-
Acknowledgments
- NYU Press
- Chapter
- Additional Information
Introduction 11 research showed the importance of both irrational enthusiasms and longterm economic cycles that shaped how much money was available for bets on new companies or new technologies.2 Importantly, free-market fundamentalism was challenged by those who saw problems in extreme financialization and in cognate ideas like a happy end to industrial society. The coming of post-industrial society, to borrow Daniel Bell’s phrase for it, was at best an account of how some previously rich societies might fit into a global economy in which industrial production mattered a great deal, and possibly a dangerous account if read to suggest that emphasizing industry would always keep economies backward. The importance of industrial production has been manifest in the development of China, India, Brazil, and a range of other countries now moving from semiperipheral to core status in the global economy.3 With the crash, such ideas found traction with new audiences. But if they helped produce a better understanding of successes in economic development, they also lent less happy insight to analysis of problems. A number of these were evident in formerly socialist economies that found themselves inserted into the modern world system as semi-peripheral players at best, with difficulty matching the low wages and labor discipline in Asia. And the combination of problematic policies and political favoritism for some investors didn’t help. Perhaps the strongest of these countries, Russia has remained dependent on its (happily huge) natural resources but unable to generate self-sustaining techno-industrial growth. This is no doubt for many reasons, but at least one important one is the nature of the transition from communism imposed on Russia, one that abruptly transferred state property to private ownership. Not only was the public robbed, but also a powerful class of oligarchs was created and for the most part they were not disposed to productive investment. All this is background to the challenge taken up in this volume, that of thinking through how to account for which countries were winners or losers in the “savage sorting” that Sassen describes in chapter 1 and what significance this has for pursuing growth and economic development in the future. Sassen herself integrates political economy with an understanding of the spatial transformations of capital accumulation on a global scale. She presents a view of the world in which governments—especially in the rich countries—support or even produce intensive privatization and mirror this in their regulatory and tariff policies.These governments 12 Calhoun and Derluguian (backed up often by international organizations like the IMF) typically combine advocacy for free trade with fiscal policies that make financing available for efforts to extend profit extraction into what had previously seemed unlikely domains. This can be a matter of international investment —growing flowers in Africa for shipment to Europe. But it is a link between the domestic investments and the global investments that boomed in the financial era. The paradigm case may be selling mortgages on modest properties to buyers who cannot plausibly be expected to repay them. The profits were grand because this was done on a large scale, with government guarantees , with mechanisms like credit-default swaps to provide an element of insurance, and with the quick conversion of mortgages into securities that could be sold to others. So there is a sharp division between winners and losers within nominally national economies. But at the same time, those economies are being subjected to new sorts of globalization that both challenge the tools governments use to manage domestic affairs and literally move entire sectors of production from one country to another (sometimes while leaving it under the control of the same capitalists). In less rich countries, the expansion of capitalist investment can offer opportunities —as it has in China. There are winners even in a competition for cheaper labor prices (though they are not necessarily workers themselves). But at the same time, there are expansions with much less clearly positive consequences for poorer countries, and while one may see this as capitalist globalization, it also wears new national faces—as, for example, China buys great tracts of land and mineral rights in Africa. As Sassen suggests, we see primitive accumulation alongside, and interwoven with, the most sophisticated workings of capitalist financial markets. Many hoped the end of the Cold War would usher in an era of thriving capitalism, ever-extended democracy, and peace. There would be open exploration of the best collaborative solutions to global problems and respect for...