CHAPTER V

 

GLOBALIZATION:

CHALLENGES AND OPPORTUNITIES

 

G.B. MADISON

 

                                                We live non -- for the first time in hu­man history -- in a new era when our planet is enveloped by a single civiliza­tion.

                                                                                                Václav Havel

 

 

INTRODUCTION

 

            One doesn't have to be a Marxist to realize that economic factors play a crucial role in the development of human civilization. The very term "civilization" has a dual ma­te­rial/spiritual significance, and in the advance of civilization the material and the spiri­tual are always conjoined. The history of humanity is the history of its progressive liberation from material deprivation, i.e., of economic development, as well as the history of the growth of freedom in the realm of the spirit (see Madison 1996). We now have a name for the dynamics at work in our present stage in the development of civiliza­tion, namely, globalization. In this paper I will highlight the multi-faceted phe­nomenon of globalization in an attempt to discern some of the challenges it poses as well as some opportunities it offers.

            I hasten to add that I speak neither as an advocate nor as a critic of globalization; I neither applaud it, nor do I condemn it. What purpose would either of these stances serve? Like it or not, globalization is a fact (a fact-in-the-making); it is irrelevant whether one "approves" or "disapproves" of it. As a phenomenologist, I seek only to discern the sig­nificance of what historically is; like Hegel, I believe that the task of philosophy is not that of "issuing instructions on how the world ought to be"; it is simply that of des­cribing what actually or effectively is -- and what, given the logic or dynamics of the processes at work, is likely to be (see Hegel 1991, p. 21, and Madison 1994).1 Globaliza­tion has become the overarching fact with which all the various countries (and cultures) of the world must contend; it is a challenge which none of them can avoid. Like all pro­found transmutations in history (such as the earlier, and still on-going, phenome­non of modernization), globalization is something that is not a matter of human choosing. We cannot choose the historical situations with which we must contend, but we can do our best to make the best of the opportunities they present to us. Why indeed can we not hope that the emerging global civilization will turn out to be one imbued, in the words of Václav Havel, with "a new spirituality, a new ethos, and a new ethics, values that should be adopted today by all cultures, all nations, as a condition of their very survival"? (Havel 1998, p. 24)

 

THE PHENOMENON OF GLOBALIZATION

 

            The phenomenon of globalization is itself global, that is to say, all-encompassing. It is, of course, in the first instance a material or economic phenomenon, but, like all significant civilizational developments, it also has profound cultural or spiritual significance. (Nothing in human affairs is ever "merely" economic.) I would like to reflect on some of the cultural and political consequences of globalization, but before doing so let me focus on some of its more strictly economic aspects.

            Many of the basic features of the new economic reality being brought about by globalization are now a matter of common knowledge or awareness, and, accordingly, I shall not dwell on them. What globalization above all signals is a fundamental transfor­mation in the primary arena of human economic activity, i.e., the "marketplace." Whereas in former times it made sense for economists to take the "national economy" (Nationalökonomie) as their chief point of reference, this is no longer the case. Markets (the chief object of economic science in those countries deemed to be "capitalist") are rapidly being "denationalized," as it were. National markets are increasingly mere subsets of a worldwide international or, perhaps better said, transnational marketplace. And this marketplace, though it is multifaceted and varied, is truly global, encompassing as it does markets not only for an unlimited range of goods and services, but also for capital and finance, and to a lesser degree labor. For instance, capital is no longer restricted to financing projects in domestic markets with poor returns, but can be shifted instantaneously to any country that offers more productive investment opportunities (much to the chagrin of illiberal gov­ernments). Financial and currency markets have also become global, with over a trillion dollars moving about the world every day with the speed of electricity (far outstripping the value of trade in goods and services -- and subjecting national fiscal and monetary policies to the merciless verdict of the market). Even the manufactured goods that are traded in the global marketplace often no longer "originate" in any particular country but are the composite products of "an ela­bo­rate international web of suppliers and assemblers."2

            All these developments are the consequences of developments in the material infrastructure of human existence. I am referring in par­ticular to the new electronic technology of information and telecommunications. By greatly increasing the power, scope, and ease of communication while at the same time dramati­cally lowering its costs, technology has pretty much abolished the natural barriers that hitherto separated national markets.3 Communication is now global, and the conse­quences are not only economic, but social and political as well.

            From a social point of view, the demands of the global economy are bringing about profound changes in the work habits and lifestyles of people in their own native countries. In order to meet the challenge of global competition, national economies are obliged, if they are not to fall behind, to "retool" themselves, which often entails wide­spread social transformation and dislocation. This is naturally disruptive of established social practices, and is thus often viewed negatively by both citizens and gov­ernments. People do have a deep-seated craving for stability, a human susceptibility to which socialists know well how to play. Unlike the static world of blissful con­tentment projected by socialist utopianism, the world of actual "capitalism" is one of ever-increasing wealth. It never achieves, or even aims at, a state of equilibrium (contrary to what mainstream neoclassical economists would have us be­lieve); but is rather a world of ever-reoccurring disruption and dislocation.4 As Joseph Schumpeter famously remarked, the capitalist "order" is one of perpetual "creative de­struction" (see Schumpeter 1994).

            On the political side, globalization poses a serious challenge to the old idea of "national sovereignty."5 By reason of its own internal logic, the new global economic or­der both requires and calls forth the ever-increasing liberalization of trade and investment. In turn, multilateral trade agreements such as those institutionalized in the new WTO neces­sarily restrict the ability of national governments to act unilaterally in their own parochial interests when trade disputes arise. As a result they have a decidedly "negative" impact on any individual nation's "sovereignty" (a development greatly bemoaned by na­tionalists and socialists alike).6 My own view is that the "withering away" of national sovereignty is a positive development which has the possibility of promoting democracy on a global scale, a point to which I shall return. For the moment, I would like to concen­trate on one highly noteworthy economic -- or, to be more precise, political-economic -- consequence of globalization.

 

THE NEW GLOBAL ECONOMIC ORDER

 

            We often hear it said that the recent economic crisis in Southeast and East Asia, precipitated by the collapse of the Thai baht in July of 1997, demonstrates the "downside" of globalization. When national economies are increasingly interlinked and when capital is free to move about, a crisis in one country can rapidly spillover into other countries, creating a kind of global domino effect of an extremely disruptive sort. There can be no denying that this is exactly what happened. But what exactly does the Asian crisis de­m­onstrate: That globalization is inherently destabilizing and something to be resisted; that nations should adhere instead to what Indian nationalists call swadeshi, self-reli­ance? I don't think so. I suggest that what the Asian crisis really demonstrates is not a failure of global capitalism but rather, a failure of capitalism hitherto to be truly global. What I mean is that the Asian crisis can be viewed as stemming from the fact that the economies in question were not sufficiently "capitalist," i.e., free-market ori­ented, in the first place. Thus, as happened in the aftermath of the Mexican crisis of 1994-95, which had spillover effects throughout Latin America ("the tequila effect"), there is every rea­son to hope that the current Asian crisis may actually turn out to have long-term benefi­cial results, the disrup­tions and hardships it has produced in the short term notwithstand­ing. This is to say that analysis of its underlying causes can serve the very useful purpose of improving the workings of the global economic order that is coming into being. In other words, it can serve to make this order more free market oriented and, thus, more efficient -- which is also to say, more conducive to the promotion of the general welfare of everyone, everywhere. In any event, it would, in my estimation, amount to a gross error in judgment to view the crisis as being somehow the nefarious result of Western "economic imperi­alism." If blame is to be assigned anywhere, it should be placed squarely on the shoulders of the primary political and economic actors of the countries in question; it should be attributed to the structural defects of the economic systems for which they themselves were responsible.7

            The existence of a global economy -- specifically, of a free market in currency trading -- may have been the proximate cause of the Asian crisis; it was most definitely not, however, its underlying raison d'être. It was, for instance, pure self-serving dema­goguery designed for a domestic audience when Malaysia's prime minister, Mahathir Mohamad, blamed the precipitous drop in value of his country's currency on international Jewish speculators and stated at the 1997 annual meeting of the IMF and the World Bank in Hong Kong that unrestricted currency trading was "unnecessary, unproductive and im­moral."8 By divesting themselves of the Malaysian ringgit and other re­gional currencies, managers of hedge funds and speculators, like George Soros, were not, behaving like "highway men of the global econ­omy" but were actually per­forming a valuable service to the countries in question. They were sending a much needed wake-up call that the funda­mentals of those economies were not in good shape and that their curren­cies were not worth what they would have liked them to be worth.9 One thing that can be attributed to the phenomenon of globalization is a change in understanding of what constitutes the nature and "value" of money.10 As Georg Simmel pointed out at the beginning of this century, money is not something "objective" or "material"; it is in fact a purely geistig entity whose "value" is constituted solely by the (subjective) evaluations of acting human be­ings (see Simmel 1990). In general, the "essence" (value) of money is totally relative and expresses nothing other than the trust and confidence that people feel warranted in plac­ing in the workings of a national economy. When this confidence is, for whatever reason, called into question, it is inevitable (given the existence of free markets) that a country's currency will drop in value.11 It is precisely this confidence-measuring function that free markets are designed to serve. Don't blame the market if the message it sends you is that you're doing something wrong, though unfortunately, the inclina­tion to kill the mes­senger bearing bad news seems to be an ineradicable feature of human nature. Mr. Mahathir currency trading, whatever its defects may be, most defi­nitely does have economic value.12

            What the Asian crisis has made us realize is that the much-touted Asian "economic miracle" was, to a not altogether insignificant extent, a matter of smoke-and-mirrors with the possible exception of Taiwan.13 In 1995 a Japanese institute raised the question, "How long will Asia's economic miracle last?" (Fukukawa 1995, p. 2). Well, as we now know (and Japan could have known several years ago) not very long. Like Hong Kong's wildly overpriced real estate market (a result of official policy14), the East Asian economic bub­ble was destined to burst at some point or other. That point was reached in July 1997. This is when the real message of economic globalization began to hit home.

            What exactly was wrong with the East Asian economies that the challenges of globalization have now exposed? Certainly, there was no lack of competitive spirit, a solid work ethic, and entrepreneurial talent. In some countries, the failure can be attri­b­uted in part to the lack of energetic government support for universal public education (the crea­tion, as Peter Drucker would say, of "knowledge workers" [see, for instance, Drucker 1993a]). On the whole this was certainly not a major factor.15 A failure to provide for general public education would signal as in the case of India a systemic defect of the economy in question; it would not be such as to promote an immediate crisis. If, as it so happened, a serious crisis occurred in short order, it was because investors real­ized that the fundamentals of the economies in question were untrustworthy, even in the short term. A list of the foundational defects in these economies might include the fol­lowing (this is a general list, the items cited applying much more to some countries than to others):16 poor regulation of the economy and a woeful lack of transparency in gov­ernment bookkeeping; a corporate culture that valued neither financial transparency nor stockholder accountability; insider trading; low productivity and an inefficient use of capital and labor; industries run less for the sake of turning a profit than for enhancing the power of their directors; an over-reliance on export in relation to domestic consumer spending; over-guaranteed and under-regulated banks; soft bank lending practices and a dysfunctional relation to capital, even outright fraud on the part of major banks and finan­cial institutions; opaque systems of cross-ownership; an incestuous relation between gov­ernments, banks, and highly indebted companies (as in the case of South Korean chaebols such as Samsung and Hyundai); nepotism, cronyism, influence-peddling, and general cor­ruption; a reluctance on the part of governments to let large floundering companies go bankrupt; a failure, even, to have properly designed bank­ruptcy laws; labor market rigid­ity; a lack of democratic openness and an over-reliance on technocratic elites; and a lack of social safety nets.

            This very schematic list indicates that the structural problems of the Asian economies that have now become apparent were both economic and political in nature. That is to say, they were a matter of political economy, having to do with defects in the way the "capitalist" system was politically-economically institu­tionalized in these countries. "Capitalism," i.e., free-market economics, is, after all, a more or less recent arrival in this part of the world, and thus it is not surprising that it should require some time for the logic of this way of organizing human affairs to work itself out and for it to take root in new cultural settings. Advocates of "Asian values" notwithstanding, there is no justification for believing that authoritarian governance is superior to capitalist or "bourgeois" democracy -- the institutionalized re­spect for indi­vidual rights and freedoms -- in promoting economic development. More fundamentally, there is no justification for thinking that there is, or could ever be, some­thing like an "Asian" capitalism differing in essential ways from "Western" capitalism. To the degree that there was such a thing as "Asian capitalism," the term was simply a euphemism for corrupt capitalism. Indonesia, for instance, was not so much a free-mar­ket, capitalist tiger on the rise, as in the words of one writer, "a vast patronage racket that finally fell apart."17

            As in the case of other human disciplines, economics is a science, and one of the chief functions of this science, hermeneutically speaking is ideal-type analysis, i.e., delineating the essential features of this or that possible type of economic organization of human affairs.18 The ideal-type capitalism or market economics, for in­stance, possesses certain eidetic or essential features, ones which in one cultural form or another are to be found everywhere that this type of economy can be said properly to ex­ist. The laws of economics, e.g., "supply and demand," do not vary in any essential way from one culture to an­other; they are universal, i.e., transcultural. It was a failure to real­ize this -- an attempt, in the words of Les­ter Thurow, "to defy economic gravity" -- that was the underlying cause of the Asian cri­sis; this was the lesson delivered to these nations with stunning swiftness by the global economy.19 In dramatic contrast to what was commonly proclaimed a de­cade or so ago, we now know that "Japanese capitalism" was never a logical alternative to the somewhat more orthodox versions of capitalism as practiced in the West, America in particular, and did not pose a threat to them.20 From the point of view of basic eco­nomic theory, what the Asian crisis has demonstrated is that Asia's "managed capitalism" did not constitute a third category of political economy -- that of "capitalist developmen­tal states" (CDSs).21 It is not a kind of third way in relation to the socialist command economy, on the one hand, and the free-market, entrepreneurial economy, on the other. The success for a time of the "Japanese model," we are now in a position to see, did not amount to a refu­tation of the Hayekean argument against economic planning in general, i.e., against the very possibility of any such attempt ever being suc­cessful. After decades during which it was thought that the economy could be "steered" -- by means either of central planning or some form or other of the "Keynesian" macro-man­agement -- socialist and "mixed" econo­mies have both run up against what the Austrian-school economists calls the Knowledge Problem: No gov­ernment is capable of mustering the knowledge that it would need to possess in an explicit form in order effec­tively to coordinate the economy. Only the spontaneous or­dering, free-pricing function of the market is capable of achieving this (altogether re­markable) result.22

            I want to emphasize that these remarks are in no way intended to hold up for every particular instanciation of the market economy, a model such as the American or British. It is the same in economics as it is in politics: there are cer­tain essential features that market economies necessarily all have in common, just as there are certain essential features that all political regimes must possess if they are properly said to be democratic ones. But it is equally the case that differing national histories, cultural traditions, and societal values will influence the way universal economic laws and democratic values are applied or institutionalized in any particular country, at any particular time.

            Thus, for instance, while one essential requirement of democracy is the existence of free, regularly scheduled elections, there are any number of ways in which electoral laws providing for such elections may be drafted. A country may opt for the "Westminster," district-based, first-past-the-post model, for proportional representation or for any convoluted combination of the two.23 In terms of ideal types, however, there is no more such a thing as "Asian capitalism" than there is such a thing as "African demo­cracy."24 "Capitalism" -- to the degree that it exists -- is essentially the same the world over, just as is democracy. Cultural factors will -- and, indeed, should -- influence the way universal laws, principles, or values are applied in this or that instance and will inevitably produce different mixtures of policies and structures in different countries. There is no universal formula for the implementation of universal values. However, this cannot alter the fact that certain normative principles have genuine universal validity. In this regard, the liberal-democratic revolution in world politics ("democratization"), and world economics ("liberalization") that the phenomenon of globalization signifies necessarily entails a certain degree of what some social commentators somewhat misleadingly refer to as cultural "homogenization." It is, accordingly, to a consideration of some of the cultural consequences of globalization that I now turn.25

 

GLOBALIZATION AND CULTURE

 

            As I mentioned at the outset, there is always a dual material/spiritual aspect to develop­ments in human civilization. This is today no more evident than in the realm of culture. Thanks, precisely, to material developments in the technology of communication as well as transportation, whose effect has been to bring ever-increasing numbers of people form all quarters of the globe into direct face-to-face contact,26 we are currently wit­nessing the emergence of a global mass culture -- indeed, as Havel would say, a single worldwide civilization. This fact may be bemoaned by cultural elites in the West as well as by cul­tural autarkists in some of the more backward parts of the world, but it is a fact of world history nonetheless, and thus merits hermeneutic scrutiny.

            At roughly the same time in the last century when Marx issued his backhanded paean to capitalist dynamism, praising capitalism for having abolished national barriers and created something altogether new, namely, an early form of the global economy,27 John Stuart Mill, that great spokesperson for liberal individualism and human individu­ality,28 publicly bemoaned what he took to be the trend of the times: "[T]he general ten­dency of things throughout the world is to render mediocrity the ascendant power among man­kind. . . . Europe . . . is decidedly advancing toward the Chinese ideal of making all peo­ple alike."29 A present-day Mill who watched TV would no doubt have even more reason for saying much the same. Increasing "homogenization" is a worldwide cultural fact -- and a direct consequence of globalization. Is "homogenization" such a bad thing, though? The fact of the matter is that the "homogenization" which is coming about is anything but Chinese. Even in China, traditionally the land of oppressive social con­formity, as Mill well recognized, the cultural ideal of "group-think" (or "groupism," as the Chinese have now appropriately labeled it), is in full retreat.30 The sti­fling, ant-hill-like, socialist uni­formity of the Mao era is out, and, in terms of dress, fash­ion, social mo­res, and intellec­tual practices, the Chinese are fast becoming, as are other Asian peoples, indistinguishable from Westerners. All of this came about thanks to the capitalist re­forms initiated by Deng in 1978 and his altogether revolutionary policy. It was revolutionary in terms of China's long history of self-imposed isolation and of "opening up" the country to the outside world and to the global economy. In China, Western-style in­dividualism is on a spectacular rise. A fact which, incidentally, bodes well for the pros­pects for full-fledged democracy in that country.31 The situation is much the same in Ja­pan: The age-old cultural value of social conformism, i.e., nakama-ishiki or group-conscious­ness, is no longer held in high es­teem by increasing numbers of globally-influenced, independently-minded people. The Japanese, who prided themselves on their "difference" from other peoples, are beginning to speak up for their rights and are becoming a bit less "different." Universalism, by which I mean the belief in the universal validity of the no­tion of human rights, is in today's world the single most important factor serving to pro­mote "individualism," i.e., the rights and lib­erties of individual human beings.32

            While individualism is on the rise in China and other non-Western countries, the culturalists are of course right in pointing out that cultural differences overall are de­clin­ing at a rapid rate. While individuality may be on the rise in, say, China, many of the "cultural" features which have hitherto served to account for its "difference" from other countries are fast eroding. Some refer to this as the "McDonaldization" or "Coca-Colaza­tion" of the world and view it as one of the supposedly pernicious effects of global capi­talism (an issue to which I shall return). Frankly, I do not consider it such a bad thing if many of the "cultural" factors which have hitherto served in an impressive fashion to constitute the "difference" between non-Western and Western countries were to disappear altogether, even if this disappearance were to result in greater cultural "homogenization."33 Can anyone seriously maintain, for instance, that primitive cultural practices, often defended by religious fundamentalists, that amount to blatant violations of human rights are aspects of cultural "difference" that ought to be cherished and pre­served?

            Globalization may have as its effect a certain leveling of cultural differences and, owing to the consumerism it promotes, may make for increasing similarity in lifestyles around the world, but it is difficult to see how this consequence of globalization may not actually have decidedly beneficial effects. If it is anything, globalization is a potent counterforce (the only really effective one?) to the destructive forces unleashed by the end of the Cold War. I am referring to the new tribalism, the ethno-nationalism triggered by the demise of Socialism and the end of the balance of terror between hostile super­powers which served to keep conflicts between their client states more or less in check. If there is anything that threatens to turn the emerging new world order into a world dis­or­der (see Hoffmann 1992) and to turn the world itself into the arena for a global "clash of civilizations,"34 a veritable cultural war of all against all, it is the culturalist obsession with "difference" on the part of both national elites and the spiritu­ally down-trodden, materially-deprived masses in their countries. When people are bereft of economic freedom, i.e., the opportu­nity, as Adam Smith would say, "to better their condition," it is natural that they should focus their attention (or, as in the case of the former Yugoslavia, be made to focus their attention) on petty ways of aggrandizing their self-esteem, which, as in the case of India's aggressive militarism, work di­rectly against their own material self-interest. It is natural that they should fall prey to what, borrowing an expression from Freud, that outstanding critic of ethnic nationalism, Mi­chael Ignatieff, calls the "narcissism of minor differences" (see Ignatieff 1998).

            The logical consequence of ethno-centric nationalism is ethnic rivalry, internecine warfare, and, ultimately, genocide. Global "homogenization" or, perhaps better said, global cosmopolitanism tends to promote an altogether more desirable state of affairs. Eco­nomic globalization is, in the 18th century Enlightenment sense of the term, civili­z­ing. One totally unanticipated consequence of, for instance, the "McDonaldization" of the world is a certain increase in civility in some of the countries McDonald's has success­fully colonized and in which it has become a genuinely local cultural institution. McDonald's has helped to raise overall standards of cleanliness in public rest rooms in a place such as Hong Kong, and disabused people of their environmen­tally-unfriendly habit of spitting and throwing garbage on the floor and the street.35 It has also improved peo­ple's table manners and promoted courtesy and improved public man­ners in general by encouraging people to speak in lower tones in public places and ac­customing unruly crowds to politely wait their turn in line.36 This is, admittedly, an example of rather limited scope and pertinence, but it does suggest that the spread of multinational corporations throughout the world can have -- and in fact does have -- some civilizing effects. Writing during an earlier wave of globaliza­tion, that great advocate of liberal internationalism, Montesquieu, was undoubtedly right when he said, "Le commerce adoucit les moeurs" (Montesquieu 1989, xx, 2).

            Globalization poses immense challenges, but one thing it does not challenge us with is the need to choose between "Jihad" and "McWorld," to allude to a recent book by Rutgers political scientist Benjamin R. Barber. The choice we are confronted with is not between intercivilizational warfare, on the one hand, and American cultural imperialism, on the other, i.e., an insipid and spirit-deadening uniformity, a kind of global dumbing in the realm of culture.37 The supposed "Americanization" of world culture is, moreover, more a matter of a decline in particularity in general and a globalization of culture overall: particularity is increasingly out, and eclecticism is increasingly in. The real chal­lenge of globalization is that of exploiting the undeniable opportunities it offers for in­creasing the general level of civility throughout the world. Civility -- as defended by such out­standing individuals as Václav Havel -- is the necessary condition for "spiritual civili­za­tion," as the Chinese call it, as well as being, along with democracy, a necessary condi­tion for genuine world peace. Global competition produces global cooperation. It is just possible that the new wave of globalization might be such as to enable us finally to re­al­ize Kant's cosmopolitan dream of "perpetual peace" (see Kant 1963). Moreover, globali­zation may actually serve to enhance the pros­pects for democracy in the world, an issue that I would now like to take up.

           

GLOBALIZATION AND DEMOCRACY

 

            To the degree that it comes about, globalization must necessarily result in a more cosmo­politan world situation. Perhaps the most salient consequence of this from a politi­cal point of view -- a consequence of what the Japanese call kokousaika, "internationalization" -- is, as I have already noted, a significant erosion of national sov­ereignty. Indeed, the very idea of the nation-state is fast becoming outmoded. The idea of the nation-state was perhaps the most significant conceptual and practical innova­tion of modernity, but, in the new postmodern global age, it is becoming increasingly ir­rele­vant.38 This is not, by any stretch of the imagination, to say that we are about to wit­ness the demise of the nation-state; far from it. A World Government -- a kind of glori­fied UN with all the corruption, economic and political, that that would entail -- is simply not in the cards. Leading nation-states will continue in the postmodern age to wield great power, but this power will consist to a largely extent in their ability to wreak havoc on the emerging global economy -- by, for instance, reinstituting protec­tion­ist measures of one sort or another in reaction to popular domestic pressure. Although protectionism, i.e., anti-free-trade, is not in the real self-interest of workers, who are also consumers, it is, given human nature or what earlier liberal writers referred to as "the disposition of mankind," namely, the lamentable tendency of humans to remain oblivious to their real self-interests.39 Protectionism is a bill of goods that is readily marketable in democratic countries by populist demagogues such as Pat Buchanan. There is a bit of irony in this situation. While democracy -- populist democracy, that is -- constitutes, potentially at least, a threat to the on-going march of history, i.e., to globalization, globalization itself, in my estima­tion, constitutes the greatest force yet wit­nessed in the history of the world for promoting democracy. Why is this?

            The reasons are simple and are generally known. They all center around the fact that globalization, i.e., the spread of free-market economics, is a major force in calling forth the development of civil society -- witness China. When, thanks to the pressures ex­erted by the global economy, countries adopt free-market practices, the result, invariably, is the emergence of civil, pluralist societies. The emergence of civil society is, in turn, the necessary structural condition for the creation of democracy (see in this regard Madi­son 1998a). Democracy that is sustainable can be built only slowly, from the ground up, which is to say, by permitting the autonomous formations of civil society to flourish.

            What, thanks to globalization, we have in fact already witnessed in various coun­tries in East and Southeast Asia is a steady erosion of "bureaucratic authoritarianism" and the once very fashionable belief in the efficacy of managed capitalism. As their econo­mies have grown in complexity and as the demands of regional and global competition have increased, governments have, par la force des choses, become less dirigiste and have relied to an ever greater extent on private initiative and the forces of the market.40 In doing so, they have been responding to demands on the part of their increasingly middle class citizens to see economic development translate into an improved quality of life as well as for a greater say in how their country is run, i.e., according to the forces of civil society. This general tendency towards market economics is nowhere more striking than in so-called communist China, which, ever since Deng proclaimed "It's glorious to get rich," has em­braced capitalism with a vengeance: "China's rulers have overseen the formation of a capitalist society, where wealth is created at the bottom by individual entrepreneurs. A middle class of tens of millions is beginning to emerge, and along with that, personal freedoms have expanded."41

            It should come as no surprise if, due to the "rising expectations" called into play by the emergence of civil society in numerous countries, the prospects for democracy have been significantly enhanced -- the fall of the Suharto government in the May 1998 being but the latest episode in this ongoing saga of democracy. In contrast to advocates of "Asian values," Vincent Siew, Prime Minister of the Republic of China (Taiwan), has stated: "I know of no Chi­nese values that clash with democracy or respect for human rights." Responding to ar­guments often heard in mainland China in defense of bureau­cratic authoritarianism and to the effect that political democratization can be divorced from economic liberalization, Siew also declared: "Our experience on the other side of the Taiwan Strait is that eco­nomic success can be an excellent foundation for democratization, but that a democratic form of government is essential for sustaining prosperity."42 Similarly, Martin Lee, leader of Hong Kong's Democratic Party, stated, subsequent to Asia's financial crisis:

 

            Let's hope that the region's economic reckoning and Indonesia's disastrous path will help put to rest the myth of "Asian values": that democracy and human rights are "Western" concepts inimical both to Asia and to economic growth. Now across Asia, people increasingly see the advantages of having open and ac­countable government and are beginning to demand it.

            The countries that have weathered the Asian financial storm best are democra­cies -- Taiwan, the Philippines and Japan. And those nations that are in the proc­ess of recovering, including South Korea and Thailand, have done so only after jettisoning their corrupt former regimes through a democratic process.

            The first lesson from the Asian crisis is that a government that is not answer­able to its people will not be likely to have open markets or the institutions re­quired to impose discipline to overcome a financial crisis.

            A second lesson is that guanxi, or connections, are never a substitute for the rule of law. A failure to diagnose the need for democratic and accountable government will bring only more economic misery (Lee 1998, p. wk 17).

           

            It is true that the more countries are tied into the global economy, the more they are vulnerable to financial or economic upsets when their practices turn out to be market-unfriendly. However, the more these structural deficiencies are corrected, the more dy­namic and prosperous they can expect their economies to become. The disciplining force in this regard is globalization itself: When individual nations submit to the demands of regional or global free-trade agreements surrendering to that very degree some of their national sovereignty, global economic order becomes more stable with more possibility for longterm, stable growth. Global free-trade allows people the world over to exploit their own compara­tive advantages and to concentrate on doing what they do best, thereby helping to raise the overall level of well-being.

            Curiously enough, there are those who view the stability brought about by globali­zation as a threat to democracy. You might think that anything that pro­motes world peace and prosperity could hardly be a threat to democracy. Yet the ob­jectors do have a point, in a way. The loss of national sovereignty entailed by globalization means, they say, that in many instances individual nation-states will no longer have the inde­pendence to act in accordance with the democratically expressed wishes of their citi­zens; the "will of the people" will inevitably be curtailed or frustrated, by a nation's international commit­ments and obligations to the world community. That is undeniably true. Multila­teral accords and transnational ties -- designed to promote international cooperation and stability -- reduce the scope for unilateral action and national self-determination. In a global world, no nation can go it alone. That notwith­standing, this particular objection to globalization, as I see it, misses the mark.

            Everything depends, of course, on what one means by "democracy," i.e., "rule of the people." The objection to globalization that I have just alluded to carries weight only if one equates "democracy" with some form or other of direct democracy, i.e., the unfet­tered expression of the "will of the people." In practice, this means the unfettered expres­sion of the will of the majority of the people. However, as Aristotle long ago recognized, democracy so conceived is probably the worst form of government imaginable. The most serious defect of unmitigated, direct democracy is that it provides no built-in safeguard against one of the most insidious forms of tyranny, what James Madison, and, later, J.S. Mill, called the "tyranny of the majority." In a "pure" democracy, in which the "will of the people" is not constrained by various con­stitutional checks and balances which set limits on the general will, the rights and freedoms of both individuals and minorities would in no way be secure. As Montesquieu well knew, without security there can be no real freedom. The only acceptable form of demo­cracy is one based on an entrenched, constitu­tional respect for human rights, i.e., the rights and liberties of individuals. This is what is called liberal democracy.43

            Perhaps the single most important element in liberal democracy is the rule of law. As Chiang Ching-kuo, who as President of the Republic of China on Taiwan set his country on the path towards democratization, stated: "The concept of rule by law is the core entity of democratic politics."44 It is the presence or absence of the rule of law that determines whether a society can be said to be free or not. A highly interesting thing to note in this regard is the connection that exists between the rule of law and global free-market economics, i.e., "capitalism." As Martin Lee rightly observes, guanxi is no sub­stitute for the rule of law. That is to say, it is in the bottom-line self-interest of multi- or transnational corporations to see the rule of law advanced in those countries in which they operate. Not only does the rule of law reduce the operating costs of doing business by eliminating the need to pay out bribes or offer kickbacks to corrupt offi­cials, but also it greatly enhances the longterm security of investment. The private interests of business are not incompatible with the public democratic interest; indeed, the situa­tion is just the opposite. As the case of Tai­wan demonstrates, capitalism works best in countries that are democratic, namely, those characterized by the rule of law, openness, and responsible government. Thus, by a kind of "ruse of reason," as Hegel would say, the pur­suit of self-interest on the part of business corporations, investors, and entrepreneurs works to promote the common good. In a global economy, what is good for business is good for democracy. As one social commentator remarks: "For those who would promote demo­cracy, the globalization process is, in the long view, the great facilitator" (Means 1996, p. 116). Thus, to the degree that free-mar­ket economics is globalized, to that degree it is permissible to hope that democracy will be­come a universal system of government.

 

CONCLUSION

 

            As everyone knows, the Chinese have a saying for just about every conceivable occasion. One of their sayings making the rounds these days is: "In a crisis lies opportunity." In this paper I have attempted to focus on of some of the opportunities latent in the Asian fi­nancial and economic crisis of the late 90s. As this crisis has shown, the challenges that globalization poses can be daunting; there can be no doubt that globalization will force people the world over to make far-reaching, sometimes even painful, changes in their accustomed ways of doing things.45 But if the chal­lenges are great, so also are the opportunities.

            The opportunity that globalization affords in the economic realm is that of achieving a kind of global common prosperity, gongtong fuyu, as the Chinese modernizers call it. An opportunity for greatly raising the living standards of untold mil­lions of people around the world when their na­tional economies are opened up to the dynamics of the global economy.46 These same economic forces also hold out the pro­mise, in the cultural realm, of promot­ing greater civility, both within and between na­tions -- what Montesquieu called les moeurs douces -- and thus of providing an unprece­dented opportunity for securing a global peace. In the political realm, the dynamics of globalization are such as to en­courage the devel­opment of the rule of law and the demise of bureaucratic authoritarianism; never before has there existed as great an op­portunity for pro­moting democratic governance.

            To be sure, historical opportunities can be missed, chances squandered. Nothing guarantees that peoples and nations will come out on the right side of history. Human short-sightedness being what it is, people can readily be persuaded that their self-interest is best served by walling themselves up in their own national cocoons and isolating them­selves from the winds of change blowing over the surface of the globe. The sentiments of nationalism and the Cold War mentality are still with us. There are, for instance, those who would have us believe that China's military buildup, which is fully in line with its defense needs, poses a threat to stability in the Asia-Pacific region and that the country therefore needs to be contained (see Bernstein and Munro 1997), just as there are those who insist that America must build a protectionist wall around itself if it is to defend its interests (see Buchanan 1998). There is, however, no reason to think that China has re­placed the old Soviet Union as a new threat to world peace; having set its sights on mem­bership in the WTO, it has every reason to behave like a normal country.47 More gen­erally, the great opportunity that globalization offers is the op­portunity for nations and peoples finally to realize that their own self-interests are best advanced when they respect the self-interests of all others and, ac­cordingly, interact in the global economy in a spirit of mutuality and reciprocity. Eco­nomic globalization may just possibly have the effect of forcing nations to be civil in their dealings with one another and may in this way help to forge a global solidarity, for, as the current Asian cri­sis well demonstrates, in a genuinely global economy the interests of each are inseparably linked with the interests of all.

            One last point in regard to a basic issue in political economy, as I have indi­cated, one thing that global economic liberalization signals, along with the demise of so­cialism, is the end of the legitimacy of the belief in managed, state-directed capitalism. The demise of both socialism and managed capitalism should not, however, be taken to mean that we are returning to an earlier, 19th century form of unfettered, amoral, lais­sez-faire ("Manchester") capitalism. Even though one finds a great many commenta­tors on both the right and the left saying that, in my estimation it amounts to a mis­reading of the historical dynamics at work at the present time. History never quite re­peats itself, or its errors. The form of managed capitalism -- a state-controlled and regu­lated capitalism which was often, for all practical purposes, indiscernible from social­ism -- that emerged from the Great Depression and per­sisted until recently was an alto­gether logical response, at the time, to the perceived shortcomings of lais­sez-faire capi­talism, and, indeed, its failure. The shortcomings and failure of managed capitalism and the idea that the state not only can, but should assume ultimate responsi­bility for people's lives (state-welfarism) have themselves, in turn, become fully apparent. Managed capi­talism is no substitute for laissez-faire capitalism. The great op­portunity that globalization pro­vides us with in this regard, some 200 years after Adam Smith's original "capitalist mani­festo," is the oppor­tunity to work out yet another form of capitalism, one which would be in conformity with what Hegel would call the "objective spirit" of the age, with, in other words, the demands of a postmodern global civilization. This new form of capi­talism -- "capitalism 3," so to speak -- might appropriately be termed "responsible capital­ism."

            Unlike laissez-faire capitalism which was based, philosophically or theoretically speaking, on the notion of the atomistic, asocial individual (the famous "Robinson Cru­soes" of mainline neoclassical economics), and unlike managed, state-welfarist capitalism which subordinated the individual to society, responsible capitalism overcomes the tradi­tional dichotomy between the individual and society. Responsible capitalism cannot exist in a governmental vacuum, but the appropriate role of government or the state is not that of defending the "public good" against "private interest."48 Not only does this way of viewing the role of the state inevitably give rise to some form or other of bureaucratic elitism (and is thus anything but democratic), it is also based on a false dichotomy. There is no reason for opposing, as socialist ways of thinking always did, the "collectivity" to the "individual." Except in times of war in democratic societies the "public good" does take precedence over "private interest"; (whenever the "public good" prevails over "private interest" untold numbers of individuals will, as a general rule, be condemned to spend their lives in gulags of one sort or another). In a liberal, civil society, what serves the "private" interest of all citizens is in the public interest. What we are now in a position to see is that in a free-market economy based on the rule of law and a democratic respect for human rights the public interest is best served when the state limits itself to providing the political-economic framework wherein individuals, secure in their rights, are free and able to pursue their own interests. As even the Chinese communist government has come to realize, this is the only gov­ernmental formula that can generate sustained growth and the well-being of all. This is a fact of history, of postmodern global, economic civiliza­tion. In a sys­tem of responsible capitalism, the good of society and the good of individu­als are insepa­rable and mutually reinforcing; they work together in a synergetic fa­sh­ion to bring about genuine solidarity, based on an ethic of mutual recognition of rights. A global economy produces a global division of labor, and, as Emile Durkheim pointed out, a rational division of labor produces solidarity: A non-mechanical, organic form of solidarity based not on similarity, but on individuality and difference wherein the unique contribution of each contributes to the life of all (see Durkheim 1960). Moreover, as Durk­heim also recognized, whatever serves to promote solidarity is intrinsically moral. The economic order of democratic capitalism is a social order infused with moral pur­pose.

            In order to function in a stable and productive fashion, the global capitalist order simply has to be responsible; individual corporations, for instance, must not only be concerned about making a profit, they must also have an eye to their longterm interests. These in­terests include, not just making a fast buck, but, above all, servicing the interests of their cus­tomers as best they can, merging when this proves necessary, manufacture with ser­vice and thus blurring the traditional distinction between the two -- witness in this regard the renaissance of IBM. If they are to be capitalistically successful, companies must not only be consumer-friendly, they must also provide assurance that the jobs of their quali­fied workers are valued and protected, as are the interests of their stakeholders. This is the formula for good, profitable business in the postmodern, global age. No company which is not consumer-, worker-, and community-friendly will long survive in the age of the global economy.49

            Because, as I have argued above, the new form of capitalism we see emerging reconciles public and private interest, it is itself fully moral. True freedom is not anar­chistic or libertarian; freedom entails sociality and responsibility because to will freedom for one­self is, necessarily, to will it for all (see Madison 1998a, p. 74). The same is true of eco­nomic free­dom. Just as businesses have come increasingly to realize that it "pays" to avoid unethical business practices, so, more generally, we are coming to realize that there is an ethical element that is intrinsic to market economics. Indeed, it could genuinely be said that the market economy operating under the rule of law, what I call a civil market economy, is itself a form of institutionalized ethics. This, as Hegel had already realized, is an ethics of reciprocity and mutual respect (see Hegel 1991, #199 and #255). Unlike so­cialist socie­ties which are supposedly based on altruism and benevolence but which in reality are animated by envy and resentment, the capitalist order is based squarely on the freedom of everyone to pursue their own interests. It would however -- and this is a most important point -- be a gross error to equate self-interest with greed or selfishness.50 Indeed, any defense of capitalism which equates self-in­ter­est with greed is counterpro­ductive and does a great disservice to the cause it pur­ports to defend. As Peter Drucker has quite correctly noted: "Capitalism is being attacked not be­cause it is inefficient or misgoverned, but because it is cynical. And indeed a society based on the assertion that private vices become public benefits cannot endure, no matter how impeccable its logic, no matter how great its bene­fits" (Drucker 1993b, p. 392).51

            What is most important to note is that far from being immoral, or even amoral, the pursuit of self-interest in the context of a civil market economy generates a distinct social ethics and serves to promote a genuinely "spiritual civilization" (see Madison 1998b and Madison 1996). The reason for this is that a free-market economy possesses built-in mechanisms or incentives which call forth civility and socially ethical behavior on the part of individuals. This particular spinoff of the enterprise economy occurs, more­over, in a thoroughly spon­taneous fashion, in contrast to religious or moral exhortation -- kyoka, as the Japanese call it -- which can only affect economic behavior from the outside and, as it were, coercively. In a market economy operating under the rule of law, it is in people's own interest to respect the interests of others, i.e., to be good. As the Catholic advocate of democratic capitalism, Michael Novak, has pointed out, not only does a busi­ness corpo­ration operating within the context of a civil market economy have moral re­sponsibilities, these responsibilities are "internal to it, which must be met simply for it to be a success in doing what it is founded to do" (Novak 1996, p.138; emphasis mine). Alexander Yakovlev, one-time advisor to Mikhail Gorbachev, put it succinctly: "Morality is an inte­gral part of the culture of the commodity society" (Yakovlev 1993, p. 88).

            The remarkable successes of the Asian dragons and tigers over the last few de­cades demonstrates the indisputable superiority of capitalism (the market) over so­cial­ism (the state) in combating poverty.52 What, in turn, the recent Asian setback demon­strates is the need to develop an even more sophisticated form of capitalism -- re­sponsible capitalism. There is every reason to think that the new global order will indeed be one imbued, as Havel would say, with "a new spirituality, a new ethos, and a new ethics and values should be adopted today by all cultures and all nations as a condition of their very survival."

 

                                                                        NOTES

 

            1. The mode of description in question is, of course, interpretive, i.e., a matter of hermeneutics.

            2. The expression is that of Iain Carson writing in The Economist (1998); he states: [T]oday manufacturing is becoming a genuinely international affair. The fancy work gets done in rich countries by skilled workers, the simpler parts elsewhere in the global supply chain. More and more of the process is handled by multina­tional companies, quick to see what is best done where. There is nothing to fear in this. Any country that is willing to use the skills it possesses will gain from joining in" (p. 5).

            3. Conversely, it has, thanks to these very same technological advances,  become increasingly costly, for nations which would like to do so, to keep information out -- costly not only in terms of the censorship and jamming involved, but, more importantly, in terms of foregone economic development.

            4. For a critique of the core, neoclassical notion of "general equilibrium," see Madison 1998, chap. 5.

            5. See in this regard Wriston 1992.

            6. Witness, in this regard, the moral frenzy provoked among nationalists and socialists of all stripes by the so far unsuccessful attempt on the part of the OECD to work out a Multinational Agreement on Investment (MAI).

            7. "Southeast Asia's challenge has been not to protect itself from global finance, but to deal with its insolvent banks, shaky domestic markets and overstimulated economies. The region's politicians, with their crony­ism, corruption and reluctance to take awkward decisions, were far more to blame for the currency-market turmoil and its aftermath than are international speculators." The Economist (September 27, 1997), p. 17.

            8. See The Economist, September  27, 1997, p. 87. Maharhir is quoted as saying: "We are Muslims, and the Jews are not happy to see Muslims progress. The Jews robbed the Palestinians of everything, but in Malay­sia they could not do so, hence they do this, depress the ringgit" (see Kristof 1997, p. wk 4).

            9. "The IMF estimates that hedge funds can mobilize between $600 billion and $1 trillion to bet against currencies and other assets -- for example, selling a currency forward in the hope that they can buy it back later as a cheaper rate. . . . It is . . . worth noting that speculators do not attack currencies that are backed by credible economic policies." The Economist (September 27, 1997), p. 87. "As a new study by economists at the International Monetary Fund [IMF 1998] shows, many of the charges laid against [hedge funds] are incorrect. In general, the IMF reports, hedge funds make financial markets more stable, not less so." The Economist (June 13, 1998), p. 76.

            10. Cf. Stevenson 1997, p. wk 5: "The owners of capital now judge the strength of currencies based on the soundness of the monetary and fiscal policies in the countries that issue them. Money, the experts say, flows readily into currencies that are judged sound by the market, and flows even more rapidly out of currencies seen to be undermined by weak policies. When turmoil hit the Asian financial markets, panicky investors funneled their money not into gold, once their  investment of choice during times of crisis, but into Ameri­can Treasury bonds."

            11. For a detailed discussion of  the non-material, intersubjective, and communicative function of money. (See Madison 1998, chap. 5).

            12. What could be said to constitute the fallacy underlying the self-defensive strategy resorted to by govern­ment officials such as Mr. Mahathir is the belief, widely held in many East Asian countries (Japan being a good case in point), that "government knows best."  While judicious government regulation and oversight is absolutely indispensable to the efficient functioning of a market economy,  it has now become generally recognized that government can never have better economic sense than does the market itself (the market being nothing other than the aggregate voice of free, wealth-producing citizens). The fascination with "managed capitalism" is now -- or ought to be -- a thing of the past (see in this regard Yergin and Stanislaw 1998).  That is one of the most important political-economic lessons to be learned from the phenomenon of globalization.

     In regard to currency trading, it may be noted that there are a number of market-friendly policies gov­ernments can adopt to counteract the potentially disruptive effects of a global free-market in currency  with­out having to have recourse to illiberal attempts at controlling capital flows. See in this regard The Econo­mist (January 24, 1998), p. 70.

            13. Two main factors which help to explain Taiwan's relative immunity to the Asian financial flu are that Taiwanese companies were prevented by strict capital controls from taking on cheap foreign-currency loans for speculative purposes, as well as the absence from that country of giant (and debt-ridden) conglomerates such as Korea's chaebol and Japan's keiretsu -- making it easy for new companies to start up, as well as for older ones to go bankrupt, thereby making the overall economy responsive to the exigencies and opportuni­ties of the international market. See The Economist (January 3, 1998), p. 73 and (January 24, 1998), p. 35.

            14. See The Economist (June 6, 1998),  p. 70: "The bubble was inflated by an alliance of its British colonial rulers, the Chinese Communists and Hong Kong's cartel of billionaire developers." See also The Economist (June 27, 1998).

            15. Indeed, on the whole, Asian countries, the Chinese ones in particular, often place, in actual fact, a greater emphasis on education than do such Western industrialized countries as the United States and Canada. (It is another question as to whether or not the mode of education provided by leading Asian countries -- Japan being a good example -- is the best sort of education for producing citizens who are best enabled to make productive use of their political and economic rights -- currently a matter of much debate in Japan.)

            16. For instance, on its 1997 scale of corruption which lists 52 countries (1 being the least corrupt, 52 the most corrupt), Transparency International (Berlin) lists Indonesia as one of the more corrupt countries of the world (46), while Singapore ranks as one of the least corrupt (9) (Malaysia and Thailand were ranked 32 and 39, respectively).

            17. Margaret Scott, a former editor of the Far Eastern Economic Review; see Scott 1998, p. 46.

            18. For an outstanding study of this sort (focusing on the socialist mode of economic organization), see the work of the Hungarian economist János Kornai (1992). A former Marxist and believer in the pos­sibility of a "socialist market economy," Kornai demonstrates why a "third way" is not a real possibility.

            19. Speaking of the Asian crisis, Thurow writes: "[W]hen countries have had a string of boom years, megalo­mania sets in and their governments and large investors come to feel that ordinary economic rules that apply to others do not apply to them" (Thurow 1998, p. 22). As Thurow also observes: "What is clear by now is that crashes are not set off by outside speculators who see the internal weaknesses and attack. The first in­vestors to leave the local market are always the local investors who have the best information. . . . The im­pressive abilities of international fund managers to move large sums of money across borders vastly accel­erate the forces pushing prices down; but contrary to some facile generalizations about `globalization,' they are never the triggering mechanism" (p. 23).

            20. As examples of Decline-of-the-West literature, see Kennedy 1987 and Schlosstein 1989. When at the same time in 1989 Karel van Wolferen, a Dutch journalist, published his no-holds-barred analysis of the corruption endemic to Japan in both the market and the political system (an over-reliance on bureau­cratic planning elites combined with an impotent form of political governance), he was widely accused of "Japan bashing." We now know that his analysis was basically on the mark. As Thurow remarks: "Japan's government has demonstrated its incompetence, and its problems are getting worse" (Thurow 1998, p. 23); Thurow refers to Japan as the "sickest economy in the developed world, the economy with a government that has demonstrated that it cannot deal with shocks" (p. 24).

            21. The expression is that of Chalmers Johnson (see Johnson 1982).

            22. Speaking of "the price system as . . . a mechanism for communicating information," Hayek says: "The mar­vel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; that is, they move in the right direction" (Hayek 1949, pp. 86-87).

            23. On this, as well as on the underlying hermeneutical notion of "application," see Madison 1995.

            24. On the latter point, see Madison 1998, Appendix.

            25. One lesson of globalization is that there are truths or values whose validity is universal. One might be tempted to relate the economic issues discussed in this section to a prominent feature of Japanese culture. Karl van Wolferen has observed that "the most crucial factor determining Japan's socio-political reality, a factor bred into Japanese intellectual life over centuries of political oppression" is "the near absence of any idea that there can be truths, rules, principles or morals that always apply, no matter what the circum­stances" -- the absence of any belief in universal truths (see Wolferen 1989, p. 11). This "ultimate determi­nant of Japanese public behavior" may be a factor helping to explain Japan's woeful inability for a number of years now to take the broad-based, structural reforms necessary for dealing with its serious economic downturn. In contrast with the situation of political gridlock in Japan, China under the leadership of its new prime minister, Zhu Rongi, has shown great determination in its commitment to taking the bold steps necessary to modernize its economy -- and China is a country which very definitely does believe in universal values and truths.

            26. When, as if it were the most natural thing in the world to do,  members of a primitive Amazon Indian tribe (outfitted for the occasion in full native regalia) fly up to New York on a 747 to make a public rela­tions pitch to Wall Street bankers and investors on the ecological threats to the Amazon rain forest, we know that we have definitely entered an age of global civilization.

            27. See Marx 1946. Marx (and Engels) wrote: "In place of the old local and national seclusion and self-suffi­ciency, we have intercourse in every direction, universal interdependence of all nations. And as in material, so also in intellectual production, the intellectual creations of individual nations become common prop­erty" (pp. 34-5).

            28. Cf. Mill 1947, p. 63: "Individuality is the same thing with development, and . . . it is only the cultivation of individuality which produces, or can produce, well-developed human beings."

            29. See Mill 1947, pp. 65, 73 (chap. 3, lines 340-43, 695-96).

            30. Since "groupism" is inimical to capitalist, entrepreneurial practices (and thus to the flourishing of a free-market economy), it is natural that the Communist Party of China should have declared it to be an "ism," and thus something to be combated.

            31. On the rise of individualism in China, see Pye 1996.

            32. For an analysis of Japanese "groupism" which raises the question "Is it being altered as internationalization progresses in an age of information?" see Human Studies, no. 6 (1991). In a subsequent issue of this publication, Yuji Fukuda, reporting on a survey conducted in Japan, South Korea, and China, stated that it indicated "a strong desire for European and American-style individualism" in these countries and stated as well: "there . . . undoubtedly is a universal aspect to the individualism fostered in the modern, Western societies. Asians, as I have indicated, have a penchant for such European- and American-style individualism." Human Studies, no. 15 [1995], pp. 9, 11.

            33. It should nevertheless be noted that developments in the technology of digital television have now made it possible for a broadcaster in, say, Taiwan to connect directly with Chinese audiences in America or Europe, helping them thereby to preserve in a foreign land some of the unique features of their native culture. The "homogenization" that globalism is bringing about need not be one of insipid "Americanism."

            34. See Huntington 1997. Huntington's pessimism regarding universal values (a relic, according to him, of Western imperialism),  his gloom over a supposed Decline of the West, his advocacy of a dispirited and relativistic multiculturalism, and his dour prognostics as to the possibility of "a major intercivilizational war" contrast sharply with the earlier, extremely optimistic scenario (the global triumph of liberalism) put forward by Francis Fukuyama (see Fukuyama 1992). Against Huntington, it could be argued that the threat posed by "Islamism" in a country such as Egypt is not so much a result of "culture" as it is of government ineptitude as regards liberalization and democratization (see in this regard Ibrahim 1996).

            35. One thing that struck me on my first visit to mainland China (contrasting in this regard with Taiwan, a more economically and politically developed country -- but equally Chinese nonetheless) was the apparent near-total absence of public concern for public (i.e., non-private) places, discarded trash of all sorts being strewn about anywhere you cared to look. A phenomenon such as this demonstrates a notable lack of civic spirit (the absence of which is of course understandable in socialist countries which are always hostile to the autonomous forces of civil society and which encourage in their subjects the debilitating belief that gov­ernment is the only legitimate guardian of public well-being ["Let the municipal garbage collectors take care of the mess."]).

            36. See Watson 1998 for a study of McDonald's in five Asian countries: Hong Kong, China, Taiwan, South Korea, and Japan. In regard to the beneficent effects of Coca-Cola,  I was once surprised at an international conference of economists to hear a Polish economist heap praise on  the  "Coca-Colazation" of Poland (by which I gathered he was referring to American-style fast food restaurants in general), two of its more note­worthy effects being a sharp drop in alcohol consumption and, implausible though it might sound, adoption of more healthy dietary habits.

            37. See Barber 1995. Barber writes:

 

            The first scenario rooted in race holds out the grim prospect of a retribalization of large swaths of humankind by war and bloodshed: a threatened balkanization of nation-states in which culture is pitted against culture, people against people, tribe against tribe, a Jihad in the name of a hundred narrowly conceived faiths against every kind of interdependence, every kind of artificial social co­operation and mutuality: against technology; against pop culture, and against integrated markets; against modernity itself as well as the future in which modernity issues. The second paints that fu­ture in shimmering pastels, a busy portrait of onrushing economic, technological, and ecological forces that demand integration and uniformity and that mesmerize peoples everywhere with fast music, fasts computers, and fast food -- MTV, Macintosh, and McDonald's -- pressing nations into one homogenous global theme park, one McWorld tied together by communications, information, entertainment, and commerce. Caught between Babel and Disneyland, the planet is falling pre­cipitously apart and coming reluctantly together at the very same moment (p. 4).

 

Barber's main thesis is that "Jihad and McWorld . . . conspire to undermine our hard-won (if only half-won) civil liberties and the possibility of a global democratic future" (p. 19).

            38. On the notion of the nation-state and modernity, see Albrow 1997. Traditionally, one of the most important aspects of "sovereignty" was control over money. That aspect of sovereignty has now vanished.

            39. For an argument to the effect that self-interest, "rightly understood," is one of the major factors in promot­ing human well-being, both material and moral, see Madison 1998b. For a historical  account of the emer­gence of the idea of self-interest in the Age of the Enlightenment, see Holmes 1995.

            40. For a historical account of this process, see Yergen and Stanislaw 1998, chap. 6; who state: "All across Southeast Asia, the economic model is changing as governments, to one degree or another, pull back from an interventionist role in the economy. . . . It becomes more difficult to deploy government knowledge and to exert the guiding hand, for the span of economic activity -- investment, alliances, trade, market develop­ment -- extends beyond the borders of national sovereignty, and thus beyond the ability of governments to manage and intervene as they did in earlier and, by comparison, simpler times" (pp. 188-89).

            41. See Kaplan 1998, p. wk 17. In his article Kaplan contrasts in this regard China's "dictatorship" with Rus­sia's "democracy": "In Russia, parliamentary democracy has led to neo-Communism, in the form of a new oligarchic class with its own media outlets and security apparatuses, as well as crime syndicates that have plundered state assets through cronyism, bribery and intimidation. More so than China's new wealth, Rus­sia's belongs to a corrupt, political elite in a few cities."

            42. See The Economist (January 24, 1998), p. 36. In response, as it were (and no doubt was), to authoritarian defenders of "Asian values" such as Singapore's "senior minister," Lee Kuan Yew, the well-known Chinese scholar, Tu Weiming, writes: "There is no theoretical reason why Confucian social structures could not coexist perfectly will with democratic political institutions" (Tu Weiming 1984, p. 90).

            43. Not only is the notion of the "will of the people" or  the "general will" a potentially dangerous notion from a liberal point of view, it is also, from a basic philosophical point of view, a notion that is largely de­void of meaning. The key role that this notion has played in democratic theory to date notwithstanding, it is for all practical purposes meaningless to speak of "the people" willing this or that, of knowing what in fact it is that they want, and what their own interests are -- until, that is, this "will" has been articulated in a communicatively rational way by  having passed through the various institutions of representative govern­ment and the various forums of civil society. See in this regard, Madison 1998a, pp. 79-82; see also Holmes 1995, p. 148: "It is not obvious that `the people' can have anything like a coherent `will' prior to and apart from all constitutional procedures."

            44. Cited in Nathan and Ho 1997, p. 108.

            45. At the top of the list of challenges is the challenge to the environment posed,  thanks to globalization, by rapidly developing countries like China, a point emphasized by President Clinton in his televised address to the students of Peking University, June 29, 1998.

            46. It is well  worth noting in  this regard that in China, thanks to Deng's liberalizing reforms and his open­ing-up of China to the global economy, "Per capita income doubled between 1978 and 1987 and doubled again between 1987 and 1996 -- a rate almost unheard of in modern history. It took Britain sixty years to double its per capita income; the United States, fifty years. In instituting reforms with such effect, Deng did something that no one else in history has ever accomplished -- he lifted upward of 200 million people out of poverty in just two decades" (Yergin and Stanislaw 1998, p. 212).

            47. The responsible way China has handled the Hong Kong take-over suggests that it understands quite well wherein its real self-interests lie.

            48. This outdated view, typical of socialistic, managed capitalism, animates Barber's critique of global capi­talism: "The modern democratic state is legitimated by the priority of the public over the private, where public goods trump private interests and the commonweal takes precedence over individual fortunes" (Barber 1995, p. 31). That, of course, is a recipe not for democracy but for tyranny.

            49. See in this regard John Paul II 1991, sec. 35, p. 64.

            50. This is nevertheless how, with  a horrendous amount of philosophical naivete, ABC-TV correspondent John Stossel portrayed "the capitalist system" in his 1998 TV documentary Greed  (see Stossel 1998). The unfortunate thing about reducing self-interest to selfishness or greed is that it totally obscures the properly ethical elements of the market, ones which must be developed even more in the  global economy that is now coming into being. While the free-market system is the best one yet devised for enhancing the general welfare, no one in their right mind would ever want to see it appropriated, for their own selfish ends, by "greedy capitalists."

            51. As Drucker has argued at length, capitalism is not just about making money, it is also about "values, integrity, character, knowledge, vision, responsibility, self-control, social integration, teamwork, community, competence, social responsibility, the quality of life, self-fulfillment, leadership, duty, purpose, dignity, meaning" (see Beatty1998, p. 176).

            52. In 1960 per capita income in South Korea was at the same level as in India: by the late 1980s it was ten times that of socialist India (see Yergin and Stanislaw 1998, p. 222).

 

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