Think Globally, Lose Locally
p. 17-38
Texte intégral
1The Cold War is over, and our side won. But what kind of victory? The most certain victor was capitalism, and it won globally. But this is neither the first victory of capitalism nor the first era of globalization. In its major 1997 world economic survey, The Economist observed that, by most important measures, “the world was more closely integrated before 1914 than it is now, in some cases much more so.”1 Everyone now recognizes that the first period of globalization confirmed the economics of Adam Smith; the economy, left alone, will produce the greatest wealth of nations and in the long run the state will wither, or be pushed away, as though by an Invisible Hand. Perhaps less appreciated is that it also confirmed Karl Marx, in a most particular way: every system of power tends to develop its own ideology, and ideology guides and rationalizes the governmental policies that impose and sustain the system of power.
2Putting Smith and Marx together, a funny thing happened in pre-1914 globalization that seems to be echoed in the current scene: As the market expands, the focus of ideology becomes narrower. Economic ideology becomes microscopic, with the individual at the center, making free, rational choices, and contributing to public virtue through private vice. The focus of political ideology also narrows; although manifestly anti-statist, the state does not wither away but devolves its power from national sovereignty to local control and social order. There is a wise old saying in America, that “all politics is local;” there is a still wiser corollary, that all social control is local.
3As a result, the ideology of a globalizing capitalism has a remarkably rightward tilt. It is rightward in its rejection of any government policies that have even the slightest tendency to redistribute wealth or status. It is rightward also in its support of government policies that use locally enforced social control to address the spillover effects of extreme inequalities.
The New Order
4For at least 15 years there has been a sustained, world-wide tendency toward the Right. It is especially notable in the most advanced, industrializing countries—led by the us but including Great Britain, France, Germany, Italy, Japan, Canada, and South Korea. But it also includes former socialist countries: Russia and the other former Soviet Republics, and China with its “Four Modernizations.” Within most of these countries, Left parties have succeeded only by moving right—toward the center, and then beyond. Bill Clinton became a Republican, in New Democrat clothing. Labour’s Tony Blair became Maggie Thatcher, in Bill Clinton’s clothing. The Italian left, having given itself a new name, is now moderately well ensconced as the center-leaning government of Italy as well as in the mayoralties of many major Italian cities. It is giving Italy an antiwelfare state budget in order to remain a full member of ec, and perhaps as a condition of remaining the leader of the government coalition. In France, the unemployed and many employed workers fear betrayal by their own Socialist Jospin government on matters of job security; meanwhile the national police force has expanded by 35,000. Germany, already ruled for 15 years by a center-right coalition, is now looking toward a replacement by a grand national coalition of the leading right-wing party, the Christian Democrats, with the leading party of the left, the Social Democrats. And in Canada, a national Conservative leader has been invited to take over the Liberal party in Quebec. Except in metaphorical terms, there is no Left left, anywhere to speak of.
5The Right that is first seen and heard is classically liberal. In modern policy language, this means deregulation, privatization, and devolution. In ideological terms, it means stigmatizing government, politics, and democracy itself (for all the prattle of capitalist ideologues about capitalism encouraging democracy, they reject the essential right of democratic governments to experiment and make mistakes). In the United States, because of its association with the social-democratic experimentation of the New Deal, even the word “liberalism” has dropped out of the self-description of this project. (Europeans were never fooled because they always saw liberalism as right-of-center precisely because they understood liberalism as the ideology of capitalism.) Classical liberals now call themselves conservatives, or “conservative on economics, liberal (or progressive) on social issues.”
6If the idealized Adam Smith epitomizes the first rightward path, Edmund Burke stands well for a second, with a bit of help from Bismarck (and, dressed in a moral uniform, Cotton Mather).
7How could any two belief systems be more contradictory than the Godless anarchy of pure classical liberalism and morally transcendent statism? One could at first blush simply shrug this off as the imperfection of practical politics. Confronting the actual policy implications of the two rightward paths, however their contradictions can be appreciated as two sets of functional prerequisites of capitalism.
8Let it be granted here and now that free enterprise possesses all the virtues classical economics attributes to it. But those virtues cannot be realized unless certain functions outside the market are being performed on a regular, institutionalized basis. Many of those functional requirements are met by families and other voluntary, non-economic institutions. But many are met by governmental institutions. Capitalism has proven that enterprise cannot work well unless it is free. But even freedom requires controls; it is not a matter of whether but which. And the more the market is driven by corporations rather than individual entrepreneurs, the more controls="true" are needed, and the more carefully selected those controls="true" must be.
Ideology and policy in the US
9We need to bring some evidence to bear on these claims about liberalism and conservatism, and the best single case study of what is now a worldwide phenomenon is the United States. This is true not only because we are ahead and are being widely imitated but because the unique American federal system provides a laboratory that exposes in the purest real-world form the two kinds of ideologies—liberal and conservative—and the two kinds of policies—deregulation and social control—that are being produced to support global capitalism.
American Federalism
10Federalism is a constitutional system with dual sovereignty. It provides for a central government with power sufficient to maintain the respect of other nations. That is the essence of sovereignty, but part of it is devolved upon a second, lower level of government with powers and territory that cannot be infringed upon without its consent or by some extraordinary decision process, such as a two-thirds vote or a constitutional amendment. The constitutional scheme is known well-enough: Article I delegates a number of specific powers to the national government—to tax, to raise and support armies, to regulate commerce among the states, etc.—which are broader and more impressive than latter day “originalists” would have us believe. At the same time, the Tenth Amendment makes quite explicit that all powers not delegated to the national government are reserved to the states, making them the linchpin of the us government. What makes American federalism unique, however, is that it goes beyond this division of sovereignty to provide for a specialization of functions in its use.
11For over a century, the national government was concerned entirely with internal development or “infrastructure,” with a common currency and standard of weights and measures, with the development of shipping, and with the distribution of lands to the states and to individuals in order to fill out the continent. All these policies and programs had to do with the provision of matters that were beyond the reach of the individual states, and all had to do with the husbandry of commerce. Absent from national government policies in the late 19th century—and in modest degree even after the 1930s— were any laws or programs directly regulating the conduct of individuals, including those fictitious persons called corporations. That power—which came to be given the apt name “police power”—was instead exercised almost solely by the states. Cut through all the household noise, from Eisenhower’s “creeping socialism” to the recent raves about deregulation, and what comes clear is that all the national government regulatory policies adopted by Congress since 1933 (to quote Bogart in Casablanca) “don’t add up to a hill of beans” in the total scheme of government in the United States. All of the fundamental policies that regulate the conduct of American citizens and corporate persons have been and still are made by the legislatures, not by Congress and not by local governments. For example, except for federal territories, there are no national property laws, no national corporate laws, no national morality laws, no national marriage and divorce laws, no national compulsory education laws, no national contract laws for conveyance of property, no professions laws, not even any motor vehicle laws (until speed limits imposed during the fuel crisis). The us had almost no national criminal laws except for crimes defined as interstate.
12The states also had the power to promote commerce, and they have used that power generously. But the overwhelmingly important function of state governments in the United States has been the specialized one of regulating conduct. State government in the United States is a regulatory state, and as a regulatory state its specialization is setting the rules of conduct and backing those rules by sanctions. That’s where real “government power” is.
Implications of the specialization of functions
13Once American federalism neatly separated these two functions from each other, an unintended but no less fundamental institutional development flowed from it: The American national government became the home of liberalism, and the state governments became the home of conservatism. Ideology followed policy, and ideology helped shape policy.
14First, national government policies have been almost entirely instrumental—devoid of moral imperative. If it was good to build canals and to explore and survey conquered territory, it was good because it encouraged national strength and wealth, not because it was the realization of a biblical or some other moral principle. Adam Smith was a professor of moral philosophy, yet one can find no trace of morality in his account of how individuals produce wealth. His Invisible Hand was a beautiful metaphor, but also a distinctly secular one. It was a force inherent in individual reason and action. It is liberalism, and it is this liberalism that characterized the policies of the national government in the 19th century and continued to characterize its policies in the 20th century. Even as the national government began to adopt more regulatory policies, after 1932, these were also almost entirely instrumental.
15In profound contrast, the American states were confronted with the fact that the coercion inherent in the regulation of any conduct affecting the “health, safety and morals of the community” almost always possesses a moral element. Most national—liberal—regulation is concerned with conduct deemed harmful in its consequences. In contrast, responsibility for maintenance and control of public order required regulation of conduct deemed good or evil in itself. Some state policies are liberal, instrumental; for example, regulating local traffic, local markets, fire hazards, etc. But far and away the largest number of state regulatory policies are concerned with the morality of conduct and are grounded in morality. From time to time there have been radically left regulatory policies—such as bank holidays, debt relief, de-segregation laws. But a scan of the history of policies in the American states will reveal that most state policies have been deeply, often radically conservative. And, once again, why not? The police power involves matters on which all Americans are conservative some of the time and a large number are conservative all of the time. For example, although few property-owning middle class people will support such leftist policies as rent control or improved working conditions, almost all the lower classes support strict regulatory policies to preserve law and order and are the kind of God-fearing citizens who embrace most of the sexual morality laws on the books.
16Descending to local government, cities have displayed an even more conservative tendency. Having no place in the Constitution, they are mere creatures of the states and exist for their convenience, while being permitted to adapt state law to local variations. But cities also possess a certain amount of authority under common law, such as power to control nuisance, disturbing the peace, carnal knowledge, and lascivious carriage. Uniformed forces in the us and throughout the world use such powers, both statutory and traditional or common law powers, to herd prostitutes into certain districts, to keep the poor invisible, and to help maintain the barriers between neighborhoods separated along class, ethnic and racial lines.
The Meaning of Decentralization
17Our new globalization proceeds within this context of divided government functions. The particular policies supporting global capitalism, and the ideology associated with each, are easy to appreciate and assess in the specialized atmosphere of the us federal system, but the relationship between policy and ideology on the one side and globalization on the other is worldwide; and, on the face of it, only very small, and shrinking, minorities seem to be opposed. These policies can be grouped under three separate categories: deregulation, privatization, and, most importantly, devolution.
18Deregulation. Most regulatory policies exist to facilitate social and economic intercourse by removing barriers, reducing risks and inconveniences, and protecting property rights. Regulatory policies spread like wildfire all during the late 19th century because of the enormous increase in rates of injury that went right along with the spread of mechanization. Regulatory policies to protect property also spread as “intellectual property” driving the technology explosion spread. Regulation to protect the obligations of contracts also had to be expanded as increased scale meant that the terms of contracts were harder to specify over enormous spaces and lengthier time spans. All this kind of regulation is instrumental, therefore liberal; and although every regulatory policy increases the cost of operation to someone, there was widespread justification for most of these interventions. In addition to the instrumental regulation, there was continuing spread of morally oriented regulation, such as laws that require stores to close on Sunday, or laws regulating or totally prohibiting manufacture or sale of certain products and services deemed immoral. Even the us government got into some morality regulation with such efforts as the infamous Mann Act, prohibiting the transport of women across state lines for immoral purposes.
19Then there are also regulatory policies that can only be understood as paternalistic, such as laws requiring seatbelts and headgear or laws requiring that we set aside a certain percentage of our earnings for disability, unemployment and retirement.
20But whatever the justification, and it is almost always ample, regulatory programs have a limited life span, not because they share anything with biological limitations but because the conditions that gave rise to them and justified them are likely to have changed, to some extent precisely because of the success of the regulatory policy itself. Yet, although hundreds of regulatory policies and programs long ago reached a point where it would be impossible to continue to defend them or justify them, and they now operate as drag on enterprise without any redeeming social value, it is amazing how little deregulation there has ever been.
21Except for the Civil Aeronautics Board, killed by the Democrats under President Carter, and the Interstate Commerce Commission, terminated by the Republicans after nearly fifteen years of effort, no major New Deal regulatory program has been terminated, and few have ever been singled out in a campaign for termination. The main route to successful deregulation has been to cut down on the total number of rules and regulations being issued by regulatory agencies, accomplished by presidential/executive oversight and by budgetary review. And this has worked, to the extent that the total number of rules and regulations was significantly reduced during the 1980s. But why stop with cutting down on the level of activity of these old and superannuated programs when one assumes that the goal of deregulation is to eliminate the agencies so as to cut down on the size of bureaucracy and to prevent the revival of agency activities when later administrations take power?
22The answer to this question is that genuine deregulation was not the goal in the 1980s, when the deregulation movement really got into full gear; and the main goal in the 1990s is not genuine deregulation. The main goal is stigmatization: keep all the effigies alive, in a weakened state, and maintain a continuous attack against a live enemy rather than a dead one. In this sense, deregulation has worked, because stigmatization has been successful. And to the extent that the stigmatization of regulatory policies has been a success, so has the stigmatization of the national government and of the principle of government itself. The basic principle of a nationwide regulatory program, or any general regulatory program, is constantly used by orthodox classical economists and other ideologues to illustrate the evils of government. No new programs involving any regulation whatsoever have been proposed, much less adopted, except in such areas as crime, morality, and, in particular, the War on Drugs. Somehow, morality legislation and morality-oriented legislation are not considered regulatory. For example, the vast national regulatory apparatus implicit in the 1996 welfare reform (the Personal Responsibility and Work Opportunity Act, pra) to put poor and dependent single mothers under a welfare police state went through Congress without a hitch.
23Privatization. Privatization is a different policy principle, but it serves the same purpose as deregulation in this globalizing era. There is very little privatization available in the United States, because there was never so very large a sector of public ownership as in the more centralized and older states, especially those that had short or lengthy experiences with real socialism.
24To privatize a government enterprise or service, first it has to be owned outright by the government and second, it has to be absolutely terminated as a government activity. This is done (1) by outright sale to one or more private corporations willing to buy it, or (2) by giving it away to a corporation or corporations willing to take on the liability, or (3) by simply terminating the activity altogether and leaving private companies to pick it up if they see it is to their advantage. Looking at the picture this way, the funny thing is that, despite all the cries for privatization and all praise of privatization, few enterprises outside the former orthodox socialist states precisely fit the picture. Either the enterprise was deemed public but never owned by the government, such as at&t, and therefore could not, by definition, be privatized; or, it was a fully public enterprise that was turned into a public corporation to operate independently but remained largely or fully owned by the government and closely supervised by it. In the us, the tva and the us Postal Service are two of the few examples. There are a larger number of examples of these kinds of public corporations at the state and local level. As it turns out, the examples closest to real privatization at the national government level in the United States would probably be the debt refinancing agencies, such as Fannie Mae, Jennie Mae and Sally Mae, plus comsat, which, by original design, were allowed to slip quietly over a number of years from public ownership to private; but all this was well before the globalization frenzy and the current enchantment with privatization.
25Just as there is more public ownership at state and local levels in the United States, there is also more privatization of hitherto public activities, such as garbage collection and other city services. But the record of these public services contracted out to private corporations does not confirm the privatization faith as fully as some might think. Almost all energy companies, the so-called utilities, are already privately owned, and one hears as many complaints as praises about them. Contract public schools are a spreading experiment, but so far there are no overwhelming signs of improved efficiency or effectiveness. Yet none of the fine points matter very much anyway, because, as with deregulation, privatization is not a goal in and of itself. Privatization is part of the ideological campaign to stigmatize anything public. (Does it matter whether Tennessee Power or Alabama Power are a mite better or a mite worse than tva?)
26The best example of privatization and why it has become such a shibboleth in the globalization era is privatization of prisons. Since 1980, when we can reasonably locate the dawn of the current conservative era, the American prison population has tripled, reaching 1.6 million in mid-1997, looking toward 2 million in 2000. The first privately operated prison opened in 1983, with 350 inmates. By mid-1997, over 100 for-profit prisons held 90,000 inmates, looking to 400,000 by 2000. Thirty states in the federal government now permit privatized prisons, and given President Clinton’s strong support for contracting out more federal inmates to private prison companies, for-profit prisons seem certain to be a growth industry. Wall Street certainly treats it as a growth industry. Spending on prisons exceeds $20 billion per year, and it is growing when all of the other social services are being cut back. The for-profit share of this growth is increasing, as additional states get on the prisons-for-profit bandwagon.
27Although the overall crime rate has been dropping, and although the increasing rate of imprisonment and of retention in prison obviously share some of the credit for this decline, there is no evidence after 15 years of experience that the privatized prisons have themselves contributed to the reduction of crime. Nor is there any evidence that privatized ownership and operation of prisons can do the job more efficiently or cheaply. The most comprehensive evaluation, by the venerable General Accounting Office (gao) published in 1997, “could not conclude whether privatization saved money.” And the two major trade associations of private prison companies have made no effort to amend the gao report or otherwise to engage in direct lobbying, “because,” as one industry representative put it, “it’s completely unnecessary.” Sufficient sentiment already existed in at least 30 states and Congress.2
28Come what may with privatization of prisons or anything left for privatization, the following points of significance can be made already :
Privatization needs no sponsor. It has become its own best testimony. Privatization is good in itself.
Privatization of prisons is the ultimate step, reaching into the very core of sovereignty itself. No better evidence is available to confirm that the goal of the Right is to stigmatize the state.
Prison privatization tends also to establish a new (or renewed) method of social control, moving from a discrete disciplineand-punish approach by constituted public authorities to a systematic, ongoing process of control by filtration and management, making little distinction between and among the reasons for being imprisoned. Consequently, prisoners can be dealt with as a market opportunity on the input side and a management problem within, with profit-backed incentives to retain and expand rather than with professional, political and legal incentives to rehabilitate and discharge.
29This is not intended to idealize public prisons. (Although it should be added that American prisons were thought to be so much of a positive democratic innovation that the French government sent Alexis de Tocqueville to America to study them.) The purpose here is to recognize only that in the private, corporatized world, social control is not solved by the market but is set up as a separate market while retaining all the legitimate coercive powers that are the essence of the state and of sovereignty.
30Devolution. Devolution is the most interesting and instructive of the three principles guiding the rightward movement in the United States because us federalism exposes most clearly just how strongly rightward are the policies labeled as devolutionary, and that in turn indicates how strongly rightward these same policies are elsewhere, whether they remain national or are devolved. Devolution was actually the first rightward move against the social democratic policies of the New Deal coalition, and the first important concrete step was Nixon’s Revenue Sharing. Actual federal grants-in-aid to state and local governments continued to grow throughout the 1970s, reaching over 25 percent of all state-local revenues. Out of respect for the obvious consensus still in favor of New Deal programs, Nixon attempted to introduce a conservative dimension by giving state and local governments more discretion in how they spent the federal grant money.3
31Why was this delegation of added discretion to the states and local governments conservative? And why would the greatly increased state-local discretion implicit in devolution be still more to the Right? Because the recipients of these grants—especially local governments—are innately conservative. Devolution (although it was not yet called devolution) picked up speed under Reagan, who consolidated 77 categoric grants-in-aid into 10 discretionary block grants to the state governments, who were given virtually complete authority to transfer the money to localities, with or without conditions imposed by the states.4
32The process came to some kind of culmination in 1996, with adoption of the Personal Responsibility Act, with the support of President Clinton and majorities of both parties. It reversed President Nixon’s commitment to national standards for entitlement programs by devolving almost total discretion to states and cities, as though this were like the old urban redevelopment and community development programs. This New Federal Order (God, how can one not think of the Nazi New World Order?) gave states and cities almost full discretion over federal transfer of funds for dependent persons (while of course diminishing the total amounts available). Along with giving the states and localities full discretion over eligibility, the pra also imposed a new set of national moral criteria that local welfare administrators are obliged to follow when using their discretion. As Gwendolyn Mink puts it,
[The pra] provides cash assistance, food stamps, and Medicaid to poor, single mothers, but only if they reveal their most intimate relations and only if they agree to associate with the men whom government designates as their children’s fathers. Worse yet, it provides cash assistance to poor single mothers only if they forfeit the right to care for their own children.5
33Work requirements, community service requirement, marital criteria, age criteria, and time limits, take us back to a 19th century condition, converting welfare administrators back into welfare police.
34And it is received by willing hands. A false impression has prevailed during most of this century (and perhaps further back in Europe) that cities—all urban centers—are the liberal, even leftward, component of a society, being so individualist, experimental, tolerant of class and racial differences, sophisticated, respectful of privacy, in a word, urbane. Well and good. But those urbane values rarely prevail in local governance. First of all, cities in America are tied to their local tax base, which historically has been the property tax. This serves to reinforce the primordial function of local government to preserve social order. And all of this ties the policies of cities to a rather rigidly narrow range of constituent values: Cities can be pluralist or elitist in their power distribution; they can be more or less dynamic in their approaches to economic or cultural development. But they do not depart from their obligation to social order, which extends to keeping classes, races, ethnic groups, genders and lifestyle groups in their places; by keeping the poor and the deviant invisible, in another kind of place; by cooperating authoritatively with the established higher classes and the installed institutions of church, local school, philanthropy and party, as well as relying upon police and other public agencies, to maintain order. Keeping people in their places is mainly achieved by segregation. Or we can give it a more respectable name, community.
35Communities within cities are given special racial and ethnic designations—China Town, Little Italy, Jewtown, Harlem (which in New York City had been a Jewish community before it became a black neighborhood, then Hispanic), Hoovertown and Shanty Town (for the recently impoverished) and so on. Ghetto was a term quickly adopted in America as a designation for virtually any residential district segregated distinctly enough, whether by external discrimination or internal preference; and either way, it was accompanied by police tolerance of—and enforcement of—informal restrictive covenants, plus the full cooperation of real estate agencies, banks, insurance companies and the like. It was once said that Chicago is the most segregated city in the country. They were referring to racial segregation, and it may still be true. But all cities in America are segregated, not only along racial lines but along all other lines of social discrimination. In this sense we can say that cities are not only innately conservative, and legally and constitutionally conservative, but also structurally and institutionally conservative. And most city promoters will offer this as an incentive to move there or to locate a company there.
36A false impression about the liberal progressivism of urban centers was conveyed during the epoch of federal urban policies. Categoric grants-in-aid policies and dollar-matching programs, which reached 25 percent of city revenues on average but up to 40 percent in the more troubled cities, loosened the ties of cities to their tax base while putting even the reluctant cities under pressure to face the alternative of using the federal money or losing it. And even with all these federal fiscal, legal and administrative incentives to be more liberal, cities still used federal urban development and re-development money in a conservative, segregational way, as long as discretion was available in bow to employ it. As a consequence of discretionary federal urban programs, and despite the liberal and leftward objectives of so many of the programs, cities were more segregated at the end than at the beginning. And in fact the most-favored cities became the most segregated afterwards.
37This is not a paradox. Federal funds plus discretion provided cities with the resources to carry out their primordial and historical obligations more effectively than they could have without the federal resources. They were more segregated not because white city politicians are racist but because they are racial, just as they are ethnic and class-oriented, and life-style conscious—committed to containing people in their places to maintain existing social relationships. And we mustn’t overlook the most massive and general federal urban policies of all—the home mortgage deduction, coupled with federally subsidized and federally guaranteed home mortgage loans (whose refinancing is now largely privatized). This had the direct effect of vastly widening urban segregation along class lines beyond the core city to the whole metropolitan area. Home owners are not only far more segregated today than ever in geographic terms; they are and always have been recognized in law as a class apart. Renters are considered a problem class due to their freedom of movement and lack of roots; owners are the preferred class not only because they have presumably deeper roots but have put themselves voluntarily under the long-term (30-year?) social control of the banker, the insurance agent, the neighbors, and the courts.
Capitalism’s Dirty Little Secret
38Make no mistake about it. Deregulation, privatization and devolution have become popular in Europe and in all other countries going capitalist because concerns for social control, and therefore the embrace of conservative policies, strengthen as their societies are loosened up by liberal policies necessary to join global capitalism. This is the dirty little secret of capitalism, in fact of classical economics itself: they have almost nothing to say about life after meltdown, even about what happens when the loosening creates large troubles.
39An intimation of the answer to life after meltdown was provided by the Indonesian authorities confronting their own meltdown in January 1998. As panicked Indonesians raced to buy rice, flour, sugar and cooking oil in anticipation of rising prices, and as the head of research for a major corporation was wailing that “Wide-scale social unrest is certain as bankruptcies, business failures and unemployment rise,” the Indonesian military vowed to preserve order across the sprawling island chain of more than 200 million people.”6
40Another intimation of the answer to what happens after meltdown is bankruptcy. When a single company goes bankrupt, what has been private suddenly become public. In order to avoid violence among creditors fighting over who gets what share of the remaining assets, the government takes over, puts the failed company “in receivership,” and may even continue to operate the company for an indefinite period of time while accommodations are made by the proper authorities as to the disposition of the remaining assets. This was deemed to be so inherently public a process that power over bankruptcy was one of the few specific substantive powers the Constitution expressly delegated to the national government: “To establish... uniform Laws on the subject of Bankruptcies throughout the United States.” In practice, Congress let bankruptcy laws slip to the states, but the principle remains: The public character of private markets is revealed whenever troubles loom.
41The public foundation of capitalism is fundamental and universal. It is simply overshadowed when markets are working. Americans have been the most orthodox free market liberals and the strongest believers that enterprise was once free before big government came in and took the laissez-faire away. But this is simply because American federalism had already devolved the maintenance of the public character of private markets to the state governments, and that gave the appearance of virtually full freedom of enterprise because the national government wasn’t doing the intervening. This gave the states and localities sufficient power to keep classes and races and other components in place even as capitalism was loosening up all social relationships. Other capitalist and pre-capitalist countries appear to have been more public (interventionist, heavy-handed, regulatory, paternalistic, socialistic) mainly because their central governments were always doing most of the governing, and it was there for everyone to see. And a lot of that governing was quite ant capitalist because these governments were old enough to have existed when the dominant policies of the post-feudal ruling classes were anti-capitalist. But in recent decades, as much of this old structure was torn away, conservative policies toward local social order were kept in a state of readiness once these countries decided to join global capitalism. Taking all public functions and policies together, regardless of level of government, the public foundation of private enterprise is just not all that different from one country to another. Certain practices and formalities may differ, but the degree or extent is far less likely to.
42This is why devolution is such an important public strategy today, more noticeably in the United States, but important everywhere else also. Whatever deregulation and privatization accomplish in the quest to reduce the overall size and cost of government and to increase the freedom of free enterprise, devolution is pushing in the opposite direction—toward more government, but more of a certain type. All governments seeking to join global capitalism are trying to cut their budgets and to eliminate the oppressive and discouraging networks of government licensing and other rent-skimming and pass-throughs that are so entrenched and complex that they have made the notary the most highly rewarded profession. But even as those maddening public interferences are being eliminated and enterprises being freed up, those same countries are beefing up their institutions and methods of local social control.
43Just look at countries that have not yet privatized their prisons. For example, although world trade in arms and armaments has shrunk significantly since the end of the Cold War, there is still a brisk market. Setting aside the us, the top ten importers of arms in 1995 bought, respectively: (in billions) Saudi Arabia, $8.6; Egypt, $1.9; Taiwan, $1.2; South Korea, $1.1; Thailand, $1.1; Australia, $0.9; Kuwait, $0.9; United Arab Emirates, $0,875; Greece, $0,825; Malaysia, $0,750. Three of these are mid-East oil countries, but all were in or moving heavily toward the global market system. The second tier of ten major importers of arms (PRC, Turkey, Spain, Japan, Pakistan, Oman, India, Chile, Belgium, and Israel) include some of the remaining tyrannies in the world, but these, too, are going toward world capitalism, and that certainly adds incentive to import more arms and armaments.7
44How large is large, and what’s all this military equipment for? One should not interpret such data too far, but certain points can be made with some confidence. First, capitalism can flourish in tyrannies as well as democracies, in strong states as well as weak and permissive ones. It all depends on the particular policies the state is willing to adopt. Second, as the policies and conduct of a state become more and more favorable to participation in world capitalism, preparedness for internal military action also grows stronger, when everything the ideologues tell us about markets would lead us to expect a big decline.
45Why do Greece, and Spain and Malaysia and Thailand tend to import hundreds of millions of dollars a year in guns and bullets? From what neighbor do they see a threat of war? Military preparedness is obviously needed for internal, civil control. Indonesia ranked only 36th ($0.17 billion) in arms importations in 1995. Anyone care to doubt they will move up in 1998? Or take Korea, which has had a democracy for ten years; their recent presidential election proves that Korea is a fairly stable democracy, and it is one of the most successful participants in world capitalism, with the partial meltdown of late 1997 no serious demonstration of the contrary. But the government has also very significantly beefed up the presence of national military police patrols in Seoul and other major cities. And this has little to do with North Korea and its troubles, because that is very well taken care of by Korea’s own military, the American military, and many hundreds of thousands of anti-personnel landmines all across the dmz (de-militarized zone [what a wonderful euphemism]) that Americans refuse to remove, no matter what it does to the international anti-landmine treaty.
46The us is not exempt. Thanks to its federalism, it meets the same needs by devolution. There is no national police force (except for fbi infiltration of all social movements, of Left or Right, pacific or militant). If state and local police forces and the National Guard (state militia except in times of war) were not already ready for the task of crowd control, mass strikes and other bad conduct during meltdown, a bipartisan national government in this new globalization era has been helping make certain they would be. It cannot be an accident that the national government has been increasing its commitment to police preparedness during a period of sustained economic prosperity and significantly declining crime rates. While most other areas of social policy were receiving heavy cuts in Congress, grants-in-aid to municipal law enforcement programs went up by 28 percent between fiscal years 1995 and 1996 alone. Meanwhile, President Clinton, already having substantially met his earlier pledge to put a hundred thousand more cops on city beats throughout the country, went to New York City to celebrate the great 1997 crime news and to reward the recently re-elected Republican Mayor Richard Guiliani with a new federal grant of $120 million to help the mayor make good on his inaugural pledge of 1,600 additional cops, plus another $118 million to beef up to 101,700 the total national augmentation of local police forces. The $120 million will help bring the total New York City police force up to 40,000. This is 15,000 more than 40 years ago, even though the city population has shrunk by a half million during this same period. No picture of local control would be complete without adding America’s privately employed security personnel. A 1991 National Institute of Justice study established a ratio of about 2.5 private security employees to each public police officer, amounting to a 1991 national expenditure estimate of $52 billion for 1.3 million private security employees. The nij adds that this was a gross underestimate.
47Devolution evokes such a warm and fuzzy feeling, until the imagery is complete. It amounts to an internal cold war, and, as with the international cold war, the United States is helping those countries who wish to join world capitalism but may not be able to afford to maintain sufficient domestic stability. For example, operating under authority of the Excess Defense Activities Act (eda) of 1976, the us has been disposing of its multibillion dollar weapons stockpile by giving surplus and obsolete equipment to help countries meet “domestic security concerns.” According to one independent study, Turkey, the leading recipient in recent years, received $1.5 billion in eda military equipment between 1990 and 1995, comprising more than 80 percent of Turkey’s arsenal. This has surely enabled Turkey to control its minority Kurd population. Amnesty International’s documentation of Turkey’s abuses of human rights against the Kurds, and the use of us equipment in those actions, are not denied but are largely confirmed by published State Department reports on human rights abuses. Many other countries in Latin America, the Caribbean, and Asia receive these weapons grants for security in general and as a way to meet their obligations to carry on the war against drugs, which has become its own internal cold war totally arising from the desire to join world capitalism.8
48Outside the military and police realms, there are many other methods to beef up domestic social controls. Favorites in the U.S. are state and federal laws to keep hundreds of thousands of consumers and possessors of small amounts of drugs under severe criminal law jeopardy. This involves a scale of social control far beyond the most extensive welfare state. Another American control mechanism returning to popularity is criminal and civil control of abortions. According to a recent report of the National Abortion and Reproductive Rights Action League (narral), 31 states in 1997 enacted 55 measures adding new and strengthening existing restrictions on abortions, including waiting periods, parental notification, counseling, etc.9 Even though there has been no sign of reversing Roe v. Wade, the new restrictions have taken us back closer to the status quo ante than we have been during the 2.5 years since Roe. Whatever else one might say of these new restrictions, they are certainly making women, especially lower income single women, far more vulnerable to state control. Low income single mothers become still more insecure and vulnerable to government social control because of the virtual termination of their entitlements to welfare benefits. New national as well as state criteria of eligibility, coupled with immensely broadened discretion that has been devolved to local governments have converted welfare administrators into welfare police. Recent welfare reforms alone have put women back close to the place in the social structure they occupied before 1935.
49Males on the lower end of the wage chain have also been rendered more vulnerable to control, through unemployment and underemployment. As that great libertarian magazine The Economist puts it
In a market economy, not everyone prospers... In America the problem takes the form of poverty wages, in Europe of unemployment. The underlying cause appears to be the same. There are more unskilled workers than jobs at decent wages for them to do. In America, wages are allowed to fall far enough to match the demand for unskilled labour with the supply. Unemployment is low and millions of new jobs have been created; but low wage-workers earn too little to live comfortably, and their incomes in real terms have fallen for 2.0 years. In Europe, wages and other unemployment costs are buoyed by minimum-wage laws and comparatively generous welfare benefits, so unskilled workers are less poor than in America; but unemployment is far higher.10
50All of these and other developments are evidence of preparation for membership in global capitalism through what could best be called the Internal Cold War. Joining world markets and opening up all domestic institutions to penetration by international trade constitute the necessary conditions for membership in world capitalism. But necessary is not sufficient. Sufficient requires also the beefing up of local control mechanisms. And this is like the original Cold War, especially as a mentality or culture. The purpose of a Cold War is to prevent war, or its domestic equivalent, social disorder. But it is in the nature of prevention that you cannot know when you have enough of it. Science is difficult enough when there is an actual occurrence to explain, and then to prevent. But however difficult the science of explaining occurrences may be, the science of explaining wow-occurrences is infinitely more difficult. For the most mundane of examples, this is why local fire departments hate the obligation of fire prevention and love fire fighting. Thus, with the crime rate dropping and strikes a rare occurrence, and race riots and student demonstrations belonging to some other era, all policy makers, policy consultants and think tank policy wonks can ask is “where did we go right?” The answer has to rest with “more of the same.” They have to follow the Jewish mother’s dietary rule, “too much is enough.”
51The Cold War culture is back, living in the cities. Within the mentality of the Cold War culture, social order requires social insecurity. It requires identifying that part of the population with the least stake in the system and to make them more vulnerable. And then it requires a police presence, a regulatory presence—which has to be in place and not in some remote reservation waiting for violence to happen. By the time the buses get rolling, it’s already too late. But, unlike the original Cold War, where the cost of the alternative—hot war—was intolerable—social insecurity is going to cost just about as much as social security. The costs will simply be devolved and, along with the poor, less visible.
52A few more years of experience with a cold war approach to the domestic order that full-fledged capitalism requires might lead to a re-evaluation. In case that should occur, let us hope it won’t be so far into the future that we have lost all memory trace of the alternative that was tried briefly during the exceptional social democratic era of the 1930s through roughly the 1960s. The model was the conservative Bismarck, who, during Globalization I, decided that what became the welfare state was a rational, albeit expensive, approach to social order because it gave lower middle class pensioners more of a stake in the social order while making them more dependent on the state. The welfare state was (as it turns out) a temporary social order, a brief social movement which took a security rather than an insecurity approach to social order. This made political sense because the extraordinary losses suffered by the lower middle and working classes during two World Wars deserved some recognition and reward. It also made political sense because extreme Left and Right movements proved the capacity of these classes to change history whenever sufficiently provoked, not by privation but by the appearance of unjust extremes in the distribution of wealth.
53No one can any longer deny that global capitalism requires social order, that liberalism requires conservatism and that social order will always require a relatively strong state apparatus, whether national and centralized or devolved and localized. The first era of globalization ended in 1914, and it took over 75 years of war and cold war to make its comeback. If the domestic-insecurity Cold War approach didn’t work the first time, and if the insecurity approach to social order is not all that much cheaper today than the security approach, why not explore and re-consider the security approach? Now, before it’s too late.
Notes de bas de page
1 Clive Crook, “The World Economy,” The Economist, September 20, 1997, p. 37.
2 The data and the quote in this section are drawn from Vince Beiser, “Jailing for Dollars—The New Growth Industry,” The New Leader, May 5, 1997, p. 10-11.
3 Nixon is in fact pre-modern; in many ways he is the last genuine Democratic president. He actually preferred to keep income and in-kind transfer payments (basically the entitlement programs) more national, with less state-local discretion. This was to change drastically under Reagan and successors.
4 Good data on these transfers will be found in Peter Eisenger, “Cities in the New Federal Order,” La Follette Policy Report, Winter 1997, p. 1-7; and Richard Nathan, “The ‘Devolution Revolution’ —An Overview,” Rockefeller Institute Bulletin I996, p. 5-16.
5 Gwendolyn Mink, Welfare’s End (Ithaca, NY: Cornell University Press, 1998), p. 133.
6 “Cover Story,” USA Today, January 9, 1998, p. 1 and zB.
7 Source: us Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers 1996, released July 1997.
8 Source: Paul F. Pineo and Lora Lumpe, “Recycled Weapons American Exports of Surplus Arms, 1990-1995,” Federation of American Scientists Homepage, May 1996.
9 Katharine Q. Seelye, “Advocates of Abortion Rights Report a Rise in Restrictions,” New York Times, January 15, 1998, p. A14.
10 World Economic Survey, p. 38.
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