Johns Hopkins Magazine - September 1994 Issue


The global shopping mall, etc.

New standards for sovereignty

When Steven R. David looks at the world from his vantage point as the chair of political science in the School of Arts & Sciences, he sees the world turned on its ear. "The biggest change is the uncertainty," he says. "The end of the Cold War was both unanticipated and momentous. Now all bets are off."

Only a few years ago, a government was regarded as sovereign over all territory and people within its borders by simple virtue of its being the recognized government, notes David. Now, however, for the international community to respect the sovereign rights of a state, that state's government must show that it exerts control over all of its territory, not just the capital and some military outposts--and that it is at least attempting to provide for the welfare of its people. If a government does not meet this new standard, says David, the international community seems increasingly willing to intervene, as it has done in Somalia and Kurdish northern Iraq.

These so-called humanitarian interventions, in which an outside country or countries takes control of another nation's territory, not for military gain but to protect or rescue the people who live there, are unprecedented, David says: "This kind of thing didn't happen during the Cold War. It didn't happen before the Cold War. I'm hearing arguments that the old bases of sovereignty no longer apply."

David foresees the possible redrawing of sovereign boundaries as a way of resolving ethnic conflicts around the world. He points to national boundaries that the European colonial powers arbitrarily imposed on Africa. Those boundaries created several countries that have never made much sense from an ethnic or historical standpoint and that often have never managed to cohere as societies. "One can envision convening international conferences to redraw these boundaries," he says.

Though he acknowledges the increasing interdependence of nations, especially in the global economy, David is skeptical of predictions that this will foster world peace. "At times I wonder if too much is being made of interdependence," he says. "The United States was Japan's biggest trading partner on December 7, 1941. One thing that has not changed is human nature. We still live in a state of anarchy." --DK

Leaky borders

Nations can no longer control their borders; they are leaking in every sense, says anthropologist Sidney Mintz.

Even very large countries no longer control the flow of capital in and out, Mintz says; if the markets don't like a nation's economic policy, investment goes elsewhere till the policy changes. Nations do not control communication; radio waves could be jammed, but not so the new technologies. Nor do they control the flow of goods; if the United States refuses to buy from or sell to a certain nation, goods simply move through intermediaries. And most of all, he says, nations cannot control the flow of people; consider the hundreds of thousands of people (especially non-white people) who are flooding into Europe, Canada, and the United States in a way that is "new, large-scale, and completely uncontrolled."

What's important, says Mintz, is that at the same time, "many of these same states that cannot control their own borders are also faced with intransigent internal minorities claiming sovereignty for themselves." Consider Africa, the former Eastern Bloc, the Kurds, the Basques, the Catalans, the Irish, the various vociferous groups of whatever persuasion. How many nation-states can survive such internal battering? Mintz offers the possibility that the world will eventually consist of "15,000 Mauritanias and maybe five real countries": Germany, the United States, Japan, and possibly Russia, India, and China.

The situation shows, says Mintz, that "what we know about the state is very small, and our confidence that the state is all-powerful is misplaced." A state has certain necessary functions: to socialize the young, to maintain its borders, and to feed the population. How can that be done, in today's world, while also maintaining democracy? Says Mintz, "I cannot think of any period when the future seemed so fraught with terrible uncertainty and doubt." --EH

"The free markets are calling the tune"

In September 1981, economist Steven H. Hanke gave a speech to the Public Lands Council. For that speech, he needed a word to represent the concept of taking government-run operations and turning them over to private business. His French-born wife suggested "privatize," adapted from the French word privatiser.

Now, not only is "privatize" in mainstream American dictionaries, it's entered the vocabulary of nations around the world as they transform from state-run to free-market economies. Says Hanke, professor of political economy in the School of Arts & Sciences, "In the 1920s and '30s, members of the Austrian School of Economics proved on paper that socialism was impossible and unsustainable. In the late '80s, we had confirmation of what they'd proved in theory.

"Going the next step, now we're seeing the spread of free markets not only in Eastern Europe and the former Soviet Union, but in China and all the Asian tigers and all of Latin America. We've had a complete revolution in economic thinking."

The Russians, Hanke says, claim to have privatized three-fourths of all Russian industry, and they didn't get started until 1992. "There's still a large planned portion of the economy in China, but over half the gross national product is now in the private sector." Worldwide, he notes, there are hardly any centrally planned economies left. There's North Korea, and Cuba, at least in principle, though he says the Cuban black market is so big that it's virtually the national economy.

"Whenever you can liberalize the economy," Hanke says, "you grow faster. Why do you think Africa's not growing?" He notes that the biggest African economy is that of South Africa, and it's only about the size of Minnesota's. "Africa's not even on the screen," he says.

"Whenever the markets win out over the state and the power of the politicians, you're in pretty good shape," he says. "The big danger now will be the reintroduction of socialism. Socialism's like a hydra."

Why would a country reintroduce state control if the free market works so well? The answer, Hanke says, concerns power: "The market is viewed as the enemy by most politicians." A free market of capital and labor causes power to flow away from politicians. For example, governments must finance their debt. If the international bond market becomes concerned by political decisions made by a nation's government, it may raise the price of borrowing for that nation, hurting its economy. Investment capital will flow elsewhere. Hanke points out that last year, American investors, even pension funds, bought more securities overseas than in the United States. "The politicians have less power, in effect," Hanke says. "For the time being, the free markets are calling the tune."

He cautions against assuming that a free market ensures political freedom. Hong Kong has the world's freest economy, he says, but no real political freedom--it's a British colony, and soon will fall under the control of China. But in many countries, he says, "the market has politicians back stepping." --DK

Malling the globe

"Twenty years ago, people were talking about the global village. Instead we've got the global shopping mall."

John Pocock, distinguished historian of political philosophy in the School of Arts & Sciences, speaks in measured, magisterial tones, setting forth an appalling premise: that political democracy may be extinct. "The peoples of the world"--he repeats it, slowly, to emphasize that final s--"the peoples of the world may no longer govern themselves, in the sense that philosophers have used the word govern." That is, few now are a people: sovereign over themselves because they are organized in a state that knows its unique past and acts upon its future.

The reason is that "the market, especially the global market, is now far stronger than the state." As Pocock goes on, the careful "mays" drop from his speech, but he does not speed up. This is not an interview; he is giving dictation. "The state cannot control what the market does, and it loses meaning to its citizens. Then the market demands that states give up their sovereignty to transnational institutions over which neither citizens nor peoples exercise democratic control. The state exists largely to enforce the requirements of the global market."

Pocock resumes: "The market is not interested in us as free individuals deciding who we shall be, only as producers or consumers--and now very much more as the latter. It wants to satisfy our needs, merely to give us new needs for it to satisfy; to remodel our selves every so often by reducing us to bundles of needs which it has created. And now there come in all the radically post-modern intellectuals who tell us we have no real selves. They think themselves very anti-capitalist, but they're doing the market's work for it. They are diminishing our capacity to speak with voices of our own."

The result is dehumanizing, says Pocock. "We retain all sorts of personal, legal, civil and moral liberties. We have all the freedom of choice the market allows us. But we are ceasing to share in political sovereignty, and the great Western premise is that the human is a political animal."

Pocock means that literally. "In all the history of political philosophy," he enunciates carefully, "it has always been assumed that if one is not of a sovereign people, one cannot govern oneself, and may not even have a self to govern." He looks to make sure the notes are complete, then repeats. "And may not even have a self to govern.... So if you abolish the citizen, you abolish the human."

"A world in which social democracy seemed a possibility," says the historian, "has all gone down the drain." He says that for a time, the economy needed skilled and semi-skilled workers so badly that workers could negotiate. They could unionize; they had a certain power to determine the character of their lives and their state.

These days, however, the economy needs skilled labor less and unskilled labor more. "It therefore undermines the unions and the labor-based social democratic parties; it undermines the Western cultures that might once have been governed by organized labor and its intellectual allies; and it moves on to Asia and Latin America in search of new reserves of low-skilled labor. Wherever there are peasantries weary of their back-breaking toil on the land, it moves them into huge cities where they live in slums and work for very low wages, but have far greater access to consumer goods."

The historian's smile is wintry as he outlines a juggernaut that plays out over decades: In time, these laborers get too good at consuming. That is, they insist on higher wages. So the global economy goes on to modernize another set of peasants. "It moves from the U.S. to Mexico, from Japan to Korea, from Australia and New Zealand to Chile." As each labor force in turn becomes too well paid to be economical, the market moves on. At the moment, Pocock points out, "everything you pick up says 'Made in China.'" That's because the peasants along the Chinese coast are the latest to be modernized.

He doubts the process can go on forever, if only because, "sooner or later, the planet is going to run out of peasantries--the economy will have elevated them all to the class where they are sufficiently cheap as labor and sufficiently affluent as consumers." That outcome would resemble the world according to Francis Fukuyama: "He imagined a world where the market ruled everywhere, and the human race was effectively lobotomized."

Or, Pocock thinks, the global market might "go back to the formerly industrial countries, which it has abandoned, leaving their economies to run down." By that time, the peoples of the West might have sunk enough to be grateful for work at peasant wages.

Looking at this "dismal account"--Pocock's own words--he asks whether there is "any way for the former citizens to bring pressure to bear"? Can we deter a globalized economy from exhausting the globe's resources and from selling things that do us harm? Not through governments, and therefore not by democratic means. Pocock says it flatly: "Little can be done by voting for laws or for people to enact legislation. Sovereign states cannot legislate effectively in the face of global forces."

He thinks, though, that there may be "other methods of interacting with these forces. If there are none--if we live wholly under their control and must always believe they know and do what is best for us--then we live under their despotism. It's as simple as that. But what can local, regional, neighborhood, private, non-sovereign power do in response?"

His answer: "Quite a lot, perhaps--if the economy does not proletarianize everyone of whom it doesn't make a manager. That is, if there remain large classes of consumers affluent enough to consider their behavior and make changes in it," thus affecting market forces. "In the United States, and no doubt elsewhere, there is a large morally oriented middle class which can and does change its habits. It is bringing alcohol and tobacco under control by self-reform, and it may do the same with drugs, sexual behavior, environmental waste, and even firearms--though it has to exist alongside a large third-world class which isn't well placed to reform itself."

Does Pocock have a doomsday scenario? "You can always supply one of those. In this case, it's one in which the economy runs more and more efficiently while satisfying fewer and fewer human wants," such as community and meaningful work. "Eventually it runs out of capacity to replace the needs it doesn't satisfy with new needs that it does. You then have a planetful of fairly affluent but unhappy people--and sooner or later they just walk away from the global economy, in the way in which the peoples of Central Europe and the Soviet Union walked away from the command economy." Walking away, however, does not supply people with new ways of organizing their collective lives, and in the ensuing struggles, says Pocock, "all manner of human catastrophes can be imagined on the planetary scale. I could easily imagine that being the history of the 21st century."

Pocock catches himself in mid-flow. But he emphasizes, "all this is jeremiad, apocalyptic talk, and historians learn not to predict. What happens is almost always the unexpected--and the assumption behind that is that human life always contains new and hidden possibilities that no one can predict." --EH

A different form of capitalism

In working on his latest book, Challenge to America, Pulitzer Prize winner Hedrick Smith has been observing the enormous rise in power of the East Asian economy. "Not just Japan," he says, "but the 'mini-dragons' [Taiwan, South Korea, Singapore, Hong Kong], and beyond them Malaysia, Indonesia, and, the biggest of all, China.

"Their economies operate differently from ours," notes Smith, an editor-in-residence at Hopkins's Nitze School of Advanced International Studies. "They have a different form of capitalism. They operate from Confucian standards." Smith contrasts the Confucian ideal with standard American capitalism. The traditional American belief has been that each person working for individual gain will result in the greatest common good. A good American is supposed to work hard for his or her own aggrandizement; a good American corporation for the immediate profit of the shareholders.

Confucianism, he says, emphasizes hard work "as an obligation to society, not just to personally getting ahead." In the Confucian tradition, a worker feels strong social pressure to work hard as a form of respect to ancestors, the company, and the broader society. Professional obligations are mutual, Smith points out; for example, companies in Confucian societies go to great lengths to retain their workers. --DK

Written by Elise Hancock and Dale Keiger.

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