Broadly speaking, two themes dominate the international public discourse – globalisation not only of the economy but also of communications, entertainment and indeed ‘culture’, and the need for a ‘new’ world order. The two themes are interrelated. A global village, which is what the world is becoming, cannot afford disorder in large parts of it. The trouble, however, is that the growing reality of globalisation does not admit of the goal of an orderly world. The two are incompatible.
The point is generally missed that globalisation is no longer a mere euphemism for Western dominance, though for centuries that has been, and remains, a fact of life. The change is that the West, principal instrument of globalisation, too is becoming a victim of this remorseless process. Like the rest of us, it too is losing control over its destiny.
Difficult Proposition
The reference is neither to the speed and sweep of technological changes the West is not able to cope with, nor to the rise of Japan as a formidable competitor, though these are important developments in themselves. The reference is to something possibly more basic – the triumph of the ideology of capitalism. It looks as if the story of Russia as the principal agent as well as victim of the communist ideology is being repeated on a vaster scale. This is not an easy proposition to accept in the present atmosphere of euphoria over the collapse of communism. Even so, it deserves careful consideration.
The decisive turning point for the Western world was the end of World War II when capitalism began to cease to be an instrument of nation-states and to acquire an autonomous transnational status. Thus, aggressively competitive West European empires gradually yielded place to moves towards one integrated European economy; US capital in search of larger and quicker profits financed the economic reconstruction of would-be competitors in Europe and Japan without any concern, as in the British case earlier, to long-term consequences.
The Marshall Plan and Western economic cooperation were, of course, grim necessities in the context of the Soviet challenge resulting from Moscow’s virtual occupation of Eastern and Central Europe. But that is conventional wisdom. The more relevant point is that Western capitalism emerged as an independent power after World War II. This was inherent in the capitalist ideology, as convincingly established by Louis Dumont in his book From Mandeville to Marx.
Capitalism, he has argued, sought to ‘liberate’ itself first from the realm of ethics, which it did long ago, and then from that of politics. This it could do finally, in my view, only after the war. The rise of multinational corporations, now more appropriately called transnational corporations, has been at once the instrument and expression of this ‘liberation’.
The US where the multinationals grew and proliferated has been their first and biggest victim so far. America had lost its competitive edge over West Germany and Japan by the end of the sixties, substantially as a result of the role US-dominated MNCs had played in their growth. They had become the only truly super-power. They made and unmade economies with little concern for US national interests as such.
Since the rise of budgetary deficits and the decision to delink the dollar from gold then, the US has not regained its economic primacy. Today its debt amounts to over four trillion dollars and its current budget deficit to over $ 300 billion. Neither is likely to decline in the foreseeable future.
This is not to deny that several other factors account for the US economic decline. Large resources have been diverted to defence; unlike earlier, defence research in recent years has not produced adequately spinoffs for the civilian industry; educational standards and the infrastructure have been allowed to run down; Americans have not been willing to pay the needed amounts in taxes; hedonism and populism have dominated the scene; US savings and investments have been low in comparison with its competitors. But behind all that looms the massive exit of capital from America. The British experience has been repeated. British capital moved abroad after both wars and industries at home stagnated for want of capital.
American Crisis
The American crisis is in fact much deeper and it has a bearing on the kind of world we are headed for. To quote a few sentences from Irving Kristol, one of America’s leading intellectuals, “economic progress has been accompanied by an unforeseen tidal wave of social disintegration and moral disorientation… Whoever expected that the successful creation of a welfare state in an affluent economy would be accompanied by an incredible increase in criminality, so that our streets would be blanketed with fear? A sharp increase in teenage pregnancies? In drug addiction? In the creation of a dependent, self-destruct under-class? … fatal venereal disease called AIDS? … two million abortions a year?”
The US economic decline and social and cultural incoherence need not have been a cause for undue concern if it was accompanied by the rise of a new power centre capable of stepping into the leadership role. But there is no alternative leader waiting in the wings to take over as the US was in 1945 when Britain stood exhausted and ready to disband the empire.
In the wake of the disintegration of communism, West European leaders fancied themselves in that role. France and reunited Germany talked of a European force independent of NATO and of US leadership and members of the European Community, including the hitherto sceptical Britain, rushed into the Maastricht treaty providing not only for a common currency and Central Bank but also for a common defence-foreign policy. All that is a shambles now.
Not Conclusive Proof
As if the European contribution to the outbreak of civil war in former Yugoslavia by way of rash recognition of the claim to independence of multi-ethnic Bosnia-Herzegovina with no majority community and the failure to stop it were not conclusive enough proof of its limitations, the repeated breakdown of the exchange mechanism regulations, leading to the devaluation of British, Swedish, Spanish and Portuguese currencies since last September, should clinch the issue.
Ethnic cleansing in Bosnia speaks for itself. But even that horror could turn into a footnote in history if the upsurge of racism and ethnic hatred across Europe, especially in Germany, does not subside.
All in all, Western Europe is as much adrift as the US. Where then is the leadership for the new world order to come from, assuming Western leadership is beneficent for us in non- Western lands which, of course, it is not? Banks in control of hundreds of billions of dollars joining speculators to raid currencies showing the slightest sign of weakness? Governments ready to give up the very concept of sovereignty?
In addition to financiers and speculators, TV channels assaulting and disrupting societies, including their own, threaten to become the symbols of the post-cold war world. In our case, cable TV has come in along with the World Bank and the International Monetary Fund, with Amnesty International not far behind. A new world indeed!
The Times of India, 3 December 1992