such as water and trees. 7 The teaching of the Buddha, on the other hand, enjoins a reverent and nonviolent attitude not only to all sentient beings but also, with great emphasis, to trees. Every follower of the Buddha ought to plant a tree every few years and look after it until it is safely established, and the Buddhist economist can demonstrate without difficulty that the universal observance of this rule would result in a high rate of genuine economic development independent of any foreign aid. Much of the economic decay of Southeast

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A s i a (as of many other parts of the world) is undoubtedly due to a heedless and shameful neglect of trees. Modern economics does not distinguish between renewable and nonrenewable materials, as its very method is to equalize and quantify everything by means of a money price. Thus, taking various alternative fuels, like coal, oil, wood or water power: the only difference between them recognized by modern economics is relative cost per equivalent unit. The cheapest is automatically the one to be preferred, as to do otherwise would be irrational and " u n e c o n o m i c . " From a Buddhist point of view, of course, this will not do; the essential difference between nonrenewable fuels like coal and oil on the one hand and renewable fuels like wood and waterpower on the other cannot be simply overlooked. Nonrenewable goods must be used only if they are indispensable, and then only with the greatest care and the most meticulous concern for conservation. To use them heedlessly or extravagantly is an act of violence, and while complete nonviolence may not be attainable on this earth, there is nonetheless an ineluctable duty on man to aim at the ideal of nonviolence in all he does. Just as a modern European economist would not consider it a great economic achievement if all European art treasures were sold to America at attractive prices, so the Buddhist economist would insist that a population basing its economic life on nonrenewable fuels is living parasitically, on capital instead of income. Such a w a y of life could have no permanence and could therefore be justified only as a purely temporary expedient. A s the world's resources of nonrenewable f u e l s — c o a l , oil and natural g a s — a r e exceedingly unevenly distributed over the globe and undoubtedly limited in quantity, it is clear that their exploitation at an ever increasing rate is an act of violence against nature which must almost inevitably lead to violence between men.

The Middle Way This fact alone might give food for thought even to those people in Buddhist countries w h o care nothing for the religious and spiritual values of their heritage and ardently desire to embrace the materialism of modern economics at the fastest possible speed. B e f o r e they dismiss Buddhist economics as nothing better than a nostalgic dream, they might wish to consider whether the path of economic development outlined by modern economics is likely to lead them to places where they really want to be. Towards the end of his courageous book The Challenge

of Man's

Future,

Professor Harrison B r o w n

of the California Institute of Technology gives the f o l l o w i n g appraisal: Thus w e see that, just as industrial society is fundamentally unstable and subject to reversion to agrarian existence, so within it the conditions which o f f e r individual f r e e d o m are unstable in their ability to

230

Making Margins a v o i d the c o n d i t i o n s w h i c h i m p o s e rigid o r g a n i z a t i o n and totalitarian c o n t r o l . I n d e e d , w h e n w e e x a m i n e all o f the f o r e s e e a b l e d i f f i c u l t i e s w h i c h threaten the s u r v i v a l o f industrial c i v i l i z a t i o n , it is d i f f i c u l t to s e e how the a c h i e v e m e n t o f s t a b i l i t y and the m a i n t e n a n c e o f individual liberty can be m a d e c o m p a t i b l e . *

E v e n if this w e r e d i s m i s s e d as a l o n g - t e r m v i e w — a n d in the long t e r m , as K e y n e s said, w e are all d e a d — t h e r e is the i m m e d i a t e q u e s t i o n o f w h e t h e r m o d e r n i z a t i o n , as c u r r e n t l y p r a c t i s e d without regard to r e l i g i o u s spiritual v a l u e s , is a c t u a l l y p r o d u c i n g a g r e e a b l e results. A s far as the m a s s e s are c o n c e r n e d , the results a p p e a r to b e d i s a s t r o u s — a c o l l a p s e o f the rural e c o n o m y , a rising tide o f u n e m p l o y m e n t in town and c o u n t r y , and the growth o f a c i t y proletariat w i t h o u t n o u r i s h m e n t for e i t h e r b o d y or s o u l . It is in the light o f both i m m e d i a t e e x p e r i e n c e and l o n g - t e r m p r o s p e c t s that the study o f B u d d h i s t e c o n o m i c s c o u l d be r e c o m m e n d e d e v e n to t h o s e who b e l i e v e that e c o n o m i c g r o w t h is m o r e important than a n y spiritual or r e l i g i o u s v a l u e s . F o r it is not a q u e s t i o n o f c h o o s i n g b e t w e e n " m o d e r n g r o w t h " and " t r a d i t i o n a l s t a g n a t i o n . " It is a q u e s t i o n o f f i n d i n g the right path o f d e v e l o p m e n t , " T h e M i d d l e W a y " b e t w e e n m a t e r i a l i s t h e e d l e s s n e s s and traditionalist i m m o b i l i t y , in short, o f f i n d i n g " R i g h t L i v e l i h o o d . " T h a t this c a n be d o n e is not in d o u b t . B u t it r e q u i r e s m u c h m o r e than blind imitation o f the m a t e r i a l i s t w a y o f life o f the s o - c a l l e d a d v a n c e d c o u n t r i e s . 9 It r e q u i r e s a b o v e all, the c o n s c i o u s and s y s t e m a t i c d e v e l o p m e n t o f a " M i d d l e W a y in T e c h n o l o g y " as I h a v e c a l l e d i t . " 1 A t e c h n o l o g y m o r e p r o d u c t i v e and p o w e r f u l than the d e c a y e d t e c h n o l o g y o f the a n c i e n t E a s t , but at the s a m e t i m e n o n v i o l e n t and i m m e n s e l y c h e a p e r and s i m p l e r than the l a b o u r - s a v i n g t e c h n o l o g y o f the m o d e r n W e s t .

MAKING SPIRITUAL MARGINS World d e v e l o p m e n t has m a n y different dimensions, though perhaps the hardest to u n d e r s t a n d is the spiritual one. Questions of spirituality seem far away from the material world of political econo m y and the m a r c h of industrial market capitalism. And yet the very material nature of this m a r c h makes a spiritual statement. It says that h u m a n beings can n o w rely on themselves and their industrial production systems to supply their basic needs; that the greatest reward and the clearest measure of success in this respect is the chance and the capacity to c o n s u m e the g o o d s and services these productive systems provide; and that a sense of whatever it is

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2 31

t h a t m i g h t s e e m d i v i n e to p e o p l e h a s n o e s s e n t i a l p a r t to p l a y in m a k i n g such provision. T h e s p i r i t u a l s t a t e m e n t t h a t c a p i t a l i s m m a k e s is a p a r t i c u l a r l y powerful one. This statement can be understood, though, not only by talking about the secular disenchantments w r o u g h t by m o d e r n s c i e n c e . T h e s e are f a m i l i a r to m o s t p e o p l e t o d a y a n d I shall n o t reh e a r s e t h e m h e r e . A g o o d a l t e r n a t i v e is to let s o m e o n e l i k e S c h u m a c h e r s p e a k for h i m s e l f . S c h u m a c h e r does something very unusual. He recasts political e c o n o m y in B u d d h i s t t e r m s . H e a c c e p t s as g i v e n the t e a c h i n g s of o n e of t h e w o r l d ' s g r e a t e s t r e l i g i o u s p h i l o s o p h i e s a n d he e x p l o r e s his i d e a of w h a t t h e s e t e a c h i n g s m e a n in p r a c t i c a l p o l i t i c o e c o n o m i c t e r m s . T h e r e s u l t s m a y s e e m , to t h o s e u n f a m i l i a r w i t h s u c h t e a c h i n g s , d i s t i n c t l y o d d , a n d e v e n b i z a r r e . T h i s is h a r d l y s u r p r i s i n g , s i n c e w h a t S c h u m a c h e r d e s c r i b e s in this e s s a y is in m a n y r e s p e c t s the a n t i t h e s i s of w h a t gets taken for g r a n t e d today. W h i l e B u d d h i s m m a y b e at o d d s w i t h c a p i t a l i s m , t h o s e p e o p l e s w h o p r a c t i c e as B u d d h i s t s on the w h o l e are n o t . S c h u m a c h e r cites B u r m a in w a y s t h a t m a k e it s o u n d like an e x c e p t i o n h e r e , b u t it s e e m s g e n e r a l l y to b e t h e c a s e that to h a v e c a p i t a l i s m p e o p l e m u s t s u b l i m a t e their B u d d h i s m . In this t h e y are not a l o n e . C h r i s t i a n c a p italists, for e x a m p l e , m u s t l i k e w i s e s u b l i m a t e t h e i r c o m m i t m e n t to Christianity. T h o u g h c a p i t a l i s m w a s d e v e l o p e d in C h r i s t i a n E u r o p e , t h e " g r e e d is g o o d " e t h i c of the c a p i t a l i s t e n t r e p r e n e u r is a far c r y f r o m t h e p r i n c i p l e of b r o t h e r l y love that J e s u s C h r i s t e s p o u s e d . T h i s is n o t to say t h a t c a p i t a l i s t s c a n ' t b e C h r i s t i a n s . M a n y are, a n d the C h r i s t i a n spirit h a s h a d an i m p o r t a n t h i s t o r i c a l i n f l u e n c e u p o n c a p i t a l i s m , m o d e r a t i n g its e x c e s s e s b y b r i n g i n g to b e a r c o n c e p t s like charity a n d welfare, a n d e v e n — i f W e b e r is r i g h t — p r o v i d i n g t h e original i m p e t u s for c a p i t a l i s m as a w h o l e . C h r i s t i a n i t y is n o t c a p i t a l i s m , h o w e v e r , a n d the t w o are not, in s p i r i t u a l t e r m s , e a s y to reconcile; n o r are B u d d h i s m a n d c a p i t a l i s m . W h e r e p e o p l e w a n t c a p i t a l i s m t h e y t e n d , it s e e m s , to l o s e t h e i r faith. This has p r o f o u n d existential consequences, which Marx t a l k e d a b o u t in t e r m s of " a l i e n a t i o n , " a n d w h i c h r e f o r m i s t M a r x i s t s , like the s o - c a l l e d critical t h e o r i s t s of the F r a n k f u r t s c h o o l , h a v e c o n t i n u e d to talk a b o u t as o n e of the c o n s e q u e n c e s of a c a p i t a l i s t m o d e of p r o d u c t i o n ( G e o r g e 1 9 9 4 : 1 5 0 - 1 5 5 ) . M a n y of t h e s e c o n s e q u e n c e s c a n b e v e r y d e p r e s s i n g , a n d a w i d e r a n g e of N e w A g e b e l i e f s h a v e s p r u n g u p to s e r v e t h e n e e d s of the d i s t r e s s e d . F u n d a m e n t a l i s t s f r o m t h e e s t a b l i s h e d r e l i g i o n s h a v e r e s p o n d e d to this c h a l l e n g e in t e r m s of spiritual r e s c u e , too. M o s t a n a l y s t s of w o r l d p o l i t i c a l e c o n o m y f i n d all this h a r d to u n d e r s t a n d or d i s c u s s . A s a d i m e n s i o n to w o r l d d e v e l o p m e n t ,

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therefore, with the exception of the Marxists noted above, they largely leave it alone. It's easy to see why. Most analysts in the discipline find barely comprehensible a view of the world that w o u l d want to purify the h u m a n heart rather than m a k e things. The Buddhist conclusion, for example, that to m e a s u r e living s t a n d a r d s in terms of annual rates of consumption you have to be f u n d a m e n t a l l y irrational, is a conclusion most analysts w o u l d find irrational in turn. Capitalists d o n ' t like B u d d h i s t s telling t h e m that they are not rational enough, and that if they were more rational, they w o u l d n ' t be capitalists at all. Capitalism lies uneasily with revealed k n o w l e d g e like Christianity or Islam, too. It is f u n d a m e n t a l l y at o d d s with the religious worldview. What, then, are we to m a k e of the m a r g i n s this difference creates, both in our minds and in our "developing" world? "'Listen' the saints say. ' H e w h o desires true rest and happiness must raise his h o p e from things that perish and pass a w a y and place it in the Word of God, so that, cleaving to that which abides forever, he m a y also together with it abide f o r e v e r ' " (Barthleme 1974). And yet fewer and fewer people seem to be listening like this. It is industrial m a r k e t capitalism that abides instead. While the cathedrals and the temples are m o v e d to the social m a r g i n s to be turned into cultural curiosities—on the same tourist beat as m u s e u m s and art galleries—in their stead are built office blocks and s h o p p i n g malls. While people stop chanting the Kyrie, they start chanting other litanies, like " a n o t h e r dollar, a n o t h e r day." Values change. Instead of being m e a s u r e d in terms of their eternal worth, people are j u d g e d by what their labor p o w e r will bring in the marketplace. "Meaning [is] drained from w o r k and assigned instead to r e m u n e r a t i o n . U n e m p l o y m e n t obliterates the world of the u n e m ployed . . . authentic self-determination is t h w a r t e d . The false consciousness created and catered to by mass culture perpetuates ignorance and powerlessness" (Barthelme 1974). Gods go, leaving god-sized holes. This is marginalization of a pretty serious sort. It is not at all clear, t h o u g h , h o w we should u n d e r s t a n d it in academic terms. Some a t t e m p t s have been m a d e b u t the field is still w i d e open (Robertson and Garrett 1991; Roberts 1995; Beyer 1993; Ray 1993; Meeks 1989). Where might we begin? What might p r o m p t us to? "Study of the tides of conflict and p o w e r in a system in which there is structural inequality" w o u l d be one good starting point, Barthelme suggests, in a reading not included here. With his tongue firmly in his cheek, he goes on to say that a " k n o w l e d g e of European intellectual history since 1789 provides a useful b a c k g r o u n d "

Notes

233

a n d t h a t " i n f o r m a t i o n t h e o r y offers i n t e r e s t i n g n e w p o s s i b i l i t i e s . " It's t h e r e m a r k s he m a k e s t h a t f o l l o w t h e s e t h a t m a y b e the m o s t p e r t i n e n t ones, h o w e v e r . " P a s s i o n is h e l p f u l , " he c o n c l u d e s , " e s p e c i a l l y t h o s e t y p e s o f p a s s i o n w h i c h a r e n o n - l i c i t . D o u b t is a n e c e s s a r y p r e c o n d i t i o n to m e a n i n g f u l a c t i o n . F e a r is the g r e a t m o v e r , in the e n d " ( B a r t h e l m e 1 9 7 4 ) .

NOTES 1. Pyidawtha, The Nezv Burma (Economic and Social Board, Government of the Union of Burma, 1954), p. 10. 2. Ibid., p. 8. 3. Ibid., p. 128. 4. Ananda K. Coomaraswamy, Art and Aivadeshi (Ganesh and Company, Madras), p. 30. 5. J. C. Kumarappa, Economi/ of Permanence (Sarva-Seva-Sangh-Publication, Rajghat, Kashi, 4th ed., 1958), p. 117. 6. J. K. Galbraith, The Affluent Society (Penguin, 1962), pp. 272-273. 7. Richard B. Gregg, A Philosophy of Indian Economic Development (Navajivan Publishing House, Ahmedabad, 1958), pp. 140-141. 8. Harrison Brown, The Challenge of Man's Future (Viking Press, New York, 1954), p. 225. 9. E. F. Schumacher, "Rural Industries," in India at Midpassage (Overseas Development Institute, London, 1964). 10. E. F. Schumacher, "Industrialisation Through Intermediate Technology," in Minerals and Industries, Vol. 1, no. 4 (Calcutta, 1964); Vijay Chebbi and George McRobie, Dynamics of District Development (SIET Institute, Hyderabad, 1964).

10 Postscript: Thinking with a Clear Heart •

Monty Python and the Holy Grail (1974) "Arthur and Dennis"

Arthur and Patsy riding. They stop and look. We see a castle in the distance, and before it a peasant is working away on his knees trying to dig the earth with his bare hands and a twig. Arthur and Patsy ride up, and stop before the peasant. Arthur: Old woman! Dennis: (turning) Man. Arthur: Man. I'm sorry. Old man, what knight lives in that castle? Dennis: I'm thirty-seven. Arthur: What? Dennis: I'm only thirty-seven . . . I'm not old. Arthur: Well—I can't just say: "Hey, Man!" Dennis: You could say: "Dennis." Arthur: I didn't know you were called Dennis. Dennis: You didn't bother to find out, did you? Arthur: I've said I'm sorry about the old woman, but from behind you looked . . . Dennis: What I object to is that you automatically treat me as an inferior . . . Arthur: Well . . . I am King. Dennis: Oh, very nice. King, eh! 1 expect you've got a palace and fine clothes and courtiers and plenty of food. And how d'you get that? By exploiting the workers! By hanging onto outdated imperialistic dogma, which perpetuates the social and economic differences in our society! If there's ever going to be any progress . . . An old woman

appears.

Old woman: Dennis! Have you seen the cat's front legs? Oh! How d'you do? Arthur: How d'you do, good lady . . . I am Arthur, King of the Britons . . . can you tell me who lives in that castle? Old woman: King of the who? Arthur: The Britons.

235

236

Postscript

Old woman:

W h o are the Britons?

Arthur:

All of us are . . . we are all Britons.

Dennis

winks at the old

woman.

. . . And I am your King . . . Old woman: O o o o o h ! 1 d i d n ' t know we had a king. I thought w e were an a u t o n o m o u s collective . . . Dennis: You're f o o l i n g yourself. W e ' r e living in a dictatorship, a selfperpetuating autocracy in which the w o r k i n g classes . . . Old woman: T h e r e you are, bringing class into it again . . . Dennis: T h a t ' s what it's all about . . . If o n l y — Arthur: Please, please, good people, I am in haste. What knight lives in that castle? Old woman: No one lives there. Arthur: Well, w h o is your lord? Old woman: We d o n ' t have a lord. Arthur: What? Dennis: I told you, w e ' r e an anarcho-syndicalist c o m m u n e , w e take it in turns to act as a sort of executive officer for the week. Arthur: Yes . . . Dennis: . . . But all the decisions of that officer . . . Arthur: Yes, I see. Dennis: . . . must be approved at a bi-weekly meeting by a simple majority in the case of purely internal affairs. Arthur: Be quiet. Dennis: . . . but a two-thirds majority . . . Arthur: Be quiet! I order you to shut up. Old woman: Order, eh? W h o does he think he is? Arthur: I am your king. Old woman: Well, I d i d n ' t vote for you. Arthur: You d o n ' t vote for kings. Old woman: Well, how did you b e c o m e king, then? Arthur: T h e Lady of the Lake, her arm clad in purest s h i m m e r i n g samite, held Excalibur aloft f r o m the bosom of the waters to signify that by Divine Providence . . . 1, Arthur, w a s to carry Excalibur . . . that is why 1 am your King. . . . Dennis: Look, strange w o m e n lying on their backs in ponds handing over swords . . . that's no basis for a system of g o v e r n m e n t . S u p r e m e executive power derives f r o m a mandate f r o m the masses not f r o m s o m e farcical aquatic ceremony. Arthur: Be quiet! Dennis: You c a n ' t expect to wield s u p r e m e executive power just because some watery tart threw a sword at you.

Thinking Arthur:

with a Clear

Heart

237

Shut up!

Dennis: I mean, if I went round saying I was an Emperor because some moistened bint had lobbed a scimitar at me, people would put me away. Arthur: (Grabbing him by the collar) Shut up, will you. Shut up! Dennis: Ah! Now . . . we see the violence inherent in the system. Arthur: Shut up! People (i.e. other peasants)

are appearing

and

watching.

Dennis: (calling) Come and see the violence inherent in the system. Help, help, I'm being repressed! Arthur: (aware that people are now coming out and watching) Bloody peasant! (pushes Dennis over into mud and prepares to ride off) Dennis: Ooooooh! Did you hear that! What a give-away. Arthur: Come on, Patsy. They ride o f f . Dennis: (in background as we pull out) Did you see him repressing me, then? That's what I've been on about . . .

THINKING WITH A CLEAR HEART Authur and Dennis both speak English. However, the very same words mean completely different things to them. They speak entirely different analytical languages and so the mutual quality of their misunderstanding is complete. Their conceptions of h u m a n nature, the values they hold dear as a consequence, the societal implications of these values, do not compute. Authur is a king. He thinks about his place in the world (when he bothers to think about it at all) in terms of his divine right to rule. He takes his absolute authority for granted. Dennis is an anarcho-syndicalist, however. To him, Authur is a dictator w h o exploits and represses all those w h o provide him with his privileges and spoils. As in the fictional world of Monty Python, so in the factional world of political economics; as Authur and Dennis see different versions of "reality," so too do those w h o talk about the world political economy. This is w h y a survey of the subject, if it is to make any claim to being comprehensive, must refer at every point to the various analytical languages in which the subject is described and explained. In this book I have tried to show not only how the international political economy is becoming a world political economy, but also how the major analytical languages, worked out over the last two

238

Postscript

h u n d r e d y e a r s b y those w h o h a v e tried to u n d e r s t a n d w o r l d affairs in this way, m i g h t account for that transition. E v e n in g o o d faith, these p e o p l e disagree. A n d it's little wonder. T h e w o r l d political e c o n o m y is a vast, t a n g l e d w e b of repeated h u m a n practices, a d v a n c i n g on a b r o a d front, from one m o m e n t to the next. We do it as w e try to u n d e r stand it, a n d our u n d e r s t a n d i n g s are part of w h a t w e try to do. We m a k e different a s s u m p t i o n s about h u m a n nature, and w e take different p o s i t i o n s on what to value as a c o n s e q u e n c e , and w e act accordingly. T h e w h o l e thing's a m e s s and it's a w o n d e r w e can m a k e a n y sense of it at all. I h a v e not confined the attempt I've m a d e here to u n d e r s t a n d the w o r l d political e c o n o m y to a c a d e m i c analyses, either. We k n o w about the w o r l d in w a y s other than the w a y s those c o n v e n t i o n a l analyses p r o m o t e a n d protect. By including readings of a n o n a c a d e m i c sort, I h o p e to h a v e s h o w n h o w v a l u a b l e information a b o u t the subject can be f o u n d in u n c o n v e n t i o n a l places, and v a l u a b l e insights, too, insights arguably not available from a c a d e m i c analyses. T h e c o m p l e x i t i e s of the w o r l d political e c o n o m y are b e s t a d d r e s s e d w i t h a clear head, t h o u g h too few realize this m e a n s h a v i n g a clear heart as well. If w e w a n t to k n o w h o w the w o r l d political econo m y w o r k s , in other words, w e n e e d to do as m u c h as w e can to clarify o u r thinking, our concepts, and the analytic l a n g u a g e s w e c h o o s e to use. We also need to do as m u c h as w e can to clarify our e m o t i o n s , our values, and the u n d e r s t a n d i n g s of h u m a n b e i n g w e b r i n g to bear. Clarification c o m e s , that is, in b o t h rational and nonrational forms. We not only h a v e a neocortex in our h e a d s (a " t h i n k i n g " part), w e also h a v e a limbic system ( " f e e l i n g " parts) as well. As a c o n s e q u e n c e w e not only " k n o w " about things analytically, w e " k n o w " things experientially, too. It s e e m s an obvious point to m a k e but it's one w i t h a heretic ring to it in such self-consciously scientific times. It's also a point well m a d e in Velasco's story, for e x a m p l e , w h e r e she says h o w it w a s difficult for her to " u n d e r s t a n d and s e e " w h o she really w a s until she had e x p e r i e n c e d s o m e t h i n g other than the middle-class life she had led at h o m e . S h e ' s not alone there. M y o w n efforts at clarification have taken m e from L o d g e ' s L o n d o n to E n l o e ' s b a n a n a plantations to Bastiat's sun-struck France. An o d d journey, perhaps, but c o m i n g at the c o m p l e x i t i e s of the w o r l d political e c o n o m y in u n c o n v e n t i o n a l w a y s has c o n f i r m e d for m e m y original h u n c h that the experiential does matter. C o m i n g to terms with that fact w h i l e r e m a i n i n g a c a d e m i c a l l y credible is problematic. We face a h u g e challenge in this regard. It is a c h a l l e n g e worth facing, however, if only b e c a u s e it is here, I feel, that w e also find our single biggest c h a n c e .

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Index Accumulation, primitive, 46-48, 66 Advantage, comparative, 12-13, 84, 87, 121-124, 129-132, 170, 214 Advantage, relative, 121-124 Advertising, 104 Africa, 114, 126, 168, 195 African Development Bank, 180 Age of Reason, 10 Agribusiness, 93 Agriculture, 74, 92-93, 94 Aristotle, 53, 54, 57 Armaments, 89-90, 91, 92 Asian Development Bank, 180 Asia Pacific Economic Community, 9, 114, 203, 204 Association for Progressive Communications, 85 Association of South East Asian Nations, 204, 205 Atterbury, M„ 183-184 Australia, 105, 205 Autarky, 35, 84, 190 Balance of payments, 140, 171, 177 Balance of power, 8 Bank(s), 165; Baring's, 159; borrowing from, 81; and capital flows, 157-158; central, 8; commercial, 168; foreign, 81; international, 174; private, 180; regional, 179-182; world, 179 Barter, 127-129, 151, 157, 162; balanced flow, 127-128; coproduction, 128; counter purchase, 128; direct, 147; offset, 128; pure, 127, 128; switch trade, 1 2 8 - 1 2 9 Bastiat, Frédéric, 3 1 - 3 4 Behavior: economic, 4; imperialistic, 190; market, 159; optimizing, 17; rational, 2 Bensusan-Butt, David, 1 - 7 , 11 Bongo, Omar, 111 Bourgeoisie, 14, 18; gender in, 79; global, 67, 161, 193; hatred of, 68 Brazil, 92, 187 Brundtland, Gro Harlem, 215 Bukharin, Nikolai, 193

Cairns Group, 143 Calvinism, 43 Canada, 105, 187, 201, 202, 203, 205 Capital: accumulation of, 18, 19, 46-48, 66, 120, 194; consolidation of, 66; controls, 175; defining, 27; export of, 192; as factor of production, 20, 27; finance, 117, 119, 157, 167, 192; fixed, 27; flight, 175; flows, 157, 158, 161, 167; generation of, 196; human, 185-186; imports, 158; increasing, 47; industrial, 192; intellectual, 84; liberal views on, 27; long-term, 158; Marxist views on, 27; merchants', 48-50; migration, 114; mobility, 117, 202; movement, 206; overconcentration of, 113; private, 157, 158; production of, 64; property as, 66; relation to labor, 47; self-expansion of, 26; short-term, 158; as social relation, 53; as store of value, 164; strike, 175; use of, 66; working, 27 Capitalism: class conflict in, 65; collapse of, 23, 66, 67, 91, 175; contradictions of, 65; corporate, 196; culture of, 85; environmental impact of, 214; extending, 164; as global system, 22; growth poles in, 114; industrial, 20, 22, 65; internationalization of, 193; Japanese, 195; liberal, 66, 103; margins of, 68; Marxist views on, 66; mercantilist views on, 66; money in, 28; power of, 43; revolutionary potential of, 67; social relationships in, 116; and state making, 67; tourism in, 87-88; world, 9, 164 Capitalist: Asian, 197; class, 20; dynamics, 67; exploitation, 19; imperialism, 24; markets, 24, 36, 104; monopolies, 22, 23; production, 18, 47, 67, 192 Capital (Marx), 47 Castro, Fidel, 111 Chief Joseph, 222 Chile, 74, 99 China, 17, 185, 187, 195, 204, 205

249

250

Index

Class: capitalist, 14, 20; conflict, 65, 67, 116, 198, 214; dominant, 66; formation, 116; inequalities, 132; in modes of production, 79; power, 25; ruling, 67, 85, 163; social, 73, 138, 186; struggle, 14, 217; unity, 68; working, 68 Cold War, 133, 170 Colonization, 57-60 Commodities, 49; cultural, 194; displays, 104; exchangeable value of, 28; individuals as, 88-89; money as, 28; oversupply of, 113; preferences, 137; prices of, 15, 160; primary, 108, 139; production of, 12, 33, 48 Common Effective Preferential Tariff, 204 Communications, 84, 110, 115; global, 89; information revolution in, 84; means of, 15; revolution, 86; and tourism, 86; and trade, 125 Communism, 16, 171, 214 Communist Manifesto (Marx), 13 Competition, 11; advent of, 15; cost of, 46; foreign, 31, 33, 34; free, 19, 24; inhibition of, 24; masculinized, 104; open, 19, 43, 125-126; in political economy, 43; protection from, 31 Computers, 106, 158 Consumerism, 162 Consumption, 66; levels of, 110; patterns of, 227-228 Corporations, multinational, 103-105, 202, 218; investment by, 119. See also Firms Costa Rica, 72, 185 Countertrade, 127 Credit, 150, 164-167; control of, 166; creation of, 164-165; creative uses of, 28, 169; demand for, 106; flows, 178; liberal views on, 166; mercantilist views on, 165; nonguaranteed, 158; private, 178; short-term, 168; trade in, 125, 126 Cuba, 111, 185 Cultural: commodities, 194; dependency, 85; homogeneity, 196; imperialism, 85, 86; stereotypes, 78; value, 104 Culture: of capitalism, 85; conservation of, 223; exporting, 194; political, 9 Currency, 147, 150-151, 152-153; controls, 132; convertibility, 169-174; dealing, 175; depreciation, 172;

devaluation, 179; "dirty" floating, 173; dollar, 167, 171, 172, 173; exchange, 134, 175, 178; foreign, 88, 132, 171; gold-backed, 167, 172, 173; national, 165, 166, 177; overvalued, 172; regions, 206; single European, 199; speculation, 158; stability, 166; trade, 125, 158; transactions, 158; undervalued, 173 Current accounts, 35, 36 Cybermoney, 165 Czechoslovakia, 90, 189 Debt, 167-169; burden on women, 82; crises, 10, 81, 168, 169, 173; of less developed countries, 168; liberal views on, 81, 169; Marxist views on, 81-82, 168, 169; mercantilist views on, 81; relief, 93, 160; repayment, 115, 168, 219; rescheduling, 168, 169, 173, 178; service, 81; Third World, 115 Depression, 112, 113, 119, 132, 184 Deregulation, 46, 158, 169, 174, 175, 179 Derivatives, 125, 158, 159, 161 Determinism, 4 Development, 184-188; disparities, 184; ethno-, 223; funding, 180; gender in, 221; global, 9; human, 108, 185, 187, 199; loss of, 199; of markets, 147-150; and market values, 23; policy, 214; of productivity, 20; social indicators, 160; spiritual, 230-233; state, 20; statecentric measures of, 184; sustainable, 135, 178; theory, 68; of underdevelopment, 68, 115; world, 88, 183-206, 207-233 Dodge Plan, 171 Drugs, 94-96 Dryden, John, 125 Economic: behavior, 4; cycles, 113; decisions, 2; dependence on women, 71; deregulation, 46; expansion, 216; growth, 104, 214, 215; history, 2; imperialism, 190; nationalism, 19; policy, 178; resources, 78; theory, 4, 5 Economics, 1; Buddhist, 224-230; international, 17; as moral science, 7, 8; normative, 6; and prices, 64; scientific, 2; separation from politics, 16, 18

Index Economy: core, 113; international, 47, 64; market, 48; national, 107; plantation, 48, 71; political, 19, 21, 205; settler, 48; social, 31; socialist market, 204 Education, 9, 137, 185; enrollment rates, 181; gender discrimination in, 186; respect for, 197; retention rates, 223; statistics, 187; of women workers, 76 Electronics, 106 Employment: advantageous, 13; blue collar, 109; depressed capacity, 169; and deregulation, 46; gender in, 72, 186; increase in, 32; informal, 27, 116; manufacturing, 110; migration for, 114; in services, 106; of women, 74-76, 78 "Enlightenment," 44 Enloe, Cynthia, 7 1 - 7 6 Entertainment, 137, 194 Environment: commissions, 202; degradation of, 25, 104, 119, 214; and food production, 93; pollution of, 135, 213; protection of, 179, 214; regulation in, 135; social movement involvement in, 82; and trade, 134-135 Ethnocide, 223 EU. See European Union European Bank for Reconstruction and Development, 180 European Economic Community, 199 European Union (EU), 9, 105, 114, 143, 199, 200, 204 Exchange: benefits by, 23; crises, 179; currency, 134, 175, 178; of equivalents, 28; foreign, 108, 158, 168, 175, 179; free, 191; of goods and services, 108, 125, 145; international, 128; markets, 178; media of, 145, 163; rates, 158, 170, 173, 175, 177; unequal, 132; values, 14, 54, 147 Exploitation, 184; capitalist, 19; escalating, 65; of labor, 66, 169, 202; of women, 8 8 - 8 9 , 220; of workers, 191, 197, 217 Export(s), 36, 54; finished goods, 108; increasing, 35; manufacturing, 196, 203; processing zones, 115, 203; special access for, 126; targeting, 142 Finance: capital, 117, 119, 157, 167, 192; national, 54; state independence in, 34; world, 145-182 Finland, 105, 187

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Firms: foreign, 71; global, 72, 105-107, 171; multinational, 21; profit maximization in, 22; relations with states, 21; transnational, 184 Fordism, 110-111, 201 Gabon, 111, 185 Gender: bias, 77; in development, 221; dimension of trade, 138; discrimination, 186, 187; in division of labor, 73-76; in employment, 72; exploitation, 220; imperialism, 220; inequalities, 79, 132; injustice, 78; liberal views on, 78; Marxist views on, 79; mercantilist views on, 77; practices, 79; roles, 77; social construction of, 79; and uneven growth in political economy, 117; and war making, 92 General Agreement on Tariffs and Trade, 140-142, 203, 218 Germany: capitalism in, 20; export competitiveness, 172; growth rates, 114; protectionism in, 134; purchase of U.S. securities, 172; state building in, 20 Gilpin, Robert, 45, 104, 112, 113, 114, 131, 158 Gore, Al, 111 Gramsci, Antonio, 194 Great Britain, 113; capitalism in, 20; stockmarket deregulation, 158 Greed, 13 Gresham's Law, 150 Gross national product, 4, 160, 184, 185, 187, 195, 199 Guinea, 185, 187 Hayek, Friedrich, 46, 176 Hong Kong, 195, 204 Hume, David, 166 Hungary, 143, 189 Hymer, Stephen, 4 6 - 6 5 Hypertrade, 125 Ideology, 9 Imperialism, 25, 54, 67, 184, 188-195; capitalist, 24; cultural, 85, 86; economic, 190; European, 19; gender, 220; masculine, 88; mercantilist views on, 190; political, 190; strategies of, 55-57

252

Index

Import(s), 36; capital, 158; duties, 19; primary commodity, 108; quotas, 140; restrictions on, 132; substitution, 19, 108, 144; tariffs on, 131-132 India, 92, 144, 195, 216 Indigenous peoples, 68, 112, 222-224; bio-mining of, 223 Indonesia, 74, 195, 204 Inflation, 172, 173 Information, 84, 85, 115, 144 Insurance, 137, 159 Inter-American Development Bank, 180 Interest rates, 118, 168 Intergovernmentalism, 200 International Bank for Reconstruction and Development, 179 International Monetary Fund, 9, 74, 93, 160, 169, 177-179, 218, 219 International relations, 8, 9 - 1 0 International Telephone and Telegraph (ITT), 99-103, 105 International Trade Organization. See World Trade Organization Investment, 54; diversion of, 204; domestic, 190; in education, 196; flows, 202; foreign, 22, 118, 158, 161, 162, 174, 190, 203; and gender, 161, 162; global practices, 9, 119; international flows, 133; opportunities for, 104, 113; outflow of, 118; politicization of, 22; portfolio, 158; in production, 192; returns on, 160; speculative nature of, 158 ITT. See International Telephone and Telegraph Jane, John, 89 Japan, 105, 187, 204, 205; capitalism in, 20, 195; export competitiveness, 172; growth rates, 114; market domination by, 36; markets in, 103-104; protectionism in, 134; purchase of U.S. securities, 172; state makers in, 20, 195; stock market deregulation, 158 Jevons, William, 5, 16 Keynes, John Maynard, 22, 36, 45, 54, 179, 230 Knowledge, as factor of production, 20, 26, 197 Labor: appropriation of, 26; cheap, 201; colonial, 192; commissions, 202; as

commodity, 24; control of, 25, 48, 52, 107; definitions of, 26-27; domestic, 36, 74; exploitation of, 66, 169, 202; as factor of production, 26; family, 79; flows, 202; forced, 192; foreign, 33; fragmentation, 107; gendered, 72; human, 224; immobility of, 117, 118; informal, 220; intellectual, 84, 85; liberal views on, 27; markets, 9, 119, 148-149; Marxist views on, 26, 27; migration, 114, 192; organized, 7 3 - 7 4 , 170; power, 14, 26, 27, 29, 47, 65, 106, 109, 129, 132, 169, 170, 192; productivity, 65; protection of, 36; relation to capital, 47; sale of, 8, 14, 28, 47, 85, 106, 197, 220; as source of value, 65; surplus, 52, 53, 54, 85; and technology, 27; unions, 72; unpaid, 28, 74, 221; value, 52; wage, 117; women's, 74-76, 78 Labor, division of, 225; changes in, 9, 108-110; complex, 11, 12; gendered, 76; global, 79, 108-110, 214, 221; international, 9, 64; liberal views on, 109; Marxist views on, 109; national, 64; technical, 65; unequal, 47 Latin America, 168, 195 Lenin, V. I., 113, 192, 193 Liberalism, 22, 43-46; classical, 120, 166, 171, 175; corporate, 23; neoclassical, 46; reformist, 45, 81, 120, 171, 175 Life expectancy, 160, 185, 223 Literacy rates, 160 Loans. See Credit Lodge, David, 3 6 - 4 3 Luxemburg, Rosa, 192 Maastricht Treaty, 199 McNamara, Robert, 181 Malaysia, 195, 204 Marginalization, 114, 116, 232; developmental, 222-224; of indigenous peoples, 222-224 Marketeering, 23, 25; disciplined, 196; failures, 90; free, 116; liberal, 44; offshore, 158; social consequences, 116 Market(s), 1; behavior, 159; black, 19; capitalist, 17, 24, 36, 104; coercion, 24; as counterpart to state, 21; cycles, 45; developmental poles in, 20; development of, 147-150; discipline, 178; distortion of, 46; domestic, 21;

Index domination, 36; economy, 48; efficiency, 45, 178; exchange, 178; export, 203; financial, 206; foreign, 54; free, 16, 46, 111; gender bias in, 78; global, 103; governed, 196; growth, 9, 54; imperfections, 81; internal, 196; international, 9, 21, 72; intervention in, 45; labor, 9, 119, 148-149; liberal views on, 23; limiting, 23; Marxist views on, 24, 104; masculinization of, 138; mechanics, 114; mercantilist views on, 24; merging, 103; money, 167, 175, 180; national, 31, 34; open, 204; organization of, 147-150; penetrating, 54; prices, 64; principles, 17, 24; regulation of, 23; role of money in, 157; self-regulating, 25, 45, 66; state makers in, 45; values, 23; world, 9, 81 Marshall Plan, 134, 171, 180 Marx, Karl, 13, 14, 15, 16, 17, 18, 26, 27, 28, 47, 52, 65, 66, 67, 192 Marxism, 22, 24, 65-68; classical, 18, 23, 27, 67, 79, 175, 198; extremist, 91, 109; reformist, 67, 68, 79, 82, 91, 194 Materialism, 162 Media, 9, 194 Mercantilism, 19, 22, 34-36; classical, 35; inward, 35, 81, 190; and markets, 24; orthodox, 77; outward, 35, 81, 190; patriarchal, 77 Mergers, 23 Mexico, 201, 203 Militarism, 71 Mohamad, Mahathir, 204 Money, 1, 162-164; alternatives to, 163; and capitalism, 28; circulation of, 28; control of, 166; emphasis on, 104; as factor of production, 26; flows, 163, 164; "footloose," 175; global system, 167; hyperspace for, 158; inventing, 157; liberal views on, 163, 164; markets, 167, 175, 180; Marxist views on, 163; mercantilist views on, 165; nominating worth in, 163; portability of, 164, 165; printing, 166, 172; "pure," 165; role in world market, 157; sheltering, 175; short-term, 159; as social relation, 53, 163; and storage of value, 164; supply, 166; world, 179 Monopolies, 22; production, 22, 23, 139; technological, 139; in tourism, 8 7 - 8 8 Mortality rates, 160, 181, 223

253

Movements, social, 9, 86, 92, 175, 184, 198; communication, 85; feminist, 68, 92, 94, 112; green, 68, 80, 82, 112, 216; indigenous peoples, 68, 112, 161; and investment, 161 NAFTA. See North American Free Trade Agreement Nationalism, 68, 190; economic, 19 "National Self-Sufficiency" (Keynes), 54 NATO. See North Atlantic Treaty Organization Neoimperialism, 67, 88, 180. See also Imperialism Neo-Marxism, 23, 113 Neomercantilism, 34. Sec also Mercantilism Newly industrialized countries, 195-199, 203, 204 Newly industrializing economies, 195-199, 203, 204 New Zealand, 105, 143, 187, 205 Nixon, Richard, 99, 173, 194-195 North American Development Bank, 202 North American Free Trade Agreement (NAFTA), 9, 114, 143, 201, 202, 204 North Atlantic Treaty Organization (NATO), 201 OECD. See Organization for Economic Cooperation and Development "Of Money" (Hume), 166 "Of the Jealousy of Trade" (Hume), 166 Omnibus Trade and Competitiveness Act, 141 Organization for Economic Cooperation and Development (OECD), 171 Overpopulation, 134, 184, 2 0 7 - 2 1 6 Pacific Basin Economic Council (PBEC), 205 Pacific Economic Cooperation Council (PECC), 205 Pacific Trade and Development Conference, 205 Patriarchy, 74, 77, 79, 104-105 Payer, Cheryl, 121-124 PBEC. See Pacific Basin Economic council PECC. See Pacific Economic Cooperation Council Petty, Sir William, 10, 80

254

Index

Pharmaceuticals, 94-96, 106; liberal views on, 94; mercantilist views on, 94 Philippines, 75-76, 2 1 7 - 2 1 9 Policy: choices, 81; deregulation, 174, 179; development, 214; economic, 178; foreign, 8, 134, 172, 199; open-door, 204; public, 1, 17; trade, 204, 206 Political: boundaries, 114; culture, 9; dependence on women, 71; economy, 19, 21, 205; imperialism, 190; unity, 73 Political economy, international: defining, 8 - 2 9 ; gendering in, 73-76; history of, 9 - 1 7 ; Marxist, 17; mercantilist views on, 34; preindustrial, 113-114 Political economy, world, 99-120. See also Political economy, international "Political Oeconomies" (Petty), 10 Politics: ethnic, 76; high, 8; international, 17; low, 8 - 9 ; plantation, 73; residual, 17; separation from economics, 16, 18 Post-Fordism, 110-111, 201 Poverty, 47, 194, 215, 217; absolute, 184; alleviation of, 216; among women, 78-79; creation of, 174; mass, 213-214; rates of, 160 Power: balance of, 8; class, 25; concentration of, 162; labor, 14, 26, 27, 29, 47, 65, 106, 109, 129, 132, 169, 170, 192; material, 164; productive, 11; social, 53; sovereign, 200; state, 34, 90; of state makers, 35 Price(s): of adjustment, 167; commodity, 15, 160; declining, 139; distortions, 24; and economics, 64; and efficiency, 122; fixing, 153-154; market, 64; movements in, 151-152; oil, 10, 168, 173; raw material, 109; variations, 150 Privatization, 179 Production: armaments, 89; bourgeois mode of, 15; capital-intensive, 174; capitalist, 18, 23, 47, 64, 67, 192; centralization of, 15; chains, 107, 108, 117, 126; commodity, 12, 16, 33, 48; competitive differentiation in, 110; control of, 36; diversity in, 89; efficiency, 16, 53; for exchange, 52; expansion of, 169; factors of, 20, 26, 27, 84, 93, 113, 114, 116, 132, 197; flexible specialization in, 110; food, 93, 181; globalization of, 9, 107-108, 179; human, 15; industrial, 107, 115;

information in, 84; integrated system, 107; international system of, 107; investment in, 192; labor-intensity, 106; laissez-faire, 90; lines, 110; manufacturing, 110; means of, 14, 15; modes of, 65, 104; monopolies, 22, 23; multiplication of, 12; in national interest, 34, 107; ownership of, 18, 65, 104; patterns, 9; post-World War II, 170; power of, 11; primary, 9, 106, 107, 115, 138; process, 27; quality control in, 110; revolutionizing of, 14; secondary, 9, 106, 107, 115, 137; social nature of, 49, 107; state independence in, 34; and supply, 12; technology, 106, 174; tertiary, 9, 106, 107, 115, 137; uneven growth in, 111-120; for use, 52; value-added, 107, 144; vertical integration in, 36, 84, 92, 126 Productivity, 9; of capitalism, 66; development of, 20; growth of, 114; increased, 110; labor, 65; and protectionism, 44; tied to wages, 110 Profit(s): in agribusiness, 93; declining, 111, 113, 168; and loss, 44, 159; making, 28; maximization of, 22, 85, 87, 106, 120, 132; pursuit of, 66; from war, 170; from workers, 24 Proletariat, 14 Property: as capital, 66; concentration of ownership, 15; as factor of production, 26; intellectual, 139, 141 Protectionism, 19, 20, 31, 32, 34, 36, 81, 126, 129, 134, 139, 140, 143, 144; liberal views on, 24, 198; mercantilist views on, 198; and productivity, 44; statecentric, 141 Protestant ethic, 36, 43 Radford, R. A., 1 4 5 - 1 5 7 Rationality, 2 Recession, 10, 112, 113, 132, 138, 168, 173 Redistribution, 120 Regionalism, 114, 139, 143, 199-206 Research, industrial, 109 Resources: access to, 129; decreasing, 215; depletion of, 119, 134, 135; economic, 78; efficient allocation of, 125; exploitation of, 223; human, 22; and multinational firms, 22; national, 22; natural, 9, 22, 26, 213, 228-229;

Index obsolescing, 109; value of, 109; w o m e n ' s access to, 78 Revolution: communications, 86; failures, 17; industrial, 104, 113; information, 84; marginalist, 16 Ricardo, David, 12, 125, 129 Rights: intellectual property, 139, 141; workers', 142 Russell, Bertrand, 46 Sampson, Anthony, 9 9 - 1 0 3 Samuelson, Paul, 121-124 Saudi Arabia, 185, 217 Schumacher, Ernst, 2 2 4 - 2 3 0 Schumpeter, Joseph, 190-191 Singapore, 195, 197, 204, 221, 222 Slavery, 191, 192 Smith, Adam, 11, 13, 14, 16, 17, 18, 26, 28, 43, 44, 78, 90, 91, 125, 166, 196, 225 Social: class, 73, 138, 186; democracy, 202; disparities, 20; " d u m p i n g , " 142; economy, 31; equality, 164, 179; interests, 13; justice, 179; movements, 9, 68, 80, 82, 85, 86, 92; needs, 108; organization, 145; power, 53; process, 15; production, 107; relations, 20, 27, 53, 65, 116, 164; services, 221; underdevelopment, 20; unevenness, 117; welfare, 179 Socialism, 16, 133 South Africa, 74, 92 South America, 126, 201 South Korea, 171, 195, 204, 221 Soviet Union: collapse of, 17, 173, 178, 201; growth rates, 114 Sri Lanka, 185, 187 State: authoritarian, 196; autonomy, 19, 34, 35, 44, 77, 111, 125, 190; collapse of, 66; concept of, 18; as counterpart to markets, 21; development, 20; disaggregation of, 82; and economic activity, 18; and imbalance of class forces, 66; independence, 34; integration, 200; intervention, 45, 81, 91, 95, 114, 120, 198, 202; masculinization of, 138; migration impedance, 107; national, 20, 200; planning, 196; as political economy project, 19; power, 34, 90; provision of public goods, 45, 90; purpose of, 19; regulation, 126; relationship of individuals to, 17; relationships with

255

multinational firms, 21; sovereign, 189; supervision, 196; survival, 125; universalism of, 19; vulnerability, 165; welfare, 67 State makers, 189; as facilitators, 45; Japanese, 195; in markets, 45; promotion of powers of, 35; purpose of, 18; self-interest in, 22 State making: and capitalism, 67; material means of, 34; and war making, 89-90, 92 Structural adjustment, 88, 160, 179, 181, 218, 219, 221 Subsidies, 131-132 Supply and demand, 21, 44, 90; efficiency of, 19 Supranationalism, 200 Swift, Jonathan, 2 0 7 - 2 1 3 Taiwan, 195, 204 Tariffs, 19, 35, 126, 131-132, 139, 140, 141, 172, 202 Technology: changes in, 24, 106, 113; communication, 84; industrial, 109; innovations in, 104; labor-saving, 27; production, 106; trade in, 9; transfers, 107; transport, 84 Thailand, 195, 204 Theory: dependency, 67-68; development, 68; economic, 4, 5; generalization in, 2; modern, 5; trade, 47, 166; world systems, 6 7 - 6 8 " T h e Theory of Political Economy" (Jevons), 16 Tourism, 8 6 - 8 9 , 137, 144 Trade: abstract, 125; adversarial, 139; agreements, 45, 218; aid, 126; armaments, 89-90; balances, 74, 166; barriers, 126, 139, 141, 142; buy-back, 128; commercial, 54; commodity, 9, 125, 147; and communication, 125; compensation, 128; competitive, 139; complementary, 139; credits, 125, 126; currency, 125, 158; cycles in, 134; drug, 95; East-West, 133-134, 135; and the environment, 134-135; expansion, 178; exploitative, 133; free, 14, 32, 35, 36, 43, 45, 129, 131, 134, 166, 167, 202, 203; geographic unevenness, 136-137; global, 124-129; growth of, 124-129, 132-139; international, 47, 121-144; interstate, 126; intraregional, 205;

256

Index

liberal views on, 125, 137; in manufactured goods, 9; Marxist views on, 126, 138; mercantilist views on, 126, 131-132, 137; monetized, 162; most-favored-nation principle, 140; multilateral, 127; North-South, 136; open, 55-57; patterns, 206; policy, 204, 206; regional, 143, 206; restrictions, 131-132, 135; restructuring, 140-144; in services, 9; sex, 88-89; social aspects, 137-138; South-South, 136; structure, 138-139; surplus, 81, 165; in technology, 9; theory, 47, 166; tourist, 124; transfers, 107; virtual, 125. See also Barter Transportation, 84, 86, 89, 110 Treaty of Westphalia, 19 Trilateral Commission, 194 Trust-busting, 23 Underdevelopment, 9, 187; capitalist creation of, 23; development of, 68, 115; Marxist views on, 198; primitive, 48; social, 20; of South, 114; and tourism, 87 Unemployment, 27, 36, 93, 110, 115, 119, 140, 167, 173, 184, 203, 217, 223, 232 United Brands, 72, 75, 76 United Nations, 117; Children's Fund, 160, 187; Committee on the Status of Women, 78; Decade for the Advancement of Women, 78, 221; Development Programme, 118, 119, 139, 185, 186; Monetary and Financial Conference, 170; Social Summit, 111; World Commission on Environment and Development, 215; World Summit for Children, 187; World Survey on the Role of Women in Development, 78 United States, 105, 205; capitalism in, 20; debt levels, 167; Federal Reserve, 171; foreign policy, 134, 172; presence in Europe, 201; stock market deregulation, 158; war on drugs, 95

Value, 33; changes in, 104, 232; creation of, 28; cultural, 104; dependence on utility; exchange, 14, 28, 44, 54, 147; extraction, 126; labor, 52, 65; market, 23; of resources, 109; standards of, 147, 162; stored, 106, 164, 165; surplus, 27, 28, 85, 93; of work, 24 Velasco, Pura, 2 1 7 - 2 1 9 Vietnam, 171, 189 Violence, 47, 221 Wage(s): freezes, 179; gender discrimination in, 186; labor, 8, 26, 104, 117; and productivity, 110; value of, 173; working, 173 Wapenhans Report, 182 Wealth, 184; abstract, 28; accumulation of, 19, 54, 66; acquisition of, 43; capitalist, 52; disparities in, 199; exchangeable value of, 44; origin of, 43; redistribution of, 214; source of, 224; in state making, 19; transfer of, 168; "trickle down," 173 Wealth of Nations (Smith), 11, 225 Weber, Max, 36, 43, 231 Women: access to resources, 78; debt burden on, 82; dependence of economic systems on, 71; educational levels, 76; impoverishment of, 7 8 - 7 9 ; income statistics, 78; labor of, 74-76, 220; as "last colony," 79; level of employment, 75; in service industries, 117; sexual exploitation of, 88-89; in social movements, 68; in tourism, 8 8 - 8 9 ; in war activities, 92 Work, 225-227; ethic, 3 6 - 4 3 ; masculinization of, 71, 72, 73, 74; parttime, 72; plantation, 7 1 - 7 6 ; productive, 26; unskilled, 78; unwaged, 221; value of, 24. See also Employment World Bank, 9, 93, 160, 179-182, 218, 219 World Trade Organization, 9, 131, 139, 142-144 World War I, 167 World War II, 140, 171, 195

About the Book This innovative text offers a comprehensive survey of international political economy, but it is a survey with a difference. Built around a carefully selected set of nonacademic readings, it not only reviews the traditional analytic narratives and d o c u m e n t s the transition from international to world political economy, but also critiques the rationalist bias of the discipline. In pursuit of the clarity that rationalist discourse allows, posits Pettman, researchers too often eschew an indispensable source of knowledge about IPE. The subjective, the emotive, the personal, and the experiential are actively avoided. And the result as much blinds as illuminates. Thus, Pettman encourages the student not only to stand b a c k and " l o o k " at IPE, but equally to move in close and "listen." Understanding International Political Economy (with readings for the fatigued!) introduces this important area of h u m a n knowledge in an exciting and provocative way, while demonstrating that information and insights are to be gained from the less, as well as the more, conventional accounts of what is involved. Ralph Pettman holds the F o u n d a t i o n Chair of International Relations and International Political E c o n o m y at the Victoria University of Wellington, New Zealand. His numerous publications include International Politics: Balance of Power, Balance of Productivity, Balance of Ideologies; Teaching for Human Rights; and State and Class: A Sociology of International Affairs.

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