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Constructing Globalization:Capital, State, and SocialMovementsDaniel EganPublished online: 18 Aug 2010.

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New Political Science, Volume 23, Number 4, 2001

REVIEW ESSAY

Constructing Globalization: Capital, State, and SocialMovements

Alan Gilbert, Must Global Politics Constrain Democracy? Great-Power Realism,Democratic Peace, and Democratic Internationalism, Princeton: Princeton UniversityPress, 1999, 316 pp.

Robin Hahnel, Panic Rules: Everything You Need to Know about the Global Economy,Cambridge: South End, 1999, 125 pp.

Fred Halliday, Revolution and World Politics: The Rise and Fall of the Sixth GreatPower, Durham: Duke University Press, 1999, 402 pp.

Robert O’Brien, Anne Marie Goetz, Jan Aart Scholte and Marc Williams, Con-testing Global Governance: Multilateral Economic Institutions and Global SocialMovements, New York: Cambridge University Press, 260 pp.

Michael Perelman, The Invention of Capitalism: Classical Political Economy and theSecret History of Primitive Accumulation, Durham: Duke University Press, 2000,412 pp.

Does “globalization” represent a new stage of economic development, or is it abroadening and deepening of fundamental capitalist social relations? Is thenation-state becoming irrelevant in a period characterized by both global capitaland the expansion of multilateral economic and political institutions? With thecollapse of state socialism and the power of global capital, is there no longer anyalternative to the hegemony of the market? These are questions that have beencentral to critical debates on globalization, and they are at the core of the booksreviewed here. Participants in these debates, as well as more generally interestedscholars, will �nd much of value in these books. While none of the booksexamines all of the above questions simultaneously, taken together they offer astrong, coherent critique of “globalization.”

Hahnel’s book provides a review of the social costs of globalization. Highlymobile capital and the hegemony of the market lead to increasingly severeecological destruction. This occurs for a number of reasons, all having to do withthe fundamental logic of the market. Common property resources such as theatmosphere and the oceans tend to be overexploited when users have freeaccess. This overexploitation of nature produces harmful externalities, such aspollution and greenhouse gas emissions, which socialize the costs of productionwhile privatizing its bene�ts. Policies that seek to reduce the costs of theseactivities tend to be inadequate, both because markets systematically under-

ISSN 0739-3148 print/ISSN 1469-9931 online/01/040559–06 Ó 2001 Caucus for a New Political ScienceDOI: 10.1080/0739314012009965 1

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560 Daniel Egan

produce public goods (why should a corporation bear the costs of pollutioncontrols when it cannot recover these costs from everyone who bene�ts fromcleaner air or water?) and because markets have a time horizon that tends toovervalue the present and undervalue the future. Neo-liberalism also threatenswhat Hahnel calls “economic democracy” (p. 24). Capital has aggressivelypushed for the creation of multilateral institutions such the WTO and NAFTAthat free capital from nation-state economic regulation and punish countries thatdo not harmonize downward their regulatory policies. Increasing capital mo-bility gives corporations “veto power over national economic policies” (p. 25),and, in conjunction with an aggressive attack on labor unions, results instagnating wages and more disciplined labor.

For all of these costs generated in pursuit of expanding accumulation,however, the economic performance of neo-liberalism is unimpressive. Hahnelnotes that growth in world output has been slower since 1973, during the periodof hegemonic neo-liberalism, than it was in the post-war period prior to 1973;interestingly, only in Asia is there per capita GDP growth after 1973, but thestate-controlled development that characterized the East Asian tigers is the veryopposite of neo-liberalism (p. 7). In fact, the Asian economic crisis of 1997–1998occurred precisely because Asian economies were pressured to liberalize theireconomies, subjecting them to the short-term speculative frenzy characteristic ofthe international �nancial system.

Despite the claims of its organic intellectuals, then, neo-liberal capitalism ishardly an economic powerhouse. Perelman extends this point back centuries tothe earliest stages of primitive accumulation in Great Britain. Capitalism, accord-ing to Perelman, is not the result of an inevitable process of increasingly ef�cientproduction, but rather the result of state policies intended to separate the massof the population from their traditional means of production. Perelman makesthis argument through a detailed review of the classical political economists,ranging from well known ones such as Adam Smith, Jeremy Bentham, DavidRicardo, and Thomas Malthus to lesser known ones such as Sir Thomas Pettyand Sir James Steuart. These writers argued that markets are the most ef�cientmeans of allocating social resources, and that everyone would bene�t if marketswere allowed to operate free from interference from the state. This, for example,was the logic behind Ricardo’s theory of comparative advantage, in which allcountries are argued to be better off when each specializes in producing goodsfor which it has lower opportunity costs and trades them for goods for which itsopportunity costs are higher. It also was the basis for Smith’s argument that thewage relationship is a voluntary one, a coming together of employer andemployee in which a fair day’s work is exchanged for a fair day’s pay. Thislaissez-faire approach to the market was, Perelman demonstrates, accompaniedby strong advocacy for state policies in Great Britain that forced the majority ofthe population into wage labor out of economic necessity. The classical politicaleconomists were advocates of state intervention in the form of enclosure (whichforced the poor off of the land they had farmed so that landlords could put itto more pro�table uses), legal protections for private property (such as the GameLaws of the late 17th century, which abrogated traditional hunting rights of thepoor on their landlords’ land), abolition of holidays, the enactment of vagrancylaws that compelled people without means of subsistence to work for wages,and the creation of arti�cial scarcity (high food prices were a stimulus for wage

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Constructing Globalization 561

labor to work harder). Small producers were seen as an obstacle to the develop-ment of capitalism, and the classical political economists advocated policies toensure that this obstacle was removed.

In addition, Perelman’s close reading of the classical political economistsmakes it clear that free trade does not maximize ef�cient distribution ofresources at the global level. Instead, free trade was recognized as a means ofmaintaining British hegemony (p. 64). Great Britain, the United States, and othercore countries developed with the bene�t of markets protected from competi-tors, and then through the hegemony of free trade sought to deny similaropportunities to countries in the periphery; “free trade for thee, but not for me”best describes the historical record. This disjuncture between theory and practiceis best summed up by Perelman in his observation that “the behavior ofgovernments over the years seems to lend support to the thesis that the morethey praise [the classical political economists], the more apt they are to use theirpowers to intervene in the interests of capital” (p. 252). Hahnel makes a similarpoint regarding free trade today. Not only does the classical argument ofcomparative advantage not provide any necessary reason why trade will maxi-mize global ef�ciency, it does not specify how this ef�ciency gain is to bedistributed between countries. Hahnel argues that free trade results not ineconomic development for poor countries, but in a growing gap between richand poor countries. When core and periphery compete on the equal terms of“free trade,” it should not surprise us which one comes out ahead.

Perelman provides a valuable service by reminding us of the centrality ofprimitive accumulation to capitalist development. He also, by emphasizing theactive role of the state in constructing the conditions for primitive accumulation,suggests the continuity between early capitalism and the contemporary variety,in which the neo-liberal goal of free markets is accomplished by state policy bothdomestically through the imposition of austerity and the undermining of com-mitments to social welfare and internationally through state support for multi-lateral organizations providing legal protections for private property. In contrastto arguments that the state is on the decline in the face of global capital,Perelman suggests the continued relevance of the state. In this he is supportedby the research in Contesting Global Governance. In their analysis of the WorldBank, the International Monetary Fund, and the World Trade Organization,O’Brien, Goetz, Scholte, and Williams indicate that the national state is animportant channel for social movements to in�uence multilateral economicinstitutions: “no matter how important international activity might be, there isno substitute for exerting political in�uence within the dominant economicstates” (p. 100). While the national state is clearly facing a new global terrain, weshould see arguments for the declining relevance of the state as an ideologicalcomponent of neo-liberalism. The de�ning away of the state in theory by theclassical political economists obscured the active role of the state in constructingcapitalism; neo-liberalism does the same today.

At the same time, however, there is room to be critical of the traditionaldistinction between the national and the international. The social sciences havelong emphasized the study of national societies, national polities, national econ-omies, and to the extent that the international was an object of study it was seenas a collection of distinct societies linked to each other by external relations.Halliday provides an alternative vision of the international, one that emphasizes

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“an interlocked set of social and political units, partially fragmented or sepa-rated by state frontiers, but between whom state-to-state relations in the strictersense would form only one part of a broad set of relationships” (p. 190). ForHalliday, there is no distinctive “national” politics. The relevance of the inter-national for the development of national states is demonstrated through hisstudy of revolution. International forces such as war and economic collapse havestimulated revolutionary movements. Revolutionary regimes have sought legiti-macy by associating themselves with broad historical trends (for example, therole played by the French, Soviet, Chinese, Cuban, and Iranian revolutions asexemplars) and with universal values of freedom and self-determination, andthey have both appealed for support from abroad and sought to spreadrevolution abroad by providing political, �nancial, and military support forrevolutionary movements elsewhere. Revolutions are fundamentally challengesto state sovereignty, both internally by challenging the state’s monopoly on themeans of legitimate violence, and externally by challenging speci�c nationalfrontiers as well as the very concept of frontiers. Revolutions may have takenplace in speci�c countries and sought internal social transformation, but theyhave simultaneously been international events seeking international transform-ation.

Gilbert makes a similar argument regarding the problematic distinctionbetween the national and the international. He develops what he calls the“antidemocratic-feedback thesis” (p. 28), in which state managers use inter-national economic, political, or military competition as a means of delegitimizingdomestic opposition movements. Global power rivalry is closely associated withrestriction of democracy at home. At the same time, however, the possibilityexists for international politics to have “democratic feedback” (p. 122). Gilbertexamines Marx’s writings on internationalism (for example, on the revolutionsof 1848) to illustrate how democratic and socialist movements in one countryhelped to stimulate rebellion by oppressed peoples in other countries. As withHalliday, revolution for Gilbert is simultaneously national and international, andas a result he questions the assumption of a clear distinction between the two.

All of these works challenge proclamations of the “end of history” and that“there is no alternative” to capitalism. They all identify structural opportunitieswithin capitalism to resist neo-liberalism and develop a more humane, non-market alternative. Perelman’s analysis suggests that these opportunities liewithin the politically constructed nature of capitalism. To see capitalism inpolitical, rather than in purely economic, terms makes the reproduction ofcapitalism less a matter of technical ef�ciency and more a matter of the balanceof forces between capital, the state, and opposition social movements. Theproblem is thus not globalization per se, but the particular kind of globalizationon offer.

Hahnel, for example, argues that international trade and investment has thepotential for increasing global ef�ciency, reducing inequality, and expandingeconomic democracy, but only if it is organized in ways that stress the primacyof social rather than market criteria.

A similar case can be made from a more state-centered perspective. Gilbertcontrasts traditional forms of internationalism, referring to alliances of statespursuing peaceful policies, with “democratic internationalism from below”(p. 4). Democratic internationalism emphasizes the interests that citizens across

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Constructing Globalization 563

national boundaries share, and sees citizens as international actors in oppositionto the policies of their national states and in solidarity with citizens of othercountries. What is particularly noteworthy about Gilbert’s argument is itsderivation from a close reading of a variety of neorealists (Stephen Krasner,Robert Gilpin, Robert Keohane) and dissident realists (Hans Morgenthau, Rein-hold Niebuhr); for Gilbert, “realism leads to democratic internationalism”(p. 68). In the realist perspective, the state serves as the representative of anational common good, but once the assumption of a common good is acceptedit is possible to allow for non-statist de�nitions of “common good.” The logic ofthe inter-state system, for Gilbert, offers opportunities to undermine that systemand construct more democratic, global de�nitions of the common good. Like-wise, O’Brien, Goetz, Scholte, and Williams contrast traditional state-centeredmultilateralism with the “new multilateralism” (p. 4) offered by oppositionsocial movements, which “is built from the bottom up and is based upon aparticipative global civil society” (p. 4). The question, then, is not how to opposeglobalization, but how to replace globalization from above, which serves theinterests of capital and state managers, with globalization from below.

O’Brien et al. examine the interaction between multilateral economic institu-tions and global social movements. Social movements are relevant for multi-lateral economic institutions in two ways: they can assist in or interfere with theimplementation of economic policy, and they can in�uence the state actors thatcontrol multilateral institutions. Similarly, multilateral economic institutions arerelevant for global social movements in two ways: their policies affect socialmovement constituencies, and they provide a potential channel of in�uence forsocial movements. The interaction of traditional state-centered multilateralismand the new multilateralism of global social movements produces a “complexmultilateralism” (p. 3) in which multilateral institutions offer incremental re-forms that provide some openings to global social movements to participate inpolicy, but do so “to neutralize [social movement] opposition so that the policyprocess can function smoothly” (p. 217). For example, while the World Bankhas increased resources directed towards women, it has not reexamined itsstructural adjustment policies in terms of their impact on women, nor has itmade use of feminist critiques of economics and development. Likewise, al-though the International Monetary Fund has begun to examine the social andenvironmental consequences of its policies, these clearly are of secondaryconcern.

The limits of complex multilateralism “raise the question of whether popularforces should be attempting to modify existing structures or to build alternativestructures” (p. 208). Hahnel rejects the idea that existing international institu-tions can be reformed to meaningfully incorporate social goals. Given hisidenti�cation of capitalism as the source of economic inequality and ecologicaldestruction, calls for enforceable international labor and environmental stan-dards, either as stand-alone agreements or as part of existing multilateraleconomic institutions, are inadequate. He argues that, in the context of widedifferences in standards of living, such uniform standards will not make a levelplaying �eld; the “race to the bottom” characteristic of globalization todaywould simply be con�ned to competition over wages rather than the level ofsocial regulation of capital. Instead, “We must act like Lilliputian Luddites �rstand stop corporate-sponsored globalization by any means necessary. After

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564 Daniel Egan

corporate hegemony and the present system of global pillage have been de-feated, our Lilliputian movement can cease to act like Luddites and begin tobuild a system of international equitable cooperation from below” (p. 106).

In contrast, O’Brien et al. see some utility in global social movements’ effortsto in�uence multilateral economic institutions despite the latter’s efforts to useits contacts with social movements to contain opposition. They note that both theWorld Bank and the World Trade Organization have expressed a commitmentto “sustainable development,” and that although this “arguably is little morethan a rhetorical exercise … [e]ven lip service to sustainable developmentchanges the orientation of the institution” (pp. 154–155). Global social move-ments are unlikely to win multilateral economic institutions over to newmultilateralism or Gilbert’s democratic internationalism, but they can change theterrain in which they operate. In doing so, global social movements can con-strain multilateral institutions and provide new opportunities for resistance toneo-liberalism. This position is supported by Halliday’s analysis of revolution.The French Revolution was ultimately defeated, Halliday notes, but it sub-sequently shaped the next two centuries of world history. State socialism wasdefeated by the revolutions of 1989, but its contributions to decolonization andto the rise of the social democratic welfare state means that its global impact willcontinue to be felt. Halliday believes that the revolutions of the past twocenturies have established an un�nished agenda of social change that may takedecades, if not centuries, to achieve in full. The point is that even if revolutionsare defeated, counter-revolution can never fully restore the past. Revolutionchanges the terrain on which capital, the state, and social movements operate.

Halliday leaves us with “three of the most easily forgotten lessons ofhistory”: “the enduring inability of those with power and wealth to comprehendthe depth of hostility toward them,” “the ability of history, and of socialmovements in general, to surprise,” and “the need of people—individually andin mass collective movements—to dream, to believe in alternatives to the worldin which they live” (pp. 337–338). The importance of these books lies both intheir critique of the powerful economic and political forces pushing ‘globaliza-tion’ and in their emphasis on not only the possibility, but also the necessity, ofpopular opposition to globalization from above. Recognizing the political, con-structed nature of capitalism is the foundation for the creation of globalizationfrom below.

DANIEL EGANUniversity of Massachusetts–Lowell

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