[Reader-list] The residue

[Rana Dasgupta]

I have had a number of discussions with Jeebesh and
Monica recently about what Jeebesh calls the 'residue'
of capitalism; the build-up within the 'guts' of the
system of a kind of undigestible excess that cannot be
absorbed and must eventually be expelled in dramatic,
possibly violent, ways.  

The most obvious example of what he is talking about
is the enormous migration of people (50 million
people, or 1/8 the population) out of Europe at the
end of C19/beginning of C20, a process which took much
of the underclass out of circulation and removed many
of the social and economic pressures threatening the
system as a whole.  Hobsbawm uses this fact to account
in part for the differing histories of Britain/France
and Italy/Germany: the first two were able to alter
their domestic social pressures significantly by
moving people around a global empire; the second two
did not have that recourse, and authoritarian
governments were an obvious alternative solution.  

I think this idea of the 'residue' needs more thought,
and am pasting below my summaries of two articles from
a recent edition of Biblio, one by Deepak Nayyer and
one by Benedict Anderson, in order to provoke
discussion.

I think it's worthwhile to think this through further
because it has an obvious bearing on phenomena such as
the 2 million people, mostly men, who are removed from
society to jail in the US, or the growing popularity
around the world of anti-immigration as a core
political platform.  

Benedict Anderson's article talks about the reasons
why states have become so much more fanatical about
their borders, esp since 1945.  Nayyar's article looks
at the immobility of labour in this latter phase of
globalisation compared to its great mobility in
1870-1914.  

Together they are to me very suggestive about the
build-up of 'residue' in modern states and the
measures that these states are taking to try and
control this.  We have seen several states trying the
Britain/France approach, albeit in smaller ways:
Malaysia suddenly expelling all illegal foreign
workers
(http://news.bbc.co.uk/2/hi/world/asia-pacific/2163440.stm),
though there were some 300,000 of them who were very
integrated into the economy.  And we have many states
taking more authoritarian positions with regard to
dissent, refugees, immigration, labour unrest etc.

R


Deepak Nayyar: Globalisation once more

Globalisation is not new: 1870-1914 was another phase
of intense integration of world economy.  What can we
learn from historical parallel?

Striking parallels in the conditions which brought
about both phases.

-- In C19 there were almost no restrictions on
movement of goods, capital and labour across national
boundaries.  Since 1950s there has been progressive
dismantling of barriers to international economic
transactions once again.

-- Advent of new efficient and predictable modes of
international travel and communication (steamship,
railway and telegraph in C19).

-- Foundations for new kinds of
internationally-integrated production (as opposed to
craft economy).  In C19-early C20: assembly lines
developed by Ford and management techniques developed
by Taylor.

-- Dominant political power (Britain) with currency
that guaranteed international exchange (pound
sterling).  US and dollar of course have now taken
this role.

But fundamental differences also.  These lie in sphere
of movements of people across borders.  C19 - no
restrictions.  Passports seldom needed and immigrants
granted citizenship with ease.  1870-1914 - 50 million
people left Europe of whom 2/3 went to USA, remaining
1/3 to Canada, Australia, NZ, South Africa, Argentina
and Brazil.  This figure is 1/8 total population of
Europe in 1900.  Some countries gave up 20% of their
population.

Movement around empire also enormous.  Following
abolition of slavery in British Empire, 50 million
people left India and China to work as labourers on
mines, plantations and construction in LatinAmerica,
the Caribean, Southern Africa, Southeast Asia etc.
The destinations were mostly British, French, Dutch
and German colonies that combined European capital
with Asian labour for profit.

In latter phase of globalisation, since early 1970s,
labour flows have been reduced to trickle by
immigration laws.  The present phase of globalisation
has found substittues for labour mobility in the form
of trade flows and and investment flows.

Idealogues like Jeffrey Sachs see C19 globalisation as
the catalyst for global development and period of
1914-1970 as wasted decades.  Current globalisation is
unlocking future of world again - particularly for
developing and formerly communist world.

"It needs to be emphasised that this normative and
prescriptive view of globalisation is driven in part
by ideology and in part by hope.  It is certainly not
borne out by history.  For those who recall the
development experience of the late 19th century, it
should be obvious that the process of globalisation
will not reproduce or replicate United States
everywhere just as it did not reproduce or replicate
Britain everywhere a century earlier."

C19 - most of gains accrued to imperial centres that
exported capital and imported commodities.  Some other
countries like USA and Canada also gained.  Income gap
between richest and poorest countries *within Europe*
was 3:1 in 1820 and 11:1 in 1913.  Experience for
poorer countries still of course worse.  In some of
the most open economies of the world - India, China
and Indonesia - there was industrial and economic
regression during this period.  These countries had
some of the lowest tarrifs in the world and were the
largest recipients of foreign investment.

The reality of this later phase of globalisation has
been similar.  1970s-90s world economy diverged, not
converged.  Poverty is much greater problem than
during the 'managed' period of capitalism - 1940s to
70s.  Why?

-- Trade liberalisation made labour market more
difficult for unskilled labour.  Labour has lost share
of capital nearly everywhere.  Tax reforms and
mobility of capital compared to labour emphasised
this.

--Financial markets demand near-zero inflation.
Fiscal policy is geared towards this at the expense of
economic growth and employment.

-- Excess supply of labour depressing wages.

-- Consolidation of market power in hands of global
firms.

--Competition between states for investment leading to
'race to the bottom'.

Late 1990s top 20% of world owned 86% of wealth;
bottom 20% 1%.  Wealth ratio was 32:1 in 1970s and
74:1 in 1997.  Many countries have been entirely left
out of the global market with no access to capital,
markets etc while facing stiff competition from
abroad.

In addition to these bare facts, the high visibility
of the lifestyles of those who have enjoyed the fruits
of this process creates additional stress for those
who have not.  Some seek to achieve a similar life
through crime and violence.  Some seek refuge in
ethnic identities, cultural chauvinism or religious
fundamentalism.  Globalisation erodes social stability
and thus provokes social tensions within countries in
same way as in late C19.

"The fundamental objective should be to ensure decent
living conditions for people - ordinary people - as
the welfare of humankind is the essence of
development.  The quest for a more equitable
distribution of income, wealth and power between
countries will have to be an integral part of any
attempt to move from a world economy to a world
community."


Benedict Anderson: Long Live the Nation

Useful point of departure for considering relationship
between nation-state and cosmopolitanism is the
comparison of scale of violence between nation-states
and within nation-states over past 57 years (nuclear
age).

Worst wars in Korea and Vietnam.  But war deaths
dwarfed by 'unnatural' deaths within states.  China,
India, Cambodia, Sri Lanka, Indonesia, Rwanda,
Burundi, Uganda, Liberia, Sierra Leone, Nigeria,
Yugoslavia.  Striking difference with first half of
century.

Why?

-- Nuclear weapons ruled out major wars between great
powers after 1945 and one of the traditional aims of
military conflict - territorial gain.  Proxy wars
instead.

-- Development of cartel in world arms market.  97% of
all nations became incapable of self-armament in 19th
century European manner.  these nations can only go to
war with each other if armed by gifts, loans etc from
cartel.  With collapse of USSR cartel has grown
smaller - basically US.  (US has since 1945
participated in far more wars than any other country
and killed more foreigners.)  At the same time, this
cartelisation means that all governments have military
power dwarfing what their citizens have access to.
Impotence on international scale for most states is
paralleled with internal monopoly.

-- Hegemony of the 'national idea' and its
enshrinement in UN.  Last big rearrangement of
territories took place in 1940s and is unlikely to be
repeated.  Occupations have been rare.  India in Goa
was successful but Indonesia in East Timor was
eventually not, nor Iraq in Kuwait.  Israel is
unlikely to be ultimately successful in Palestine.
When boundaries change these days they do through
internal fracture - USSR, Yugoslavia, Ethiopia - and
perhaps China and India in the future.  One can
imagine an independent Kashmir in the UN one day, but
not the absorption of Bangladesh into India; an
independent Tibet but not the disappearance of
Mongolia or Korea into China.  The world order stands
by the idea of the state and it is unlikely that the
nations in the UN will disappear, though new ones will
definitely appear.  This is significant shift.  The
period of transnational dynasties was one where
territories were moved around easily.  Domestic and
imperial possessions were joined and separated by
dynastic marriages, commercial deals etc.  But the
loss of possibilities for adding territory has
drastically accentuated the pain of losing it.
Secession is recognised as irreversible.  "The
national territory, modernly understood, was
fundamentally opposed to the imperial domain; it
belonged permanently to a People.  Its liquidation or
annexation was a genocidal catastrophe; and its
expansion was always theoretically limited."

Anderson goes on to make various arguments about the
need, within this unchallengeable framework of
nation-states, for 'healthy' nations, for which he has
various prescriptions.  He dismisses arguments that
the nation state itself is no longer a viable
institution and says that the only way to avoid the
principle kind of violence in the world - intrastate
violence - is to create open states that provide good
opportunities to their citizens.  This is OK as far as
it goes.  But it's the foregoing insights that are
useful about this essay.


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