The Hindu Business Line : Hegemons versus rest of the world

Governing globalisation is as important as reducing asymmetries in the rules of the game. That the rapidity at which globalisation is taking place is resulting in `incursions into sovereign economic and political space' without an increase in international cooperation, is a comment from one of the essays in K. S. Jomo's `Globalisation Under Hegemony: The Changing World Economy'. An interesting, albeit heavy, weekend read, says D. Murali.

ACCORDING to the latest Harris Poll (www.harrispollonline.com) President Bush's positive job rating has continued to fall with his presidency touching new lows at 34 per cent in comparison to the 88 per cent that he enjoyed after 9/11.

An earlier poll that should interest us more is what www.siliconindia.com reported on November 15 — that most American adults think "India will not be a superpower that will challenge US hegemony in the next decade". It seems "only two per cent think India is a superpower but 20 per cent believe it would attain that position in the next decade".

Only a day earlier a PTI story titled `Asia rises up to counter West's cultural hegemony', spoke about `twenty-two Asian countries, including India and China,' signing the Foshan Declaration, vowing not to be `excessively influenced' by West.

Again, on the SAARC (South Asian Association for Regional Cooperation) summit, an editorial on www.dailytimes.com.pk is critical that the SAFTA (South Asia Free Trade Agreement) issue has been "bogged down in technicalities determined primarily by politics and, in India's case, aspiration to regional hegemony."

An article on http://english.donga.co, asks `Will Korea Be East Asia's Trade Centre?' while discussing Asean (Association of South-East Asian Nations) and the Busan Apec (Asia-Pacific Economic Cooperation) Summit on November 18.

"China originally proposed a Korea-China-Japan FTA. But at the same time, it is wary of Japan, viewing it as a competitor in gaining hegemony in the region," notes the article.

As the Busan meet gets underway, and `First ladies experience Korean cultural assets', as Korea.net says, despite angry anti-Bush protests from South Koreans against plans to liberalise the country's rice market, I turn to two books on `the long twentieth century' and hegemony, edited by Jomo K.S. from Oxford University Press (www.oup.com).

The word `hegemon' originated in ancient Greece, and derives from the word hegeisthai (meaning `to lead'), explains Wikipedia. "An early example of hegemony during ancient Greek history occurred when Sparta became the hegemon of the Peloponnesian League in the 6th century BC. Later, in 337 BC, Philip II of Macedon became the personal Hegemon of the League of Corinth, a position he passed on to his son Alexander the Great," according to http://en.wikipedia.org.

"There is growing, if often grudging, recognition that relations and processes cause, perpetuate, and exacerbate inequalities, which are often linked to international arrangements of domination and hegemony," writes Jomo in the introduction to the volume titled `Globalization Under Hegemony: The Changing World Economy'. The first paper is Utsa Patnaik's, `The Free Lunch', on transfers from the tropical colonies and their role in capital formation in Britain during the Industrial Revolution. In 1811, such transfers accounted for 18 per cent of GDP, and more than 20 per cent of GDCF (gross domestic capital formation).

Patnaik wonders why no UK historian thought of `the free lunch' in the form of `taxes and slave rents wrung from colonised peoples'.

Deepak Nayyar's essay on `Globalisation and Development' argues that governing globalisation is as important as reducing `asymmetries in the rules of the game. "The momentum of globalisation is such that the power of national governments is being reduced, through incursions into hitherto sovereign economic and political space, without a corresponding increase in effective international cooperation or supra-national government which could regulate this market-driven process," he says

Since "national economies are much less governable while the global economy is largely ungoverned," Nayyar sees a remedy in global governance in the form of `institutions and practices combined with rules that facilitate cooperation', rather than of a `world government'.

In a paper that follows, Richard Kozul-Wright speaks of accepting "a world where markets fail, institutions evolve with distinct local characteristics and at an uneven pace, and massive imbalances in productive capacities abound." It seems inevitable that greater integration will expose the problems of successful management to the interface between national and international economic spaces, adds Wright.

"In practice, high finance can no longer be separated from high politics," said Benjamin J. Cohen. This quote begins a chapter on `capital flows' by Benjamin R. Hopenhayn and Alejandro Vanoli, where they rue that the momentum for genuine reform of the global financial architecture is now gone, `at least until the next systemic crisis'. "Hegemons have shown inability to change rules and trends when their economies are threatened by crises, involving both core and peripheral financial markets," the authors observe.

`The commodity Terms of Trade', the essay by Jose Antonio Ocampo and Maria Angela Parra notes: "Today, as in the past, industrialisation seems to be the only way out for developing countries as a group." Greater benefits are foreseen "if they manage to penetrate the market for technology-intensive manufactures".

Lest, in `the grand narrative of globalisation', human conditions are overlooked, there is Sabyasachi Bhattacharya's essay on `International flows of un-free labour', covering forms ranging from `corvee to debt peonage, indenture to contract labour'. Flows of commodities and capital are highlighted, not flows of labour from the South, laments the author.

"There is little doubt that imperialist forces will use every instrument from the IMF, WTO, and military intervention to squash any attempt to construct a developmental state that can challenge their hegemony," cautions Amiya Kumar Bagchi in a chapter on `the developmental State under imperialism'. Bagchi speaks of `developmental democracy' with both moral and organisational contents.

The last chapter in this volume is by Ha-Joon Chang on `trade and industrial policies during the age of imperialism', arguing for wider publicising of `the developmental experiences of the developed countries' so that we get history right, and also allow developing countries to make the right choices.

"Allowing developing countries to adopt policies and institutions that are more suitable to their stages of development and to other conditions they face will enable them to grow faster," suggests Chang. "That the developed countries are not able to see this is the tragedy of our time."

The Great Divergence

The other volume `The Great Divergence' is about `Hegemony, Uneven Development, and Global Inequality.' Jomo points out in his introduction that globalisation proponents are reluctant to claim credit for China, "which maintains a non-convertible currency, state control over its banking system, and other major violations of IMF/ Bank prescriptions".

Prabhat Patnaik writes on `the concept of mode of production' and argues that imperialism is a constant feature of capitalism, and that the notion of exploitation goes beyond `the basic extraction of surplus value'.

In a chapter on Latin America, Jose Antonio Ocampo cites statistics on the torrent of labour flows to the US. "The number of immigrants of Latin American and Caribbean origin in the US increased from 4.4 million in 1980 to 8.4 million in 1990 and 14.5 million in 2000; another 25 per cent or more can be added to this figure to account for illegal migrants."

There have also been flows to more distant destinations, particularly Western Europe (with a former source country, Spain, becoming the most significant destination), Canada and Japan, notes Ocampo.

Africa is the focus of essays by Bill Freund and Lance van Sittert. "Mauritian investors, having transformed their sugar plantation island into a textile exporter, now set up factories in Madagascar for low-wage production; Lesotho attracts Taiwanese industrialists, and locals of Asian origin in Kenya are also able to expand export markets," writes Freund; he feels sad that "the terms under which Africans experience this world are often deeply unfair as well as chaotic and violent".

Sittert finds it unacceptable that "the classic one-crop or mineral open economy has proved a remarkably difficult mould to break, and remains the enduring orientation of African national economies down to the present".

In the story of the Middle East, as Faruk Tabak recounts, one learns that "the fortunes of Turkey, an early convert to the programme of liberalisation, and Egypt, the first to initiate opening up, do not tower over the region as success stories." Reason: Widened income disparities, and rising indebtedness. "Those who have played the game by the rules set by the hegemon have failed to fare better than those who have not," comments Tabak. Maria Serena I. Diokno's essay on Southeast Asia informs, disturbingly, that the spectre of the past lives on in the form of `Unfinished projects, ongoing struggles, persistent colonial forms,' and so on.

The India chapter by Sumit Sarkar comes as the penultimate one, where the author says that democratic institutions have been spreading to `lower levels of society', while at the same time, they are widely discredited and branded corrupt.

Outstripping democratisation is "the growing strength of the state apparatus, and the readiness, really cutting across all political lines, of those in power to use it quite ruthlessly against opponents". The volume concludes with a chapter by Patnaik drawing inspiration from Lenin's ideas, for "a practical engagement with imperialism".

Before wrapping up, I check for recent happenings on the hegemony front. "The rise of China will not be peaceful at all," reads John Mearsheimer's opinion dated November 18 on www.theaustralian.news.com.au.

Most of China's neighbours, including India, Japan, Singapore, South Korea, Russia and Vietnam, "will join with the US to contain China's power," he predicts. "International politics is a nasty and dangerous business and no amount of goodwill can ameliorate the intense security competition that sets in when an aspiring hegemon appears in Eurasia," is his glum forecast.

A heavy weekend read, therefore, on the global tie: the hegemons vs rest of the world.

Economics@TheHindu.co.in

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