The Virtues of Deglobalization

September 5, 2009

By Walden BelloForeign Policy in Focus, 3 September 2009

The current global downturn, the worst since the Great Depression 70 years ago, pounded the last nail into the coffin of globalization. Already beleaguered by evidence that showed global poverty and inequality increasing, even as most poor countries experienced little or no economic growth, globalization has been terminally discredited in the last two years. As the much-heralded process of financial and trade interdependence went into reverse, it became the transmission belt not of prosperity but of economic crisis and collapse.

End of an Era

In their responses to the current economic crisis, governments paid lip service to global coordination but propelled separate stimulus programs meant to rev up national markets. In so doing, governments quietly shelved export-oriented growth, long the driver of many economies, though paid the usual nostrums to advancing trade liberalization as a means of countering the global downturn by completing the Doha Round of trade negotiations under the World Trade Organization. There is increasing acknowledgment that there will be no returning to a world centrally dependent on free-spending American consumers, since many are bankrupt and nobody has taken their place.

Moreover, whether agreed on internationally or unilaterally set up by national governments, a whole raft of restrictions will almost certainly be imposed on finance capital, the untrammeled mobility of which has been the cutting edge of the current crisis.

Intellectual discourse, however, hasn’t yet shown many signs of this break with orthodoxy. Neoliberalism, with its emphasis on free trade, the primacy of private enterprise, and a minimalist role for the state, continues to be the default language among policymakers. Establishment critics of market fundamentalism, including Joseph Stiglitz and Paul Krugman, have become entangled in endless debates over how large stimulus programs should be, and whether or not the state should retain an interventionist presence or, once stabilized, return the companies and banks to the private sector. Moreover some, such as Stiglitz, continue to believe in what they perceive to be the economic benefits of globalization while bemoaning its social costs.

But trends are fast outpacing both ideologues and critics of neoliberal globalization, and developments thought impossible a few years ago are gaining steam. “The integration of the world economy is in retreat on almost every front,” writes the Economist. While the magazine says that corporations continue to believe in the efficiency of global supply chains, “like any chain, these are only as strong as their weakest link. A danger point will come if firms decide that this way of organizing production has had its day.”

“Deglobalization,” a term that the Economist attributes to me, is a development that the magazine, the world’s prime avatar of free market ideology, views as negative. I believe, however, that deglobalization is an opportunity. Indeed, my colleagues and I at Focus on the Global South first forwarded deglobalization as a comprehensive paradigm to replace neoliberal globalization almost a decade ago, when the stresses, strains, and contradictions brought about by the latter had become painfully evident. Elaborated as an alternative mainly for developing countries, the deglobalization paradigm is not without relevance to the central capitalist economies.

11 Pillars of the Alternative

There are 11 key prongs of the deglobalization paradigm:

  1. Production for the domestic market must again become the center of gravity of the economy rather than production for export markets.
  2. The principle of subsidiarity should be enshrined in economic life by encouraging production of goods at the level of the community and at the national level if this can be done at reasonable cost in order to preserve community.
  3. Trade policy — that is, quotas and tariffs — should be used to protect the local economy from destruction by corporate-subsidized commodities with artificially low prices.
  4. Industrial policy — including subsidies, tariffs, and trade — should be used to revitalize and strengthen the manufacturing sector.
  5. Long-postponed measures of equitable income redistribution and land redistribution (including urban land reform) can create a vibrant internal market that would serve as the anchor of the economy and produce local financial resources for investment.
  6. Deemphasizing growth, emphasizing upgrading the quality of life, and maximizing equity will reduce environmental disequilibrium.
  7. The development and diffusion of environmentally congenial technology in both agriculture and industry should be encouraged.
  8. Strategic economic decisions cannot be left to the market or to technocrats. Instead, the scope of democratic decision-making in the economy should be expanded so that all vital questions — such as which industries to develop or phase out, what proportion of the government budget to devote to agriculture, etc. — become subject to democratic discussion and choice.
  9. Civil society must constantly monitor and supervise the private sector and the state, a process that should be institutionalized.
  10. The property complex should be transformed into a “mixed economy” that includes community cooperatives, private enterprises, and state enterprises, and excludes transnational corporations.
  11. Centralized global institutions like the IMF and the World Bank should be replaced with regional institutions built not on free trade and capital mobility but on principles of cooperation that, to use the words of Hugo Chavez in describing the Bolivarian Alternative for the Americas (ALBA), “transcend the logic of capitalism.”

From the Cult of Efficiency to Effective Economics

The aim of the deglobalization paradigm is to move beyond the economics of narrow efficiency, in which the key criterion is the reduction of unit cost, never mind the social and ecological destabilization this process brings about. It is to move beyond a system of economic calculation that, in the words of John Maynard Keynes, made “the whole conduct of life…into a paradox of an accountant’s nightmare.” An effective economics, rather, strengthens social solidarity by subordinating the operations of the market to the values of equity, justice, and community by enlarging the sphere of democratic decision making. To use the language of the great Hungarian thinker Karl Polanyi in his book The Great Transformation, deglobalization is about “re-embedding” the economy in society, instead of having society driven by the economy.

The deglobalization paradigm also asserts that a “one size fits all” model like neoliberalism or centralized bureaucratic socialism is dysfunctional and destabilizing. Instead, diversity should be expected and encouraged, as it is in nature. Shared principles of alternative economics do exist, and they have already substantially emerged in the struggle against and critical reflection over the failure of centralized socialism and capitalism. However, how these principles — the most important of which have been sketched out above — are concretely articulated will depend on the values, rhythms, and strategic choices of each society.

Deglobalization’s Pedigree

Though it may sound radical, deglobalization isn’t really new. Its pedigree includes the writings of the towering British economist Keynes who, at the height of the Depression, bluntly stated: “We do not wish…to be at the mercy of world forces working out, or trying to work out, some uniform equilibrium, according to the principles of laissez faire capitalism.”

Indeed, he continued, over “an increasingly wide range of industrial products, and perhaps agricultural products also, I become doubtful whether the economic cost of self-sufficiency is great enough to outweigh the other advantages of gradually bringing the producer and the consumer within the ambit of the same national, economic and financial organization. Experience accumulates to prove that most modern mass-production processes can be performed in most countries and climates with almost equal efficiency.”

And with words that have a very contemporary ring, Keynes concluded, “I sympathize…with those who would minimize rather than with those who would maximize economic entanglement between nations. Ideas, knowledge, art, hospitality, travel — these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national.”

Foreign Policy in Focus columnist Walden Bello is a member of the House of Representatives of the Philippines and senior analyst at the Bangkok-based research and advocacy institute Focus on the Global South.

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Walden Bello: Steps to a Post-Capitalist System

May 28, 2009

eon, April 2009

Political economist, planetary activist and author Walden Bello, in an interview with EON producer Mary Beth Brangan, gives his commentary on events at the April, 2009 G-20 Summit and ASEAN meeting. He lays out his vision of a ‘post-captialist system of economic democracy,’ thinking outside the boxes of the failed neo-liberal and neo-conservative paradigms that have created the current global economic, ecological and climatic crisis.


Interview with Walden Bello

March 23, 2009

This is a transcript of the Die Tagezeitzung’s interview with Walden Bello.

Dr. Bello, what is is the impact of the current crisis on the global South? 

The current global crisis will definitely have a massive impact on the South.  It is especially those economies that globalized most fully and followed strategies of export-oriented industrialization that tied their growth to foreign markets that will suffer most.  Those countries that have globalized least, like many in Africa, will be much less affected.

Could you give examples?

Exports have declined precipitously throughout the East Asian region.  China has seen 20 million workers lose their jobs in the last few months, according to the Chinese government.  The value of the Korean won has fallen by over 30 per cent in the last few months.  Remittances are going to fall and laid off migrant workers are going to return in Indonesia and the Philippines.  Argentina and Brazil’s agricultural exports are in a freefall.

Are you afraid of a further worsening of the situation?

Yes, definitely.  We are just at the beginning of the global freefall and I really don’t know when we are going to hit rock bottom and once we reach it, how long the global economy will lie there.  The global economy is just like a German U-Boat that has been depthcharged, and it’s descending rapidly to the ocean bottom, and once it reaches the bottom, you don’t know how the crew is going to get the submarine back up.  Will the crew’s tortuous maneuvers get it back to the surface, as in the film Das Boot, or will it just stay at the bottom?  Will Keynesian methods of reflation work today?  We don’t know.

How do you assess the politics and economic program of US president Obama and his administration with respect to global matters?

I think that in terms of economic policies, the administration is turning inward, away from policies of globalization and free trade.  It talks about multilateralism and against protectionism, but this is largely words still.  I think Obama’s overwhelming priority is to stabilize the US economy and foreign economic policy can wait.  Will the US take a leading role in creating a global financial architecture, with strong regulatory controls at next month’s G 20 meeting in London?  I think rhetorically yes, but the focus of regulatory work in the US will be domestic.  Once the freefall of the US economy stops, then you will see Obama move on to international economic issues.

What about the European Union?

The EU is probably going to look inward too, but whether it will come out with viable region-wide policies or revert to national policies of stabilization remains to be seen.  I think that the support for multilateralism and globalist policies is going to erode in Europe.  You will see a similar turning inward, as in the United States.  I worry about what will happen to the migrant workers from the South and from the East under conditions of economic contraction.  Racism and ethnic prejudices might run riot.

What do you expect from the upcoming G20 summit in Londonwikth respect to calming the global economic turbulenc?

No.  I think the conditions are not there to create a new Bretton Woods system.  Everybody is still at the “every man for himself” stage.  There is little support for a reform of the IMF and bigger role for the World Bank.  There is little support for completing the Doha Round of the WTO because of distrust of globalization.  People also see the Basel process as having failed to come up with the necessary regulatory framework for the banks.  There will be a great deal of rhetoric about multilateralism but little reality.

What should urgently be done to avoid the deepening of deglobalisation and disintegration?

Deglobalization must not be equated with disintegration.  Given the excesses of globalization and the way it made economies so vulnerable to collapse because it integrated markets and production and did away with protective barriers between the domestic economy and the international economy, deglobalization accompanied by regionalization of economies and the strengthening of national economies is a good thing.  The problem with globalization is that it destroyed national economies.  The challenge for us now is how to create a global system where participation in the international economy strengthens the capacity of national economies rather than destroys them.

What would be the appropriate contribution by the politically and socially critical spectrum in the North to stop disintegration?

We must see this as an opportunity to create a deglobalized world, where there is more equality between and within countries, where countries can pursue economic policies that respond to their values, goals, and rhythms as societies instead of being crammed within a neoliberal one-shoe-fits-all-model, where diversity, as in nature, is seen as a strength, where there is space to pursue sustainable development policies that do not reproduce the high consumption model of the North.  I repeat: crisis spells opportunity.

What is your general assessment of the stand of the Left and the social movements in answering the crisis?

The Left has the theoretical tools to understand the crisis, and here the Marxist analysis of capitalism’s tendency to overaccumulation and overproduction, including the insights of Rosa Luxemburg, are very important.  Where the challenge lies is in building a mass movement globally and nationally to promote an anti-capitalist soution to the crisis, a solution that lies in democratizing the economy along with a fuller democratization of politics.  We must move fast, because it people are not persuaded to go left, they might be persuaded to go right, and we don’t want countries falling into a Germany-in-the-1930’s kind of scenario again.

What changes are now necessary?

The changes I’ve alluded to above.

Thank you very much for answering the questions. Is there an up-to-date photograph of yours available?


With Bush, “Nothing Good Is Going to Happen in Poznan”: Interview with Walden Bello

December 9, 2008

Antonio Marafioti interviews WALDEN BELLO*

IPSNews

VITERBO, Italy, Dec 4 (IPS) – With the United States represented by outgoing President George W. Bush, not much can be expected of the Dec. 1-12 international conference on climate change in the Polish city of Poznan, activist Walden Bello, winner of the Alternative Nobel Prize 2003, told IPS.

Bello, executive director of Focus on the Global South — a Bangkok-based policy research institute — and a professor of sociology and public administration at the University of the Philippines, is not known for mincing words. 

He sat down with IPS on the sidelines of the VI International Media Forum of Greenaccord, an environmental group based in Italy, to discuss the current financial crisis, global warming and the challenges and opportunities facing U.S. President-elect Barack Obama. Excerpts of the interview follow: 

IPS: Obama said recently that the Poznan conference would be vital. Moreover, at the Governors’ Global Climate Summit in Los Angeles, he added that the U.S. would invest 15 billion dollars annually to help the private sector develop and improve alternative energy, and promised to reduce emissions to 1990 levels within 12 years. Do you believe that this is the first step towards ratification of the Kyoto Protocol?

WALDEN BELLO: Yes. I think that the Kyoto Protocol will in fact be ratified under the Obama administration, especially now that (the Democrats) have a majority in the Senate…But the Bush administration has always opposed mandatory reductions, so I believe that nothing good is going to happen in Poznan. 

The other thing is what level of ambition Obama will have. It is not whether or not the U.S. ratifies the Kyoto Protocol. It is rather what they will commit to, especially when you have the current economic recession and there are a number of forces within the U.S. establishment saying you can’t pay attention to climate change right now…I think it would be a mistake for Obama to listen to them…If the U.S. is ambitious, then Europe will also be ambitious. 

IPS: According to a report by The Independent newspaper, more than 60 nations, mainly in the developing world, will have hundreds of millions of “environmental refugees” caused by global warming. Does this mean a worsening situation for poor communities in Africa? 

WB: Yes, definitely. I think the problem is that communities that have contributed the least to global warming… are also the ones who are suffering the consequences in a major way. So I think this is a very serious problem… It is very important that we create mechanisms that will transfer both technologies as well as money to those communities. 

IPS: According to a recent report of the U.N. Framework Convention on Climate Change (UNFCCC), emissions of greenhouse gases by industrialised countries grew by 2.3 percent from 2000 to 2006. However, the Kyoto Protocol was aimed at reducing emissions by 5.2 percent by 2008. What didn’t work?

WB: I think several things. One is the level of ambitions of the Kyoto Protocol that has to be lower in terms of reduction. The second thing is the U.S. of course, which did not participate in the global regime of mandatory reductions, and created a lot of problems in terms of the legitimacy of the Kyoto Protocol. 

I think we must realise that the Bush administration made a tremendous contribution to the deterioration of the climate. There should be a category of environmental crimes under the International Criminal Court (ICC). Bush should be prosecuted under it. 

The incoming Obama administration must be aware that this is the time to have an effective protocol by getting mandatory commitments, particularly from the biggest greenhouse gas polluters, including the United States. 

IPS: Developing countries, such as China and India that are about to overtake the U.S. as major producers of greenhouse gases, say that they will cut emissions only when the industrialised countries have done the same. Do you think that the EU and the U.S. should take the initiative? 

WB: In terms of responsibility for climate change, it has been the North, including Europe and the U.S., which have been most responsible for the historical accumulation of greenhouse gases. So the North should take the first step. 

Unless Northern countries do that, India and China are not going to follow. That’s very understandable. Why commit yourself to a mandatory reduction when the key culprits are not willing to do so? This brings us to a negotiation with two phases: First, commitments by the U.S. and the others, and second, India and China, and maybe Brazil, also undertake mandatory reductions. 

IPS: The World Bank has been accused of profiting from carbon credits. What do you think the World Bank’s role should be? 

WB: The World Bank should not have anything to do with the climate change mechanisms. It has a very bad record. The World Bank is spending much more on gasoline than on development or its commitment to alternative energy sources. 

The U.N. Environment Programme alone should really be the mechanism for supporting financial initiatives against climate change. It could be a disaster if the World Bank were to take over these functions, apart from the fact that it is controlled by the rich countries and the banks, which are the wrong institutions to deal with climate change. 

IPS: What are the limits standing in the way of sustainable development? 

WB: The real limit to sustainable development is not the lack of resources. The real limits are ideas and political will. If we have ideas and political will, we can achieve things even if we don’t have that many resources. If we have imagination and determination, if we are skilful and smart, we can commit to the welfare of the people and of the environment with wise political strategies. 

*With collaboration by Miren Gutiérrez in Rome. (END/2008)


Towards a New American Isolationism

September 6, 2008

By Walden Bello*, Focus on the Global South, September 5, 2008

(This essay originally appeared as the author’s commentary in Foreign Policy in Focus, Sept. 5, 2008.)

Despite the glitter that surrounded both the Olympics in Beijing and the Democratic National Convention in Denver, the messages coming to Asia from the two events were very different.

From Beijing, the message was, to put it in the words of one pundit, China has had a few bad centuries but is back on its feet.  From Denver, the word was that the world’s most powerful country has been on a desperate decade-long downspin that can only get worse if the Republicans keep the White House. 

For people in this part of the world, the weakening of US power is most evident elsewhere:  in the Middle East and Southwest Asia, where Washington is bogged down in unending wars in Iraq and Afghanistan; in Latin America, where the rebellion against neoliberalism and US meddling is in full swing; and, most recently, in Central Asia, where Washington and the North Atlantic Treaty Organization (NATO) have been taught a painful lesson in overextension in Georgia.

The erosion of Washington’s position is less obvious in East Asia.  After all, the US continues to maintain over 300 military bases and facilities in the Western Pacific.  Over the last decade, it has established what amounts to a permanent troop presence in the Southern Philippines to make up for its giving up its two big military bases on Luzon Island in 1992.   And in Indonesia, the Pentagon has reestablished its close ties with the Indonesian military after several years of uncertainty, using the opportunity provided by relief operations during the tsunami of 2004. 

Erosion of US Power in East Asia

Nevertheless, the region—and Southeast Asia in particular—is probably more independent of the US today than at any other time in the last 60 years.  Economics is the reason.  Over the last two decades, several developments have eroded the US’s position. 

First of all, its drive to create the trans-Pacific free trade area known as the Asia Pacific Cooperation (APEC) failed.  APEC was meant to be a westward extension of the North American Free Trade Area (NAFTA), and both were intended to serve as a geoeconomic counterweight to the European Union.  Japan, China, and the Association of Southeast Asian (ASEAN) countries, fearing US economic domination in the name of free trade, scuttled President Bill Clinton’s trans-Pacific dream at the APEC Summit in Osaka in 1995.  APEC summits continue to be held, but these are remembered more as times when heads of state don the host country’s national costume than as occasions for serious economic decisionmaking.

Second, the US effort to impose capital account and financial liberalization on the Asia Pacific economies as a key element of more thoroughgoing structural transformation backfired.  Capital account liberalization led to the Asian Financial Crisis in 1997-1998.  Instead of helping to shore up economies in crisis, Washington took advantage of the crisis to try to comprehensively transform the region’s economies along neoliberal lines.  As one of Clinton’s economic lieutenants saw it, “Most of these countries are going through a dark and deep tunnel…But on the other end there is going to be a significantly different Asia in which American firms have achieved a much deeper market penetration, much greater access.” 

The outcome proved to be different.  Malaysia imposed capital controls.  The International Monetary Fund (IMF) was discredited, with the Thai government declaring its intention never to go back to the agency after paying off its loans in 2003 and the Indonesian government resolving to do the same thing in 2008.  While Washington and the IMF were able to kill Japan’s proposal for an Asian Monetary Fund (AMF) at the height of the crisis, the East Asian governments formed the “ASEAN Plus Three” financial mechanism that excludes the US and is likely to be the precursor of a full-blown regional financial agency.  Neoliberal transformation has stalled in Japan and most Southeast Asian countries, with possibly only South Korea continuing to travel along the free-market path desired by the US. 

 Moreover, to protect themselves against future speculative crises provoked by the movements of global finance capital spearheaded by US funds, the Asian governments have built up massive foreign exchange reserves, on which the US has become dependent for funds to prop up its massive military expenditures and the middle-class spending that for a long time served as an artificial barrier against recession.  With the unraveling of American financial institutions, the onset of recession, and the depreciation of the dollar, the US economy has become hostage to these countries’ decisions to continue to lend to Washington and Wall Street.

A third development that is not positive for the US is the region’s becoming increasingly dependent on the red-hot Chinese economic locomotive.  According to a United Nations report, China has been a “major engine of growth for most of the economies in the region.  The country’s imports accelerated even more than its exports, with a large proportion of them coming from the rest of Asia.”   In fact, Chinese demand is what pulled the Asia Pacific economies from the recession caused by the Asian financial crisis that the US tried to take advantage of.  China has not only surpassed the United States to become Japan’s main trading partner but Chinese demand has helped keep the world’s second-largest economy from falling back into recession. 

Conscious of its economic clout, China has moved to consolidate its position as East Asia’s new economic center via smart economic diplomacy.  In 2002, it convinced the ASEAN governments to create the ASEAN-China Free Trade Area that is scheduled to come into effect in 2010.  Japan has tried to catch up by offering ASEAN countries “economic partnership agreements.” Meanwhile, talks on a U.S.-Thailand free trade area have been frozen by popular opposition to Washington’s strident championing of the so-called intellectual property rights of its corporations.  All in all, there is a great deal of truth in the observation that the biggest beneficiary of the Bush administration’s imperial and corporate misadventures over the last decade has been China, which has kept itself from military entanglements and devoted itself singlemindedly to economic development.

Challenges Posed by China’s Ascent
The rise of China provides a number of very fundamental challenges to different key actors in East Asia.  
To Japan, the key challenge is to move from being effectively a vassal state of the United States in security matters to a mature relationship with China that would definitively leave behind five decades of aggression followed by six decades of serving as a springboard for US power projection onto the Asian mainland.  A definitive acceptance of responsibility for the atrocities committed by Japanese troops during the Second World War, including the infamous Nanjing Massacre, on the part of the Japanese people and their leaders is an indispensable step in this move towards a mature relationship between Asia’s leading economic powers.

For Southeast Asia, the challenge is how to avoid becoming an appendage of the Chinese economy.   

Chinese demand was, as mentioned earlier, an immense force lifting Southeast Asia’s economies from the depths of the Asian financial crisis.  However, China’s developing trade and investment relations with ASEAN have had some not pleasant aspects.

The experience of Thai vegetable and fruit producers owing to an “early harvest” free trade arrangement with Thailand earlier this decade is one of them.  Under the agreement, Thailand would export tropical fruits to China while winter fruits from China would be eligible for the zero-tariff deal.  The expectations of mutual benefit evaporated after a few months, however, with massive imports from China wiping out Thai producers of many fruits and vegetables such as garlic and red onions.

But the fear of many in Southeast Asia goes beyond having trade agreements with China that would yield unequal benefits. With land and energy relatively scarce in China, Chinese enterprises, with the blessings of the Chinese government, are seeking deals that would allow them to mine minerals and grow crops in Southeast Asian countries for exclusive export to the China market.  To take one example, in a deal with the Philippines, the Chinese Fuhua Group planned to invest $3.83 billion over five to seven years to develop 1 million hectares of land to grow high-yielding strains of corn, rice, and sorghum.   The Philippine government’s Departments of Environment and Agrarian Reform plan to identify “idle lands” that could be incorporated into the Chinese plantations.  This in a country where seven out of 10 farmers are landless!  This is a formula for real trouble. 

Some have been quick to call China’s international economic policies “imperialistic.”  It is, however, difficult to sustain this label since exploitative relations between China and other developing countries have not congealed structurally.  Economic trends where China emerges as a net beneficiary do not add up to imperialism.  Moreover, there is absent that element of force and coercion that accompanied the imposition of European and American economic power on weaker societies. 

Nevertheless, Southeast Asian governments need to balance their spontaneous feelings of South-South solidarity with cool-headed realism.  Countries like China, Brazil, and India,  are led by  developmentalist elites that are seeking to find their place in a new global capitalist order marked by the loosening of the economic hegemony of the old capitalist centers, that is, Japan, the US, and the European Union.  The pursuit of national economic interest, not regional cooperation for development, is their central concern. By uncritically signing trade and investment agreements or joining a regional formation anchored by these bigger, ambitious powers, smaller countries may simply end up being used economically, territorially, and politically to advance their regional and global agenda. 

Does this mean that a trade agreement and regional economic formation linking China and ASEAN is to be avoided at all costs?  No, it simply means the ASEAN governments must enter talks with China with eyes wide open and negotiate collectively, not as 10 separate governments.  They must make it clear to China that they do not desire a trade agreement based on free trade, such as the arrangements that the US, European Union, and Japan are pushing on them, but one where, as the weaker economies, the net benefits of the arrangement accrue to them, not China.  They must see to it that the terms of association must be carefully negotiated and that they work closely to offset the dominance of the central power. 

Yes, China’s relationship with Southeast Asia cannot be described as an exploitative one.  But unless considerations of equity are front and center in the negotiation of economic relationships between Beijing and its neighbors, the old structural patterns marking the relations between Southeast Asia and Europe, the United States, and Japan could easily be replicated.

The US-China Relationship
The most critical regional relationship, however, is between the US and China since the US is the most powerful power in East Asia and China the next most powerful.

In his stimulating book Adam Smith in Beijing, the eminent political economist Giovanni Arrighi of Johns Hopkins University writes that there are three alternative policies that the United States can adopt towards a China that is on the ascendant.

The first is an updated version of the Cold War strategy of containment.  In this strategy, China is seen as a strategic threat or, as the 2002 National Security Strategy Paper of the Bush administration puts it euphemistically, a “strategic competitor.”  The US response would be to “dissuade China” from its military ambitions by giving a high profile to the massive American military presence in the Western Pacific, strengthening the bilateral agreements with US allies that sustain this trans-Pacific garrison state, and building up defense cooperation with India, Asia’s other big power.  Needless to say, this response misconstrues the nature of the Chinese challenge, which is an economic rather than a strategic one.  And needless to say as well, this response would be disastrous for the whole world.

A second strategy is not to directly confront China as the US confronted the old Soviet Union but to put into motion balance of power politics, wherein China is weakened indirectly.  Arrighi quotes James Pinkerton, a protagonist of this approach:

Instead of confronting directly the rising Asian powers, the United States should play them off each other.  As the Latin expression tertium gaudens—the happy third—reminds us, rather than getting in the middle of every fight, sometimes it is better “to hold the coats of those who do.”  For the US national interest, “a better Asia would be one in which China, India, Japan, and possibly another ‘tiger’ or two contend with each other for power while we enjoy the happy luxury of third party by-standing.” |

Needless to say, this strategy would also have terrible consequences for the region.

A third strategy, one that Arrighi identifies with two old faces from the 20th century, Henry Kissinger and Zbigniew Brzezinski, National Security Adviser to President Jimmy Carter, does not see China as a revisionist power but as one that wants to join the global status quo.  The appropriate response for Washington is to accept China as part of the elite of the global state system and work with it in pursuit of international stability, in the same way that Britain, the hegemon of the 19th century, cooperated and made way for the United States, the hegemon of the 20th century.  

Arrighi prefers the third strategy.  Indeed, though still in essence conservative in that it seeks to preserve the global status quo, this is by far a preferable American response.  It is, however, the least likely to be adopted.  The problem is that imperial America is not like imperial Britain.  The US is ideologically an expansionist missionary democracy that will find it difficult to accept a No. 2 status without provoking a reactionary populist reaction among key segments of its population.  Aside from its powerful corporate and strategic drives, providing leadership in the messianic enterprise of remaking the world along the lines of a liberal or neoliberal Lockean democracy is a fundamental driving force of US hegemony.

Civil Society, China, and America
This conundrum inevitably leads to a discussion of how civil society, both in Asia and globally, ought to respond to the erosion of US hegemony and the ascent of China.  In the best of all possible worlds, the US and China could be supporters of the effort to create a new world order built on peace, justice, and popular sovereignty.  Unfortunately, we live in a less than ideal world 

With respect to China, the task of civil society is to pressure it, as it intensifies its engagement with the world, to resist the temptation of following the destructive imperial path trodden by Europe and the United States.  It is also to push it to move away from the fossil-fuel intensive, consumption-oriented path of development pioneered by the West to one that is more ecologically sustainable and sensitive to equity issues.  This will not be easy.  Nevertheless, there are signs of hope, one of them being the rethinking of the direction of China’s development that is going on among China’s leaders. One can only agree with Arrighi when he says:

If the reorientation succeeds in reviving and consolidating China’s traditions of self-centered market-based development, accumulation without dispossession, mobilization of human rather than non-human resources, and government through mass participation in shaping policies, then the chances are that China will be in a position to contribute decisively to the emergence of a commonwealth of civilizations truly respectful of differences.  But, if the reorientation fails, China may well turn into a new epicenter of social and political chaos that will facilitate Northern attempts to reestablish a crumbling global dominance. 

With the Chinese leadership’s great concern for legitimacy both internally and internationally, one cannot say that the failure of the proponents of reorientation is a foregone conclusion.  This is why pressure from international civil society for a change in economic strategy, for pro-environment policies, for the expansion of democratic rights, and for equitable relations with the developing countries must be kept up.

Towards a New American Isolationism
Blunting Washington’s innately hegemonic thrust will be much more difficult.  Difficult but not impossible. 

Perhaps the best strategy for civil society at this point is not so much to rely on appeals to American ideals but to continually point to the very high costs of intervention, in terms of soldiers killed, money spent, domestic strife, and credibility lost, to consistently campaign against any temptation for US forces to intervene on whatever grounds.  Part of this strategy must be pressure for the removal of the US military bases from Asia and the Pacific and the neutralizing of the bilateral treaties between the US and a number of Asian countries.  Aside from being the pillars for Washington’s containment of China, these institutions are the main factors that prevent China and other East Asian countries from evolving a more mature relationship. 

More broadly, the aim of civil society mobilization both in Asia and globally should be to encourage a new American isolationism. Barack Obama is definitely preferable to John McCain, but the world does not need a new American internationalism, this time of the liberal and “soft power variety.”  We should not tolerate a policy of withdrawing troops from Iraq, only to send them to Afghanistan in the name of defending human rights. We do not want in place of military confrontation, an aggressive diplomatic isolation of Iran led by a Democratic elite that is uncritical, as Obama is, of Israel.  We do not want an obsession with the Middle East to be replaced with an obsession with destabilizing Hugo Chavez and restoring US influence in Latin America.  And we should worry when Bill Clinton says, as he did during the Democratic Party convention, that one of Obama’s objectives will be to “restore American leadership in the world.”  Asia does not need or want American leadership.

What Asia, like the rest of the world, needs is a vacation from a messianic United States, and a few decades of a withdrawn, self absorbed, isolationist America, paying attention to its domestic troubles and deterred by the high costs of the continued pursuit of hegemony globally, would be good for the region, good for everybody. 
   
The Asia Pacific region, in sum, is pregnant with both dangers and possibilities, and there is, if anything, great indeterminacy, a great element of contingency on where we’re heading.  In times like this, when the possible and the impossible hang in a fine balance, it is important to remember the advice of that great Italian thinker Antonio Gramsci about balancing the pessimism of the intellect with the optimism of the will.

* Walden Bello is Professor of Sociology at the University of the Philippines and senior analyst at the Bangkok-based research and advocacy institute Focus on the Global South.  He is the author of, among other books, Dilemmas of Domination: TheUnmaking of the American Empire (New York: Henry Holt, 2005).


WALDEN BELLO on Global Justice

August 16, 2008

July 2008

WALDEN BELLO, author, scholar, activist and founder of Focus on the Global South, lays out his view of the challenges and opportunities of the planetary movement he has helped to organize.