The Epochal Shift

Over the past quarter century the global economy has come to exert an almost transcendental importance in our lives and societies. While the term "globalization" is generally used to describe this transformation, heated controversies abound over the significance and extent of globalization. Not even established economists and defenders of the neo-liberal order agree on how to assess the current era, while liberals, social democrats and those on the left are divided over how to interpret and respond to globalization.

Our position is that globalization marks an entirely new epoch in the world's economic history. As such it requires a shift in our Weltanschauung, the very way we view the world, its politics, societies and economies. To understand this epochal shift, we need to situate it in relation to other fundamental transformations in the history of capitalism.

First came the age of discovery and conquest. Capitalism, emerging from its feudal cocoon in Europe, began its outward expansion, symbolized by Columbus's arrival in the Americas. This was the epoch of mercantilism and primitive accumulation, what Marx referred to as the "rosy dawn of the era of capitalist production."

Next came the birth of industrial capitalism, the rise of the bourgeoisie, and the forging of the nation state. This epoch spanned what Eric Hobsbawm calls in his seminal historical works the ages of revolution, capital, and empire. It is keynoted by the French revolution and the eighteenth-century manufacturing revolution in England.

The third epoch starts around the turn of the twentieth century with the rise of corporate ("monopoly") capitalism and the financial-industrial corporation, intensified wars among the imperial powers, and the emergence of a socialist alternative. This epochal change is exemplified by World War I and the Bolshevik revolution, the "Age of Extremes," as Hobsbawm titles his history of the twentieth century.

Today we are in the early phases of the fourth epoch of capitalism. Referred to as globalization, it is highlighted technologically by the microchip and the computer — the information age — and politically by the collapse of twentieth-century attempts at socialism. The latter was most graphically signaled by the fall of the Berlin Wall and the disintegration of the Soviet Union shortly thereafter, and also by a lesser discussed event, the defeat of the Sandinistas in Nicaragua in the 1990 elections, which symbolized the failure of a whole generation of third world national liberation movements to offer an alternative to world capitalism.

Periodization is somewhat arbitrary. But we can say that the first epoch ran from 1492 to 1789, the second from 1789 to 1900, and the third from 1900 to the early 1970s. Perhaps the first event that signaled the beginning of the transition to the globalization epoch is when Richard Nixon took the U.S. off the gold standard in 1971. Many have noted that this marked the end of the Bretton Woods currency agreements and the waning of U.S. supremacy. A single headquarters for world capitalism had become untenable as the process of transnational market, financial, and productive integration heightened.

Behind the economic turbulence that ensued in the 1970s was the transition from the nation-state phase of world capitalism and its distinct institutional, organizational, political and regulatory structures to a new, still emerging, transnational phase. Other markers include the formation of the Trilateral Commission in the mid-1970s, which foreshadowed the rise to hegemony of a transnational faction of the bourgeoisie, and a lesser-known event, the Cancun Summit in Mexico in 1982. Then the core capitalist states, led by the U.S., launched the era of global neo-liberalism and began imposing structural adjustment programs on the third world as part of this process.

There is a major current of dissenting voices on the left staking out the position that globalization is not a new epoch. These include some world systems theorists who believe in the continued primacy of the nation state. But the most vocal opponents over the past few years have been some Marxists who insist that globalization is an illusion fostered by the ideologues and pundits of the established order. The basic dynamics of capitalism have not changed in any way, these Marxists argue. Capitalism is still capitalism. If we break capitalism down into its most fundamental characteristics — the exploitation of labor by capital, commodity production, and the continued expansion of capitalism — then yes nothing has changed. However, to take this view one could argue that nothing has changed since Columbus, or perhaps since the industrial revolution, if one defines the earlier period as mercantile capitalism. As A. Sivanandan has argued in an exchange with Ellen Meiksins Wood: "Doubtless capitalism is capitalism is capitalism, but the failure to distinguish between its different avatars freezes us in modes and forms of struggle which are effete and ineffectual and blinds us to the revolutionary possibilities opened up by information technology."

To be sure, leftist critiques of the concept of globalization are railing out against some very disturbing developments. The process of capitalist globalization is used increasingly to justify the continued dominance of capital. On the one hand, most of the establishment politicians of the world, from Bill Clinton and Tony Blair to Ernesto Zedillo of Mexico and Fernando Henrique Cardoso of Brazil, demand concessions from working classes in the name of "national competitiveness" in the global economy. Transnational capital in this way attempts to reify global capitalism as a reality external to its own agency and interests.

Some on the left, or the former revolutionary left, who feel overwhelmed by the seeming power of global capital and are unable or unwilling to adjust their revolutionary outlook and strategy to fundamentally altered circumstances, conclude that no alternative to global capitalism is currently possible — the TINA syndrome, or "There Is No Alternative." The only "realistic" strategy is to try to negotiate the best deal possible with capitalists and to achieve the best "competitive" reinsertion of each country into the global economy. This position is put forth in its most coherent form by Jorge Castaneda in...