Bottom Rail, Moving Up

31 thoughts on “Bottom Rail, Moving Up”

1. Very interesting, but the last paragraph seems a bridge too far. The phenomenon you identify seems to fit much better into a (relatively complex) quasi-realist international relations framework; state elites in Asia recognize that the system is stacked against them, and restructure key elements of that system. "Progressive" benefits seem incidental. Another way of putting this is that you have a contest between two sets of elites, with the masses not necessarily neutral in the conflict, but also not "represented" to any meaningful degree.

2. You're probably right, Rob. This really should have been two separate posts.

3. JW,

   Asians stand out but emerging economies in general have learned from the recurring crisis of the 1980s and 1990s to build a war chest of reserves to insulate themselves against "runs" on their currencies. Look at Russia, in 2008, it entered the crisis with nearly $500 billion in reserves and despite massive capital flight and instability in the banking system, managed to withstand the crisis and run government deficits. Same with Brazil, which had close to $200 billion in reserves and was for the first time able to run countercyclical policies.

   But I think you have missed one force that made it possible for these countries to build these large reserves–the US (and to a lesser extent other western economies) running large and growing deficits from 1998 to 2008. Of course, Greenspan blowing bubbles and keeping the US economy growing robustly fueled these deficits. In short, were it not for the Nasdaq bubble and subsequently the housing bubble, perhaps Asia would not be in such a robust situation.

4. Greenspan and his allies have often blamed Asian reserve accumulation for the crisis – they certainly aren't going to take any personal responsibility for it!

5. @Josh:

   Asian countries do pay a price for self-insuring: while they are sitting on their foreign-exchange hoards, that cash is not available to fund domestic infrastructure projects and social spending that these still rather poor countries desperately need.

   But I agree with the thrust of this post and others you’ve written on this theme. You make a strong general case that developing countries that pursue autonomous, dirigiste trade, monetary and fiscal policies prosper in rejecting neo-liberal orthodoxies of “openness.” I think that’s eminently correct.

   The tangent I do want to rant about is your framing of these insights within a bankrupt left theory of neo-imperialism. You start by referencing the “periphery” idea from World Systems Theory, which is one of the worst theories of history ever proposed. There is no such thing as a “subordinate geography,” as you put it; indeed, the notion that there is a “periphery” under the economic thumb of the “center” is contradicted by all the evidence you’ve amassed of “peripheral” nations blithely thumbing their noses at the center. Any competently-organized state can follow independent development policies that radically transform its global position; Asian countries have done so routinely, ever since Japan started in the 1850s.

   The flip-side of the neo-liberal mythology of openness is the left’s superstitious dread of “evil” international financial institutions. In reality, there is no coherent world economic system, much less a disciplinary regimen controlled by paper tigers like the IMF. The pope at least has the Swiss guards, but the IMF has no divisions at all. It doesn’t even have soft power; yesterday’s IMF whipping boy will be tomorrow’s darling of international investors if it can post a few quarters of growth. It’s true that governments in developing nations cite IMF strictures for their austerity programs, but that’s just an excuse domestic elites use to justify policies—slashing government budgets, immiserating workers, liberating domestic capital from domestic social demands—that they want to impose for their own reasons, in the same way that American elites invoke “global competitiveness” to inflict similar policies on the United States.

   Imperialism is one thing and one thing only: boots on the ground. In the absence of direct military control, there is no such thing as an informal economic imperialism operating through the occult machinations of Wall Street and IFIs. You’ve made the important “economic” point that the economic policy pursued by national governments is the sole determinant of development and prosperity. The “political” point that follows is that national economic policy is the sole relevant target of protest and political action. The left’s fixation on IFIs and the destructive effects of international finance therefore obfuscates and distracts more than it clarifies.

   It’s not so much what you said, it’s the way you said it:

   “In principle, there's the potential for progressive struggle whenever the sociological basis of a form of political consciousness requires it to cohere somewhere beneath the top of a value chain.”

   Dude, there’s just no excuse for Marxian gobbledygook like that.

6. Disclaimer: I like your Marxian gobbledygook…

   Question: I know that the core/periphery model positions the global south as periphery, and the … industrialized north? I can't think of a blanket term for the 'powerful' … as the core. Has anyone discussed using that model to explain class/geographical relations within a country or a region? (So, Europe as region, UK/Germany/France as core, small countries at risk of default as periphery; or some version with the US?) Can you think of any problems — logic-wise, consistency-wise — with doing so?

   -N

7. @ Will

   I find your tangent to be insufficiently tangential. Yes, some of Josh's rhetoric may be derived from or associated with theories of (neo)imperialism–a fetish of a term which I agree gets in the way of good analysis–but nothing he wrote is necessarily requires a neo-imperial articulation. The (contingently associated) language is mostly fine. It's not a package deal: "imperialism" is basically all (psychological) add-on.

   Also, you think a theory of history that prioritizes relational and systemic thinking is the "worst" (or even a particularly bad) theory of history ever proposed? Please elaborate.

   @ Nina

   I believe the whole core-periphery metaphor was actually drawn from the economic geography of the North and projected out onto the globe. I like to re-import it. In NYC, for example: the Brooklyn-to-Queens G-train as a glorious South-South linkage bypassing the Manhattan core!

8. @ P,

   World systems theory, from what I have hazily gleaned through casual conversation and reading book reviews, is really an invalid generalization from formal imperial economic systems. In the British Empire, for example, there really was a “core”—thank you, Nina E—in London that dictated economic roles to a colonial periphery: for example, requiring that trade to the American colonies had to be conducted through British merchants, banning certain American enterprises like iron foundries, etc.

   But absent a conscious political program enforced at bayonet-point, no such coherent international economic system can arise through the workings of capitalist finance and trade. People who think it has only do so because they don’t rigorously analyze what a “system” is. In a true integrated system, the parts are rigidly specialized, interdependent and non-convergent. A good example is the human body. Noses and feet have very distinct roles that never converge: the nose never gets better at bearing weight, and the feet never get better at tasting food.

   That’s not what the global economy is like at all. There we see that the “parts”—different countries—change their specialized economic roles over time and accumulate new ones so that they become diversified generalists with many roles and capabilities instead of just a few. We see the Brazils and Malaysias and Indonesias and Koreas and even the minute Singapores of the world adroitly moving up from commodity agriculture into the ranks of advanced, diversified industrial economies. In other words, the periphery gets more and more like the core through the autonomous action of parts prompted by their internal dynamics, which is a convergence that can’t happen under world systems theory or any other rigorously conceived systems theory. WST also has the problem that there is no plausible mechanism by which neoliberalism or any other system can impose itself short of military conquest. Josh’s work shows that: developing countries that defy the economic pressures brought to bear by the neo-liberal regime suffer no ill consequences at all.

   So yes, P, I do indeed believe that a knee-jerk resort to “relational and systemic thinking” can yield incredibly bad theories of history. Spurious relationality and over-systemitizing is a crucial component of conspiracy theories and anti-semitism, for example. In the case of WST, Hardt-Negri empires and their ilk, it leads to a pernicious fixation on globalist phantasms and red herrings like the IFIs. The world economy is simply not an integrated system; it is a collection of autonomous entities who have fluid provisional arrangements with each other. Nation-states, not global economic institutions and relationships, are the dominant economic actors—and growing ever more so. Development and prosperity are almost entirely a function of internal domestic factors—government economic policies, political institutions, legal systems and business culture. The sooner the left learns that, the more cogently it will think and act.

9. @ Nina E.

   That’s a good question. I would say that core-periphery systems might be relevant within a country. That’s because nations do have central political authorities—“cores”—that can consciously shape economic policy so as to cause specialization and economic inequality along either class or geographical lines.

   But systems theory is not relevant when applied to supra-national regions like the EU, because there is no central political-military authority that can forcibly impose the system. The perfectly autonomous nations within the EU can take it or leave it as they please, so the EU aims for convergent development rather than the interdependent specialization that is the hallmark of a true system. The point of the EU is not to consign Ireland to potato-growing and sheep-herding and poetry-writing, but to make Ireland into an advanced diversified economy like Britain. That’s why Ireland participates in the EU.

   There is a systematizing bond in the euro, a modern version of the gold standard, which is the real source of the financial turmoil in Europe. But it’s very weak and easily discarded. If Greece defaults, Germany is not going to invade to extract repayment. Indeed, Greece’s path forward is clear. It should default, return to a devalued drachma, post a few quarters of rising growth and exports and place a few articles about the Hellenic Tiger in business mags; within 18 months, tops, investors will be lining up to buy Greek bonds. Why doesn’t Greece do that? The answer is to be found entirely within domestic Greek politics.

10. @Will

    That’s really quite a compliment, describing my invocation of “relational and systemic thinking” as “knee-jerk”, like telling me I’ve got Marx in my bones. After all it’s usually a challenge to keep front and center the relations within which units form and change—to think like Stephen Jay Gould, say, instead of either Dawkins or the cult of Gaia. But note that I said “prioritizes” relational and systemic thinking—interesting that you dropped the key word. It’s the very opposite of imagistic or anthropomorphic thinking, where the units (individuals and/or/as groups) have ontological priority over their relations, as in seemingly all of your various examples: the human body and its organs; your take on WST as a world economy comprised of static, specialized slots; conspiracism and anti-semitism; your interpretation of Negri; interacting nation-states. I wasn’t referring to a corporate whole with internal relations any more than I was referring to free-standing parts with external relations. But here I get the sense that we’re probably on the same page: the push for profit and rent, and the demands of labor, are the main drivers, and while these are universal and cut across nation-states, the latter are their prime political battlegrounds and policy organs, practically speaking.

    For what it’s worth, btw, I don’t believe that’s at all incompatible with WST. I know that Wallerstein—who I’m not particularly fond of—prefers the term world-systems analysis, sort of an injunction to look at things in terms of dynamic, historically-changing systems rather than a particular view of the eternal order things, and the former is really what I had in mind in my previous post. The latter is how it tends to be presented in, say, an undergraduate course on IPE or IR theory. But next to the other items on that course’s menu—realism, liberalism, institutionalism, constructivism—WST would be far from the worst choice. Anyway, my sense is that WST people have gotten away from the more rigid, dependency-style view of the earlier work—force of circumstances—but that its signature practitioners do exhibit an abiding tendency toward deterministic thinking in general.

    The counter-example of East Asian industrialization fits into WST just fine—see Arrighi in NLR and elsewhere. Yes, though, it does seem that nations in the South have more economic latitude than previously—or previously supposed anyway. But the development of internal markets is sustained by the political strength and economic demand of labor. The WST take on this? It’s the logical conclusion of the secular trend of proletarianization driven by the extension and intensification of capitalism. Thus the theorized system has outgrown its earlier descriptions— proposed in the 20th century and influenced by earlier periods—for intra-systemic reasons.

11. Some quibbles about the WST (that I know only through a synthesis that I studied at university in a manual that synthetized various theories of international relations):
    The WST actually divides the world in three parts: core, periphery and semiperiphery.
    1) The core is the developed center, that also happens to have most political/institutional power. In our world this would be the USA (or maybe USA + satellites like EU and Japan).
    2) The semiperiphery is a group of countries that are half developed, and that strive to become the new core. In those countries, the elites keep their power throug commerce to the core, that grants them a lot of economic power over commoneers. Thus the core does not "oppress" directly the masses of the semiperiphery, but it empowers the local elites (which in turn give economical advances to the core). In our world this would be the asian states (to the degree that the elites chose to diminish consumption of the masses, like in China) and in part the arab/oil states.
    3) The actual periphery is a sorry place were actual "boot on the ground" imperialism exists and is very underdeveloped, so that the only use of the periphery is extraction of natural resources. This would be the poor african countries and, in part, still the arab/oil states (that are somehow in between the periphery and the semiperiphery status, because their main economic activity is extraction of natural resources).

    The WST predicts that the semiperiphery states will at some point challenge the core states for the control of istitutions (like, rejecting "washington consensus" theories) and, when core countries are forced to fight back, this might lead to an actual armed conflict. For example, Japan and Italy in WW2 are the classical semiperiphery "rising powers", and also Germany that was part of the core but was hurt by the result of WW1 can be seen as a "semiperiphery" power.

    Hence the fact that asian states are "forcing their way" and ignoring some prescription of the institutions (such as IMF) is perfecly in line with the WST, as is the fact that this helps those states.

12. Great post! And I love "mewling American economists" – the phrase, not the phenomenon.

13. @ P,

    You’ve reminded me of everything that’s wrong with WST.

    You characterize good WST as

    “sort of an injunction to look at things in terms of dynamic, historically-changing systems rather than a particular view of the eternal order things.”

    But this retrenchment makes WST into an utterly vague truism. That’s a common response when a theory’s “particular view” is falsified: water it down until it is so nebulous that it no longer has a “particular view” and is therefore no longer falsifiable. Could you state the precise tenets of WST that you think are valid, and the observations we can expect to flow from them?

    “The counter-example of East Asian industrialization fits into WST just fine—see Arrighi in NLR and elsewhere.”

    Could you sum up what Arrighi wrote? I am too poor to buy New Left Review, and have no easy access to a library.

    “It does seem that nations in the South have more economic latitude than previously—or previously supposed anyway.”

    I would emphasize the “previously supposed”—by WST. Economically backward nations, so long as they were not ruled formally by empires and had competently-organized states, have always had untrammeled economic latitutde. This was true of Japan starting in the 1850s, so it is not a recent development. Your statement is a muted acknowledgment that WST failed to predict the signal historical development of our age, namely the industrialization of previously backward economies through their own initiative.

    “But the development of internal markets is sustained by the political strength and economic demand of labor. The WST take on this? It’s the logical conclusion of the secular trend of proletarianization driven by the extension and intensification of capitalism.” Thus the theorized system has outgrown its earlier descriptions—proposed in the 20th century and influenced by earlier periods—for intra-systemic reasons.

    Could you elaborate on this? Try not to use Marxian jargon, because it is hard to understand. Also, the notion that “the theorized system has outgrown its earlier descriptions” sounds like handwaving to explain away the outright failure of WST as a theory. Thus, we observe that WST fails to predict how history actually progresses. Does this mean that WST is wrong? No, of course not, it just means that the system “has outgrown its earlier descriptions.” Well, you can always say that in retrospect to excuse any theory’s wrong predictions. But in saying that, you also acknowledge that WST has no predictive value whatsoever. Using WST, you can never say at time T1 what the system will look like at time T2, because the system’s dynamics may change in the interim in unpredictable ways. WST is utterly useless as a theory. It can’t tell you where history is going, or how economies change, or why.

14. @ Random Lurker

    Your baroque proliferation of conceptual categories within WST points to another hallmark of a failed theory, reminiscent of the endless proliferation of epicycles within Ptolemaic astronomy. Whenever a part of the system fails to behave as predicted, just carve out for it a brand new conceptual category with its own ad hoc behavioral rules. Since core and periphery utterly fail to explain the observed behavior of nations and economies, set up a new category of the semi-periphery. Still not enough? Well, then, throw in a category that is “somehow in between the periphery and semiperiphery.”

    Here’s the kind of awesome predictive power that flows from this theory of history:

    “The WST predicts that the semiperiphery states will at some point challenge the core states for the control of istitutions (like, rejecting "washington consensus" theories) and, when core countries are forced to fight back, this might lead to an actual armed conflict.”

    I certainly can’t disagree with this, and I would only add that Gog and Magog may rise up against the Whore of Babylon, and war, famine and pestilence may be let loose in the earth.

    More specifically, you establish that World War II was a revolt of the semi-periphery against the core. Yes, it’s true that the mainstay of the semi-peripheral coalition against the core, Germany, was actually part of the core, but, you see, during the war it was temporarily acting as part of the semi-periphery. That’s clear, then. The scope and consistency of WST are indeed breathtaking.

    Analyses like yours—full of arbitrary exceptions, ad hoc retrospective adjustments, and predictions that are Nostradamian in their capacity to conform to every conceivable happenstance—are quite in line with even sophisticated treatments of WST, except where these have been watered down to the point of vacuousness. WST precepts—everything is connected, the world is invisibly ruled by the occult Powers and Prinicipalities of the core and international finance—are really just a species of Manichean mysticism. It’s sad that intelligent people cling to them.

15. A lot to respond to.

    Srinivas-

    Your first paragraph is absolutely right, this is not just an East Asian phenomenon. On the second paragraph: Figuring out the causality between US deficit, the US housing bubble, and reserve accumulation abroad is not straightforward, especially since neither of "prices" that are supposed to mediate these relationships — exchange rates and interest rates — reliably move to produce equilibrium in the relevant markets the way they do in textbooks. As I've discussed here before, one useful way to think about this is that reserve demand over the past decade pushed down interest rates on risk-free assets and drive more yield-sensitive purchasers of those assets to look for substitutes. It was in large part to satisfy this demand that mortgage-securitization industry developed, allowing the housing bubble to take off. The important point here is that this destructive dynamic only took off because the demand for federal debt wasn't satisfied in the natural way … by issuing more federal debt. This is part of the reason I think that — as long as country's need to self-insure in dollars, which is likely to be for a long time to come — the US needs a higher federal deficit not just in slumps, but secularly. This is also the conclusion Jorg Bibow comes to in one of the articles I linked to above. His proposal for "Bretton Woods III" is for the US to satisfy the world's demand for safe reserve assets in a sustainable way by permanently increasing its level of debt-financed spending on public goods. Ideally, and not implausibly, the public goods would be ones with positive externalities for the rest of the world — basic science, higher education, green energy; if you like, security. (Me, I don't like, but BWIII would look even better if you thought the rest of the world derived a net benefit from US military spending.) Of course utopian schemes for reconstructing the international financial architecture are like assholes — everybody's got one. But this is different in that all it needs is for us to stop fighting the way things are heading already.

    Anonymous-

    Could you use a handle of some kind? Multiple people commenting as "anonymous" leads to confusion. Thanks!

    Of course you are right. I've argued here before that criticism of the "mercantilism" of China and other Asian countries is just a way of distracting attention from the failures of the US political system.

    Will-

    I'll make the same concession to you as to Rob: This probably should have been two separate posts. The last bit is addressing different questions, on a different level of abstraction, from the rest. I'm not ready to give up my Marxist gobbledygook, but I don't want it distracting from the stuff that doesn't require it.

    On the rest of your comment and the later ones, I'll reply tonight.

16. @Will Boisvert
    As I said, I have just a scant understanding of the WST. However, I am quite sure that the "semiperiphery" concept is not a later addition, but is part of the original formulation of the theory (the wikipedia entry http://en.wikipedia.org/wiki/World-systems_theory seems to confirm this).
    I also believe that the economical link between the elite of the s.p. and the core is part of the original nucleus of the theory (this is from memories of my studies, the wikipedia page doesn't state this).
    I will not go on on this argument, since it seems quite OT, however I think that you are misstating the focus of the WST: for example, the USSR also was part of the s.p., so that it is hard to say that WW2 was s.p. VS core.

17. @Will

    I should clarify that I am defending WST’s right to exist, not seeking to champion it. My primary point was to get some perspective: stacked up next to realism, liberalism, etc., WST is pretty useful despite its flaws. You’ve spent the last post mostly just kicking down doors left open by my own post: theoretical adaptation to changing circumstances; national latitude in the world economy; WST more as a way of analyzing rather than a single falsifiable description makes it an empty truism. You’re giving WST the Delong treatment. You’re not taking it for what it is, and certainly not for what it can offer; you’re saying, WST is this and only this, and this is so, so wrong. In the process, you’ve taken up the opposite position of ahistorical national agency and, perhaps despite yourself, effectively replicated the bad opposition of determinism vs. voluntarism, global/structure vs. local/agency. I endorse the political point that we need to set aside the specters of “Empire” and its ilk and emphasize the national forum, but that need not preclude some theoretical reflection. How about a little dialectical finesse? If you want to dismiss that as “hand-waving”, that’s to your—and everyone’s—detriment. And that, btw, is the utility of Wallerstein’s injunction—or the injunction of someone like Fredric Jameson, to “always historicize!”, or a Keynesian’s injunction to keep in mind the way virtue can suddenly turn to vice. People who should know better continually lapse into one-sided fatalism or voluntarism.

    As for WST itself, it does hold that there’s normally little mobility between upper, middle, and low income status. To my knowledge, the facts have not disproved this. WST doesn’t say that there can’t be great improvements or changes within those constraints. It holds for nations what macro-econ says for companies: great management can make the most of the opportunities available, but if there’s not enough demand, all the prudence in the world won’t overcome that constraint. Left alone, a poor country can pursue social and economic policies that make the most of its resources, broadly construed, but it is still likely to remain relatively poor, barring a big break, like what happened with the South Korean “development by invitation”, where the US and Japan gave it unprecedented access to money, technology, and markets, an opportunity South Korea seized with both hands. The Cold War drove this industrialization of Korea the way WWII justified Keynesian policies in the US. Likewise, there’s no reason why the Korean model couldn’t be generalized on its own merits, but that would require a strong enough Left to force capitalists to accept the profits of a full-employment, positive-sum economy instead of a mercantilist one. Left to their own devices, individual capitalists don’t have a good track record on that count. So, the three-tier hierarchy is not destiny—a global leveling-up is possible in WST—but as with the Northern economies in the 20th century or the example of South Korea, it’s driven the combination of endless accumulation and increasing class struggle—basically, more thoroughly capitalist, more saturated with the demands of labor—both of which to my knowledge have always been intrinsic suppositions of the WST model. I’m not sure if it was always conceived this way, but in my experience the “systems” in WST are conceived along the lines of Stephen Jay Gould’s punctuated equilibrium. These are systems in motion, driven by contradictions, with recurring cycles of a sort, but also asymmetric trends, which eventually force the system into breakdown. The utility of this model is certainly debatable. But anyway, I can’t speak for the predictions made by various WST people—though I know Wallerstein says some zany Nostradamus shit, and Arrighi is fond of a probably overly rhythmic description of capitalist history—but the possibility of the system changing beyond recognition has been assumed by WST from the beginning.

18. This is surely unsatisfactory—haven’t really even gotten into Japan, East Asia, etc.—also I haven’t been in the habit of commenting/writing, so I know I’m not always clear—but I’ve got to run, so it’s all I can write for the moment.

19. Looks like my first comment didn't post. Josh, I'll check back later/await your instructions–don't want to duplicate it and add any more clutter than necessary.

    Also, never really introduced myself to the blog. First time commenting–not a big commenter in general–but it's become one of my favorites, and I like the occasional inclusion of art, literature, and science. Best.

20. @ Random Lurker,

    I'm sure you know more about WST than I do. I can't see how WST has anything cogent or true to say about WWII, which pitted coalitions of core and semiperiphery against each other. Any attempt to analyze that conflict using WST concepts immediately lapses into contradiction and incoherence and brute factual error. WST fares no better with any other topic when it is required to formulate clear, testable propositions. It's only purpose is to give anti-capitalist posturing the intellectual cachet of jargonized abstraction. It is a red herring.

21. The central question here seems to be, (when) is it useful/legitimate to think of an international economic system as an integrated whole with its own dynamics, as opposed to simply the aggregate outcome of causal processes happening on the national level? Will B. is obviously taking the second view, and to an extent I think his skepticism is appropriate — it's true that national elites may find it useful to blame the IMF for policies they are really choosing in their own interest. But I'm afraid he's taken a reasonable position and pushed it to an unreasonable extreme.

    I don't think it's helpful to say that

    Imperialism is one thing and one thing only: boots on the ground.

    Personally, I would prefer to say that imperialism is any situation in which the political power (of which military superiority is an important element, but still only one element) of one region (we can call it the core without signing up for the whole of WST) is used to establish an international specialization with another region (periphery, ditto) that is advantageous to the former and disadvantageous to the latter. I think Wallerstein is useful in thinking about how these kinds of specializations have arisen and been maintained historically; but so are Rosa Luxembourg, Fernand Braudel, David Harvey, Giovanni Arrighi, Raul Prebisch, and a lot of other people. So let's not get to fixated on the specifics of the World Systems Theory/Analysis.

    But, when I think about this stuff today my first implicit point of reference isn't any of them but non-Marxist, not even radical historians of the gold standard like Alec Ford and Barry Eichengreen. What they show is that there was a fundamental asymmetry in the operation of the classical gold standard in the decades before WWI. Focusing on the relationship between Britain and Latin America (especially Argentina), they observe that (1) British foreign investment largely financed the purchase of British capital goods, so that exogenous increases in financial outflows from Britain led to comparable increases in British exports, so there was no pressure on the balance of payments. No similar mechanism buffered financial outflows from Latin American countries. And (2) booms and bust were largely synchronized across the countries on the gold standard, and during booms British foreign investment increased, during busts it diminished. This meant that interest rates tended to rise in Britain in the boom and fall in the bust, very useful in a period when discretionary countercyclical monetary policy didn't really exist; while in Latin America interest rates fell in the boom and rose in the bust, amplifying business cycles. So the gold standard system stabilized the financial system in Britain and destabilized it in Latin America; this was one of a number of factors that encouraged Latin America to specialize in primary production, since farms and ranches were less dependent on external credit than were factories.

    Did Britain force Argentina to accept the gold standard at bayonet-point? No, not really. But was Britain's (and the US's in the later part of the gold standard period) superior political-military position relevant to Argentina's accepting this bad deal? Obviously, they were. I think it's useful & meaningful to describe this kind of asymmetric relationship between core and periphery as imperialism.

22. it’s usually a challenge to keep front and center the relations within which units form and change—to think like Stephen Jay Gould, say, instead of either Dawkins or the cult of Gaia.

    This is nicely put, and exactly right. We want to avoid both obscurantist holism and mechanistic reductivism. Altho, I feel obliged to say that even Dawkins isn't Dawkins when he's writing biology. Have you ever looked at The Extended Phenotype? It's kind of the perfect refutation of the gene fundamentalism that he promotes in his more popular writing

    Also, sorry about your comments getting stuck in blogger's incompetent spam filter (same thing happened to this very comment; I really need to move to WordPress) and thanks for the kind words. Thanks to Kevin Q. also — EconoSpeak is one of my must-reads.

23. Re: Dawkins, yeah, I was just referring to his persona— it’s always interesting to see thinkers shrink back from the full radicality and/or reasonableness of their thought. (Somewhat along those lines, I’ve gotten more interested in Keynes; would love to see some thoughts on that, or some recommendations) But Dawkins—haven’t read any of his biological work, but I thought the selfish gene idea was interesting, and The Extended Phenome seems quite interesting, thanks for drawing my attention to it. Also, appreciate the compliment on the quote.

24. I don’t think I disagree with the accuracy of Josh’s use of the term “imperialism”. My preferred practice is to lay stress on the more purely economic/class dimension when possible or appropriate. Imperialism exudes the sense that inter-group conflict is the primary logic of the situation–one national group dickishly lording it over another group—which tends to be the effect, certainly. But there’s a lot to be said for construing it along the lines of: there are some enterprising fellows in one country who are dead-set on making a killing, and their business plan requires them to make some changes in other countries, and if the “collateral damage” in those faraway lands have a problem with that, well, tough for them, cause when push comes to shove, those determined fellows own the dreadnaughts or aircraft carriers or space zeppelins, what have you. (Mark me down as predicting space zeppelins as the weapon of the future, I guess?) On the other hand, though, “imperialism” can be useful in raising a citizen’s awareness of their own implication in seemingly unconnected economic affairs.

25. @ Josh,

    You're right; in the gold standard you’ve identified one of the few purely economic mechanisms—perhaps the only one—that’s capable of propagating a systematizing pressure from one country to another. But, boy, is that a weak pressure. You don’t quanitfy it, but your post makes its influence sound erratic and marginal, just one of many factors impeding Argentina’s industrialization. And boy, is that a weak system. Other countries as diverse as the United States and Japan had no trouble industrializing during this period. If the gold standard explains why Argentina remained backward (it’s actually just one factor among many), does it explain why the United States and Japan did not? I doubt it; to answer that rather salient question, you have to look at internal domestic factors. So, again, we run up against the glaring explanatory failure of systems theory: it simply can’t give a coherent account of comparative development, which was the whole rationale for inventing it. And that’s because of a fundamental conceptual error. WST investigates comparative development by looking at international economic interactions, which is the wrong place to look because those interactions have only marginal effects. The right place to look is within domestic economies.

    And Sweet Jesus that’s a weak imperialism. Forget the Rape of Nanking and the Belgian Congo—it doesn’t even measure up to the Townshend Acts. How does it even work?

    “was Britain's (and the US's in the later part of the gold standard period) superior political-military position relevant to Argentina's accepting this bad deal? Obviously, they were.”

    Well, that’s not obvious. Were Britain and America going to invade Argentina if it left GS? What other forms of coercion could they use? Is there any example of a country trying to leave GS and being bullied back in? Perhaps Argentina’s trade and foreign investments might have been crimped by exiting GS, thus weakening its finances and growth—but then, as you’ve repeatedly shown, these dreaded economic consequences generally don’t materialize. I don’t think any outside force kept Argentina on GS—just a misguided belief in economic orthodoxies, coupled perhaps with domestic politics. (GS was a raging political issue within the United States as well during this period.)

    To lump every “asymmetric” economic relationship, no matter how tenuous, non-violent and consensual, under the rubric of “imperialism” is to drain the word of all meaning, like crying “genocide” when an ethnic-studies department has its budget trimmed. This kind of promiscuous rhetoric doesn’t explain or clarify anything. Its only function is polemical: to spuriously associate mundane market mechanisms with brutal despotism. And it drastically misconstrues the reality of neoliberalism, which, for all its sins, is just not a coercive or bloodthirsty creed. Borrowing and lending and cash settlement simply can’t inflict the kind of outrages and misery that the sword and the whip can.

26. @ Josh:

    You blog:

    “We want to avoid both obscurantist holism and mechanistic reductivism.”

    As a social democrat, I normally applaud this kind of Goldilocksism. In this context, though, I think it’s misplaced. “Mechanistic reductivism”—reductionism?—is simply the mode of investigation that seeks to enumerate a finite number of causal entities and elucidate the mechanisms by which they produce natural phenomena. Indeed, it is the only scientifically valid way of explaining natural phenomena. To “avoid” mechanistic reductivism is to assert that there are properties of a system that cannot be explained by the causal mechanistic actions of its parts. There is a precise term of art for such a belief—mysticism.

    I’m afraid there is no third way here. In condoning systems theory, one abandons the sunlit realm of reason for the mystic fog.

27. Reductionism, you're right.

    And of course there are properties of systems that can't be usefully explained by the causal mechanistic actions of their parts. That goes without saying. The tricky part, where balance really is needed, is loosely integrated systems where the parts are somewhat autonomous and we have to think about causal relationships both there and for the system as a whole. I suppose on the list of things we that divide Marxists and liberals, we can add that liberals see the units that act and have interests are well-defined, discrete and naturally given, while Marxists are interested in the ways they emerge and change historically.

    But really, there's no point in arguing about this stuff at such a high level of abstraction. I intend to go on thinking and writing about the concrete ways in which the international financial systems have systematically disadvantaged countries outside of the European/North American core, and about the openings within that system for industrial policy and related national development strategies. (How an elite interested in pursuing such strategies comes into being and maintains itself strikes me as an extremely important question, but not one that I personally can contribute much to answering.) The original point of this post — which I am hoping to develop in more detail soon — is that in 1997, Asian countries were following the Washington Consensus as promoted by the IMF, etc., and nearly capsized; this time they'd ignored the IMF, followed a self-insurance strategy, and came through an even worse storm with much less damage. In telling this story, I think it's perfectly possible to have in mind both the ways in which various forms of pressure from the North shape the choices made by the South, and the ways in which countries of the South sometimes have successfully resisted that pressure.

28. @Will

    But in this version of Goldilocks, the girl moves back forth between hot and cold, instead of settling for a lukewarm synthesis of myth. So there are not three positions, there are four.

    If you want to emulate the really hard sciences, consider the way physics moves back and forth between two more or less equally validated realms: quantum mechanics and general relativity. Nothing mystical there—though plenty of physicists are mystics. It’s just that the same basic stuff behaves differently on different scales. In this metaphor, the tempting yet precarious Goldilocks synthesis is string theory, and the back-and-forth is the search for something like a truly testable background-independent unifying theory.

    It’s worth being mindful about how we invoke falsifiability, though. If you give Popper’s essay on it a close-read, for example, you’ll see that he’s not talking about science so much as he’s championing social distinction in the same manner as Keynes’ Ricardians or Krugman’s Very Serious People. I’m not saying we shouldn’t strive toward it, I’m saying we shouldn’t fetishize it. Especially in the realm of human relations, it’s not always an instant pass to the truth.

    Anyway, it just seems to me that you have an aversion toward a dialectical approach to things, in the very basic sense of maintaining oppositions in their tension rather than collapsing the field toward one pole or the other. At least in physics and biology, the most successful science seems to be quite dialectical—the physics noted above, or Dawkins’ selfish gene and Stephen Jay Gould all come to mind.

    I won’t keep running on about this.

    Also, as you’ve noticed I’ve given the WST thread a rest; wanted to give the comments area some breathing room from what was really an off-topic. I think the case of Japan is interesting and wouldn’t mind discussing it sometime, though.

29. Also, an incidental imperialism anecdote that might be mildly interesting:
    A while back I checked out a symposium at Columbia entitled “What does ‘imperialism’ mean in an age of finance?”, featuring David Harvey, Duncan Foley, a delegation of Marxists from India, a guy from a UN agency, maybe some others. No one actually talked about imperialism. As I recall, a couple people slapped the term onto predatory practices and subalternity within India. Foley talked about the financial crisis. The UN guy shuffled through some powerpoints on recent theories like HN’s Empire, none of which addressed imperialism with any specificity. Then he talked about capital flows, and it seemed like he was building toward a sort of US-centered neo-tributary vision—but didn’t. Harvey just said he didn’t find the term that useful, and continued to talk about other things. A collective shoulder shrug.

30. Look, it makes no sense to conflate neoliberalism with imperialism and inequitable world systems.The economic logic of neoliberalism runs directly contrary to the economic logic of imperialism, and to the logic of geographical specialization.

    Here’s the logic of the Spanish Empire and world system: “There’s a huge silver deposit in Bolivia. So we’ll conquer Bolivia, whip the Indians to make them mine silver, and keep all the profits.” Great, send out the conquistadors! Then a Spaniard says, “And while we’re at it, let’s build a cloth factory in Bolivia.” But the Seville cloth-makers at court respond, “No way. The competition would eat into our profits.” The Emperor owes the cloth-makers money, so he issues an edict forbidding cloth manufacture in Bolivia. Voila—the Spanish Empire: a big silver mine with no manufacturing.

    This logic wouldn’t play with today’s neoliberals. Suppose some imperialist proposed that America conquer China, whip the Chinese to make them work for us, and keep the profits. A neoliberal would say, “Why not just invest in Chinese companies and sell their cheap imports at Walmart? That way you get profits without the bother of conquering and whipping people.” Then some textile executive says, “I don’t want the Chinese to set up cloth factories and export their goods here. The competition will eat into my profits.” The neoliberal says, “You’ll make a ton more profit if you close your textile factory here and sink your money into a Chinese one.” And there you have neoliberalism: a regime that disdains conquest while investing like crazy in the industrialization of developing countries.

    Neoliberalism is based on the insight that nowadays, thanks to global trade and global financial markets, all rich people everywhere can extract profit from all economic activity everywhere. It follows that there is no longer any economic rationale for controlling territory or imposing geographical specialization. NL not only doesn’t have the ability to keep the periphery mired in underdevelopment, it wouldn’t want to if it did—it’s much more profitable to finance the industrial development of the periphery and its convergence with the core. NL is even OK with countries that defy NL orthodoxies, like China, etc., as long as they participate in industrial development and international finance and trade.

    So the logic of NL is antithetical both to empire and to geographically inequitable world systems. And that expectation is born out by what we observe in the real world under the neoliberal regime: the dismantling of empires and the convergent development of formerly backward economies. Tarring neoliberalism with the brush of imperialism and inequitable development is just barking up the wrong tree.

31. From wikipedia:
    http://en.wikipedia.org/wiki/Imperialism
    
    "the creation and/or maintenance of an unequal economic, cultural, and territorial relationship, usually between states and often in the form of an empire, based on domination and subordination."
    […]
    primarily a western undertaking that employs "expansionist – mercantilism and latterly communist – systems."
    I think that the most important "mercantilist" imperialism is not the spanish one, but the british one.
    British imperialism worked this way:
    1) We (Britain)are most efficient manufacturers
    2) We sell to (say) chinese and indians, that suck at manifacturing but can still sell us agricultural products and/or raw materials
    3) We enforce laws tat impede protectionist policies by India and China, because we need to export or we end in a "overproduction" crisis
    4) Since we are very good manifacturers, this still improves the living standards of most chinese and indians
    5) But anyway we definitely kill chinese and indian manufacturing, since we outcompete them too much, with dire social, political and economical (in terms of prospects for growth) consequence for China and India.

    This is the original "liberal" imperialism.

    However today the USA is acting at the opposite, since it is an "importer" nation.
    What is happening today is:
    1) Most developed and semi developed nations have an industrial surplus, that they need to sell or they fall in recession. Semideveloped nations like China actually need to export even more in order to speed up their modernization.
    2) Many of those nations use "keynesian" policies to avoid recessions, but are limited by national debt, often denominated in dollars.
    3) The USA also uses keynesian or pseudokeynesian (monetaristic) policies, in fact at a level that it netly imports from other nations (thus easing other nations problems).(Side note: since this actually helps the "elites" in other countries to maintain the status quo, whe still have the "core" country that in pratices coalesces with the elite of the semiperiphery. Welcome WST!)
    4) But USA can print dollars so that, in case of crisis, it can easily print away debt, thus dumping the problem on other countries.
    5) Thus apparently the USA would be able to live permanently above its means at the expense of other countries, that actually have to subsidize USA debt. Wow!
    6) But, because of the internal workings of USA politics/society, that is still basd on laissez faire capitalism at least on a cultural level, it seem determined not to do this, meanwhile keeping the whole world economy (that is extremely favourable to the USA!!) down with itself.

    I'm not sure that this fits with the definition of "imperialism", but still has some similarities.

    As an interesting note, the italian wikipedia has a much stricter definiton for "imperialismo" (http://it.wikipedia.org/wiki/Imperialismo), where imperialismo only refers to the policies between 1871 and 1914, whereas older policies (such as Spain's conquista) are referred to as "colonialismo". Apparently the term was used for the first time by Napoleon, and was initially used only for the late kind of imperialism. The marxist interpretation of imperialism (as a way to avoid crises of overproduction at home) apparently is based on this "original" meaning of the term imperialismo, whereas the actual use in english is much wider (the wikipedia page speaks of imperialism of the roman empire), so that mixing the marxist interpretation with the modern use of the term causes some confusion.

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