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Globalisation or Imperialism?JAMES PETRASBattle Professor Emeritus of Sociology, State University of New York, Binghamton

HENRY VELTMEYERProfessor of Sociology and International Development, St. Mary's University, Halifax

The article details and criticises both the theoretical and empiricalweaknesses of the widely used concept of globalisation. The article sets outand discusses three arguments concerning the phenomenon ofglobalisation: first, that globalisation is a novel phenomenon; second, thatthe state has become an anachronism; and third, that the technologicalrevolution is the main impetus behind globalisation. The article challengesthese contentions, and argues, to the contrary, that the concept ofglobalisation obscures more than it reveals; that the macro-dynamics of theworld economy can best be understood through an analysis of the active roleof the imperial state and the opening up of overseas opportunities viapolitical power; and that developments associated with the newinformation technology are subordinate to more important developmentsgrasped with reference to the concept of imperialism.

I. IntroductionMany writers argue that we have entered a new era characterised by

globalisation, the driving force of epoch-defining changes in the nature of societiesand economies across the world, resulting in the creation of an interdependentsystem. This notion of globalisation has become a part of the everyday discourse inacademia and among policy-makers. It serves as a point of reference and aframework of ideas for the analysis of macro and micro socio-economicdevelopments, and of the process that gave rise to them. The notion of'globalisation' spans the ideological spectrum and crosses academic disciplines.Even trenchant critics of the dominant discourse have been constrained to adoptthe term and, in the process, tacitly accept its presuppositions.

The very pervasiveness of the notion of globalisation points towards a problem.Not only does it reflect the presence of a fundamental paradigm, a worldview thatstructures the thinking and practice of most scholars in the field, it also suggests theworking of an ideology which obfuscates reality. Although globalisation ispresented as an economic process, a paradigm for describing and explaining

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GLOBALISATION OR IMPERIALISM?

worldwide trends, it is better viewed as a political project, a desired outcome thatreflects the interplay of specific socio-economic interests. We will argue that'globalisation' provides an inadequate description and understanding ofworldwide trends and developments. More useful in this regard is the concept ofimperialism, a notion which is currently a minority view, but one which isbeginning to gain attention from scholars, including some former supporters oftheVietnamWar.1

In the process of critically analysing the notion of globalisation, and supportingthe greater intellectual relevance of the concept of imperialism, we will proceedfirst by critically discussing the presuppositions and claims of globalisationtheorists. Then we will proceed towards a systematic critique of globalisationtheory. This will be followed by an argument in support of an alternative way ofunderstanding worldwide trends and developments based on the concept of'imperialism'.

//. The origin and rise of globalisation theoryWhat is globalisation? The term has been used in a multiplicity of senses. For

some writers it refers to an increasing number of events and developments takingplace simultaneously in more than one country - in an increasing number andrange of countries worldwide.2 For others globalisation implies something beyondsimilarity. They argue that these trends and developments are connected and thatthere is a steady multiplication and intensification of links and flows amongdiscrete national entities - a higher level of organisation and integration into onesystem. For a few writers, the term tends to be used loosely to refer to a broad rangeand great variety of processes and trends, some of which, such as privatisation andliberalisation, are increasingly escaping control by the nation state, reflecting anew level of capitalist development in a new set of supra-national institutionswhich have replaced the nation state.3

The notion of globalisation contains a description and explanation ofprocesses and trends that hitherto unfolded at the national level but that over thepast few decades have spilled beyond the boundaries of the nation state. In its mostgeneral sense 'globalisation' refers to the upsurge in direct investment and theliberalisation and deregulation in cross-border flows of capital, technology andservices, as well as the creation of a global production system - a new globaleconomy.4 It is in this sense that the term was apparently coined in 1986, in thecontext of the Eighth Round of General Agreement on Tariffs and Trade (GATT)negotiations.5 For the theorists of this process and its many advocates these flows,both in scope and depth, together with the resulting economic integration andsocial transformation, have created a new world order with its own institutions andconfigurations of power that have replaced the previous structures associated withthe nation state, and that have created new conditions of peoples' lives all over theworld, including a greater interconnectedness.6

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Globalisation as a new phenomenon?There are several points of dispute about this process, particularly as to whether

it represents something 'new', a qualitatively different phase in the evolution anddevelopment of capitalism, a new epoch, or simply the latest and not necessarilymost significant phase in a long historical process.7

This issue has both a conceptual and empirical dimension. On the one side it isargued that the trends and developments associated with globalisation cannot beequated with the evidence of the internationalisation of economic intercourse andthe flow of goods, capital and labour during the late 19th century. Several studieshave documented that the flows of capital, goods and labour were higher in theperiod leading up to World War I than during the last half of the 20th century.However, advocates of globalisation argue that the earlier forms of thisinternationalisation were not accompanied by anywhere near the same degree ofeconomic integration and that it did not result in the creation of an integratedglobal production system.

As for the new global economy formed over recent decades the driving forceswere different. The entire process of change, globalisation theorists argue, has beenunderpinned by accelerated technological progress, mediated by the growing roleof transnational corporations and facilitated by the deregulation and liberalisationof markets all over the world.8 The difference between the past and the present,these theorists assert, is in the technological conditions of this globalisation (arevolution in communications technology); its relevant institutional and policyframework (free-market reforms, structural adjustment measures); and the degreeof systemic integration. The neoliberal programme of structural adjustments andpolicy reforms of the post-World War period9 were designed, and have served, toliberalise the international flow of capital, goods and services, technology andinformation. In addition, they have worked to deregulate the associated economicenvironments and markets.

The myth of the third technological-industrial revolutionIf indeed we were living in a new global economy based on the new information

technologies, we would expect the introduction of those technologies to have asignificant impact on productivity growth. In the past, during the first and secondindustrial revolutions, when steam power, electricity, and the internal combustionengine were introduced, productivity showed a marked increase. To speak of theinformation revolution means that the innovations have had a profound effect instimulating new productive investments, more productive utilisation of capitaland new ways of stimulating output per capital investment. A comparison ofproductivity growth in the US over the past half-century fails to support theargument of the proponents of a Third Scientific Industrial Revolution (TSIR).Between 1953-1973 productivity grew on an average of 2.6%; between 1972-1995productivity grew a mere 1.1%.10 The information 'revolution' clearly did notrevolutionise production. In fact, it failed to even sustain the previous levels ofproductivity and was not able to counteract the tendencies to capitalist stagnation

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that have been operative since the 1970s.Some advocates of theTSIR argue that the real 'take off, of the information

revolution should be dated from the mid- 1990s, citing the productivity growth of2.2% between the last quarter of 1995 and the first quarter of 1999. While this figureis substantially greater than the rate of productivity between 1992-95 it is still belowthe growth data for the 1953 -1973 period. Moreover, it is very questionable whetherthe increase in productivity can be attributed to the technological revolution. Arecent article by Robert Gordon, which analyses the increase in productivitybetween 1995-99, raises serious doubts about the claims of theTSIR.11 He arguesthat almost 70% of the improvement in productivity can be accounted for byimproved measurements of inflation (lower estimates of inflation necessarily meanhigher growth of real output, thus productivity) and the response of productivity tothe exceptionally rapid output growth over the three year period. Thus, only 30% ofthe 1% (or 0.3%) gain in productivity made during the 1995-99 period can beattributed to computerisation or the so-called 'information revolution' - hardly arevolution.12

Even more devastating for the advocates of the TSIR, Gordon provides aconvincing argument that most of the increase in productivity attributed tocomputerisation is in the manufacturing of computers! According to Gordon'sstudy, productivity growth in the production of computers has increased from 18%a year between 1972 and 1995 to 42% a year as of 1995.13 As Gordon sees it, thisaccounts for all the improvements in productivity growth in durable goods. In otherwords, the computer has brought about a 'revolution' in the production ofcomputers, having an insignificant effect on the rest of the economy. The basicreason is that computers have simply substituted for other forms of capital.According to a recent study, growth in computer inputs exceeded those in otherinputs by a factor of 10 in the 1990-96 period.14 The substitution of one form ofcapital for another need not raise productivity in the economy as a whole. The basicmeasure of a technological revolution is what the authors call 'multi-factorproductivity', the increase in output per unit of all outputs. The basic questionposed by TSIR theorists is not over whether computers have revolutionised theproduction of computers but how the so-called information 'revolution' hasaffected the other 99% of the economy. According to Gordon's longitudinal study oftechnical progress covering the period between 1887-1996, the period of maximumtechnical progress as manifested in annual multi-factor productivity growth was inthe period from 1950 to 1964, when it reached approximately 1.8%. The period oflowest multi-factor productivity growth in this century was from 1988 to 1996 -approximately 0.5% growth!15

Clearly the innovations in the early and middle 20th century were far moresignificant sources of economy-wide productivity improvement than theelectronic, computerised information systems of the late 20th century.

Computer manufacturers account for 1.2% of the US economy and only 2% ofcapital stock (1997).16 While corporations spend substantial amounts oncomputers it is largely to replace old ones. There is no evidence to back up theclaims of the advocates of TSIR. There has been no such thing as the Third Scientific

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Industrial Revolution - at least by any empirical measure of increased productivityin the US economy. Despite the vast increase in the use of computers, theproductivity performance of the US economy remains far below the levels achievedin the pre-computer age of 1950-72. In fact, annual multi-factor productivitygrowth (AMPG) between 1988-96 is the lowest of the last 50 years.17 Even moresignificantly the rate of growth between 1950-1996 has been steadily declining:from 1950 to 1964 AMPG grew approximately 1.8%; from 1964 to 1972 it grew 1.4%;from 1972 to 1979 it grew 1.1%; from 1979 to 1988 it grew 0.7% and from 1988 to1996,0.6%.18 The claim of the NSIRs related to a new capitalist era has no basis inany purported Third Scientific Information Revolution.

On the contrary, one could argue that the new information systems might havea negative effect on productivity insofar as they draw a disproportionate amount ofcapital away from more productive activities and feed into and reinforce 'service'activities, such as financial speculative investments, that hinder productivitygrowth. At a minimum one could argue that the new information systems are notlikely to counteract the long-term systemic propensity towards crisis. We can alsoargue that rather than being the wellspring of productivity, or the determinant ofcapitalist growth, the newinformation systems are subordinate elements of a largerconfiguration of capitalist institutions - particularly financial - that influence theiruse and application.

The myth of the new Revolutionary Information Age of capitalism, however,has served several political uses. First, it is an attempt to put an intellectual'technological' gloss on the imperial expansion of Euro-American capitalism. Thedriving force of what is dubbed 'globalisation' is imputed to the 'revolutionary'consequences of electronic information systems that operate across nationalboundaries. The information systems approach renders the old Marxist categoriesof capitalist expansion-imperialism obsolete. The dominance of the newinternational information systems, according to TSIR, creates a 'global economy' -a new global phase of capitalist development. Since we have argued that no such'technological revolution' has in fact taken place, at least as it affects the growth ofthe productive forces, what can we make of the arguments for a 'global economy1

and 'global corporations,' ambiguous terms that veil the relations of power in theworld economy.

At issue in the overseas expansion of Euro-American capital was the need tocounteract, and undo, institutional arrangements that were formed in the post-warcontext of an East-West Cold War; movements of national liberation and thedecolonisation of a large part of the so-called 'Third World'; and a labour andcapital accord, supported by the institutions and policies of a Keynesian state in theNorth and a developmentalist state in the South.19 Under conditions of aneconomic and fiscal crisis that beset the system as a whole in the late 1960s andearly 1970s, the sweeping reforms of the New Economic Model (NEM)20 broughtabout a counter-revolution in theory and practice, and with it the subversion of thepost war world order - and the new Euro-American empire dubbed by thenPresident Bush the New World Order (NWO).




The inevitability ofglobalisation ?Globalisation, according to its advocates, has ushered in a new era of late or

post- capitalist development, the economic and political dynamics of which havebecome focal points for a broad range of studies from diverse perspectives.21 Soentrenched has this notion ofglobalisation become that even its many critics havesuccumbed to the suggestion, or claim, that the process is inevitable and thusinescapable in its effects. Accepting this claim some critics argue that the best andonly'realistic option' - as Casteneda22 has put it - is to enter into the globalisationprocess under the most favourable conditions available and to adjust to itsrequirements as needed or possible. This position is most clearly articulated in theWorld Bank's 1995 World Development Report. Among others Keith Griffin, by nomeans a globalist, allows for no possible alternative to an adjustment to whatcannot be avoided or changed.23 Against clear evidence to the contrary presentedby the United Nations Development Programme (UNDP) with which he is himselfassociated, Griffin sees a trend towards convergence, which is creatingopportunities for some developing countries to participate in the fruits ofdevelopment engendered by globalisation. In this connection, Griffin adopts aview held not only by the economists at the World Bank but by most sceptics andcritics ofglobalisation.24

Globalisation and the nation stateThe claim of globalisation theory about the growing irrelevance of the nation

state has also been widely accepted, even by critics. They see globalisation astending to displace the role of the state as the institution creating the conditions ofcapital accumulation as well as the regulation of capital. Scholars as diverse asStalker,25 who provides an International Labour Organisation (ILO) perspective onglobalisation, and Drucker,26 articulate the widely held mainstream view thatglobalisation has ushered in a newpost-capitalist form of development. They arguethat the nation state has retreated from the development process and beenreplaced by what Robinson calls the 'internationalised state'.27 Some scholars inthis connection more plausibly argue for a new system of global governance, a set ofinstitutions that can secure the regulatory conditions of political stability for aglobal capital accumulation process.28

However, not everyone has accepted this notion of a powerless state, unable toresist the erosion of its economic role. Some 'realist' analysts of the politicaldimension of the 'globalisation' process continue to see the nation state as a majoractor in international relations and its substantive conditions.29 Similarly, thenotion of a powerless state, whose role and weight in the economy has beendiminished by forces of globalisation, has been seriously challenged.30

Nevertheless, the prevailing view in academia is that the regulatory powers of thenation state, and its capacity to make policy, have been seriously compromised andare giving way to a new set of supra-national institutions for managing the processor for securing 'good governance'.31

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III. Globalisation in theory: an epoch-defining shift or capitalismas usual?Supporters of the neoliberal order and the associatedWashington Consensus32

come in two varieties, as do its critics. Among the globalises there remain hard-linevoices in favour of an entrenched neoliberal form of free market capitalism such asShepard33 and the World Bank.34 However, the dominant approach is to take thepillars of the neoliberal order, its institutional framework and enabling policyframework, as a given but to recognise the need for a social dimension and to givethe development process a 'human face'.35 The ILO,36 a voice for the EconomicCommission for Latin America and the Caribbean ECLAC. and associates of theWashington based Institute for International Economics typify this approach.However, even the IMF has softened its views by proposing reforms to theneoliberal model and redesigning the Structural Adjustment Programme (SAP) .37

Critics of the NWO can also be put into two camps. First, there are thoseconcerned with the social dimensions of the globalisation process. They tend tofocus their criticisms on the uneven distribution of its socio-economic benefits -and at times its underlying agenda of corporate capitalism. Amongst thesereformist critics can be found intellectuals such as Korten38 and other participantsin the People Centered Forum (PCD), a consortium of international NGOs thathave constituted themselves as a watchdog of the World Bank, the WTO and otherguardians of the New World order. Also ranged within this spectrum of liberalreformers are the diverse participants in the anti-globalisation AlternativeForum39; Griffin and Khan, associated with the UNDP and its concept of humandevelopment; Ghai and others with UNRISD and its concern with the socialdimensions of the adjustment process; and Wolfe,40 a voice for the EconomicCommission for Latin America and the Caribbean ECLAC.41

The reformist critique of the NWO and the process involved inbringingit about- globalisation - focus on the fundamental inequalities and inequities in thedistribution of society's productive resources and fruits of development as a majorproblem. Most recognise as does Sengenberger, Director of the ILO's EmploymentStrategy Department, that it is the workers who as a class bear a disproportionateshare of the social costs of adjustment. To redress this fundamental market-generated inequity, reformist critics of the NWO, for the most part, turn to aKeynesian state-led form of capitalist development, based on a selectively,interventionist and socially reformist state.

These reformers argue for a social dimension to development, in order toalleviate the worst effects of an inevitable process and to protect the poor and othervulnerable groups. They propose a turn towards social liberalism, a reformedneoliberalism, and appeal to the institutions of global capital to reform themselves.In this context, critics also appeal to an emergent global 'civil society' coalescingaround a global network of international Non-Governmental Organisations(NGOs).

While this school of thought introduces a reformist agenda, it still embraces theidea that there is no alternative to capitalism, the NWO, and the globalisation




process. Having accepted the idea that there is no alternative, the issue becomeshow best to adapt and to insert economies and societies into the process. The issuebecomes: what are the most favourable conditions available in order to strike thebest deal possible through direct pressure and negotiated concessions? Thesolution is what Griffin and Khan, Casteneda and others see as the only 'realisticoption.' A second group of critics share a Marxist understanding of the nature andmacro-dynamics of the international capitalist system, although 'Marxism' heretakes diverse forms. These critics workfrom very different theories of the macro-dynamics of post war capitalism and its propensity towards crisis. The general viewis that there is an alternative to the existing order and the globalisation process andthat it should be sought in political terms.

The writers associated with the Monthly Review*2 view globalisation as anobfuscating myth, an analysis of an imperialist centred international economy.Another group of left-wing scholars43 view globalisation as the latest phase in a longhistorical process, representing an epochal shift in the nature of capitalism, and assuch a systemic (or political) response to the crisis that beset world capitalism in thelate 1960s and early 1970s.44 In this connection, we propose the concept ofimperialism as an alternative explanatory framework of international capitalistexpansion and the growing inequalities, and for describing and explaining the processof the concentration of power, property and income in the international system.

IV. Globalisation or imperialism ?The term 'globalisation' not only serves as description and explanation of what

is going on. It refers even more so to a prescription - that certain developments,particularly 'the liberalisation of national and global markets,' will produce 'thebest outcome for growth and human welfare' and that they are in everybody'sinterest.45 In this connection, the notion of globalisation is clearly based not onscience but on ideology, a manifesto, as it were, of advanced capitalism in which itserves as a shorthand reference to developments and outcomes that are deemed tobe highly desirable.46

In this connection, the problem is how to generate the requisite support and the'political will' needed to implement the required reforms and policies. The WorldBank, in particular, has assumed responsibility in this area, arrogating to itself thetask of ensuring that governments all over the world adjust to the requirements ofEuro-American multinational corporations and their states.47

Another issue in this connection is how to differentiate between reality andappearance. In appearance, there is an unfolding of trends that are leading towardsincreased integration into one world system. In the process, the nation state isweakened, hollowed out, forced to retreat from the process of nationaldevelopment and surrender its decision-making power to a new set ofinternational institutions. The reality, however, is otherwise. The state in the ThirdWorld actively intervenes to subsidise and attract capital, reduce organised laboursrole, etc. The imperial state bails out banks, investors and speculators, providespolitical pressure to open markets, and sends military expeditions to eliminatealternatives.



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Within the frameworks of both concepts, that of globalisation and imperialism,repeated reference is made to the dramatic increase of the international flow ofcapital, particularly in the form of Foreign Direct Investment (FDI); an associatedprocess of mergers and acquisitions; and the restructuring of capital, viz. its shifttowards developing countries, particularly Latin America.48 However, theeconomic restructuring associated with the so-called 'globalisation' process hasnot only shifted the conditions of a systemic crisis from the North to the South, witha resulting deterioration of economic conditions all across the South and aneconomic recovery in the North, but has also led to a greater concentration ofownership of the world's productive resources. In this connection, Fortune's top500 multinational corporations, 80% of which are based in the US or westernEurope have dramatically increased their control of the world economy.49 The bulkof technological innovations and direct investments, as well as international trade,are under the direct control of these multinationals, the principal units of Euro-American imperialism. In addition, the 1990s saw a dramatic increase in the take-over, and recolonisation, of the strategic sectors of many economies, particularly inLatin America, which, over the course of the decade, took over from East Asia theposition of major destination for the growing international flow of productive andspeculative capital in the Third World. The growth of direct and equity investmentflows is only one, albeit central, part of the mechanisms of a new resurgentimperialism, a means of securing US hegemony.50 Also involved are the dynamicsand growing integration of world capital markets and the transnationalisation oftrade.

A recent empirical comparative study by Doremus, Kelley, Pauly and Reich ofUS, German and Japanese transnational corporations (TNCs) found that on thevital issues of investment, research and development the great majority ofdecisions were taken in the national headquarters of the TNCs.51 With regard toresearch and development (R&D) of US TNCs they show that 88% of the total R&Dexpenditures are made in the 'home' country, and only 12% of majority ownedaffiliates overseas. Technology development remains centralised in the nationalheadquarters of the TNCs. In the other key area of TNC strategy, direct investmentdecisions and intra-firm trade, the authors find that the priorities of nationalheadquarters predominate. The authors' findings and conclusions refute the mythof the 'global', multi- or transnational corporations demonstrating their ties to thenation state and their centralised nation-centred decision-making structure. Whilethe TNCs locate production in many countries and divide up operations andproduction in multiple sites, control and profits are centralised within nationstates. Expansion and control by TNCs has not changed their enduring links tonation states; nor have their international operations transformed their centralisedempire building character. The process of international political and economicexpansion and its associated trends and developments has more to do with thedynamics of political and economic power than the transformative effects of newtechnology. If there is a driving force to the process it relates to the political andmilitary victories of overseas expansionary social classes and political leaders overtheir nationalist and collectivist adversaries.



GLOBALISATION OH IMPERIALISM?

V.Towards an alternative perspective: neo-imperialism and theresurgence of US hegemonyGlobalism as a perspective is deficient at a number of levels and with regards to

a number of critical issues. First, as we have seen it is clearly mistaken to viewglobalisation in terms of linear progress based on the introduction of revolutionarytechnologies and, in these terms to visualise a new form and phase of capitalistdevelopment. The process involved is cyclical rather than linear and,notwithstanding the caveats of globalists on this score, not particularly different ornew. More to the point, the globalist perspective misreads or ignores the majormacro-dynamics of the long-term capitalist development process. Whether viewedas a process or alternatively as a project, recent trends and developments can bebetter grasped in terms of an imperialist perspective.

In these terms, the resurgent international flow of capital, technology and tradein commodities and services that globalists make so much of is indicative of aprocess in which US and European capital has not only recovered from the crisisthat beset it, but has also provided the mechanisms of a renewed hegemony. Thetrend-defining facts related to this process are not in dispute. The issue is how bestto interpret them. In the 1990s, the dominant trend was for FDI and other forms ofcapital to relocate to areas of the world where the spoils are greater- the developingcountries of East Asia and, vis-cl-vis the US, Latin America.

The TNCs that dominate the process are far from stateless. On the contrary,their headquarters are located either in the US or in western Europe. Further, theseTNCs have not escaped the regulatory powers of the nation state. They aresupported and led by states that not only pave the way for their internationaloperations but that continue to regulate their operations, working closely togetherwith the TNCs to ensure their success in providing increased returns on investedcapital. In this connection, the network of international institutions is an adjunct tothe power exercised by the imperial state. The top officials of theWorld Bank andthe IMF are always appointees of the US for the former and Europe for the latter.Policies are always cleared with their home countries. In this context it is a seriousmistake to view the state as obsolete, a hollowed out shadow of its former self,drastically reduced in its role and capacity. Rather, the state has been restructuredin the interests of each country's TNCs and its neo-imperialist agenda.

VI.The political dynamics ofimperialism: retreat of the state orresurgence of the imperial state?One of the myths of globalisation, consumed by scholars across the ideological

spectrum, is that it has led to the retreat of the state and a displacement of its formerpower vis-cl-vis capital to an emerging set of supranational institutions at theservice of capital.52 As Tabb constructs it, the idea of a powerless state vis-d.-vis theglobalisation process is a powerful tool in the service of the status quo.53 In bothintellectual and ideological terms, it gives support to the argument that the officialsor occupants of the nation state have lost control over the instruments offundamental economic policy and that, perforce, they are unable to resist

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liberalising pressures to open the national economy to the requirements of theimperial centres. The political implications of this position are momentous,dictating as it does the form of national politics and policy-making.

In practical or political terms, the idea of a powerless state not only ignores thecontinued capacity of the state to regulate capital but it totally ignores the role ofthe state as a major agency for imperialist expansion and the imperial as well asclass character of the state at the centre of the system. The international circuits ofcapital and commodity flows are controlled byTNCs whose headquarters are basedin the US or Europe. Moreover globalisation theorists tend to ignore or play downthe political dynamics involved in opening markets, overthrowing recalcitrantnationalist regimes and invading countries. The historical fact is that the countriesin Africa, Asia and Latin America have had a long history of several centuries basedon imperial ties and relations of exploitation with markets, exchanges andinvestments dominated by one imperial power or another. Both the current andearlier forms of internationalisation in the flow of capital, technology, and trade ingoods and services must be understood, and analysed, in this context.

Of late there has emerged a line of analysis that is not structural in approach.Indeed it is anti- or post-structural.54 Through the optics of these studies themacro-dynamics of the capitalist system are not at issue. The issue is the subjectiveexperience and actions of diverse agents - diverse ways of socially constructing,seeing and being in the world - and interpreting its micro-dynamics. The contextfor this form of interpretation is constituted in the search for a community-basedand localised form of participatory development that is at once 'sociallyempowering' and 'transformative'. Advocates of this approach tend to either ignoreexternal structures and processes or minimise their workings and impacts.

A major lacunae in this and other forms of discourse on globalisation is in thearea of class - an inability to understand (or deliberate avoidance of) the classcharacter of the forces and institutions involved in what is taken as 'globalisation'.One reason for this is the exaggerated focus on impersonal economic institutions.Today, class-based structures and relations operate on a world scale and in such away that their 'objective effects' are clearly visible and recognised even by thedefenders of the current world order.55 What we find today are the actions of a state-centred system in which the state, and the US in particular, which in concert withthe states of western Europe, everywhere projects its political power in support ofUS capital and its project - the strategic take-over and recolonisation of the of worldeconomy and the nation states tied to it. This project was advanced in the 1990swith dramatic results. By the end of the decade the US emerged as a hegemonicforce, the only super-power in political and military terms, and with strategiccontrol of the major operating agencies of the imperialist system, the bearers ofcapital and technology and majority membership in the club of transnationalcorporations and financial institutions.

A survey published by the Financial Times of the world's largest companiesbased on their market capitalisation shows that among the 500 biggest, the USaccounts for 244, Japan 46, and Germany 23.56 Even if we aggregate all of Europe,the total number of dominant companies is 173, far fewer than those owned and



GLOBALISATION OB IMPEBIALISM?

controlled by the US. Thus it is clear that European, not Japanese, capitalismremains as the only competitor to the US for dominance in the world market. Theacceleration of US economic power and the decline of Japan in the 1990s ismanifest in the increasing number of US firms among the top 500, up from 222 to244 and the precipitous decline of Japanese firms from 71 to 46 over the decade.This tendency will be accentuated over the next few years because US-based TNCsare buying out large numbers of Japanese enterprises as well as Korean, Thai, andother firms.

Looking at the largest 25 firms, those whose capitalisation exceeds $86 billion,the concentration of US economic power is even greater: over 70% are American,26% are European and 4% are Japanese. As for the top 100 companies, 61% areAmerican, 33% are European and only 2% are Japanese. To the degree that the TNCscontrol the world economy, it is largely the US which has emerged as theoverwhelmingly dominant power. Insofar as the very largest companies are theleading forces in buying out smaller companies through mergers and the fusion ofcapital we can expect the US-based TNCs to play a major role in the process ofconcentration and centralisation of capital.

VII. ConclusionsAn important issue involved in academic debates focuses on how to view recent

trends and developments in the world economy. As an economic process, impelledby dynamics of a system, or as a political project, the intentional outcome of aconsciously pursued strategy.57 In this connection, it has been said, globalisation isnot a 'monolithic, unstoppable juggernaut, but a complex web of interrelatedprocesses', some of which, as Stalker notes, 'are subject to greater control thanothers'.58 In the same connection, international expansion of Euro-US capital is notas so many see it: a process without a subject and as such irresistible in its logic andinescapable in its effects. To the extent that the international flows of capital andcommodities involves a process it has both a conscious direction and a politicalagenda: to promote the worldwide interests of a new class of transnationalcapitalists anchored in the US and Europe. This can best be understood as a form ofempire building - imperialism.

The advocates of globalisation theory argue for the interdependence of nations,the shared nature of their economies, the mutuality of their interests, the sharedbenefits of their exchanges.59 Imperialism emphasises the domination andexploitation by imperial states and their multinational corporations and banks ofless developed states and labouring classes as well as international competitionand cooperation among the rival imperial states and enterprises. In today's world itis clear that the imperial countries are hardly dependent on most of theThird Worldcountries they trade with. They have diverse suppliers; the economic unitsoperating are owned and operated in large part by stockholders in the imperialcountries; and the profits, royalties and interest payments flow upward andoutward in an asymmetrical fashion. Within the international financial institutions(IFIs) and other world bodies, the imperial countries wield disproportionate ordecisive influence. On the other hand, the dominated countries are low wage areas,



Rob McBride

interest and profit exporters, virtual captives of the IFIs and highly dependent onlimited overseas markets. Hence the imperial concept fits the realities much betterthan the assumptions that underlie the notion of globalisation.

The concept of globalisation relies heavily on diffuse notions of technologicalchange accompanied by information flows and the abstract notion of'marketforces'. In contrast, the concept of imperialism sees the transnational corporationsand banks, and the imperial states, as the driving force behind the internationalflows of capital and tradable commodities. A survey of the major events, worldtrade treaties, and regional integration themes quickly dispels any technologicaldeterminant explanations: it is the heads of the imperial states that establish theframework for global exchanges. Within that political shell the major transactionand organisational forms of capital movements are found in the TNCs, supportedby the IFIs, whose personnel are appointed by the imperial states. Technologicalinnovations operate within the parameters that further this configuration of power.The concept of imperialism thus gives us a more precise idea of the social agenciesof worldwide movements of capital than the notion of globalisation.

According to most advocates of 'globalisation' theory we are entering a newepoch of interdependency in which stateless corporations transcend nationalfrontiers, spurred by the third technological revolution and facilitated by the newinformation systems. According to this view the nation state is an anachronism, themovements of capital are unstoppable and inevitable and the world market is thedeterminant of the macro-micro political economy.

The result, according to globalisation theorists is a progressive, dynamic,modernising world of prosperous nations. But the contrast between the premisesand promises of globalisation theorists and contemporary realities could not bestarker. Instead of interdependent nations we have dramatic contrasts betweencreditor and debtor nations; multi-billion dollar corporations appropriatingenterprises, interests royalties and trade surpluses while billions of workers andpeasants reap poverty and miserable existences. Structurally we find that over 80%of the major multinational corporations control their investment, research andtechnology decisions out of their home offices in the US, Germany and Japan.60

TNCs are based on worldwide operations but their control is centralised.Notwithstanding the resistance of the globalists, their basic premises, viz. the

claim of inevitability and the notion that it represents a novel development drivenby technological change, are suspect. And the same can be said in regards to thedenial of possible systemic alternatives to the dominant NewWorld Order. In thisand other regards we can point to a clear divergence between the grand claims andmeagre explanatory power of globalism as theory. In this context the concept ofimperialism can be seen as a more useful descriptive and explanatory tool forgrasping the dynamics of the process involved.

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1 Johnson Chalmers, Blowback: The Costs and Consequences of American Empire, New York,Metropolitan Books, 2000.

2 Peter Stalker, Workers Without Frontiers, Boulder, CO, Lynne Rienner, 2000.3 Keith Griffin and Azizur Rahman Khan, Globalisation and the Developing World, Geneva,

UNRISD; Roger Burbach and William Robinson, 'Globalisation as Epochal Shift', Science &Society, vol. 63, no. 1.1999.

4 Dharam Ghai.'Preface', in Stalker, Workers Without Frontiers.5 Silvia Ostry, Governmentand Corporations in a ShrinkingWorld: Trade and Innovation Policies in

the US, Europe and Japan, New York, Council on Foreign Relations, 1990.6 On this see, inter alia, Anthony Giddens, The Consequences of Modernity, Cambridge, Polity

Press, 1990; Griffin and Khan, Globalisation and the DevelopingWorld; various contributors toHans-Henrik Holm and Georg Sorensen, eds., Whose World Order? Uneven Globalisation and theEnd of the Cold War, Boulder, CO, Westview Press, 1995; and James Rosenau, Turbulence inWorldPolitics, Princeton, Princeton University Press, 1990.

7 Peter Dicken, GlobalShift: The Internationalization of Economic Activity, New York, GuilfordPress, 1992, p. 1; Stalker, WorkersWithout Frontiers, pp. 3-10.

8 Griffin and Khan, Globalisation and the DevelopingWorld, pp. 59-66.9 On these policy and institutional reforms, and the associated strategy of structural adj ustment,

what in the Latin American context is referred to as the New Economic Model, see, inter alia,Henry Veltmeyer and James Petras, The Dynamics of Social Change in Latin America, London,Macmillan, 2000; and Economic Liberalism and Class Conflict in Latin America, London,MacMillan, 1997. The widespread experiment in neoliberal reforms in the 1980s and 1990s werepioneered by the military regime of Agusto Pinochet who in the mid-1970s initiated whatMcKinnon, one of the World Bank's architects of the SAP, saw as 'the most sweeping reforms inhistory' (see Fernando Leiva and James Petras, Democracy and Poverty in Chile, Boulder, CO,Westview Press, 1994).

10 Martin Wolf, 'Not So New Economy', Financial Times, 1 August 1999, p. 10.11 Robert Gordon, 'Has the New Economy Rendered the Productivity Slowdown Obsolete',

http://faculty-web.at.nwu.edu/education/gordon/researchhome.htm, June 1999.12 Gordon, 'Has the New Economy Rendered the Productivity Slowdown Obsolete?'.13 Gordon, 'Has the New Economy Rendered the Productivity Slowdown Obsolete?'.14 Dale Jorgenson and Kevin Stiroh, 'Information Technology and Growth', American Economic

Review, May 1999.15 Robert Gordon, 'U.S. Economic Growth Since 1870: One Big Wave?', American Economic Review,

May 1999.16 Wolf, 'Not So New Economy".17 Gordon, 'U.S. Economic Growth since 1870: One Big Wave?'.18 Gordon, 'U.S. Economic Growth since 1870: One Big Wave?'.19 For alternative interpretations of these contextual conditions of the postwar development

process see, inter alia, Giovanni Arrighi, The Long 20th Century: Money, Power and the Origins ofOur Times, London, Verso, 1994; Stephen Marglin and Juliet Schor, The Golden Age of Capitalism:Reinterpreting the PostwarExperience, Oxford, Clarendon Press, 1990.

20 Victor Bu lmer -Thomas , The Economic Model in Latin America and its Impact on IncomeDistribution and Poverty, NewYork, St. Martin's Press, 1996.



21 Kevin Danaher and Muhammad Yunus, 50 Years is Enough, Boston, South End Press, 1994; PeterKenen, Managing the World Economy, Washington, DC, Institute for Internationa! Economics,1994.

22 Jorge Castafleda, Utopia Unarmed, NewYork, Vintage Books, 1993.23 Manfred Bienefeld, 'Assessing Current Development Trends: Reflections on Keith Griffin's

"Global Prospects for Development and Human Security"' and Keith Griffin, 'Global prospectsfor Development and Human Security', Canadian Journal of Development Studies, vol. XVI, no. 3,1995.

24 These critics range from scholars of international relations or economic development such asBello, Korten, Rosenau to participants in a series of anti-globalisation forums and networks - theSan Francisco-based International Forum on Globalisation; the Bangkok-based Focus on theGlobal South, the PCD Forum, the US-based 50 Years is Enough network for global economicjustice, the Third World Network, and The Centre for the Study of Globalisation andRegionalisation at the University of Warwick.

25 Stalker, Workers Without Frontiers.26 Peter Drucker, Post-Capitalist Society, NewYork, Harper Business, 1993.27 William Robinson, Promoting Polyarchy: Globalisation, US Intervention and Hegemony,

Cambridge, Cambridge University Press, 1996, pp. 363-380.28 The political dynamics of this process have been the central concern of a n u m b e r of studies

sponsored or published by, inter alia, the US Council for Foreign Relations (Ostry, Governmentand Corporations in a Shrinking World), its scholarly mouthpiece Foreign Affairs and theWashington-based Institute for International Economics (for example , Kenen, Managing theWorld Economy, Dani Rodrik, Has Globalisation Gone Too Far?, 1997).

29 Holm and Sorensen, eds. Whose World Order?30 Linda Weiss, TheMyth of the Powerless State: Governing the Economy in a Global Era, Cambridge,

Polity Press, 1998.31 Robert Boyer and Daniel Drache, eds., States Against Markets: The Limits of Globalisation,

London, Routledge, 1996.32 On this consensus see Jeffrey Williamson, ed., Latin American Adjustment. How Much Has

Happened? Washington, DC, Institute for International Economics, 1990.33 Stephen Shepard, 'The New Economy: What it Really Means?', BusinessWeek, 17 November, 1997,

pp. 38-40.34 World Bank, Global Economic Prospects and the Developing Countries, Washington , DC, 1992.35 United Nations Research Institute for Social Development (UNRISD), States of Disarray: The

Social Effects of Globalisation, Geneva, 1994; World Bank, Global Economic Prospects and theDeveloping Countries, Washington, DC, 1992.

36 Werner Sengenberger, Director of the ILO's Employment Strategy Depar tment and the ILO'sWorking Group on the Social Dimensions of Globalisation and Liberalisation of Trade (seeForeword to Stalker, Workers Without Frontiers, pp. xii).

37 Joanne Salop, 'Reducing Poverty: Spreading the Word', Finance & Development, vol. 29, no . 4,December, 1992.

38 David Korten, When Corporations Rule the World, West Hartford, Connecticut, Kumarian Press,1995.

39 Inter alia, Danaher andYunus, 50 Years is Enough.40 Marshall Wolfe, Elusive Development, London, Zed Press, 1996.

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4 1 UNRISD, States of Disarray.42 Arthur MacEwan, Neo-Liberalism or Democracy? Economic Strategy, Markets, and Alternatives

for the 21" Century, London, Zed Books, 1999; Harry Magdoff, Globalisation: To What End?, NewYork, Monthly Review Press, 1992; A. Sivanandan and Ellen Meiksins Wood, 'Globalisation andEpochal Shifts: An Exchange', Monthly Review, vol. 48, no. 9, 1997; Paul Sweezy, 'More (or Less) onGlobalisation', Monthly Review, vol. 49, no. 4, 1997; William Tabb, 'Contextualizing Globalisation:Comments on Du Boff and Herman', Monthly Review, vol. 49, no. 6, 1997.

4 3 Richard Du Boff and Edward Herman,'A Critique of Tabb on Globalisation', Monthly Review, vol.49, no. 6, 1997.

44 On the diverse approaches and theories related to the macro-dynamics and crisis tendencies ofcapitalism in the postwar period see, inter alia, SamirAmin, Re-Reading the Postwar Period, NewYork, Monthly Review Press, 1994; Robert Brenner, The Economics of Global Turbulence, London,Verso, 2000; David Laibman, Capitalist Macrodynamics, London, MacMillan, 1997; MichaelWelder and David Rigby, The Golden Age of illusion: Postwar Capitalism, New York, Guilford,1996.

4 5 In this regard see, in particular, World Bank, Workers in an Integrating World, Oxford UniversityPress, 1995.

4 6 A major statement of this ideology can be found in the World Bank's 1995 World DevelopmentReport. For a deconstruction of this ideology see Henry Veltmeyer, 'The World Bank's 1995Report: A Capitalist Manifesto on World Labour', Transition, issue 26, January 1997.

47 On the World Bank's strategy and its underlying ideology, particularly as relates to the world'sworkers, see Henry Veltmeyer, 'Challenging the World Bank's Agenda to Restructure Labour inLatin America', Labour, Capital and Society, vol. 30, no. 2, 1997, pp. 227-259.

4 8 On some of the dynamics of this process see James Petras and Henry Veltmeyer, 'Latin America atthe End of the Millennium', Monthly Review, vol. 51, no. 3, July-August 1999, pp. 31-52.

49 Petras and Veltmeyer, 'Latin America at the End of the Millennium'.50 James Petras and Henry Veltmeyer, Ascensão da Hegemonia dos Estados Unidos no Nova Milenio,

Sao Paulo,VOZES, 2000.51 Paul Doremus , William Kelley, Louis Pauly, Simon Reich, The Myth of the Global Corporation,

Princeton, Princeton University Press, Chapter 5.52 Robinson, Promoting Polyarchy; Stalker, Wbrkers Without Frontiers.5 3 Weiss, The Myth of the Powerless State.54 On the various permutations of this post-structuralist or post-modernist approach see, inter

alia, Arturo Escobar, Encountering Development: The Makingand the Unmaking of the ThirdWorld, Princeton, Princeton University Press, 1995; and Gustavo Esteva and Madju Suiri Prakash,Grassroots Post-Modernism: Beyond Human Rights, the Individual Self, the Global Economy, NewYork, Peter Lang, 1996. For a cr i t ique see Henry Veltmeyer, 'New Social Movemen t s in LatinAmerica: the Dynamics of Class a n d Identity', The Journal of Peasant Studies, vol. 25, no . 1,October 1997.

5 5 Stephen Shepard , 'TheNewEconomy: What it Really Means?', Business Week, November 17, 1997,p p . 38-40; World Bank, Global Economic Prospects and the Developing Countries, Washington ,DC, 1992.

56 Financial Times, 27 January l999.



57 On this point see, inter alia, t he various con t r ibu t ions to Preet Aulakh a n d Michael Schecter ,Rethinking Globalizations: From Corporate Transnationalism to Local Interventions. New York,St. Martin's Press, 2000.

5 8 Stalker, Workers Without Frontiers, p. 10.59 Robert Keohane a n d Joseph Nye, 'Globalization: What 's New? What 's Not? (And So What?)',

Foreign Policy, no. 118, Spring 2000.60 Doremus et al, The Myth of the Global Corporation, Chapter 5.

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globalisation or imperialism?

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