The Rise of the Rich: A New View of Modern World History

1. Modern World Economic History Between Liberalism and Political Economy

1 Modern World Economic History Between Liberalism and Political Economy A l t h o u g h m a n y i n t h e f i e l d of world history are aware of the shortcomings of the Rise of the West paradigm, the main trend remains one of trying to preserve it, possibly by reforming it as opposed to abandoning it for something better. In this chapter I look at the attempts at reformism by turning to world economic history as it is now being developed in New Liberalism.1 To reduce the subject of New Liberalism to manageable proportions , I focus in this chapter on one concept associated with it, one that is of particular importance for a study of world history: transnationalism. Transnationalism, one finds, is serving to justify for New Liberalism some fairly major revisions in the familiar periodization of world history, and as we shall see it performs other functions as well. I will then briefly consider Marxist economic thought. And, again, contrary to what one might suspect in practice today, neither in its metanarrative of world history nor in its methodology is it much different from liberalism. Not only, then, do both liberalism and political economy share in the Rise of the West, but they share a great deal more as well. I then ask if Marxism, once an alternative to positivism and liberalism, became absorbed by it. If so, is reform of Marxism still a possibility? T ransnationalism and I ts D iverse U sages Commentators on the world economy basing their work on the use of the term transnationalism were among the first to point to the increasingly 1 2   |   the rise of the rich international and fragmented nature of contemporary capitalism, the term thereafter taking on a life of its own, developing a number of different but related meanings, thereby gaining significance for writers in many fields beyond economics, narrowly conceived.2 In the process, transnationalism became a very important concept in world economic history, conveying not just a way to pursue the study of history beyond the nation-state but a way to link the subject of world history to other fields of scholarship with similar concerns. Thus, we find that whereas transnationalism initially introduced simply the idea of going beyond the nation-state or of functioning in the framework of globalization,3 as it developed it came to serve as a point of departure for research on numerous issues related to it, among which are the “knowledge society,” transnational feminism, the postindustrial economy , the idea of the diasporic self, and of migration. To these topics one could add two other uses to which the concept of transnationalism is also currently being put, one by religionists who perceive solidarities extending beyond the nation-state, as in Pan-Islam, and the other by researchers who find the European Common Market to be an example of what is meant by going beyond the nation-state. After examining these various usages, I conclude by examining the impact that the term in its expanded sense is now having on the writing of world history and find it to be considerable. An article written in the year 2000 on transnational corporations (TNCs) introduced the basic idea of transnationalism, asserting that TNCs own or control a quarter of the world’s productive assets.4 Given their size, TNCs dominate oligopolistic situations, as for example in the oil and the car and truck manufacturing industries. Given their size and power, TNCs are able to operate outside their country of origin and are thus typically characterized by having operations in two more countries. Their management decisions are based on regional or global market possibilities as opposed to national concerns. In effect, the TNC is independent not only of national history but indeed of any cause and effect that a historian could easily introduce. When one looks at the matter more closely, the two parts of this definition are clearly of different orders of magnitude, and it is the second one that appears to be the really problematic one for the historian. A corporation could operate in several countries and its manager could be affected by global market conditions, but the nature of its decision making modern world economic history   |   3 could not necessarily be inferred from these facts alone. From the perspective of a more traditional cause-and-effect history, the country...