Who Elected the Bankers?
By Louis W. Pauly. Ithaca, N.Y.: Cornell University Press, 1997. 184 pp., $25.
Globalizing Capital: A History of the International Monetary System
By Barry Eichengreen. Princeton, N.J.: Princeton University Press, 1996. 223 pp., $24.95.
The Retreat of the State
By Susan Strange. Cambridge: Cambridge University Press, 1997. 218 pp., $49.95, cloth; $16.95, paper.
Along the Domestic-Foreign Frontier: Exploring Governance in a Turbulent World
By James N. Rosenau. Cambridge: Cambridge University Press, 1997. 467 pp., $59.95.
"There are few free traders in the present-day world, no one pays any attention to their views, and no person in authority anywhere advocates free trade." Thus economist Jacob Viner's summary of the global political landscape in the January 1947 issue of Foreign Affairs. Today, of course, the panorama is strikingly different. "It's the global economy, stupid" has become the Clinton administration's rallying cry, while the president himself can be heard resolutely proclaiming the equivalent of "Ich bin ein free trader" before groups large and small as he campaigns for fast-track authority, leaving his secretary of state to sign arms control agreements.
Although it is unlikely that the tapes--if there are any--of Bill Clinton's meetings on, say, the 1994 Mexican peso crisis will be as riveting as those of Kennedy and his advisers during the Cuban missile crisis, the current emphasis on globalization would lead one to believe that world security depends on current account balances and exchange rate policies. While this may be overstating the case, cynically dismissing global economics would be wrongheaded; as Henry Kissinger found out in the 1970s, the subject matter studied by those he had once dubbed "second-rate minds" does intimately affect America's security. Whether it is the supreme security concern is another question.
Kissinger quickly realized the central role politics plays in economic matters, a role variously investigated in the four books under review. The tension between the political and the economic in globalization forms the focus of Louis Pauly's Who Elected the Bankers? Pauly cuts to the core of the globalization debate by noting that "the logic of markets is borderless, but the logic of politics remains bounded." Throughout much of the cold war the first part of this proposition was in abeyance; liberal international markets functioned under multilateral constraints and did not infringe on core domestic economic behavior. This compromise, as Pauly calls it, has been breached in recent years; the welfare state, controls on capital mobility, and trade barriers have been jettisoned to allow the global market to work its "magic."
It is not atavism, Pauly notes, that motivates negative citizen reaction to this new model, but a genuine desire to ensure that structures remain in place to prevent market failures and maintain a safety net that offers protection "from the tender mercies of efficient markets." The removal of one of those structures--ontrols on international flows of capital--forms an essential part of Pauly's discussion. It is also an important aspect of Barry Eichengreen's readable history of the international monetary system, which recounts both the breakdown of the postwar system that was to keep global capital markets at bay and the unfolding of their borderless logic. While generally concerned with explicating the mechanics of this unfolding, Eichengreen also examines the role politics has played, and how market forces have "overwhelmed the efforts of governments to manage their currencies."
"Exactly!" Susan Strange would undoubtedly respond. Her Retreat of the State is an impassioned critique of those who argue that the state's control of its currency, or even home-based multinational companies, remains intact. Her central point in a wide-ranging collection of provocative essays: "Where states were once the masters of markets, now it is the markets which . . . are the masters over the governments of states."
Strange's strong claim about the state's eroding authority has proved contentious. Less so is James Rosenau's exploration of the same topic. Rosenau focuses on the myriad changes that are occurring as the border between the domestic and foreign becomes more porous; his nuanced understanding of globalization's impact is more a meditation than a theoretical construct. It is also a refreshing pause from the political and academic attacks that attend globalization--and a sophisticated interweaving of the political and economic threads that are globalization.
W. W. F.
The Case against the Global Economy and for a Turn Toward the Local
Edited by Jerry Mander and Edward Goldsmith. San Francisco: Sierra Club Books, 1996. 550 pp., $28.
Jerry Mander and Edward Goldsmith have put together probably the most important collection of leftist and
environmental critiques of globalization to date. The authors of the book's 43 essays share a skepticism toward
claims that globalization is inevitable,
desirable, and impartial, as well as a zest for debunking conventional economic wisdom.
As an alternative to globalization, the last section of the book offers "localization."
To critics' charges that such a project is utopian, Mander answers that "[w]hat is truly utopian . . . is to continue to say that a
development model that defies natural limits and economic and social equity can possibly function for long."
The independence of thought in this volume makes it essential reading for anyone interested in economic
globalization.
D. W.