Daniel Cohen: Globalization and Its Enemies

Daniel Cohen: Globalization and Its Enemies (2006; paperback, 2007, MIT Press)

(pp. 35-37):

However, a principal fact disarms the theory according to which colonialism would be a significant factor in Western wealth: the colonial powers all experienced slower growth rates than non-colonial powers. "The correlation is almost perfect," according to Paul Bairoch. Germany and the United States, latecomers to the colonial scene, experienced faster economic growth than France or the United Kingdom; Sweden and Switzerland experienced faster economic development than the Netherlands or Portugal. Better, if it dare be said, Belgium saw its growth rate slow the moment it became a colonial power, at the turn of the nineteenth century. Conversely, the Netherlands saw its growth rebound upon losing its colonial empire. Similarly, according to Bairoch, "it is very probable that one of the reasons for the relative absence of the United Kingdom from 'new' industrial sectors at the end of the nineteenth century was precisely its very great access to colonial empires."

The idea that wealthy countries got rich thanks to the exploitation of raw materials imported from poor countries is false for one simple reason: rich countries themselves have long produced said raw materials. The fate of the developing countries was already sealed with importing raw materials became the norm for the rich countries. As Paul Bairoch explains once more, on the eve of World War I, while the developed world already possessed a manufacturing productive capacity 7-9 times the global average in 1750, 98 percent of metallic ore and 80 percent of textile fibers came from industrialized countries themselves. Energy production does not escape the rule either. Until the 1930s, the developed countries produced more energy than they consumed and released a gross excess, notably coal. The biggest energy exporter was, in fact, England, the first industrialized country. It is only due to the role played by Middle East petroleum after World War II that the scheme was reversed. Even in this case, it was not until 1957 that the United States became a net energy importer. Until World War II, energy self-sufficiency was practically assured in the West, whence comes Bairoch's formula that "rich countries did not need poor countries."

(pp. 76-77):

The simple lesson that Mexico is learning anticipates what China may learn one day: that a country cannot hope to prosper solely on the basis of the international division of labor. Just as yesterday the industrialization of rich countries was responsible for the South's poverty, the deindustrialization of advanced economies will not by itself create tomorrow's prosperity in the developing world. In order to grow, a country must become a "center" in its own right; that is to say, a place dense with production and consumption. Because the new economy gives rise to the illusion of a world without borders, it fosters the hope that the North-South tension is going to be resolved. However, reducing the costs of distance does not bring either people or wealth any closer. It tends, moreover, to heighten the polarity between the center and the periphery, in the image of the town center and its suburbs. Contrary to the Braudelian plan, according to which the periphery lives a "history [that passes] in slow motion, lives repeat themselves from generation to the next," the suburban life illustrates the novelty of the new world economy. Through the commuter railway or the movies, the suburbs of Paris, Cairo, Mexico, and China all evenly gaze upon the world. It is the world which ignores them.

(pp. 144-145):

The nature of intellectual property is entirely different. A song or a chemical formula is neither bought nor consumed in the usual sense of the term that describes the use of physical goods. These are ideas and not objects; they survive the various private uses made of them. When an idea is discovered, nothing stops everyone from using it if not intellectual property rights, such as patents or copyright. Whereas physical property alone makes the appropriation of an object possible, intellectual-property laws restrict the free use of something that theoretically has no limits. Deprived of an owner, an ordinary good is not consumable. In the case of intellectual property, nothing of the sort takes place. An idea can be used by everyone without contradiction, and nothing guarantees that a system in which all potential ideas would be protected by property rights would be efficient.

In principle, the best way to find a new idea with which to solve a given problem is to coordinate the research of those whose work in the area and, once the discovery is made, to put the result at everyone's disposal. The reference model here is not the market but academic research, which compensates the researcher while leaving the discoveries free to all. The intellectual-property system manages to do exactly the opposite. Competing teams researching the same topic (for example, a drug for a certain illness) do not share their knowledge, and once the discovery is achieved it will be the exclusive property of the one who first realized it. For the contemporary world, here is an extension of an idea articulated by Marx, a contradiction between productive forces (here, innovation) and property rights.

posted 2008-06-27

Gray on Globalization

I've had the April 27, 2006 issue of The New York Review of Books in a pile next to my desk, planning on writing something about John Gray's "The Global Delusion" review of several books on globalization. The first quote is a summary of Daniel Cohen's book Globalization and Its Enemies:

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

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

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

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

This strikes me as approximately right in general, although I would add that when first world capitalists do engage the third world -- the more au courant "developing world" terminology seems prejudicial to this discussion, since the point is that they aren't developing -- it is with advantage in mind, which easily enough maps to exploitation. My other point is that the poor in the US are neglected in the same way -- a point which the last line of the quote underlines. It's easy to make sense of this phenomena as global class struggle, but few people on either side see it that way, because few people have a direct sense of exploitation, but many or most can identify cultural differences that correlate in their minds with continued disparities of wealth.

In this world of mismatched views, anything that disrupts our sheltered sense of civilization is terrorism, but how else can an outsider get our attention? In the old conservatism the poor were always with you, but in neo-world the poor are out of sight and out of mind -- as much as possible, anyway. That's a program for not solving problems, for periodic eruptions of rude shocks, and for nasty reprisals. We know from history that distancing is what makes atrocities palatable, and therefore more likely.

Gray's take on globalization goes beyond his books to focus on limits to growth -- resource dependencies, environment, etc.:

This conjunction of intensifying scarcity in energy supplies with accelerating climate change is the other face of globalization. It poses a large question mark over Cohen's belief that the main problem with globalization is that it is incomplete, for it suggest that completing it may not be feasible. The current phase is only the extension to the wider world of the industrial revolution that began in England a couple of centuries ago, but already it is destabilizing the environmental systems on which all industrial societies depend. Extending the energy-intensive lifestyle of the rich world to the rest of humankind would have an even more destabilizing impact.

I'm reminded here that Kenneth Deffeyes starts his book Beyond Oil off with a quote from Kenneth Boulding:

Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist.

I've seen economics described as the science of scarcity -- i.e., economics is the study of how we allocate goods in a world where goods are scarce. But when we look back at the material comforts one once aspired to and compare them to what has been widely achieved -- at least in the "developed world" -- and our lack of satisfaction with them, one is tempted to conclude that scarcity itself is a major product of capitalism. Indeed, the engine that produces a greater sense of scarcity appears to be nothing less than the growing disparity between rich and poor: the richer the rich get, the steeper the demand for equality -- hence more strife, whether class conscious or confused; hence more destruction, whether inflicted by rich or poor. It's as if the contradictions within capitalism have to break loose even if not in the form Marx imagined them.

On the other hand, if we could come up with a sense that some achievable level of material comfort satisfies our needs and is universally achievable, we would inch beyond scarcity, hence beyond economics. Whether this is possible isn't all that clear, but moving in the direction of greater equality is likely to be key.

posted 2006-07-12