The 1997 E. Asian financial crisis and world trade

Loomis in a Lawyers Guns & Money post linked to this piece that in turn linked to this piece by Dean Baker.  I was particularly interested in Baker's point that many poorer countries started running large trade surpluses with most of the developed world after the '97 East Asian financial crisis.  Governing elites in the S.E. Asian countries after the crisis felt they needed to build up large foreign exchange reserves (and were also, in effect, told to by the IMF); hence, the need to increase their exports as much as possible to the rich countries.  The U.S., unlike Europe and Japan, was running a trade deficit with these countries before the '97 crisis, but the U.S. trade imbalance with them got larger after that, peaking in 2005.  One result was increased loss of U.S. manufacturing jobs.  Anyway, you can read the links for the details of the argument.

Noted

Buzan and Lawson open a symposium at The Disorder of Things on their book The Global Transformation.

Added later: The previous symposium at the same blog, on Anievas's Capital, the State, and War, should also be noted. (I've just been glancing at it and those interested in Marxian approaches to IR will find it worth a look, if not always especially easy going.)

The mantra of growth; or, Bhagwati vs. Pogge

Given the nature of the news cycle, the debate sparked by Pres. Obama's (successful) nomination of Jim Yong Kim to head the World Bank has long since been eclipsed by a spate of fresher stories. But I wanted to write this post before the Kim story faded into complete oblivion, because the debate over Kim raised again some fundamental questions about economic growth, inequality, and poverty.

In a column published last month criticizing the choice of Kim, Jagdish Bhagwati asserted that the Obama administration has the wrong view of development. He wrote:

...perhaps the most compelling factor in Obama’s choice [of Kim] seems to have been a fundamental misunderstanding of what "development" requires. Micro-level policies such as health care, which the Obama administration seems to believe is what "development" policy ought to be, can only go so far. But macro-level policies, such as liberalization of trade and investment, privatization, and so forth, are powerful engines of poverty reduction; indeed, they are among the key components of the reforms that countries like India and China embraced in the mid-1980’s and early 1990’s....

[I]t is the rapid acceleration of economic growth in the major emerging countries that has reduced poverty, not only directly, through jobs and higher incomes, but also by generating the revenues governments need to undertake the public-health, education, and other programs that sustain poverty reduction – and growth – in the long term.

Now, there's no question that economic growth in India and especially in China has enabled millions of people to improve their living standards and leave the ranks of the extremely poor. And it's also true that economic growth generates revenues that governments, if they have wise priorities and some administrative resources, can use for public-health, education, and similar purposes. But Bhagwati failed to ask an important question: Could 'emerging countries' have reduced poverty even more by following a different, more equitable growth path?

A 2008 article by Thomas Pogge suggests that the answer is yes.* Pogge used China to illustrate his case. He argued that although poverty in China has gone down substantially, "it is likely that more equitable growth," i.e., growth accompanied by less income inequality, "would have been much better for the Chinese poor." Pogge pointed out that although China's gross national income (GNI) increased dramatically from 1990 to 2004, the relative income share of the bottom ten percent (decile) of China's population decreased from 30.8% in 1990 to 16.0% in 2004. This decrease in its relative share meant that the absolute income of the poorest decile increased "by only 75 percent" at a time when China's GNI was going up by a whopping 236 percent (see section 5.3 of the article as reprinted in Pogge's Politics as Usual, pp.100ff.).

What if China had preserved the income distribution as it existed in 1990, even if that meant sacrificing some growth? Pogge assumed, for the sake of argument, that preserving the existing income shares would have cost China 2.3 percentage points in per capita GNI growth from 1990 to 2004. Under this assumption, the poorest decile "would have done much better..., ending the period [in 2004] at an average income of $715, rather than $500, thus with a gain of 150 rather than 75 percent." (p.101) Slower, more equitable growth also would have caused less environmental degradation, a consideration that, coupled with equity, suggests that "all countries should conceive growth much more from the standpoint of their poorer population segments" (p.102, italics in original). He also pointed out that economic inequality is much easier to create (or generate) than to reverse, because the better-off are able to change the relevant rules in their favor (ibid.). There are, in other words, lock-in effects (though Pogge does not use that phrase).

Pogge also highlighted the growth in global income inequality from 1988 to 2002, with the relative share of "the poorest 30 percent of humanity" down by about 20 percent during that period, "from 1.52 to 1.22 percent of global household income" (p.106). Again, inequality translates into differential influence over the rules that shape the distribution of global income and wealth (p.107).

These are the sorts of considerations one should keep in mind when reading the celebratory assertions of Bhagwati and others about rapid economic growth in 'the emerging countries' and its effect on poverty. Of course such growth has reduced poverty, in some cases substantially, but poverty would have been reduced even more if that growth had been more equitable, even if less rapid. Neoliberal globalization, heralded by its supporters for reducing poverty, has likely not reduced poverty as much as a more equitable form of globalization would have, and it has perpetuated the unequal structure of influence in global institutions. The appointment of Kim to the Bank will obviously not drastically change this, since no single appointment could have such an effect and the institution will no doubt exert its organizational pull over any leader. But Kim's critical stance toward neoliberal globalization -- or what was his critical stance some years ago, at any rate -- perhaps offers a bit of hope. In any event, Bhagwati's critique was completely off the mark.

-----
*T. Pogge, "Growth and Inequality: Understanding Recent Trends and Political Choices," Dissent (Winter 2008), reprinted (in slightly different form) in his Politics as Usual: What Lies Behind the Pro-Poor Rhetoric (Polity Press, 2010), pp.93-109.

Robert Kagan & Norman Angell

Yesterday I heard snatches of a call-in radio show in which Robert Kagan was talking about his new book The World America Made. One caller apparently (I say "apparently" because I missed the question itself) made a point about economic interdependence and its connection to the unlikelihood of war.

In response Kagan trotted out the old, inaccurate Norman Angell story. It goes like this: About five years before WW1 Norman Angell published The Great Illusion (which was a huge best-seller) making the very same case about economic interdependence and war that the caller made. Then WW1 happened. Therefore economic interdependence (actually Kagan said economic "rationality," if I recall correctly) cannot be relied on to prevent war. People are motivated by many things, Kagan went on: hatreds, passions, questions of honor, not just economics.

Well, there are still hatreds and passions around, no doubt about that. But there are two problems with Kagan's reply: (1) Norman Angell did not say that economic interdependence made war impossible; he said it made war futile (a lose-lose proposition); (2) certain things have changed since WW1, and one reason they have changed is precisely the impact of WW1 itself.

In the opening pages of his book Dangerous Times? The International Politics of Great Power Peace [Amazon; Powell's], Christopher Fettweis makes the point about Angell very clearly:

It is hard to believe that anyone who has actually read Angell's work would come away with the impression that he believed the age of major war had come to an end. Angell was hardly a naive, utopian pacifist.... War with Germany was not only possible, he wrote, "but extremely likely." He argued that "as long as there is danger, as I believe there is, from German aggression, we must arm," and that he "would not urge the reduction of our war budget by a single sovereign." In order for war to become obsolete, Angell realized, a revolution in ideas had to occur. His book [The Great Illusion] was an attempt to spark that revolution. It was "not a plea for the impossibility of war...but for its futility."

Kagan is a popular author and a think-tanker but also a historian -- his book Dangerous Nation was his Ph.D. dissertation at American University. Everyone makes mistakes, including credentialed historians, but this one, made on national radio, was unfortunate.
-----
On Angell, a good starting point is:
J.D.B. Miller, "Norman Angell and Rationality in International Relations," in D. Long and P. Wilson, eds., Thinkers of the Twenty Years' Crisis (Oxford U.P., 1995), pp.100-121. There is also now a full-length biography: Martin Ceadel, Living the Great Illusion: Sir Norman Angell, 1872-1967 (Oxford U.P., 2009; here). See also Daniel Pick, War Machine: The Rationalisation of Slaughter in the Modern Age (Yale U.P., 1993), pp.150-51, for several interesting quotes from Angell's 1915 pamphlet The Prussian in our Midst.
-----
P.s. I recently ran across a conference paper which argued that because there is a statistical correlation between growing interdependence (or globalization, to use the paper's word) and growing international tension in the years before WW1, we can infer that the former caused the latter (!). Well, perhaps it was a bit more nuanced than that but not much. I'm not giving the link because I may blog about the paper properly later on.
-----
P.p.s. I just looked at the brief Wikipedia entry on The Great Illusion. The entry claims the 'futility' argument was added in the 1933 edition. I believe this is incorrect and that the argument was in the original edition.
P.p.p.s. I have changed the Wikipedia entry.

Book review: Winning the War on War

Joshua S. Goldstein, Winning the War on War: The Decline of Armed Conflict Worldwide. Dutton, 2011. 385 pp.

"The war against war is going to be no holiday excursion or camping party." -- William James, "The Moral Equivalent of War" (1910)

"What dramatic vision of hell can compete with the events of twentieth-century war?" -- C. Wright Mills, The Sociological Imagination (1959), p.17

Introduction

War is on the decline: in particular, the years since the end of the Cold War, although obviously not free from deadly conflict, have been less violent than the years that came before. A main purpose of Joshua Goldstein’s Winning the War on War (hereafter WWW) is to convey this message to a broad audience. The book also aims to persuade readers that peacekeeping, through the UN and other organizations, is succeeding and deserves much more financial and political support.

This review will not cover all the elements of the book; rather, I will summarize several of its main points and then offer some thoughts on why the decline in armed conflict has happened, focusing on certain historical aspects of the question. While agreeing with Prof. Goldstein that the decline in conflict is not irreversible, I will suggest (unoriginally) that future large-scale interstate war, or so-called hegemonic war, is very unlikely, for reasons that have partly to do with the impact and consequences of the twentieth century’s world wars. As the word "partly" suggests, I acknowledge at the outset that this explanation for the decline of conflict, and of interstate war in particular, is not a full one. Although the fact of the decline in conflict is clear, the reasons for it will remain an area of disagreement among scholars and other observers.

A related point of disagreement is whether to view the twentieth century as a uniquely violent era. Writing in 2002, Mark Mazower observed that "the twentieth century is increasingly characterized by scholars in terms of its historically unprecedented levels of bloodshed." ("Violence and the State in the Twentieth Century" (review essay), American Historical Review, v.107, no.4) However, it is clear that certain parts of the century were considerably worse than others. After comparing the twentieth to previous centuries, Goldstein concludes that "the twentieth century may indeed have been the bloodiest relative to population but is not really much different in character than earlier ‘bad’ centuries" (WWW, p.37). The twentieth century’s bloodshed, however, is arguably somewhat fresher in the collective memory than that of previous centuries, which may be significant.

Peacekeeping and the Decline of War

Winning the War on War begins with the story of the one occasion on which its author personally witnessed gunfire in a war zone: Beirut, 1980. Residents of the city, Goldstein observes, managed to live relatively normal lives in the midst of a low-level civil conflict. This story immediately engages the reader’s interest and is also a way to introduce the basic point that war exists on a scale, or a continuum, of destructiveness.

Interstate wars, in which two or more countries’ regular armies fight each other, are usually more destructive than civil wars, and the decline in interstate wars is the main reason that "battle-related deaths" – i.e., violent deaths that occur during armed conflicts -- have fallen over the last several decades. Such deaths averaged more than 200,000 a year during the 1980s, whereas from 2000 to 2008 they were on the order of 55,000 a year (WWW, p.238). Looking at longer periods, there were roughly 215,000 average annual battle deaths from 1970 to 1989, and this came down to an average of 75,000 annually from 1990 to 2009 (p.16). Furthermore: "More wars are ending than beginning, once ended they are less likely to restart, and the remaining wars are more localized than in the past" (p.4). On the other hand, military spending has not seen correspondingly sharp reductions (p.19), and "the problem of civil wars may remain in some fundamental way unsolved" (p.247).

While acknowledging multiple causes of the decline in conflict (see further discussion below), Goldstein takes peacekeeping as the "central thread" (p.44) in his account. He gives a history of UN peace operations from the days of their founder, Ralph Bunche, to the secretary-generalship of Kofi Annan and into the present. A key early moment was the 1956 Suez crisis, which resulted in the deployment of the first armed peacekeeping force. Since then, peacekeeping missions have become increasingly "multidimensional," involving not just observing or enforcing cease-fires but a range of other tasks, from disarming and demobilizing combatants to, in a few cases, temporarily running a government. There are 150,000 peacekeepers (about 100,000 UN and 50,000 non-UN) currently deployed at the relatively low cost of $8 billion a year (pp.308-9).

Although some peacekeeping missions have succeeded while others have failed -- and the failures, such as Bosnia or Rwanda, perhaps have tended to linger in the public memory longer than the successes, such as Sierra Leone or Namibia or (in a more qualified way) Cambodia – on the whole peacekeeping missions significantly reduce the chances that war will restart after a cease-fire (pp.105ff., citing the work of Page Fortna, Paul Collier, and Michael Doyle and Nicholas Sambanis). As one would expect, the more peacekeepers there are relative to a country’s population the more likely it is the mission will succeed (at least eventually), as is evident from a comparison of the mission in Sierra Leone (which ended in 2005) with the ongoing mission in Dem. Rep. of Congo. Each mission had roughly the same number of peacekeepers, but Congo has ten times Sierra Leone’s population (p.176). Indeed, the number of peacekeepers in Congo (now roughly 17,000) has been absurdly inadequate given the country’s size. That is not the only reason for the shortcomings of the Congo mission but it is a significant one.

The revival of an active UN role in resolving difficult armed conflicts dates from the late 1980s, when a confluence of developments, including Gorbachev’s ‘new thinking’, enabled the Security Council to pass Res. 598, demanding an immediate cease-fire in the Iran-Iraq war, then in its seventh year. A good deal of credit for this revival belongs to then-Sec. Gen. Pérez de Cuéllar, who at an informal meeting on Jan. 16, 1987 -- 25 years ago to the day -- prodded the representatives of the permanent members of the Security Council to act on the Iran-Iraq war. Goldstein’s account of this period draws on Giandomenico Picco’s 1999 memoir Man without a Gun. (To supplement it, see Cameron R. Hume, The United Nations, Iran, and Iraq: How Peacemaking Changed, reviewed in: Paul Lewis, "Rise of the Blue Helmets," N.Y. Times Book Review, Nov. 6, 1994. I have taken the detail about the Jan. 16, 1987 meeting hosted by Pérez de Cuéllar from Lewis; he calls it a "tea party," a phrase which now has other overtones.)

Winning the War on War contains not just description and analysis but also prescription. The peace movement, Goldstein argues, should focus directly on supporting efforts that contribute to the decline of conflict rather than following Pope Paul VI’s maxim "If you want peace, work for justice" (p.208). While peace is "almost always a necessary step" toward "prosperity, human rights, and social justice" (p.77; cf. p.169), peace should be treated as an independent goal and the peace movement should pay much more attention to strengthening institutions like the UN, Goldstein maintains. He argues that targeting "big corporations, oil companies, and globalization," as some in the peace movement do, is not an effective way to advance peace (p.208); however, given what he writes about the causes of civil wars, pressing for more economic assistance to poor countries might very well be (see pp.293, 307).

Causality and Learning

What is responsible for the decline in war? A number of plausible causes suggest themselves. Goldstein mentions a 2007 article by Louis Kriesberg that "identifies eight 'peace factors'…underlying the decline in wars…since 1990: the end of the Cold War; the dominance of U.S. power; the economic benefits of globalization (which war would disrupt); spreading norms about peace and human rights; spreading democracy; the proliferation of NGOs; the increased participation of women in politics; and the growing field of conflict resolution" (p.15). Later in the book he mentions the combination of factors identified by the 'democratic peace' theorists Bruce Russett and John Oneal: "democracy, economic interdependence, and...the development of international organizations, including the UN" (p.278). Thus for Goldstein the downward trend in war has "multiple causes, not easily untangled" (p.44) but, as already seen, he gives the UN and peacekeeping pride of place among the contributing causes. (See e.g. p.278, where he writes that the development of international organizations is the "most important, in my view" of the various factors.)

To say that the UN, and international organization more generally, is the most important cause of the decline in conflict raises the question: what "caused" the UN? I don’t mean what caused the UN in a proximate historical or ideological sense, a subject on which historians disagree. Rather: What if the UN, as it eventually came to function, is an institutional consequence of a process of learning from experience?

Goldstein writes (p.42):

Several possible causes [of the decline in war] come to mind. First is the notion that civilization has evolved over the long course of human history in a way that has gradually strengthened norms of behavior that discourage violence. Later in the book I will discuss evidence that changing norms have reduced barbarity in general, from torture and slavery to capital punishment, while building up an idea of human rights and the responsibility of governments to their people. As part of this process, war has gone from a standard and even attractive policy option to a last resort, at least in political rhetoric. One trouble with this explanation is that it would predict a gradual diminishing of war over the centuries, whereas instead we have found a long series of ups and downs culminating in the horrific World Wars.

Of course it is true that the twentieth-century world wars, and all the associated horrors, make it extremely difficult to tell a convincing story about linear normative progress from pre-history to the present. But it seems highly likely that the twentieth-century world wars themselves had an impact on subsequent normative and institutional development and on basic assumptions about war (a point Goldstein acknowledges but does not, in my opinion, emphasize enough). Thus, although an "evolving norms" or "learning" explanation does not work well for "the long course of human history," it may nonetheless help to explain the war-and-peace trajectory of the last century or so. (This in turn raises the question of why at least some human groups appear to have learned from the twentieth-century world wars, and from mass killings not connected with the world wars, what they failed to learn from earlier conflicts -- a question that might require an entire book to answer and so will be left to one side here.)

Consider the impact of the First World War, "a catastrophe of unbelievable horror, suffering, and destruction," in P. Kennedy’s words, in which armies suffered enormous casualties quite often for no good strategic or other reason. (Revisionist historians might disagree with this statement; so be it.) Goldstein remarks that "the senseless slaughter [of World War I] swung public opinion in the West against the idea of war as a good in itself" (WWW, p.224), but this statement is buried in the middle of the book and is not given much emphasis in the discussion of causality.

It took a while for revulsion about the 1914-18 war to set in fully, but once it had done so, World War I "permanently discredited major war both as an appealing activity and as a potentially profitable instrument of national policy" in the view of many "in the developed world" (John Mueller, Retreat from Doomsday, p.30). (One might qualify this statement inasmuch as reactions to the war were somewhat different in France, e.g., than in Germany.)

Mueller also argues that the experience of WW1 persuaded most "normal" political leaders, including those of Britain and France, that another major war on that scale was almost inconceivable. They were aware of Hitler's bellicose statements in Mein Kampf and elsewhere but could not take them seriously. As Mueller observes (Retreat from Doomsday, p.69):

…Hitler’s opponents in Europe were horrified by the experience of the Great War and appalled by the prospect of going through anything like that again. They had concluded that only a monster or a lunatic could want, or even want to risk, another Great War, and they paid Hitler the undue compliment of assuming that he did not fall into those categories…. There was thus broad consensus – shared even by the curmudgeonly Winston Churchill, then out of office – that great efforts should be expended to reach a general peaceful settlement of any remaining grievances in Europe.

Similarly, referring to the British and French "decision to abandon Czechoslovakia [at the Munich conference] in September 1938," James Joll wrote: "Above all it was the result of an intense desire for peace, a deep horror aroused by memories of the First World War and a reluctance to believe that Hitler actually envisaged war as a means of attaining his ends." (Europe Since 1870, p.373)

And a final quotation, from William Rock:

… [for the British] the historical lesson of the First World War was clearly writ: the total nature of that great struggle had rendered war in its traditional role as senseless beyond contemplation. It was not that the whole nation had converted to philosophical pacifism, for only a wing of the Labour party had taken that route…. It was simply a poignant realization of the terrible destruction wrought by modern war; a keen appreciation that its costs vastly exceeded any benefits which might accrue to a prospective victor, in name only; a plain recognition that Europe had reached a stage of moral development where war must be considered a barbarity incompatible with civilized life…. War, in short, had emerged in the British mind as the ultimate evil. Nothing would justify another one.

(Rock, British Appeasement in the 1930s, p.41, as quoted in Randall L. Schweller, “The Twenty Years’ Crisis, 1919-39: Why a Concert Didn’t Arise,” in Elman and Elman, eds., Bridges and Boundaries, p.202)

Granted, there were increasing divisions in the British elite, as the 1930s progressed, about what policy to adopt toward Hitler; many bitter memoirs were later written about those divisions. But this doesn’t invalidate the points made in the passages quoted above.

Thus, the conviction, shared by many, that World War I had rendered great-power war illegitimate as a tool of statecraft (see Schweller, op. cit., pp. 200ff.) was an important moment in normative evolution.[1] Tragically, it took another great-power war, bringing with it more and indeed almost unimaginable horrors, before that conviction became widespread enough to have a significant influence on the behavior of the great powers as a group.

This argument should be distinguished from that of a commenter here a few years ago who suggested, in the comments thread to this post, that "the modern reduction in violence…reflect[s] a sort of hangover from the two World Wars and their grisly and prolonged aftermath (Korea, Vietnam, de-colonization, etc.)." A hangover, of course, is a very temporary phenomenon; by contrast, the ‘learning’ from the two world wars and subsequent conflicts has become institutionalized in various ways (peacekeeping being, of course, an important one).

Finally, it’s possible that some may view the preceding discussion as too Eurocentric or 'Western' in its emphasis, and too focused on the great powers. Perhaps it is. However, the decline in armed conflict, whatever its causes, is a global phenomenon, one that is definitely not confined to Europe and North America, and thus to draw attention to it cannot be seen as furthering a Eurocentric perspective on the world. (I’m sure Goldstein, who pays considerable attention to Africa in WWW, would agree.)

Conclusion

When one thinks of the armed violence still blighting some parts of the planet, it may seem hard to believe that the world is becoming more peaceful. But it is.

Winning the War on War describes this development while also offering a thorough analysis of peacekeeping and peace movements, along with prescriptions for strengthening them. Goldstein's proposals include a standing UN rapid deployment force with troop contributions from the permanent members of the Security Council. (This latter element is unlikely to happen, since most of the major powers have never shown much or any inclination to put their forces under UN command, although the UN Charter envisaged this.) The author’s feel for data is put to persuasive use, e.g. in ch. 10 ("Three Myths"), and the book manages to address four different audiences: general readers (especially in the U.S.), peace activists, students, and scholars.

In addition to presenting a lot of information and the findings of the relevant scholarly work (interspersed with personal stories), Goldstein is not shy about stating his own views. His attitude of hard-headed optimism is congruent with what might be called, with a bow to the late John Herz, a sort of realist liberalism. Even someone in general sympathy with the book's argument will not agree with every single statement in it; at least, I do not (e.g., was Fidel Castro's endorsement of the Tobin tax really a "kiss of death"? - p.312). The main thing, however, is the book's basic message, which is solid and well supported and deserves a wide hearing.

Footnote

1. How the much-maligned Kellogg-Briand Pact fits in here, or doesn’t, would have to be the subject of a separate post.

References mentioned/cited in this post

James Joll, Europe since 1870. Harper & Row, 1973.

Paul Kennedy, "In the Shadow of the Great War," New York Review of Books, Aug. 12, 1999.

Louis Kriesberg, "Long Peace or Long War: A Conflict Resolution Perspective," Negotiation Journal, April 2007.

Paul Lewis, "Rise of the Blue Helmets," New York Times Book Review, Nov. 6, 1994.

Mark Mazower, "Violence and the State in the Twentieth Century" (review essay), American Historical Review v.107, no.4, 2002. 

John Mueller, Retreat from Doomsday: The Obsolescence of Major War. Basic Books, 1989.

William R. Rock, British Appeasement in the 1930s. Norton, 1977.

Randall L. Schweller, "The Twenty Years' Crisis, 1919-39: Why a Concert Didn't Arise," in Colin Elman and Miriam F. Elman, eds., Bridges and Boundaries: Historians, Political Scientists, and the Study of International Relations. MIT Press, 2001.

------

For more on WWW, see the author's blog: here.

-----

Added later: See also J. Mueller, "War Has Almost Ceased to Exist: An Assessment," Pol Sci Quarterly (2009), available here.

Are governments losing control over national borders? In a word: No.

According to John Robb, "governments worldwide are losing control over all of the classical forms of national power from borders to finances to communication to media to economic activity to security to trade flows (of all types)."

Focus on the first item in this list: borders. Are governments worldwide losing control of their borders? No.

Next month, a conference on "Fences and Walls in International Relations" will be held at the University of Quebec at Montreal. The conference's call observes that:

"...some 26,000 kilometers of new political borders have been established since 1991 (Foucher 2009), and states have declared their intention to dig in behind fences, barriers and built structures. Moreover, the post-Cold War and post-9/11 periods have seen the rise of border walls, symbols of separation which seemed to be on the way out in the wake of decolonization...and were believed to be entirely finished and done with after the fall of the Berlin Wall."

Border walls are back in a big way, and walls often mean more control of what goes in and out of the national territory. They won't always work -- I am skeptical about the extent to which the mostly-uncompleted wall/fence along the U.S.-Mexican border will reduce undocumented immigration -- but on the whole, the more walls, the more control. The notion that states have lost control of their borders is wrong.

P.s. This is not to say that border fences/walls are necessarily a good idea. See, for example, here.

If wishes were horses then beggars would ride

Economic crises, while bad for those living through them, are often good for the reputations of past radical thinkers. There has been some talk recently of the renewed relevance of Marx and perhaps also some talk about the old Marxist debates on "finance capital." The phrase came to mind when I read Jason Schulman's review of Robert Reich's Supercapitalism in the spring '09 issue of Democratic Left. Schulman writes:

"Today, capitalism is dominated by finance capital, abstract capital.... Subordinating productive capital to itself, finance capital makes the economy function on a short-term and unproductive basis. It is therefore fundamentally predatory and parasitic, increasing investment in circulation rather than production -- spending vast levels of resources on income property [sic], commodity, equity and bond speculation."

To the fairly standard complaint about excessive speculation, Schulman adds the morally charged epithet "parasitic," and he goes on to say that the U.S., where only 15 percent of the labor force "is directly involved in actual production," acts as "a parasite in the world economy."

While I happen to agree that it would be better if a larger percentage of people in the U.S. made things as opposed to pushing paper (or -- dare I say it -- writing blogs!), I'm not sure I entirely buy the notion that the production of tangible goods is non-parasitic and all other economic activity is parasitic upon it. This is a quibble, however, since I do not of course want to speak up in favor of short-term speculation (who does?).

Writing in a democratic socialist publication, Schulman asserts, not surprisingly, that Reich in his book displays the timidity characteristic of New Deal liberals. Reich notes trends but fails to explain them (Schulman says), and "Reich fails to understand...that the American state....is very much a capitalist state...part of an international state system, subject to the world market, through which capital reigns."

Oh boy. Anyone up for a re-run of the Miliband-Poulantzas debate? Hmm, not right now, I'm not even typing this at my home computer.

Moving right along, we come to the very end of Schulman's review (a longer version of which is apparently going to appear in the journal New Political Science). Here there is this sentence: "...the fight for economic democracy is intrinsically tied to the fight for greater political democracy than capitalists and their political representatives will ever be willing to accept: to go beyond the freedoms of speech, assembly, association, movement, etc., and onto democratic control of the economy and real control of the state."

Now, I agree with Schulman on the need for "democratic control of the economy." (I wouldn't be a member of the organization that publishes Democratic Left if I didn't.) There's just one little problem: leftists have been calling for democratic control of the economy for decades, with distressingly little to show for it in terms of results. Am I blaming the left for all the malign world-historical events, from the breakdown of the Keynesian accommodation to the rise of neoliberalism, that have occurred in the last 30 years? Of course not. But I do think that, as someone who read Michael Harrington as a teenager and joined DSOC when I was in high school, I am entitled to be just a little bit weary when, roughly 35 years later, I read yet another series of clarion calls for "democratic control of the economy," having read quite a few such calls in the intervening years.

Democratic control of the economy. Democratic control of investment. Genuine political and economic democracy. Transcending capitalism.

Great. I'm all for it. But I'm not holding my breath.

Pakistani brothers in an unlikely line...

...the manufacture of garments used by Americans and Europeans into bondage and fetishes.

They complain that their profits have fallen since trade unions, illegal under Musharraf, are now legal. Can't say I feel sorry for them on that score.

[Hat tip: Chris Blattman]

Megacities

Last fall, UN-Habitat released its annual State of the World's Cities report. As summarized in The Guardian of Oct. 23, '08, the report highlights two trends in particular: (1) growing economic inequality within cities, in both developing and 'developed' countries; and (2) continuing rapid urbanization (and concomitant deruralization) in the global South.

On the first point, according to The Guardian, the report finds New York "to be the ninth most unequal [city] in the world," while inequality levels in Atlanta, New Orleans, Washington, D.C., and Miami match those of Nairobi and Abidjan. The most unequal cities are in South Africa, Namibia, and Latin America.

On the second point, the report predicts that 70 percent of the world's population will live in urban areas by 2050, and of that population, well over half will live in Asian cities. Forty-nine new cities have been built in the past 18 years in China alone. "Urban growth rates are highest in the developing world, which absorbs an average [of] 5 million new urban residents a month and is responsible for 95 percent of world urban growth" [my italics]. At the same time, some older cities in the 'developed' world have been losing population as a result of deindustrialization and other factors.

In 2007, the four most populous cities were Tokyo (35.7 million), Mexico City (19 m.), New York-Newark (19 m.), and Sao Paulo (19 m.). In 2025, the report projects that Tokyo will still be number one (with 36.4 million), but numbers 2, 3, and 4 will be two Indian cities -- Mumbai and Delhi -- and Dhaka (capital of Bangladesh), with 26.4, 22.5, and 22 million, respectively. Dhaka, which had 13.5 million in 2007, will nearly double in population by 2025, according to this projection.

[Hat tip: A post of 10/23/08 at Blue Republic of America.]

Bonnie Honig on 'Slumdog Millionaire'

In a remarkable column on 'Slumdog Millionaire' (published in Indian Express last month), political theorist Bonnie Honig reads the movie as "a meditation on the contradictions of democracy and the ideological faces of global capital."

This is the kind of piece that probably should be read on the page not the screen, so, having not yet printed it out but just read it on the computer (and read it somewhat hastily at that), my reactions must be tentative. What Honig says about the movie's peddling a fantasy that the global capitalist economy rewards human singularity, when in fact it doesn't, seems right. But the movie's consciousness of the fantasy-like quality of its plot (among other things) prevents it, I would suggest, from being an apology for capitalism (and I suspect Honig would agree).

Where I am less convinced by the piece is its argument about democracy. What makes Jamal's story a "tale of democracy," Honig says, is its "dependence on chance," and she quotes Jacques Rancière on contingency's link to democracy. I do not really see this, at least not as clearly as she does. It's also telling, I think, that the words "justice" and "injustice" do not appear in the column. If instead of citing Rancière, Lacan, and Hannah Arendt, Honig had quoted, say, Amartya Sen or Thomas Pogge, the column might have had a somewhat different flavor. That said, this piece is still worth reading and, indeed, worth printing out.

[Hat tip: The Virtual Stoa]

Globalization's impact on (domestic) redistribution

"Globalisation seemingly erodes governments' ability to redistribute wealth." A column at VoxEU.org. H/t: Dani Rodrik.

When economic isolation doesn't seem so bad

In recent years, most (not all) mainstream economists have argued that developing countries do best when they are integrated into the global economy to the greatest extent possible. That might have been true when the global economy was, after a fashion, working. Now that the global economy is in crisis, however, the advantages of not being fully integrated are becoming apparent. An interesting article in the Wash Post today, somewhat provocatively titled "The End of American Capitalism?," includes the following passage in which the head of the IMF notes that African countries are relatively insulated from the most damaging effects of the crisis by virtue of their comparative lack of exposure to the world economy:

"'Obviously the crisis comes from an important regulatory and supervisory failure in advanced countries . . . and a failure in market discipline mechanisms,' Dominique Strauss-Kahn, the IMF's managing director, said yesterday before the fund's annual meeting in Washington.

"In a slideshow presentation, Strauss-Kahn illustrated the global impact of the financial crisis. Countries in Africa, including many of those with some of the lowest levels of market and financial integration and openness, are now set to weather the crisis with the least amount of turbulence."

Of course, there are virtually no truly autarkic economies, so all will be affected, but it's a matter of degree. There are other interesting passages in this article, but I'll let readers ferret them out for themselves.

p.s. What the article says about China is particularly worth noting. See also this post from D. Rodrik.

Globalization of healthcare-for-the-rich

"There is a revolution afoot in international healthcare." So begins a piece in the May-June issue of Harvard Magazine, which notes that changes in U.S. visa policy since 9/11, making trips to the U.S. for certain purposes more difficult, have prompted wealthy non-Americans to seek "world-class" healthcare outside the U.S. Hospitals for the wealthy (or relatively wealthy) have been springing up around the world, and various U.S. universities have sought to capitalize on this.

Something called Harvard Medical International (HMI), which was set up in 1994 to make money for Harvard Medical School (HMS) and which has projects in 20 countries and an operating budget (for '07) of $21 million, is being transferred by the university to Partners Healthcare, "the parent organization for two of the largest Harvard-affiliated teaching hospitals." The rationale for the transfer is that HMI is a consulting company that should never have been a formal part of the university in the first place. But the new organization will be allowed to use the Harvard name, when entering into new contracts, for the next five years, and the university will continue to be involved in some aspects of HMI-connected projects. HMS will continue to operate, for example, its Dubai Center (for postgraduate and continuing medical education), which is linked to the projected 4-million-square-foot Dubai Healthcare City.

A pertinent issue, broached but not really tackled by the article, is whether this whole trend benefits anyone other than the wealthy. If so, very indirectly, would be my admittedly ignorant guess. On the other hand, an interesting coda to the article, which may relate to this issue, questions "the model that says medical advances develop in the United States and ripple out to the rest of the world." It relates the story of an HMS student, Eric Twerdahl, who spent a summer researching "the impact of HMI projects in Dubai and India on healthcare in their respective regions." It goes on:

Twerdahl met a vascular surgeon in Bangalore who has revised operating room practice -- for example, sterilizing and reusing equipment, instead of using disposable items -- to cut the cost per procedure. He met a cardiac surgeon in Mumbai who has pioneered open-heart surgery without general anaesthesia, using instead an epidural administered above the level of the heart. These innovations sharply increase access to care, but were unlikely to develop in the United States, where the healthcare system is much less responsive to cost. In this sense, says Twerdahl, "the days of U.S. medicine thinking that it's at the top of the pile are numbered."

But at the same time, of course, that organizations like HMI are engaged in projects that may encourage such innovations, it is safe to assume that a number of health systems in various parts of the world are not at all in good shape: see, for instance, this report on the situation in what used to be Soviet central Asia.

"I [Heart] China"

Margaret Warner's excellent report from China on the PBS Newshour yesterday included a brief shot of a man helping load relief supplies in Beijing for transport to earthquake victims; the guy was wearing a T shirt that said (in English) "I [heart] China." Could there be a better 15-second illustration of the contradictions of globalization?