Is Globalization Americanization?
Hutton, Will & Giddens, Anthony
WILL HUTTON and Anthony Giddens are playing leading roles in the British debate on globalization and the "third way." This fall, their jointly edited book Global Capitalism will be published in...
...Markets not only provide for a rational allocation of products and labor power, they foreclose the need for any kind of program of social justice...
...Japan's economic collapse and China entering the world trade system did not help the declining growth in exports that were already uncompetitive...
...The United States doesn't control financial markets any more than any other country or agency does...
...interests, much as it has been trying to do in Japan for the past thirty years...
...The argument is settled...
...The Americans said, if you want Wall Street money then you must peg your currencies to the dollar and open up your financial systems to our banks and financial institutions, and that was all done under this technocratic umbrella term—capital market liberalization...
...Treasury and the IMF worked together to help U.S...
...The poorer countries don't think it is just that they should accept limitations on their own economic development because of environmental problems caused primarily by industrial developments in the West...
...There they were, the free market, University of Chicago, Nobel Prize-winning economists, who had designed complex, computer-based, risk-assessment models, but whose basic economic assumption was that markets tend to clear and that prices tend to converge around some normal distribution...
...As for the death of neo-liberalism, I'd like to believe that, but I'm not sure it's true...
...power trying to increase its interests...
...The voters aren't either...
...The liberals are broadly for them...
...Whatever the issues, whether intellectual property rights or capital market liberalization, they have been shaped by U.S...
...The difficulty is that while consumers clearly have the power to buy or not to buy, it is pretty crude—and only arises when there is a well-publicized flashpoint...
...That's not the conventional view, and I think it puts an important question mark over globalization...
...of course, plus the World Bank and the IMF are also more or less wholly dominated by the affluent countries...
...now there are 62 n DISSENT / Summer 2000 more than ten thousand...
...It wasn't that the United States wanted to "overturn" Asian capitalism...
...back to the late 1980s and early 1990s when economic policies in Asia were dictated by the need to meet the agenda of Western capitalism, and American capitalism in particular...
...and that they have been ruthless in pursuit of their interests, compromising the Clinton presidency and shaping globalization in U.S...
...capitalism's vitality can be turned to collective advantage...
...that the conservatives are in the ascendant...
...and the dollar peg was established in part to meet inflation targets, and in part to ensure that exchangerate risk was borne by the host country so that the inward investors—mainly the Americans but also Western Europeans— wouldn't have to insure themselves so heavily against so much risk...
...companies and forcing sales of assets to U.S...
...WH: I don't recall any significant body of opinion saying that Mexico would be swamped by the United States when NAFTA was set up...
...Economic globalization, of course, has been and is shaped by U.S...
...And perhaps most important of all, I am not sure that sufficient consumers are internationalist in their thinking and represent the basis for the global civil society you seek...
...As developed in Thatcherism and Reaganism, neo-liberalism also involved strongly conservative influences...
...terests any more...
...The United States wanted price stability and it wanted less exchange-rate risk for its overseas investments, and the dollar pegs seemed a good way of achieving both...
...The basic idea of neo-liberalism, as I would understand it, is that markets are in almost all respects superior to government...
...All countries have a material interest in collaborating to help resolve or limit these problems...
...There isn't a zero-sum game DISSENT / Summer 2000 n 59 IS GLOBALIZATION AMERICANIZATION...
...power now...
...For example, the document that Schroeder and Blair presented in June 1999 as their model of updated social democracy was 6o n DISSENT / Summer 2000 an astonishing statement of neo-liberal principles [Ed...
...There is a dimension of globalization that is about opening up the world to American interests in particular and Western capitalism in general...
...It explicitly argues that the job of politicians is not to change, reform, or manage these markets...
...To some extent our discussion is following the same divide—be tween the more traditional leftist views and the modernizing left...
...So what really took place in the 1990s is a great power play: Asian capitalism versus American capitalism...
...refers to a complex of changes rather than a single one...
...One of the biggest changes over the past thirty or so years has been a vast growth of nongovernmental organizations [NGOs] , interest groups, and pressure groups operating on a worldwide level...
...The result of the emergency IMF [International Monetary Fund] programs was to cement the commitment to liberalization, opening up markets to U.S...
...The idea of minimal government flows directly from this...
...Taken as this package, I don't think many people are neo-liberals any more...
...And the Federal Reserve Board cut interest rates aggressively...
...Manufacture can in principle be both much more efficient and cleaner when dominated by information technology...
...Idealistic internationalism has to be backed by a cool appreciation of where power lies and the balance of national interests, and I think this is where your arguments are sometimes weak...
...58 n DISSENT / Summer 2000 unless they had been pegged to the dollar...
...Your position is still too close to old leftIS GLOBALIZATION AMERICANIZATION...
...One of the green movement's favorite arguments is that environmentalism is win/win: profitable and environmentally friendly...
...According to new ecological thinking, "waste" should become a redundant concept...
...but as a matter of fact they did benefit hugely...
...When you get to specific points and examples, you find yourself in agreement with positions that you tend to dismiss as traditional in general—but which remain true...
...economy...
...You may think that it is dead, but it lives on in the minds of some of our leading politicians...
...And there have been a number of occasions—such as your argument that poverty is no longer a condition and that any condemnation of inequality should be leavened by recognition that in America at least there is an inclusive attitude toward minorities— where I have felt that your argument is full of insight, but incomplete...
...Consumers do not have a systematic voice through the democratic process or in the ways companies take decisions, although as we have discussed, we would both like to see a much more robust web of national and international regulation to enforce responsible corporate behavior...
...globalization presents new risks as well as new opportunities...
...This has been evident in all kinds of arenas, from not signing the Comprehensive Test Ban Treaty to unilaterally firing off cruise missiles at terrorist targets— and of course in the Sudan they proved not to be terrorist at all...
...It may be true that in the intellectual economic and social science circles with which you and I are familiar, neo-liberalism is pretty much stone dead...
...American conservatives, with their allies in the Fortune 500 and on Wall Street, are against all these things...
...American economic power was backed by a global network of military alliances, by numerous forms of interventionism, and by the propagating of "proxy wars" in various places...
...The Indians looked to the example of China, which has nuclear weapons, and which gets courted much more by the Western nations than India does...
...AG: There are two general questions that we need to answer...
...Anthony Giddens is director of the London School of Economics and Political Science and the author, most recently, of The Third Way and its Critics.—EDs...
...It continues to have a naive trust in markets...
...If recycling waste was so profitable, capitalism would have moved in...
...Consumer power is also easily manipulable, and sometimes the manipulators are unaccountable and too free and easy with facts...
...Even some of the biggest fans of a neo-liberal perspective have now abandoned it...
...They were wrong, and hadn't factored the scale of price swings we saw during the Asia crisis into their models...
...But there are also fundamental processes of "globalization from below," which to some extent counterbalance the other set of forces...
...It allows the United States to finance colossal trade deficits and extraordinary levels of domestic consumption...
...It doesn't make much sense to treat financial markets as the advance guard of American interests...
...I think we share quite a lot of common ground over the need for more supranational and European-level government and regulation...
...We must take globalization seriously, which means responding above the level of the nation as well as domestically...
...During the cold-war period successive U.S...
...The values of the left—solidarity, social justice, protection of the vulnerable, and the belief that active government is needed to achieve these—are still crucially important in the contemporary world...
...The Asian economies might have experienced setbacks, but they are nonetheless the most remarkable examples we have of countries that have achieved a breakthrough in economic development...
...They are also plainly subject to irrational fluctuations and panics...
...But the old strategies and institutions, including existing structures of the welfare state, are no longer able to deliver upon them...
...And it has been comparatively successful...
...If we had believed the Club of Rome prognostications thirty years ago, we would not have allowed the degree of economic growth of which you boasted earlier on...
...Obviously the United States is by far the dominant economic power in the world and most of the big corporations are U.S.-based...
...I'm not sure how dynamic the Asian response was in the sense of being driven from the top...
...I am very sympathetic to green arguments, but I am not sure that building international coalitions in this territory is ever going to be that easy...
...political consciousness...
...Thus we can marry social justice and economic efficiency...
...I am much more cautious over the proposition...
...As a matter of fact President Clinton did set up in 1993 the Economic Security Council, one of whose aims was expressly to open up ten countries to U.S...
...I thought you were right earlier on to cite the collapse of the Soviet Union as being one of the chief events to change the world...
...The argument rather was that too many U.S...
...But no country that opts out of the new world economy has any chance of sustaining effective economic prosperity...
...The NGOs are certainly formidable and sometimes effective, but again I am not sure you can generalize from them to draw the optimistic conclusions that you do...
...Third-way politics is being discussed in most countries, and all sorts of politicians—some of doubtful provenance—are laying claim to being "thirdway politicians...
...WH: I don't for a minute think the Americans designed the crisis...
...WH: I would redefine that battle—you equate the old Democrat left and the Republican right in true third-way style, but they are not equivalent...
...You have just got the numbers wrong...
...New forms of waste management are also very promising...
...the injustices you want to correct are not independent of the capitalism you admire—they result directly from its operation...
...interests...
...Most of our institutions need modernization, where this means reforming them in response to the changes we've been analyzing...
...I think its system is more robust than you think, that's all...
...It is definitively a left-of-center project, but one that is unafraid to shed old left dogmas and prejudices...
...If neo-liberalism is also in decline, we have to look for something different—a third way...
...ANTHONY GIDDENS: You've got too much of a conspiracy theory there...
...India's decision to test nuclear weapons was prompted largely by its feeling of being overlooked in the world community...
...AG: But I don't see why it's only the United States that gains...
...They are also transmission mechanisms of very particular economic ideas—like the belief in ultra-free markets— and of very particular economic interests, which are overwhelmingly if not exclusively American...
...It is a battle between Americans who want to sustain a liberal international order in all its guises, for which there is a substantial majority on the left notwithstanding some protectionist tendencies, and others who want to assert U.S...
...The health of the global economy at any one time is strongly influenced by the strength or otherwise of the U.S...
...But there could not have been a run on these currencies Reprinted from Global Capitalism, edited by Will Hutton and Anthony Giddens, published by the New Press...
...capitalism wins, with the Asia crisis of 1997-1998 actually being the flashpoint, and the financial markets working in a way that furthers U.S...
...Equally, the financial markets must not be seen just as sources of economic instability, although they are that...
...it's very hard to avoid a sharp increase in your exports if your currency has halved, and I'm sure that all of them would have settled for no crisis in the first place...
...Note: see "The Third Way/Die Neue Mitte," by Tony Blair and Gerhard Schroeder, annotation by Joanne Barkan, Dissent, Spring 2000...
...More broadly put, is globalization a set of processes dominated by Western countries to their own advantage...
...They act as something of a check upon the activities both of governments and business corporations...
...I don't think Germany holds the key to the future...
...It's the same story on land-mines, the International Criminal Court, contributions to the UN, reform of the IMF, and committing to international agreements on the environment...
...They are also emphasising much more strongly than before the crucial importance of tackling world inequalities...
...involved...
...I thought that would shock people into moving away from neo-liberalism but it has not...
...But to say this does not mean that I am "old left" or want "old left" responses...
...You have made some sweeping judgments about the reach of the knowledge economy, the systemic crisis of contemporary Germany, and the improbability of the Americans directing globalization that I haze disputed and that I think are not supported by facts...
...I don't think you could say the Asian crisis was in the American interest...
...I have argued that capitalism is creative as well as destructive...
...Third-way politics for me is about the rebirth of social democracy...
...The Chinese remain a communist power run by a military oligarchy, and they give the United States the pretext to stand by its unilateralist position...
...Government is needed only to provide a legal framework for contracts and for defense, law, and order...
...If we are to win support for the changes we both want to see, I think there has to be recognition that until the relationship between the United States and China can be rebased, the prospect of any substantive reform is minimal...
...Most don't want to be told that "you are on your own" in the face of the insecurities of the global marketplace...
...AG: The United States and the West are easily the dominant powers in "globalization from above"—financial markets, trade, and technological innovation...
...WH: Personally I think the environmental arguments will only be advanced in the face of real perceived problems—not the possibility that problems might emerge at some unspecified time in the future...
...As for the United States, your use of the verb "rig" overstates what I am arguing...
...It begins with a vigorous dialogue between the editors, and we present excerpts from it here...
...rather, it is to attempt to improve the empowerment of our citizens to do better in these markets...
...Heineken, Unilever, and Monsanto are having to adjust their corporate strategies to consumer power...
...Globalization...
...And don't underestimate U.S...
...balance of payments deficits grew explosively...
...sovereignty, self-interest, and longstanding isolationist proclivities—a set of propositions to which the Republican Party, with some honorable exceptions, is now passionately committed...
...But, so far at least, the Mexican economy seems to be doing pretty well out of the deal...
...Moreover, the crisis period passed because most of the Asian countries reacted in a dynamic way...
...People in a number of key countries stopped buying Shell products...
...And I feel very strongly that you can't have it both ways...
...companies would migrate to Mexico and take low-wage jobs with them, and that would be a problem in some of the older manufacturing areas in the United States—as it has been...
...Sometimes you have found yourself wanting both more regulation and more capitalism...
...No one much thinks that one can go back to top-down, bureaucratic government...
...AG: I suppose this depends upon how one understands "neo-liberalism...
...Every Democratic senator voted for it...
...The battle within the United States these days is between those who favor free trade and a global role for the country and those (a mixture of old left and Republican right) who favor protectionism and disengagement...
...AG: One of the most difficult issues, of course, at least on the face of things, is the environmental one...
...You don't need, and can't have, policies of social justice when—if the market is given full and free play—everything is bought and sold at its true value...
...You must not be naive about the exercise of power, or the determined way the U.S...
...I would certainly see this as a general shift in IS GLOBALIZATION AMERICANIZATION...
...the effective response can only be global...
...foreign and domestic policy...
...At the time of the crisis I thought neo-liberalism might be dead...
...it wanted to open it up to U.S...
...WH: Good point, and I broadly accept it...
...It's too easy to blame the ills of the world economy on U.S...
...The other organizations, G7 IS GLOBALIZATION AMERICANIZATION...
...It is both possible and necessary to achieve more effective global governance, greater world equality, and better ecological regulation...
...And the reason I have not specified alternatives is that our conversation has not got that far yet...
...WH: I think you're being a bit naughty here...
...It goes along with the rise of third-way politics...
...But there seems to me much more general will to regulate financial markets than there used to be...
...Copyright © 2000 by Will Hutton and Anthony Giddens...
...After all, the financial markets are made up of many investors, looking for investment opportunities and assessing these against risk...
...You know very well that I am not "old left," but if the tag sticks that will delegitimate some of my arguments and legitimate yours...
...Both Schroeder and Blair believe the neoliberal doctrine that markets are essentially benevolent, a wealth-creating process that generates efficiencies...
...No single country, or group of countries, controls any one of them...
...Economic globalization today is the medium of economic development, whatever its downsides might be, and I agree they are many...
...DISSENT / Summer 2000 • 63...
...WILL HUTTON: I think you can trace the Asia crisis...
...power...
...Consumers can also play a part in these movements and pressures...
...look how in the recent beef war between Britain and France consumers very quickly became jingoistic...
...However, I believe that with a certain amount of goodwill, and of rational understanding from both sides, these issues could be resolved...
...WH: Not everything the old left believed is axiomatically wrong...
...and there is now a consensus that Shell's original plan for the rig was broadly reasonable...
...AG: I don't see that, because you haven't specified any alternatives...
...It is quite mistaken to identify third-way politics, as you did earlier, with letting markets rip...
...Traditional symbols, the traditional family, and the traditional nation were to be preserved...
...We join them as they dispute the origins and implications of the Asian economic crisis of 19971998...
...Reforming the Global Economy AG: Even though one of its themes was globalization, I was astounded by the global response to my book The Third Way...
...Dollarization has come to Mexico with a vengeance, and it has become a regional economy of the United States without any accompanying rights...
...I would answer a qualified "no" to each of these questions...
...trade and finance—and the Asian tigers were the principal target...
...economy would simply swamp the Mexican one...
...But it lives on in politics...
...interests...
...The idea of the third way has also sparked a barrage of critical responses from the more traditional left...
...The dollar is the world currency...
...after all, the case is not proven yet as a watertight proposition although the facts are pretty suggestive...
...Yet the global marketplace isn't just an extension of American power...
...But the more long-run problems, like global warming, seem to me very difficult to get agreement on, and rightly...
...governments were propagating a distinct "way of life" around the world in a self-conscious struggle with communism...
...The less developed states should be brought much more fully into the picture as they are to some degree in the new G10...
...In the Brent Spar episode, it wasn't only the activities of Greenpeace that forced Shell to change its position and policies, but consumer power too...
...Will Hutton is the former editor of the London Observer and the author of The State We're In...
...Unlike you I regard Francis Fukuyama and The End of History as missing the point: underneath the glitz there remains the exercise of raw power...
...When NAFTA [North American Free Trade Agreement] was set up, many thought that the U.S...
...Old habits die hard, but the United States doesn't have these strategic inDISSENT / Summer 2000 n 6i IS GLOBALIZATION AMERICANIZATION...
...Fifty-two Republican senators voted against the Comprehensive Test Ban Treaty in October 1999—and only four for it...
...investors— as especially in Korea...
...I think the emerging water shortage in parts of Africa, the Middle East, and Asia may bring a collaborative response, and we can see how the argument is developing over the food chain—with Monsanto now agreeing that it will not produce the so-called "terminator gene...
...that it hasn't suggests that there is a lot of wishful thinking on the matter...
...Is globalization, in sum, the same as Americanization...
...Countries like India or Brazil are not represented on the UN Security Council...
...Everything that goes into production can be recycled, quite often adding to profitability rather than detracting from it...
...In addition, new technologies offer the chance of skipping some of the phases of industrial development that an emerging country used to have to go through...
...I don't just mean intellectuals...
...interests...
...Greenpeace has admitted that in the Brent Spar case its facts were wrong and it misled public opinion and a gullible media...
...but what it has also done is to leave the United States unchallenged as the world's hegemonic power...
...AG: The structure of power in the main international organizations is plainly imbalanced in favor of the developed societies...
...The countries that have opted out most completely, such as North Korea or Burma [Myanmar], are among the poorest in the world...
...This fall, their jointly edited book Global Capitalism will be published in the United States by the New Press...
...Most environmental pollution may have been caused by Western industrial development, but it now affects everyone...
...Neo-liberalism is pretty much dead...
...Save in a few closed societies, it is almost impossible nowadays to carry on dubious activities in any one corner of the world without their becoming widely known...
...I also think transport, both nationally and internationally, is a major environmental challenge...
...So it was more or less inevitable that the whole policy nexus would become unsustainable as soon as the financial deregulation caused asset price booms— bubble economies really—property booms and all the rest of it...
...I didn't see much sign that American governments of any complexion have wanted to overturn Asian capitalism, although at one point many thought it held the keys to the future—as you continue to think of Germany now...
...The less developed countries are threatened more by global warming than are the developed ones, which are nearly all in the more temperate zones...
...The United States isn't able to rig things quite as easily or completely as you say...
...I argue that the seeds of the financial crisis were sown not so much by crony capitalism but by the impact of this ill-judged capital market liberalization interacting with the speculative international financial markets who had these pegged exchange rates to speculate against...
...It's no good treating world financial markets as though they were part of some gigantic American scheme to control the world economy...
...There used to be only a few hundred of these...
...WH: . . I wonder, why do you think reform has been so difficult...
...My point throughout this conversation is that liberal America has its back against the wall...
...As for the financial markets and Mexico, the country nearly went bust in 1981 and again in 1995, costing it years of lost growth...
...The major world organizations, for example, like the World Bank, are mostly talking of the need for better and more transparent government...
Vol. 47 • July 2000 • No. 3
