confronting-globalization.pdf

Confronting Globalization*

Alain de Benoist

Everyone is talking about globalization — a phenomenon all the

more significant because it is generally considered inevitable and beyond

anyone’s control. What does it mean? Although there are many works on

this subject, 2 the concept remains unclear. For some, globalization is a

development beyond the nation-state. For others, it defines a new type of

opposition between capital and labor brought about by the rise of finance

capital, or a new separation between skilled and unskilled labor. Some see

it as the expansion of world-trade with the inclusion of new players from

the South (accompanied by the globalization strategy of multinational

corporations), while others emphasize the broadening of exchange caused

by the information revolution. What is it really?

First of all, cultural globalization must be distinguished from eco-

nomic globalization. These two phenomena overlap, but are not the same.

One of the most obvious features of economic globalization is the explo-

sion of financial exchange. Today, international business is growing more

rapidly than the various GNPs. In 1990 international exchange was

1. “Face a la Mondialisation,” translated by John Lambeth and Deborah Shair

2. See Robert Reich, L’Économie Mondalisée (Paris: Dunod, 1993); Francois

Chesnais, La Mondialisation du Capital (Paris: Syros, 1994); Jacques Adda, La Mondali-

sation de l’Économie , 2 Vol. (Paris: Decouverte, 1996); Samir Amin, Les Défis de la Mon-

dialisation (Paris: L’Harmattan, 1996); Anton Brender, L’Impératif de Solidarité . La

France Face à la Mondialisation (Paris: Decouverte, 1996); Jean-Yves Carfantan,

L’Épreuve de la Mondialisation. Pour une Ambition Européene (Paris: Seuil, 1996;

François Chesnais, ed., La Mondialisation Financière. Genèse, Coût et Enjeux (Paris:

Syros, 1996); Elie Cohen, La Tentation Hexagonale. La Souverainaité à l’Épreuve de la

Mondalisation (Paris: Fayard, 1996); Philippe Engelhard, L’Homme Mondial. Les

Sociétés Humaines Peuvent-elles Survivre? (Paris: Arlea, 1996).

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ALAIN DE BENOIST

already 15% of world business. In only five years, from 1985 to 1990,

exports increased by 13.9%. Between 1960 and 1989, the exchange of

manufactured products doubled while the flow of capital increased four-

fold. During that time the nature of financial flow changed: the continu-

ous development of direct foreign investment was accompanied by the

ready availability of short term capital. These direct investments are also

increasing more rapidly than world wealth. The annual rate of growth has

gone from 15% between 1970 and 1985 to 28% from 1985 to 1990, dur-

ing which time direct investments quadrupled in volume, going from $43

billion in 1985 to $167 billion in 1990. A global economy has emerged

with an increasing share of GNP directly dependent on foreign exchange

and international capital flow.

The other important factor is obviously the growing role of computers

and electronics. By reducing the costs of long distance transactions and

permitting communication in “real time” anywhere in the world, thus pro-

viding instantaneously information crucial to price structuring — infor-

mation that used to take weeks to reach a few financial centers — the new

communication technologies have made possible an unprecedented finan-

cial flow. The sun no longer sets on interconnected stock markets. Cur-

rency moves from one end of the globe to the other, searching for the best

returns at the speed of light. This globalization, however, is exclusively

financial: the currency market is the only one where instantaneous arbi-

trage makes sense.

Thanks to this increased mobility, made possible by computers, trans-

actions on currency markets have experienced a fantastic growth. They

now exceed a trillion dollars per day. These funds come from commercial

bank holdings, multinational corporations, floating currency reserves held

by central banks especially created for this type of transaction. The foun-

dation of the system is the exchange of currency which, from day to day,

or even hour to hour, may result in considerable gains, far higher than

those derived from traditional industrial or commercial activity. In antici-

pation of moving exchange rates, computerization allows for the immedi-

ate virtual displacement of enormous amounts of currency, almost

completely independent of the central banks. This is why this new phe-

nomenon is called the “casino-economy.”

Some commentators locate the origins of globalization in the early

1970s, at the time of the double shock of skyrocketing petroleum prices

and the crisis of the international monetary system. At that time, the slow-

ing of productivity and growth-rate, the progressive saturation of demand

CONFRONTING GLOBALIZATION119

for durable consumer goods, the increasing burden of foreign financial

constraints, along with the abandonment of fixed exchange rates and the

explosion of the American trade deficit, led to a rise in purely speculative

financial products. This process continued into the 1980s, with the grow-

ing public debt favoring the development of a vast currency market —

especially with the wave of deregulation that, beginning with the Reagan

Administration, rapidly spread to all developed nations. At that time,

states began to retreat in the face of financial integration by adopting the

“three Ds” — decompartmentalization, dumping the middleman, and

deregulation. By liberalizing the capital market, this strategy allowed

arbitrage at a global level and opened consumer markets and large corpo-

rations to foreign dealers. Then, at the beginning of the 1990s, the sudden

collapse of the Soviet Union and the brutal switch in the former commu-

nist countries to unbridled capitalism translated into the entry of 2.5 bil-

lion additional people in the world market, while at the same time

spreading the illusion of a unified planet within a single bloc.

The Monopolization of Capital

This series of events must be placed within a broader chronology. Far

from being an aberration or a radical innovation, or even the result of some

plot, globalization is simply part of a long term dynamic of capitalism. As

Karl Marx already observed during the last century, “the tendency to create

a world market is part of the very concept of capital,” 3 For Philippe Engle-

hard, “globalization is undoubtedly only the grand finale of the explosion

of Western modernity.” 4 It justifies a whole series of metamorphoses

throughout the long history of the mercantile economy — an economy

based from the very beginning on open exchange within a climate of indi-

vidualism and universalism, predicated on a metaphysics of subjectivity

and material success. It began with the development of long term business

at the time of the Italian city states in the 14th century, continued with the

“great discoveries” and the industrial revolution, then with colonialism.

Between 1860 and 1873, England had already succeeded in creating the

beginning of a global commercial system. In July 1885, Jules Ferry

declared to the Chamber of Deputies that “founding a colony means creat-

ing a market.” By contributing to the disintegration of traditional cultures

and societies in Africa and Asia, colonialism allowed the penetration of

3. Philippe P. Engelhard, Principes d’une Critique de l’Économie Politique (Paris:

Arléa, 1993).

Ibid ., p. 543.

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ALAIN DE BENOIST

Western products and opened new trade centers, a practice that would not

be abandoned until it had lost its profitability, i.e., when the colonies began

to cost more than they were bringing in. 5

The market as an institution is itself inextricably bound with the inter-

nationalization of exchange. In classic 18th century economic theory, the

free circulation of goods and services is already supposed to lead to the

equalization of systems of production and living standards. As such, capi-

talism appears as a nomad from the very beginning. Thus, as Adda notes,

globalization “merely brings capitalism back to its original vocation, more

transnational than international, which is to play with borders as with

states, with traditions as with nations, in order to better subsume all things

under the single law of value.” 6 Yet globalization also exhibits a number of

new features. In addition to the fact that, in international exchange, it is

now manufactured products that take precedence over raw materials, the

financial sphere has acquired an extraordinary degree of autonomy in rela-

tion to real economic production. The great market deregulation of the

1980s effectively heralded the arrival of a capitalism no longer primarily

industrial but speculative. The monetary mass circulating in the world

today is estimated to be more than 15 times the value of production. This

financial “bubble” aggregates funds from the private as well as the public

sectors, be it the management of public debt by individual nations or retire-

ment pension funds. It naturally encourages speculative and illegal logics:

drugs and corruption become integral parts of the new economic order.

Another novelty is the universalization of the market. Transactions

now involve previously independent sectors. Culture, services, natural

resources, intellectual property are now part of the free trade mechanism.

All things are now being transformed into currency. What enters the sys-

tem as a living thing comes out as a commodity, a dead product. Further-

more, the players are no longer the same. Yesterday, these players were

primarily nations. Today, they are multinational corporations that domi-

nate investment and trade, while financial markets dictate the rules and

the banks control a financial sector increasingly disconnected from the

real economy. A world organized around nation-states is giving way to a

“world-economy” structured by global players. This is a fundamental

5. “The rest of the events,” said Marcel Mauss in 1920, “goes in the sense of a

growing multiplication of loans, exchanges, identifications all the way to the detail of

moral and material life.” See his “La Nation,” in Oeuvres , Vol. 3: “Cohésion Social et

Divisions de la Sociologie,” (Paris: Minuit, 1969), p. 625.

Adda, op . cit. , Vol. 1.

CONFRONTING GLOBALIZATION121

transformation. Some decades ago, nation-states were still the natural

political and social frameworks for managing the national systems of pro-

duction. Capitalist competition played itself out basically among nations.

The dominant trait of the capitalist system was thus territorialization, i.e.,

its attachment to a particular industrialized nation. Although expanding,

the market was primarily national. Even for companies with foreign sub-

sidiaries, it was crucial to have a mother-company located in a powerful

nation. Economics and politics basically coincided, making national eco-

nomic policy decisions all the more important. Finally, the Third World

had not yet become part of the industrial system and there was a stark

contrast between industrial centers and peripheries.

Today, the global integration of capital has broken down national pro-

duction systems and has restructured them as so many segments of a global

production system. The various components of production are now scat-

tered far from the corporation’s geographic location and sometimes even

independent of its financial control. Products incorporate technological

components of such varied origins that one can recognize neither the spe-

cific contribution of each nation nor the nationality of the labor force pro-

ducing the merchandise. Robert Reich notes that when an American buys a

car from General Motors for $20,000, less than $800 returns to American

producers. Globalization is creating a reorganization characterized prima-

rily by a generalized deterritorialization of capital. “Space of places” is

being displaced by a “space of flux.” In other words, territory is being

replaced by network , 7 which no longer corresponds to a particular territory

but is inscribed within the world market, independent of any national polit-

ical constraints. For the first time in history, economic and political space

are no longer bound together. This is the deeper meaning of globalization.

The appearance of industrial firms able to plot their development on a

global scale and to implement integrated world strategies is one of the most

characteristic traits of globalization. Multinational companies are those that

do more than half of their business abroad. In 1970, there were 7,000 of them.

Today there are 40,000 and they control 206,000 subsidiaries while employ-

ing only 3% of the world’s population (about 73 million people). The budget

of these corporations in 1991 was greater than all of the world’s exports of

goods and services ($4.8 trillion); they control either directly or indirectly a

good third of the world’s revenue and the top 200 of these companies monop-

olize a quarter of the world’s economic activity. Nearly 33% of world trade

now takes place among the subsidiaries of the same corporations, not between

Bertrand Badie, La Fin des Territories (Paris: Fayard, 1996).

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