Globalization yet to have its day

2010-03-26Asia Times

BEIJING - Vladimir Lenin's mark on communist theory was his book on imperialism [1], which the Russian leader considered the supreme - and thus last - phase of capitalism. After the imperialistic stage, capitalism would fall. He was wrong in many respects. Capitalism did not fall apart, and imperialism was just a stage in capitalistic evolution.

Now is the time of globalization. After imperialism and post-colonialism, globalization is the most recent phase of capitalism's (r)evolution. As at every turn of economic transformation, political paradigms are also dramatically transformed. Are old zero-sum game political theories still working, or are they fading into a mist?

With imperialism, a few countries occupied most of the rest of the planet and organized local economic activities as a function of their own desires. Post-colonialism eliminated political occupation, but left many strings attached between former colonizers and ex-colonies. Globalization is a new ball game in which former victims of imperialism have emerged as the big players in international trade, and political rules have become intertwined with economic rules.

This phase of capitalism sheds new light on the old concepts of zero-sum games in international politics. As capitalism proves that there is an invisible hand whereby selfish goals, if controlled and restricted by fair competition, can spread into social benefit, so "political expansion" of a nation in a globalized world dominated by well-managed trade rules need not translate directly into suppression of other countries' interests and benefits.

The emergence and expansion of former so-called Third World countries could create an overall win-win game because countries gaining from globalization, including China, India, parts of Southeast Asia, have an interest in stability conducive to more and better economic exchanges (and not just trade). Therefore, instead of destabilizing the present system for their own goals, they have a vested interest in preserving and upholding it. This ultimately lightens the load for the United States, which has taken the lead in maintaining the global security that underpins the present globalization.

Here is the principle; in reality there are a few snags. The burden of security is expensive and countries that have spent nothing or very little on global security would like to carry on doing so. It is human nature: if I haven't paid taxes so far, I want to carry on not paying them or postpone payments as long as possible. The other is trickier: if I have to contribute to security, I want to have a voice in security decisions. For instance, is Iran a real security concern? And even if it is, what are the real effective measures to force Iran to fold?

These are big issues for the West, which along with paying so far has also made all political decisions. But for China, this brings a new dimension to traditional political calculations.

First, the present global economic crisis most likely is not a crisis of the capitalist system - it is part of the capitalist system, and capitalism most likely will come out stronger than before. And secondly, the process of globalization has fostered the emergence of a global interest, ie the common interest of all countries benefiting from the globalization being bigger than the interests of a single nation. If one country tries to put its own interests before the global interest, the globalized economic balance could be shaken and collapse, damaging everybody - first and foremost, the country that tried to reap too many benefits.

The capitalist modern world that fails to reach beyond the old political mindset of a zero-sum game doesn't square with the global-interest mentality, and new "globalized politics" are hard to perceive while old perceptions of political advantage survive. This new atmosphere does not fit China's imperial idea of stability.

China has accused America several times of a "Cold War mentality", but the same could be said about China vis-a-vis America. China sometimes perceives that if the US does something not for China, then there must be a reason to get one over China. But objectively, besides intentions, in a globalized world, this may not be true.

Still, mindsets are important in reading what is happening. One classic Chinese paradigm is the triangular pattern, coming from the old novel The Three Kingdoms. The paradigm is that the emerging power should try to establish a triangular competition in which the weakest player can play the two strongest against one another. This was Mao Zedong's strategy in the war against Japan and the Kuomingtang, and it was possibly also Mao's idea in distancing himself from the US and the Soviet Union. However, this old strategy is doomed - even without taking into account broad globalization - simply because there is no third party that can work in the play between China and the US.

International political issues could have a new twist if both China and the US were to recognize they have to solve issues of concern to both because general common interests point the way forward.

Where politics mixes directly with economics is on the issue of the revaluation of the yuan. In the present crisis, China keeps the yuan undervalued to bolster its export industry and therefore employment, but also to keep China attractive for investment, which provides modern technology and know-how.

A yuan revaluation could stop or slow down this transfer, as also foreign countries may object to China buying foreign assets and foreign technology with its stronger currency. With a revaluation of the yuan, China would cough up some of the money it has earned in the past decade, but it could do so also by acquiring new technology.

The transfer of foreign technology is the key. This would also be the strongest proof to China that a new globalization political paradigm exists and that the old zero-sum ideas are dead or dying.

1. Imperialism, the Highest Stage of Capitalism (1916) (2010-03-26 Asia Times)


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