Globalization and Its History

Globalization and Its History
Review by: MichaelLang

The Journal of Modern History, Vol. 78, No. 4 (December 2006), pp. 899-931
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Review Article
Globalization and Its History*
Michael Lang
University of Maine
A boundary is not that at which something stops but, as the Greeks recognized,
the boundary is that from which something begins its presencing. . . . Accord-
ingly, spaces receive their being from locations and not from space. (Martin
Heidegger, 1954)
1
The number of scholarly works on globalization continues to explode. The number
of scholarly works that open by citing this explosion continues to explode. Over fteen
years of vigorous discussion inside and outside the academy have revealed various
intellectual tendencies but no clear sensenor even an approximate senseof what
this word means. Globalization may be the leitmotif of our age, but its exclam-
atory recurrence appears to express confusion rather than staying power.
2
One author
writes that globalization is a network of dependencies which covers the entirety of
the planet; another, that over 80 percent of the worlds population lives outside any
such network.
3
Some commentators interpret the events of September 11 as the end
of globalization; others see them as its conrmation. Similarly, the U.S.-Iraq War is
regarded as a great threat to globalization or, alternately, as its latest manifestation.
4
* Books reviewed in this essay include C. A. Bayly, The Birth of the Modern World, 17801914:
Global Connections and Comparisons (Malden, MA: Blackwell Publishing, 2003), pp. xxiv540,
$69.95 (cloth), $34.95 (paper); Michael D. Bordo, Alan M. Taylor, Jeffrey G. Williamson, eds.,
Globalization in Historical Perspective: A National Bureau of Economic Research Conference Report
(Chicago: University of Chicago Press, 2003), pp. ix588, $95.00 (cloth); Andre Gunder Frank,
ReOrient: Global Economy in the Asian Age (Berkeley: University of California Press, 1998), pp.
xxix416, $21.95 (paper); David Held, Anthony G. McGrew, David Goldblatt, and Jonathan Per-
raton, Global Transformations: Politics, Economics, and Culture (Stanford, CA: Stanford University
Press, 1999), pp. xxiii515, $29.95 (paper); Paul Hirst and Grahame Thompson, Globalization in
Question: The International Economy and the Possibilities of Governance, 2nd ed. (Malden, MA:
Polity Press, 1999), pp. xviii318, $33.95 (paper); A. G. Hopkins, ed., Globalization in World History
(New York: Norton, 2002), pp. x337, $19.38 (paper); Kevin H. ORourke and Jeffrey G. William-
son, Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy (Cam-
bridge, MA: MIT Press, 1999), pp. xii343, $87.50 (cloth), $35.00 (paper).
1
Martin Heidegger, Building Dwelling Thinking, in his Poetry, Language, Thought (New York,
1971), 154.
2
Quote from David Held and Anthony G. McGrew, eds., The Global Transformations Reader: An
Introduction to the Globalization Debate (Malden, MA, 2000), 1.
3
Zygmunt Bauman, Wars of the Globalization Era, European Journal of Social Theory 4, no. 1
(2001): 1128; Richard J. Barnet and John Cavanagh, Global Dreams: Imperial Corporations and
the New World Order (New York, 1994), 383.
4
For the former, John Gray, Where There Is No Common Power, Harpers (December 2001):
1519; for the latter, Eli Zaretsky, Trauma and Dereication: September 11 and the Problem of
Ontological Security, Constellations 9, no. 1 (2002): 98105; and David Kirkpatrick, After Sep-
tember 11, One Thing Has Become Painfully Clear: We All Live in One World for Better or for
900 Lang
In the summer of 2001, the U.S. representative to the UN Conference against Racism
rejected an anti-Zionist platform with the demand that the conference agenda address
global, rather than regional problems.
5
Where might we nd global racism? Mer-
its or demerits of the platform aside, appeal to the global framework bloated the
conference topic into an indistinguishable and useless abstraction. Globalization is
promoted as an essential object in the study of the contemporary world, as the central
thematic for social theory,
6
but as it emerges from the discourse, the concept seems
rather to be limping into the future. Perhaps this results from the construal of its past.
Globalization and related global concepts rely on some kind of geographic for-
mulation. In 1990 Anthony Giddens offered the now-classic description of globali-
zation as the stretching of social connections between the local and the distant so as
to create a highly intensied worldwide scale.
7
The territorial borders of the nation-
state, Giddens and others argue, are now being relativized by this global scale of
economic and political interactions, a condition one author labels supraterritoriality.
8
This image of globalization is so popularand so pliablethat it spans otherwise
rmly opposed political afliations. Conservatives rail against its cosmopolitanism,
neoliberals praise its free markets, social democrats bemoan its undermining of the
welfare state, Marxists critique its capitalist dominance, and postmodernists afrm its
diversity and its destabilization of national identities.
On the heels of Giddens, these borderless world and retreat of the state argu-
ments became very popular in the early and mid-1990s.
9
An industry of volumes then
began to take as their basis the presumed contemporary condition of globalization.
The globalization phenomenon was considered to be new and to require new descrip-
tions: the term itself spoke to the alleged incapacity of previous concepts and analysis.
It was common to hear epochal transformation, epochal shift, paradigm shift,
the end of the world as we know it, and simply a constant hammering of the new.
10
Worse, Fortune, November 26, 2001, 74110 (see esp. lead commentary by author, commentary by
economist Joseph E. Stiglitz, and interview with German media executive Andreas Schmidt). See
also Rob Lever, Iraq Rift Threatens US-EU Engine of Global Economy: Experts, EUbusiness.com,
March 19, 2003, http://www.eubusiness.com/cgi-bin/item.cgi?id105886; David North, Into the
Maelstrom: The Crisis of American Imperialism and the War against Iraq, World Socialist Web Site,
April 1, 2003, http://www.wsws.org/articles/2003/apr2003/dn-a01.shtml.
5
From the preparatory talks at Geneva for the UN World Conference against Racism, Racial
Discrimination, Xenophobia, and Related Intolerance, reported on All Things Considered, National
Public Radio, July 30, 2001 (archived at http://www.npr.org/ramles/atc/20010730.atc.15.ram).
6
Mike Featherstone and Scott Lash, Globalization, Modernity, and the Spatialization of Social
Theory: An Introduction, in Global Modernities, ed. Mike Featherstone, Scott Lash, and Roland
Robertson (London, 1995), 124, 1.
7
Anthony Giddens, The Consequences of Modernity (Stanford, CA, 1990), 64.
8
Jan Aart Scholte, Globalization: A Critical Introduction (New York, 2000).
9
Kenichi Ohmae, The Borderless World: Power and Strategy in the Interlinked Economy (New
York, 1990); Walter B. Wriston, The Twilight of Sovereignty: How the Information Revolution Is
Transforming Our World (New York, 1992); Jean-Marie Guehenno, The End of the Nation-State,
trans. Victoria Elliot (Minneapolis, 1995); Susan Strange, The Retreat of the State: The Diffusion of
Power in the World Economy (Cambridge, 1996).
10
James N. Rosenau, Along the Domestic-Foreign Frontier: Exploring Governance in a Turbulent
World (Cambridge, 1997), 7; Roger Burbach and William I. Robinson, The Fin de Siecle Debate:
Globalization as Epochal Shift, Science and Society 63, no. 1 (1999): 1039; Jan Aart Scholte,
Globalisation: Prospects for a Paradigm Shift, in Politics and Globalisation: Knowledge, Ethics,
and Agency, ed. Martin Shaw (London, 1999), 922; Malcolm Waters, Globalization (London, 1995),
158; Zygmunt Bauman, Globalization: The Human Consequences (New York, 1998), where we nd
the new freedom of capital, new speed, new polarization, new extraterritoriality, the new
expropriation, the new global elite, and so on (10, 18, 23, 65, 125).
Globalization and Its History 901
The approaching turn of the century also added a millennial gravitas to the otherwise
giddy excitement.
11
Amid this tidal wave, some historically minded criticism did
emerge,
12
and by the second half of the 1990s, promoters of the concept took care to
note that globalization is historic. At times this was glibly announced so as to be
tossed aside,
13
but elsewhere historical evaluation became the focus of analysis. In
large part, the globalization discussion had shifted into a contest over history.
This essay reviews some of the leading recent arguments concerning the history of
globalization. It is guided by a basic question: at what historic date can we begin to
describe the globalization process? It will quickly become clear that this question
hinges on the conceptualization of the key idea. The rst section of this article outlines
a brief history of the concept. It then assesses David Held et al.s Global Transfor-
mations for its claim that state-constricting globalization is new. The argument I will
pose in response is that contemporary global integration is both exaggerated and
precedented, that constraint upon the state is overestimated in the present and under-
estimated for the past. The cause of the distortion in perspective is the ahistorical
abstract separation of political and economic affairs. Section 2 addresses various
works that date the start of globalization before the contemporary era. For the nine-
teenth century, Kevin ORourke and Jeffrey Williamsons canonical work Globali-
zation and History repeats the same abstract conceptualization used by Held et al.: it
treats economics and politics as opposing and conicting activities. For the eighteenth
century and before, problems lie elsewhere. I will argue against several works that
for this period the globalization concept is overburdened and that the numerous links
across the early modern world did not constitute a global aggregation. I will also
discuss the additional difculties that arise from Andre Gunder Franks all-too-
European anti-Eurocentrism. Section 3 draws from the uncollected essays of Michael
Geyer and Charles Bright to identify a global turning point in the second half of the
nineteenth century. It denes globality as the reproduction of local power that became
interregional and globally networked at that time. For key European states, this in-
cipient engagement with a global system simultaneously enhanced power and wealth
and increasingly constrained them within what worrisomely came to be called geo-
politics. The article concludes by explaining the recent popularity of the globaliza-
tion concept as a result of the ideological instability of the postcold war era.
GLOBALIZATION AS PRESENT
If in ones own history it was possible to register new experiences, those which
supposedly no one had ever before had, it was also possible to conceive the
past as something that was fundamentally other. (Reinhart Koselleck)
14
11
Of many such examples to the new millennium, see Waters, Globalization, 1; Daniele Archi-
bugi, David Held, and Martin Kohler, eds., Re-Imagining Political Community (Stanford, CA,
1998), 1.
12
Robert Zevin, Are World Financial Markets More Open? If So, Why and with What Effects?
in Financial Openness and National Autonomy, ed. Tariq Banuri and Juliet B. Schor (Oxford, 1992),
4383; Jeffrey D. Sachs and Andrew Warner, Economic Reform and the Process of Global Integra-
tion, Brookings Papers on Economic Activity, no. 1 (1995): 1118; Robert Wade, Globalization
and Its Limits: Reports of the Death of the National Economy Are Greatly Exaggerated, in National
Diversity and Global Capitalism, ed. Suzanne Berger and Ronald Philip Dore (Ithaca, NY, 1996),
6088.
13
See, e.g., Archibugi et al., Re-Imagining Political Community, 1.
14
Reinhart Koselleck, Neuzeit: Remarks on the Semantics of the Modern Concept of Move-
ment, in his Futures Past: On the Semantics of Historical Time, trans. Keith Tribe (Cambridge,
1985), 250.
902 Lang
Globalizationas a term describing an epochal change in world integration
emerged in the years following the breakdown of the Bretton Woods System. Dis-
cussion centered around business studies, where methodological isolation of the econ-
omy helped to formulate the concept. Globalization then returned the favor by
appearing to conrm the autonomy of economics. To date, most debate over global-
ization has remained dependent on some economic register. This section will describe
the concepts historic formulation, evaluate claims concerning the contemporary
global economy, and compare these descriptions to the world economy of a century
ago.
The Bretton Woods System, initiated in 1944 to guide the postwar order, was en-
gineered to promote growth by managing exchange rates and trade ows between
individual nation-states, each responsible for designing and administering its own
domestic policies.
15
As early as 1950, though, several studies argued that poor coun-
tries were not beneting and were instead becoming increasingly dependent on the
power of the capitalist core.
16
And by the 1960s this core had itself become uneasy;
U.S. trade imbalances were pressuring the systems central mechanism of pegged
currency rates as foreign-held dollars surpassed U.S. gold reserves. Financiers moved
out of dollars wherever possible, threatening ination for more desirable currencies
and thus highlighting for the otherwise rich and powerful states their constraining
interdependence. By 1973, Japan and the European states were forced, under U.S.
pressure, to oat their currencies. International nancial markets exploded with ac-
tivity as investors could now take advantage of widening currency value and interest
rate differentials. The era of Bretton Woods had come to an end.
17
With the ascendancy of the neoliberal agenda, research of the 1970s increasingly
advanced market-oriented arguments about the new transnational character of the
economy. To many, state power appeared diminished under the rising inuence of
international business. Such analysis usually emphasized capital markets. As Law-
rence Krause wrote, The world is experiencing a growing degree of economic in-
tegration between all countries. . . . Integration of nancial markets is of particular
concern because private international nancial activities have seriously infringed on
governmental sovereignty.
18
This examination of international political economy
ourished amid ongoing U.S. trade imbalances, high ination, the price spike by the
Organization of the Petroleum Exporting Countries (OPEC), a general slowdown in
15
For Bretton Woods foundations, Barry J. Eichengreen, Globalizing Capital: A History of the
International Monetary System (Princeton, NJ, 1996), 96106; Eric Helleiner, States and the Re-
emergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, NY, 1994), 2550. For
Bretton Woods early development theories, Gerald M. Meier and Dudley Seers, eds., Pioneers in
Development (Oxford, 1984).
16
Raul Prebisch, Economic Survey of Latin America (New York, 1950); and Paul A. Baran, The
Political Economy of Growth (New York, 1957); more recently, Arturo Escobar, Encountering De-
velopment: The Making and Unmaking of the Third World (Princeton, NJ, 1995). For a review of
dependency theory, Dudley Seers, Dependency Theory: A Critical Reassessment (London, 1981).
17
For the systems problems and its breakdown, Richard N. Cooper, The Economics of Interde-
pendence: Economic Policy in the Atlantic Community (New York, 1968); Eichengreen, Globalizing
Capital, 11339; Helleiner, States and the Reemergence, 81124. On the effects of the decision to
oat exchange rates, Jeffrey A. Frankel, On Exchange Rates (Cambridge, 1993), 1021.
18
A key inaugurating text reecting divergent orientations and perspectives is Robert O. Keohane
and Joseph S. Nye Jr., eds., Transnational Relations and World Politics (Cambridge, 1972). See
particularly in ibid. Lawrence Krause, Private International Finance, 17390, 189. For a review of
the eld, Peter J. Katzenstein, Robert O. Keohane, and Stephen D. Krasner, International Organi-
zation and the Study of World Politics, International Organization 52, no. 4 (1998): 64585.
growth, and the apparent inability of states to respond effectively to these problems.
By the end of the decade, the study of business could propose the complete disen-
gagement of the economy from the nation-state and its control. The globalization
canon was born with the claim that territoriality was now irrelevant. One of the most
inuential works of the period was The New International Division of Labour, written
in German in 1977 by Folker Frobel, Jurgen Heinrichs, and Otto Kreye and quickly
translated into several other languages. The authors emphasized the worldwide redis-
tribution of production sites that enables manufacturers to pay extremely low wages
in poor countries and eliminate more costly workers in their home countries. While
workers are squeezed by competition and wage pressure, the industrial states are
rendered helpless, compelled to provide business incentives and tax concessions in a
bid to keep some production domestic. Dependency and interdependency are now
fused and transcended by a single world-wide capitalist system. The global whole
eclipses most local distinctions in a system largely independent of geographical
distance.
19
Equally inuential was Theodore Levitts 1983 advice on corporate strat-
egy, The Globalization of Markets. Levitt claimed that successful companies, es-
pecially Japanese companies, now sell the same things in the same way everywhere.
The world had become a marketplace of homogenized tastes. Different cultural pref-
erences, national tastes and standards, and business institutions are vestiges of the
past. . . . Global competition spells the end of domestic territoriality.
20
From the per-
spective of marketing or Marxism, whether analyzing nance, production, or trade,
these texts announced the emergence of globalization and dened it as an economic
limit on state power.
Writings such as these helped to initiate some buzz around market globalization
in the 1980s, but by late in the decade, discussion within business studies actually
began to decline.
21
At the same time, however, the concept entered the general stream
of social science discourse. As noted, the 1990s then witnessed an explosion of glob-
alization talk, most of it reliant, if not focused, on some formulation about the new
business economy. One of the most extensive retorts to these presentist perspectives
came from Paul Hirst and Grahame Thompsons Globalization in Question.
22
The
authors challenged the global description of contemporary affairs by arguing that
nationally centered processes have not been overturned by cross-border activities: the
great majority of multinational corporations operate from specic national bases,
while the state remains essential to the management of economic affairs. The authors
emphasized their thesis by comparing the contemporary world economy to that of the
belle epoque. According to their various macroeconomic measures, current levels of
integration were fully matched by those of a century ago, indicating that a high degree
19
Folker Frobel, Jurgen Heinrichs, and Otto Kreye, The New International Division of Labour:
Structural Unemployment in Industrialised Countries and Industrialisation in Developing Countries
(Cambridge, 1980), 8, 13.
20
Theodore Levitt, The Globalization of Markets, Harvard Business Review 83, no. 3 (1983):
92102, 93, 96, 94.
21
Mauro F. Guillen, Is Globalization Civilizing, Destructive, or Feeble? A Critique of Five Key
Debates in the Social Science Literature, Annual Review of Sociology 27 (2001): 23560, charts a
history of the literature based on the number of citations in several leading bibliographic indexes.
Though a useful survey of some of the leading positions, the piece does not consider periodization
to be a key debate.
22
The rst edition of this book was published in 1996; references are to the 1999 edition, cited
above. Sections discussed here are the same in both editions, save for page number.
904 Lang
of such internationalization does not create a supraterritorial global order. They did
not deny the historicity and variation within the twentieth-century world economy but
rather sought to register a certain scepticismover whether we have entered a radically
new phase in the internationalization of economic activity (49).
The Hirst and Thompson book created a turning point in globalization discourse;
it extended the frame beyond current affairs and put the concept on the defensive.
Epochal globalization now required more than mere assertion. In 1999 four British
social scientists, David Held, Anthony G. McGrew, David Goldblatt, and Jonathan
Perraton, responded with Global Transformations: Politics, Economics, and Culture,
a hefty volume that aims at exhaustive coverage. The authors position themselves as
transformationalists, sober moderates between presentist hyperglobalists and
nothing-new skeptics, though the great bulk of Global Transformations is directed
against the skeptics, and specically against Hirst and Thompson. Globalization, the
book agrees, certainly has a history, but its contemporary conguration displays un-
paralleled qualitative differences. . . . The contemporary epoch is historically unique
(425). The greatest difference, and the central concern of the text, is the current
transformation of the nation-state, the erosion of [its] internal/external distinction
(438). In contrast to the state-directed world economy of the belle epoque, contem-
porary globalization is distinguished by a new geography of power and privilege
which transcends political borders and regions (429). To make this point, Global
Transformations brings to bear an impressive apparatus of social scientic evaluation;
it also brings a political agenda. The entire volume can be taken as substantiation for
the lead authors theoretical work of 1995, Democracy and the Global Order, where
a bid for cosmopolitan governance relies on a supposition concerning todays state-
surpassing globalization: The operation of states in an ever more complex interna-
tional system both limits their autonomy (in some spheres radically) and impinges
increasingly upon their sovereignty.
23
This assertion seeks its empirical evidence in
Global Transformations.
Global Transformations is probably the most cited work on its topic,
24
and some
of the big bats in history and the social sciences have stepped up to praise it. Akira
Iriye calls it the best synthesis on globalization; Anthony Giddens, the most com-
prehensive introduction to the subject; Manuel Castells, the best, and most com-
prehensive, analysis of globalization.
25
Such strong approval of the book and its
synthesis of dozens of arguments make it a good basis for evaluating in detail the
claims of contemporary globalization. In dening their key term, the authors explicitly
echo Giddens: Globalization can be taken to refer to those spatio-temporal processes
of change which underpin a transformation in the organization of human affairs by
linking together and expanding human activity across regions and continents (15).
On this basis, the authors conduct a comparative historical analysis of what they call
globalizations discrete historical epochs (17). These are divided through familiar
terminology: as premodern, early modern, modern, and contemporary. The meaning
of the key term modern is never claried, however. When we ask what drives
23
David Held, Democracy and the Global Order: From the Modern State to Cosmopolitan Gov-
ernance (Stanford, CA, 1995), 135 (entire passage italicized in original).
24
Based on Institute for Scientic Information (ISI) Web of Science citation search, April 3, 2005.
25
Akira Iriye, Internationalizing International History, in Rethinking American History in a
Global Age, ed. Thomas Bender (Berkeley, CA, 2002), 4762, 61 n. 17; Anthony Giddens, Runaway
World: How Globalization Is Reshaping Our Lives (New York, 2000), 84; Manuel Castells, The Rise
of the Network Society, 2nd ed., vol. 1, Information Age (Oxford, 2000), 101.
globalizing processes of change, the authors cite the combined forces of moder-
nity (10). Yet this must refer to globalization in its more recent forms; surely the
forces of modernity did not create premodern globalization. Periodization of the
modern therefore relies on nothing but the tautological assertion of itself. Yet the
temporal markers remain necessary because the books denition of globalization in
itself is so general as to include almost any spatial linkage that has an effect. Likewise,
some periodization is of course needed if present-era links are to be considered epo-
chally unique. Against Hirst and Thompson then, the bulk of the books historical
argument contrasts the contemporary to the modern.
Held et al. have a twofold thesisshared by most in the eldthat we have
entered a new era of history, one in which the distinctions of territorial power are
eroding. Despite a chapter each on culture and the environment, they emphasize the
state-economy axis and, within that, a case study set of six advanced capitalist states
(the United States, the United Kingdom, France, Germany, Sweden, and Japan). This
would be an odd and narrowselection for the defense of any thesis about globalization,
though the authors insist that here we nd the most compelling evidence of todays
global enmeshment (441, 428). The evidence they present, however, does not sur-
mount the objections raised by Hirst and Thompson. I will evaluate in turn the vol-
umes discussion of economics and politics, though, as we will see, its analytic ab-
straction of each from the other creates a fundamental problem for both.
The economic arguments follow the commonplace breakdown of production, trade,
and nance. Since Bretton Woods, each is said to exemplify globalization, deterrito-
rialization, a decline in national autonomy, and therefore the emergence of a categor-
ically new phase of world economic history (17879, 22223, 27273, 426). How
global are these registers? How unique are they compared to those that existed a
century ago?
Concerning production, often called the global assembly line, Held et al. measure
and map foreign direct investment (FDI). According to their argument, export of
production and distribution systems is now at unprecedented levels, creating the trans-
national power of the new global corporation (282). On the contrary, though, world
FDI is highly concentrated and unevenly distributed. Globalization in this regard
actually involves but a handful of countries, each in varying degrees of intensity. An
extensive study of European business reports, for example, that for the last twenty
years FDI has remained more or less stagnant for British and Dutch rms. While
increases did occur in Germany and France, the destinations for investments coming
from all four sources were hardly global; rather, they were European, and they did
not show the expected increase to low-wage locations. Overall, multinational pro-
duction accounts for less than 10 percent of output within even the most integrated
economies.
26
Within that, policies concerning ownership structures, corporate gov-
ernance, worker relations, competitor relations, long-term nancing, research and de-
velopment, in-house trade, and international investment strategy follow established
national trajectories and vary widely between U.S., German, and Japanese rms.
27
26
Alfred Kleinknecht and Jan ter Wengel, The Myth of Economic Globalization, Cambridge
Journal of Economics 22 (1998): 63747; Theodore H. Moran, Beyond Sweatshops: Foreign Direct
Investment and Globalization in Developing Countries (Washington, DC, 2002), 56; Geoffrey Gar-
rett, Global Markets and National Politics: Collision Course or Virtuous Circle? International Or-
ganization 52, no. 4 (1998): 787824.
27
Neil Fligstein, The Architecture of Markets: An Economic Sociology of Twenty-First-Century
906 Lang
Concerning trade, Held et al. cite both its recent geographical extension and its
increasing intensication (measured by trade to gross domestic product [GDP] ratios)
to assert a new era of trade globalization (150). Yet nearly 80 percent of todays
$36 trillion world economy remains national, and further, like FDI, these trade ows
are highly uneven; Africa below the Sahara accounted for just 1 percent of world
trade in the 1990s.
28
The authors do demonstrate a slight upswing in world exports
relative to world GDP during the postWorld War II era (169), but the distribution
of this trade indicates regionalization rather than globalization. In Europe, for ex-
ample, trade among European Union (EU) partners has grown signicantly in the
postwar period, but extracontinental trade has stagnated or diminished for most of
the individual states and for the EU as a whole. Some economists go so far as to call
the European Union a closed economy.
29
Overstated assertions about global trade
usually follow classical trade theory in ignoring the signicance of geography. Yet
costs associated with shipping, time lag (such as interest charges, perishability, and
changes of style), cultural and linguistic unfamiliarity, human travel, and time-zone
differentials all contribute to local agglomerations that in turn develop their own
gravitational tendencies. These business costs are easily overlooked in the age of the
Internet, but they serve as the basis for todays regionalized trade blocs.
30
Finally, the argument for contemporary economic globalization most often draws
from the recent history of international nance. Reduction of controls and taxes on
capital movement, liberalization of domestic regulatory restrictions, offshore account-
ing, and huge numbers, like the $2 trillion in daily (mostly speculative) currency
Capitalist Societies (Princeton, NJ, 2001), 10122, 17090; Paul N. Doremus, The Myth of the Global
Corporation (Princeton, NJ, 1998); Louis W. Pauly and Simon Reich, National Structures and Multi-
national Behavior: Enduring Differences in the Age of Globalization, International Organization
51, no. 1 (1997): 130; John Zysman, The Myth of a Global Economy: Enduring National Foun-
dations and Emerging Regional Realities, New Political Economy 1, no. 2 (1996): 15784. Ronald
Philip Dore, British Factory, Japanese Factory: The Origins of National Diversity in Industrial Re-
lations (Berkeley, CA, and Los Angeles, 1973), the groundbreaking work on the national origins of
modern business development, insisted on the importance of a nations preindustrial social structures,
the relative power of the state, the ideology of elites, the nations history in war, strategic needs,
resource allotments, population density, and racial divisions. For Dore, twentieth-century industrial-
ization has been determined neither by a single model of development nor by unique national-
cultural characteristics but by overlapping and divergent national histories. For international invest-
ment strategies, see W. Ruigrok and Rob van Tulder, The Logic of International Restructuring
(London, 1995), a large-scale study of the worlds one hundred largest multinationals ([None] has
managed to overcome its base. Globalization remains a myth, 169 and see also 12930); and Alan
M. Rugman, The End of Globalization: Why Global Strategy Is a Myth and How to Prot from the
Realities of Regional Markets (New York, 2001), 218.
28
World Bank, Total GDP 2003 (2005), http://www.worldbank.org/data/databytopic/GDP.pdf;
World Trade Organization, International Trade Statistics 2004 (Geneva, 2005), Tables 1.5 and 1.7,
http://www.wto.org/english/res_e/statis_e/its2004_e/its04_bysubject_e.htm. For Africa, Robert Gilpin
and Jean M. Gilpin, The Challenge of Global Capitalism: The World Economy in the Twenty-rst
Century (Princeton, NJ, 2000), 21.
29
Kleinknecht and ter Wenzel, The Myth, tabulations at 640, quote from 638. Current numbers
for North America reveal regionalization in sharp relief. The United States absorbs about 90 percent
of all Mexican exports and nearly 80 percent of those from Canada. About two-thirds of Mexican
and Canadian imports come from the United States (U.S. Embassy in Mexico, The U.S. and Mexico
at a Glance [2004], http://www.usembassy-mexico.gov/eataglance1.htm#trade). For Canada, De-
partment of Foreign Affairs and International Trade, Trade Update 2004 (2004), table 1C, http://
www.dfait-maeci.gc.ca/eet/trade/state-of-trade-en.asp.
30
Jeffrey A. Frankel, Ernesto Stein, and Shang-Jin Wei, Regional Trading Blocs in the World
Economic System (Washington, DC, 1997).
trading, are usually cited. According to Held et al., contemporary nancial globali-
zation represents a distinctive new stage in the organization of credit and money in
the world economy (235). There is no question that international capital mobility is
less impeded today than during the Bretton Woods era, but, as with FDI and trade,
patterns of international nance are quite lumpy, and even within such international
ows, signicant national distinctions endure. One study of recent world nancial
currents shows that upper-income countries account for 93 percent of total activity
and that the polarization between rich and poor in this regard is growing. Twelve
countries in Asia and Latin America secured 75 percent of the total capital ow to
developing countries, while 140 of the other 166 developing economies received less
than 5 percent.
31
Among the rich states, the proportion of foreign-held securities also
varies enormously, demonstrating that domestic institutional decisions remain essen-
tial to any understanding of nancial internationalization. Different national histories,
policies, and cultures create basic structural asymmetries between capital markets.
Variations in the degree of domestic capital centralization, the function and regulation
of banks, tax systems, bankruptcy rules, accounting practices, cost perception, risk
perception, and the distribution of corporate equity all indicate that nance remains
rmly embedded in national capital markets.
32
Finally and perhaps most important,
capital mobility in itself reveals quite little about actual market integration. Currency
risks, even among the richest states, sustain large differentials between national in-
terest rates.
33
Financial markets do not converge among Held et al.s examples and
certainly not across the globe.
In general, corporate practices and nancial markets both remain securely rooted
in national political and cultural structures, and while levels of international trade
continue to rise, such activity sharply gravitates toward regional, not global, circuits.
It thus remains to be asked whether this integration is unique. Have we entered, as
Held and others claim, a new era of contemporary history? Hirst and Thompsons
belle epoque shows remarkable precedents for what is today described as epochal
globalization.
Starting again with international production: of the six wealthy states on which
Held et al. focus, only Sweden shows a substantial increase in outward FDI from
1914 to 1994. Japan, the United States, and Germany all measure about the same.
France and the United Kingdom show heavy contraction (275). The better measure
of a global scaleworld FDI (relative to world GDP)shows that 1913 levels re-
mained unsurpassed into the late 1990s.
34
Multinational corporations ourished during
31
Hak-Min Kim, Globalization of International Financial Markets: Causes and Consequences
(Aldershot, 1999), 101; Alejandro Lopez-Mej a, Large Capital Flows: Causes, Consequences, and
Policy Responses, Finance and Development 36, no. 3 (1999), http://www.imf.org/external/pubs/ft/
fandd/1999/09/lopez.htm.
32
Eswar Prasad, Kenneth Rogoff, Shang-Jin Wei, and M. Ayhan Kose, Effects of Financial Glob-
alization on Developing Countries: Some Empirical Evidence, International Monetary Fund (Wash-
ington, DC, 2003); Louis W. Pauly, National Financial Structures, Capital Mobility, and International
Economic Rules: The Normative Consequences of East Asian, European, and American Distinctive-
ness, Policy Sciences 27 (1994): 34363. See also Andrew Carl Sobel, Domestic Choices, Inter-
national Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor,
MI, 1994); Wade, Globalization and Its Limits.
33
Frankel, On Exchange Rates, 6869.
34
Francesca Sanna-Randaccio, Globalization and Foreign Direct Investments: Towards a New
Protectionism? in Globalization, Institutions, and Social Cohesion, ed. Maurizio Franzini and Felice
R. Pizzuti (Berlin, 2001), 5972.
908 Lang
the earlier period and were essential agents in the internationalization of production.
By 1914, U.S., British, German, French, Dutch, Swedish, Swiss, and Japanese rms
had innovated production, packaging, products, and management techniques to create
a global diffusion of goods. Production of automobiles, telephones, cameras, pho-
nographs, typewriters, elevators, paints, dyes, tractors, arms, electrical equipment,
food products, and cigarettes became multinational and usually multiregional in the
era before World War I.
35
Likewise, international trade today is not noticeably greater than during the prewar
era. Comparing 1913 to 2000 (and again using Held et al.s six advanced industrial
states), only Germany shows a signicant increase in total merchandise trade relative
to GDP. France, Sweden, and the United States show slight expansion, Japan slight
reduction, and the United Kingdom a major deinternationalization.
36
For more com-
prehensive numbers, Christopher Chase-Dunn tabulates the level of world trade (as a
percentage of world GDP) and reports only a moderate increase from 1913 to 1995.
He writes: There is simply no support for the idea that a completely new stage of
global integration has emerged in recent years.
37
Finally, what about securities markets? By many measures, world capital integration
in the belle epoque actually exceeded the levels reached today. Starting in the mid-
nineteenth century, European savings banks moved past their insufcient, short-term
assets through amalgamation and national centralization, bringing more domestic cap-
ital to nancial centers and into international markets.
38
The worldwide geography of
British banking is well known, but the nancial centers of France, Germany, Holland,
Belgium, Switzerland, and the United States were likewise linked to highly mobile
international capital markets. Barry Eichengreen estimates that 89 percent of the
worlds 1908 population lived in economies using convertible currency under the gold
and silver standards.
39
When net capital ows (current account relative to GDP) of
35
Mira Wilkins, Multinational Corporations: An Historical Account, in Transnational Corpo-
rations and the Global Economy, ed. Richard Kozul-Wright and Robert Rowthorn (New York, 1998),
97111. See as well the discussion of nineteenth-century free-standing companies, multinational
enterprises with no home market designed solely as foreign direct investments, in Mira Wilkins and
Harm G. Schroter, eds., The Free-Standing Company in the World Economy, 18301996 (Oxford,
1998).
36
For a 191390 comparison, Robert Feenstra, Integration of Trade and Disintegration of Pro-
duction in the Global Economy, Journal of Economic Perspectives 12 (1998): 38. Hirst and Thomp-
son compare the same period but with a different method of measurement and using the Netherlands
instead of Sweden. Their numbers show, even more pointedly, Dutch and Japanese levels declining
drastically and the rest in rough equivalence (27). For the 1990s, World Trade Organization, Inter-
national Trade Statistics 2001 (Geneva, 2001), 44, 60, 6364.
37
Christopher Chase-Dunn, Yukio Kawana, and Benjamin D. Brewer, Trade Globalization since
1795: Waves of Integration in the World-System, American Sociological Review 65, no. 1 (2000):
7795, 88. Using different methodologies and arriving at the same conclusion (though only to 1990),
Angus Maddison, Monitoring the World Economy, 18201992 (Paris, 1995), 227, 239. See also
Antoni Estevadeordal, Brian Frantz, and Alan M. Taylor, The Rise and Fall of World Trade, 1870
1939, Quarterly Journal of Economics 118, no. 2 (2003): 359407; as well as Paul Krugman,
Growing World Trade: Causes and Consequences, Brookings Papers on Economic Activity, no. 1
(1995): 32762.
38
Daniel Verdier, Domestic Responses to Capital Market Internationalization under the Gold Stan-
dard, 18701914, International Organization 52, no. 1 (1998): 134.
39
Geoffrey Jones, British Multinational Banking, 18301990 (Oxford, 1993); P. L. Cottrell, Great
Britain, in International Banking, 18701914, ed. Rondo Cameron and V. I. Bovykin (Oxford, 1991),
2547, 3031; Herbert Feis, Europe, the Worlds Banker, 18701914: An Account of European
the preWorld War I period are compared to those of today for Held et al.s six
wealthy states, only Germany shows an increase; the United States stays the same,
and France, Japan, Sweden, and the United Kingdom all indicate decline. The aggre-
gate number for these and the six other top economies has today also declined to
about two-thirds of the 1913 level. Before the war, Britain moved up to half of its
domestic savings into foreign loans. France peaked at nearly 30 percent, and Germany
at nearly 20 percent, both still enormous by todays standards.
40
On the receiving end,
the numbers were equally staggering. For the period 18701910, net inward foreign
ow as a percent of total capital formation was 37 percent for Canada, about 70
percent for Argentina, and up to 75 percent for Mexico. These gures are especially
revealing when compared to the debt-crisis years of the late 1970s and 1980s when
the third world imported 1020 percent of its capital, with Argentina at 22 percent
(ORourke and Williamson, 210). Moreover, todays foreign asset distribution is gen-
erally a risk-sharing enterprise where assets are swapped to hedge investments.
41
In
this sense, contemporary globalization is less global and more state-dependent, as rich
investors seek the protection of safe and comparable settings while development for
poor states now requires a greater share of national nancing. Finally, measurements
of the speed of spreading panic reveal that gold-era capital markets were more volatile
and interdependent than those today.
42
In 1890, for example, the meltdown of the
overspeculated and unstable Argentine economy spread crisis throughout South
America and rebounded money market troubles into all of Europe. Barings Bank
nearly collapsed; stunned European creditors came to realize that dependency now
owed both ways. A recent survey comparing nancial market openness concludes,
We have never come close to recapturing the heady times of the pre-1914 era.
43
Unquestionably the world has moved toward greater economic integration since
World War II and the state-centric postwar settlement of Bretton Woods. The world
economy remains distant, however, from anything approaching a deterritorialized
space. Sources, destinations, and behavior of contemporary economic ows reveal
the ongoing and forceful signicance of political, cultural, geographical, and historical
specicities. Further, the shift toward increased integration is not new. By most mea-
sures, todays world economy still does not match the integration of a century ago.
Global Transformations makes its economic arguments to support its general po-
litical thesis concerning diminishing state sovereignty. Transnational production net-
works weaken states ability to manage growth. New patterns of trade make welfare
systems difcult to sustain and severely limit the protectionist option, while rule-based
regimes like the World Trade Organization directly constrain state sovereignty. Like-
wise, global nance undermines the effectiveness of domestic monetary policy. In
Foreign Investment and the Connection of World Finance with Diplomacy before World War I (New
York, 1965); Eichengreen cited in Sachs and Warner, Economic Reform, 7.
40
Maurice Obstfeld, The Global Capital Market: Benefactor or Menace? Journal of Economic
Perspectives 12, no. 4 (1998): 930.
41
Maurice Obstfeld and Alan M. Taylor, Globalization and Capital Markets, National Bureau of
Economic Research (Cambridge, MA, 2002), 5859.
42
Niall Ferguson, The Cash Nexus: Money and Power in the Modern World, 17002000 (New
York, 2001), 28388.
43
Carlos Marichal, A Century of Debt Crises in Latin America: From Independence to the Great
Depression, 18201930 (Princeton, NJ, 1989); Obstfeld and Taylor, Globalization and Capital Mar-
kets, 58.
910 Lang
sum, the power and the role of the territorial nation-state is [sic] in decline.
44
On
this point, as noted earlier, general agreement issues from an unusually wide range
of commentators, from conservatives to Marxists.
45
Like the narrower economic arguments detailed above, this assessment of state
power appears exaggerated and misconstrued in several ways. First, the guarantee of
private property demands a political forma deployment of enforcing powerto
codify and protect exchange and possession. Nothing, of course, has changed in this
regard. Moreover, government policy instruments, like business strategies, remain
distinct in their relation to the international economy. Geographical, historical, and
political differences account for a variety of unique, state-specic instruments. China,
Russia, and the post-Soviet states have each laid nationally unique foundations for
their marketization.
46
Among advanced capitalist countries, levels of public invest-
ment differ by state as well as by election cycle within states.
47
Even deregulation, so
often touted as evidence of both global pressure on the state and the convergence of
global policy norms, actually varies signicantly between states, sustains economic
differences between them, and most often rearticulates, rather than delimits, state
power.
48
Finally, expansion of international regulatory regimes is not in opposition to
state sovereignty but in fact relies on it. International business requirements for cal-
culable trade rules and consistent property rights, to take the most obvious examples,
44
From the self-description of the authors position in The Great Globalization Debate: An Intro-
duction, in Held and McGrew, The Global Transformations Reader, 13.
45
John Gray, False Dawn: The Delusions of Global Capitalism (New York, 1998), 5577; John
Gerard Ruggie, At Home Abroad, Abroad at Home: International Liberalisation and Domestic Sta-
bility in the New World Economy, Millennium: Journal of International Studies 24, no. 3 (1995):
50726; Rosenau, Along the Domestic-Foreign Frontier, 82, 71; Philip G. Cerny, Globalization and
the Changing Logic of Collective Action, International Organization 49, no. 4 (1995): 592625;
Martin Carnoy, The Demise of the Nation-State? Theoria 97 (2001): 6981; Jurgen Habermas, The
Postnational Constellation, ed. and trans. Max Pensky (Cambridge, 2001); William I. Robinson,
Social Theory and Globalization: The Rise of a Transnational State, Theory and Society 30, no. 2
(2001): 157200; Michael Hardt and Antonio Negri, Empire (Cambridge, 2000).
46
For a general survey of different national industrial and development strategies, Peter Dicken,
Global Shift: Transforming the World Economy, 3rd ed. (New York, 1998), 11544. For a focus on
poor states, Mark A. Carlson and Leonardo Hernandez, Determinants and Repercussions of the
Composition of Capital Inows, IMF Working Paper 02/86 (Washington, DC, 2002). On China and
Russia, Yingyi Qian, The Process of Chinas Market Transition (197898): The Evolutionary, His-
torical, and Comparative Perspectives (1999), Stanford University Economics Department, http://
www.econ.stanford.edu/faculty/workp/swp99012.html. On post-Soviet Europe, Mitchell A. Orenstein
and Martine R. Haas, Globalization and Development of Welfare States in Postcommunist Europe,
BCSIA Discussion Paper 2002-02, John F. Kennedy School of Government, Harvard University
(Cambridge, MA, 2002), http://bcsia.ksg.harvard.edu/publication.cfm?programCORE&ctype
paper&ite m_id339; and Robert Boyer, The Convergence Hypothesis Revisited: Globalization but
Still the Century of Nations? in Berger and Dore, National Diversity and Global Capitalism, 2959.
47
Fligstein, Architecture of Markets, 21320; Geoffrey Garrett, Partisan Politics in the Global
Economy (Cambridge, 1998); Peter Evans, The Eclipse of the State? World Politics 50, no. 1 (1997):
6287. During the recent steel dispute between the EU and the United States, both sides agreed that
European companies were better able to consolidate because of their states responsibility to fund
pension and health benets (Edmund L. Andrews, Europe versus United States in Steel War, New
York Times, March 26, 2002, C1). Within the United States, proposed stimulus packages following
September 11 were substantively polarized between the Democratic plan to support middle, poor,
and unemployed sectors and the Republican plan to refund corporate taxes.
48
Pauly, National Financial Structures; Steven Kent Vogel, Freer Markets, More Rules: Regu-
latory Reform in Advanced Industrial Countries (Ithaca, NY, 1996); see also Gray, False Dawn, on
the highly activist state in Thatcherite deregulation (2434).
could not be established by companies themselves. The move toward common stan-
dards and free trade demands that states negotiate and create such a regime. In
addition, too great a focus on international regulatory regimes obscures from view
the ongoing impact of state-imposed trade barriersthe duties, domestic subsidies,
technical standards, limits to foreign investment, and preferential trading arrange-
ments that vary signicantly around the world.
49
By ignoring the locally specic, contested, domestic-political production of policy
and power, much of the globalization literature can thus project a singular, abstract
logic that covers the globe. Ironically, this conceptual bloat came to prominence in
the globalization discussion right after a decade of methodological reection in eco-
nomics had focused, conversely, on shedding the disciplines own naturalist assump-
tions for an articulation of multiple equilibria, imperfect competition, and the contin-
gencies of history, geography, psychology, and accident.
50
Yet in the bulk of
globalization studies signicant attention to any locally driven variability is perforce
blocked by an appropriately abstract notion of political power, drawn from one of the
most enduring of historical presumptions, the Westphalian system.
The foundation stone of twentieth-century realism, the Westphalian model denes
sovereignty as the self-determining authority of any bordered, territorial space. With
the closing of the Thirty Years War, centralized political units could brush aside
emperor, pope, and baron, eliminating all overlapping claims to rule. The geographical
demarcation of territorial states, according to this formulation, became the basis of
an international political system that eventually encompassed the world.
51
Understood
as freedom from external authority, sovereignty thus renders domestic politics into
an abstract equivalence for all states. Analysis can then proceed to dispense with the
details of local differentiae. Inattentive to domestic decisions and tendencies, the West-
phalian model consequently treats economy as either contained within a state, and
therefore secondary to the system itself, or outside state power, supraterritorial, and
therefore a threat to the states sovereignty. In the globalization literature, this notion
of state functions on the one hand to minimize the local production and interrelation
of political and economic power and on the other hand to isolate cross-border com-
merce into a global abstraction. The former allows the latter; the latter then conrms
the former.
Further, the Westphalian gure of the territorial state is offered as conrmation of
todays epochal global change: delineated boundaries of political rule, historically
clear and unambiguous, are now being blurred by globalization. Held et al. declare:
The Westphalian regime of state sovereignty and autonomy is undergoing a signi-
cant alteration. . . . A new sovereignty regime is displacing traditional conceptions
of statehood as an absolute, indivisible, territorially exclusive zero-sumformof public
49
Nicholas Stern, Open the Rich Markets to Poor Countries Exports (2001) World Bank, http://
www.worldbank.org/knowledge/chiefecon/speeches/nsoped-iht2.htm; Keith E. Maskus, John S. Wil-
son, and Tsunehiro Otsuki, Quantifying the Impact of Technical Barriers to Trade: A Framework
for Analysis (2000), World Bank, http://econ.worldbank.org/view.php?type5&id1324.
50
Nicholas Kaldor, Economics without Equilibrium (Armonk, NY, 1985); Paul A. David, Clio and
the Economics of QWERTY, American Economic Review 72, no. 2 (1985): 33237; Paul Krugman,
Geography and Trade (Cambridge, MA, 1991).
51
Hans J. Morgenthau, Politics among Nations: The Struggle for Power and Peace (New York,
1948), 24363; Kenneth N. Waltz, Theory of International Politics (Reading, MA, 1979), 9596,
131. A nonrealist argument for Westphalian territoriality, Daniel Philpott, Revolutions in Sovereignty:
How Ideas Shaped Modern International Relations (Princeton, NJ, 2001).
912 Lang
power (444, 9).
52
Myriad other approaches to globalization likewise historicize a
golden age of Westphalian sovereignty now coming to its end.
53
In all cases, pre-
sumption of the model serves to underestimate state power in the present while over-
estimating such power in the past. But international pressures on state sovereignty
are not new, and, like today, responses were locally dependent and highly variable.
As Michael Mann writes, modern states have always possessed a complex combi-
nation of relative autonomy and complex interdependence.
54
To submerge the variant
Westphalian operations of boundary, domestic rule, and international law under the
single rubric of sovereignty seems to obscure considerably more than it reveals. In
any case, this rubric confronts the manifest evidence that domestic rule has commonly
been subject to external authority and intervention. According to Stephen Krasner,
every major peace treaty from Westphalia to Helsinki has compromised the so-called
Westphalian model.
55
Historical analysis raises additional skepticism regarding the Westphalian periodi-
zation of territoriality, the linchpin of the entire model. According to Charles Maier,
actual centralization of enforceable state authority emerged only in the last third of
the nineteenth century when the control of land, transformed by industrial capitalism,
escaped from the hands of traditional rulers to be recongured by alliances of new
and old elites. Administrating industrial wealth, arms, and infrastructure, regimes were
now able to fuse the space of decision with the space of identity into a single
territorial unit.
56
And it is here, also for the rst time, that lawyers and historians,
52
The text shifts freely between sovereignty as a theoretical conception and as a description of
political reality. According to Jens Bartelson, this oscillation is symptomatic of all historical attempts
to dene sovereignty insofar as the mutual production of knowledge and power goes unrecognized
(Jens Bartelson, A Genealogy of Sovereignty [Cambridge, 1995]).
53
Competing against realism, though reliant on its state-centric historicization of Westphalia, are
cosmopolitanism, in addition to Held et al., Andrew Linklater, The Transformation of Political Com-
munity (Cambridge, 1998); neoliberal institutionalism, Robert O. Keohane, Hobbes Dilemma and
Institutional Change in World Politics, in Whose World Order? ed. Hans Henrik Holm and Georg
Srensen (Boulder, CO, 1995), 16586; constructivism, John Gerard Ruggie, Territoriality and Be-
yond: Problematizing Modernity in International Relations, International Organization 47, no. 1
(1993): 13974; systems theory, Rosenau, Along the Domestic-Foreign Frontier; sociology of space,
Scholte, Globalization; sociology of war, Martin Shaw, Theory of the Global State: Globality as
Unnished Revolution (Cambridge, 2000); critical theory, Habermas, The Postnational Constellation;
Marxism, Robinson, Social Theory and Globalization, and Hardt and Negri, Empire.
54
Michael Mann, Has Globalization Ended the Rise of the Nation-State? Review of International
Political Economy 4, no. 3 (1997): 47296, 477.
55
Stephen D. Krasner, Globalization and Sovereignty, in States and Sovereignty in the Global
Economy, ed. David A. Smith, Dorothy J. Solinger, and Steven C. Topik (London, 1999), 3952;
Stephen D. Krasner, Compromising Westphalia, International Security 20, no. 3 (199596): 115
51. See also Justin Rosenberg, The Empire of Civil Society: A Critique of the Realist Theory of
International Relations (London, 1994); and Justin Rosenberg, The Follies of Globalisation Theory:
Polemical Essays (London, 2000).
56
Charles S. Maier, Consigning the Twentieth Century to History: Alternative Narratives for the
Modern Era, American Historical Review 105, no. 3 (2000): 80731; similar periodization in
P. H. H. Vries, Governing Growth: A Comparative Analysis of the Role of the State in the Rise of
the West, Journal of World History 13, no. 1 (2002): 67138. See additionally, for the national
centralization of banks, Verdier, Domestic Responses; for the territorialization of currency, Eric
Helleiner, One Nation, One Money: Territorial Currencies and the Nation-State (1997), Advanced
Research on the Europeanisation of the Nation-State, University of Oslo, www.arena.uio.no/
publications/wp_97.htm; for the shift from federative to national political organization, Robert Cedric
Binkley, Realism and Nationalism, 18521871 (New York, 1935). Most famously, this periodization
is asserted in Eugen Weber, Peasants into Frenchmen: The Modernization of Rural France, 1870
1914 (Stanford, CA, 1976).
theorizing the Janus-faced state, projected back the origins of its sovereignty into a
mythically construed Westphalian Treaty.
57
From there this nineteenth-century con-
ceptual artifact became the basis for twentieth-century international relations theory
and its paradigmatic realism as well as the basis for todays globalization studies and
its own peculiar realism.
Yet already in the late nineteenth century international economic ows were un-
dermining the rhetoric of Westphalia. To secure development loans, weak states of
the period, like many in recent history, surrendered scal autonomy to foreign gov-
ernments, creditors, special supervisory companies, and international commissions.
58
Furthermore, the eras gold standard, as previously noted, increasingly approached a
near-total integration of world currencies. This system subordinated the national mon-
etary policies of rich states as well as poor ones to the demands of gold parity and
sufcient gold reserves. Even Britain, often regarded as the hegemonic conductor of
the system,
59
could nd its options nullied. On several occasions, Britains respon-
sibility to gold was split between domestic and international obligations. To deect
runs on its reserves and a possible collapse of sterling convertibility, the Bank of
England was forced to become the borrower of last resort, drawing gold reserves from
French, German, Belgian, and Russian central banks. The worlds nancial power-
house was itself dependent on and restricted by this multipolar system, later assailed
by Keynes as a constraint on national sovereignty.
60
Both weak and strong states were compromised by the world economic order of
the prewar era. This did not mean, however, that conditions or consequences were
uniform. Domestic distinctions and national decisions remained signicant. Among
golds major players, different devices were used to uphold currency strength: Britain
frequently adjusted its discount rates, France hoarded gold and limited franc con-
vertibility, and Germany combined these to suit current exigencies, while the United
States had no central bank and minimal national management. Each of these in turn
generated diverse local and systemic effects.
61
In smaller economies, negotiation with
the international system was of course more imposing, yet also informed by local
factors. Fearing U.S. economic penetration, Mexican elites carefully regulated all
foreign economic presence. The Brazilian government, in contrast, pursued policies
57
Andreas Oriander, Sovereignty, International Relations, and the Westphalian Myth, Interna-
tional Organization 55, no. 2 (2001): 25187.
58
Krasner, Compromising Westphalia, 12833; Marichal, A Century of Debt, 12223, 14970.
59
The tack taken by Held et al. to distinguish that era from the absence today of an economic
hegemon (196).
60
Barry J. Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, 19191939
(New York, 1992), 2966; The Collected Writing of [John Maynard] Keynes, vol. 6, bk. 2, A Treatise
on Money (London, 1971), 151, 270303. Held et al. attempt to deect any contemporary comparison
by critiquing Keyness assessment: Domestic monetary policy was never solely determined by global
nancial markets, a hyperbolic claim that Keynes did not make (196). They also overlook Keyness
suspicion and Eichengreens conrmation that in short money, prewar London was as much a debtor
as a creditor.
61
Eichengreen, Golden Fetters, 4254; see also the appropriate chapters in Cameron and Bovykin,
International Banking, 18701914. Despite their somewhat misleading titles, J. Lawrence Broz, The
International Origins of the Federal Reserve System (Ithaca, NY, 1997), and Origins of the Federal
Reserve System: International Incentives and the Domestic Free-Rider Problem, International Or-
ganization 53, no. 1 (1999): 3970, insist on the local, partisan, and distributional contestations over
the creation of the U.S. Federal Reserve; similarly, Daniel Verdier, Capital Mobility and the Origins
of Stock Markets, International Organization 55, no. 2 (2001): 32756, reports that levels of inter-
national capital mobility among the United States and European states heavily depended on the
sectoral distribution of political power and the intensity of state centralization.
914 Lang
favoring landowners and their export interests, deliberately exposing the national cur-
rency to the depreciating pressure of foreign denominations. Contrary approaches to
importing capital were also found within the commonality of the British Dominion.
The policies of colonial states likewise depended on the specic conguration of
local and imperial conditions.
62
Among both the powerful and the weak, differing
histories, geopolitical contexts, domestic distributional conicts, elite preferences, in-
stitutional settings, and developmental strategies created unique relations to the in-
ternational economic order and its pressures.
In general, then, the contemporary era represents neither a new economic regime
nor a new system of states. Like most of the presentist globalization literature, the
Held et al. volume distills the complex of world power into the abstracted categories
of politics and economics. Its authors defend the epochal language of globalization
by using these categories to make inherently distorted comparisons with the past. On
their own terms, these comparisons are not particularly convincing. And when po-
litical and economic forces are understood not as being in conict but as reciprocally
constructed, the constraints on contemporary governments appear exaggerated and by
no means new. The modern territorialized state has always needed to manage the
mobile ows of international wealth. This should not be taken as supraterritoriality,
though. Such a condition is inected but also created at the site of decision. Domestic-
distributional, national, and regional variations, both in the past and in the present,
defy the claim that power transcends political borders.
GLOBALIZATION AS PAST
The accountants have computed their great counting-house the globe, by gir-
dling it with guineas, one to every three parts of an inch. (Herman Melville,
1851)
63
Despite its extensive social scientic apparatus, Global Transformations fails to prove
its central contention that the contemporary epoch is historically unique (425). Mea-
sured by the degree of world economic integration and by the strengths and limits of
the state form, the contemporary era appears remarkably similar to the period pre-
ceding World War I and in this regard can hardly justify the millennial discourse of
an entirely new era. Indeed, the problem of historical precedent was developed in a
major work of economic history published in 1999, the same year as Global Trans-
formations. Kevin ORourke and Jeffrey Williamsons Globalization and History now
serves as the urtext for a large body of research on nineteenth-century globalization.
64
Internal debates aside, this corpus represents a consensus that globalization is best
historicized by a U-shaped descriptor: a very high degree of economic integration in
the nineteenth century, dipping drastically after World War I and returning to historic
peaks in the late twentieth century. In the 2003 essay collection Globalization in
62
Richard Weiner, Race, Nation, and Market: Economic Culture in Porrian Mexico (Tucson, AZ,
2004), 4869; Eichengreen, Golden Fetters, 5465; William G. Clarence-Smith, The Modern Co-
lonial State and Global Economic Integration, in Smith et al., States and Sovereignty in the Global
Economy, 99135.
63
Herman Melville, Moby Dick or, the Whale (New York, 1992), 178.
64
In addition to the work discussed here, see esp. the papers available at the National Bureau of
Economic Research, www.nber.org.
Historical Perspective, this periodization is generally assumed rather than argued.
Whereas Hirst and Thompson sought to overturn the globalization concept entirely,
these economists do not shy away from dening the integration process in this way.
They portray globalization as the convergence of pricesas the reduction in cost
spreads for goods, labor, land, and moneyagainst which states can only interfere.
In this neoclassical approach, economy and state are separate and for the most part
opposing forces. The political abstraction of the Westphalian state is here ironically
mirrored by an equally abstract market economy.
ORourke and Williamson argue that nineteenth-century international price con-
vergence followed two initiating forces. First, they look to the explosion of transport
revolutions: the steamships, railroads, canals, and refrigeration that combined to
lower drastically the costs of international transport (29). As these costs collapsed,
trade and migration increased: general commodity prices, land rents, and wage gaps
thus converged across the North Atlantic. By late century, commodity price and land
rent convergence extended beyond this core and around the world.
65
Second, the
authors point to the liberal trade regime initiated by Great Britain in the 1820s, con-
summated with the repeal of the Corn Laws in 1846 and soon duplicated by most
continental states and many others in Asia. Tariffs were minimized, while various
bilateral treaties further lowered duties and subsequently were often generalized to
other trading partners. Free trade, coupled with the capacities of cheap transport,
generated a trade boom that linked remote locales and integrated factor and com-
modity markets across the globe. One article in Globalization in Historical Perspective
estimates that between 1820 and 1914 intercontinental price gaps dropped by 81
percent. Over two-thirds of this was due to declining transport costs; the rest, to tariff
cuts (Williamson and Lindert in Bordo et al., 231, table 5.1). But starting in 1875,
free trade policies were reversed in a globalization backlash instituted by powerful
domestic interest groups negatively affected by integration. Ongoing reductions in
transportation costs maintained a considerable degree of convergence, but state inter-
ference continued to grow past World War I and into a new era of world market
segmentation. After World War II and especially after 1973, free trade and new trans-
portation technologies once again generated global convergence.
In ORourke and Williamsons historical explanation of integration, policy hardly
garners any role. Globalization occurs with liberalization of the state; deglobalization
occurs when the state reasserts itself. As for transportation technology, the process of
its local introduction is simply presumed. ORourke starkly summarizes this outlook
elsewhere by dening politics as the obstructing gap between an eras technology and
its globalization potential.
66
But the development of technology has never been an au-
tonomous process. Similarly, the notion that free trade involves a mere withdrawal
by the state is an oversimplication. In the mid-nineteenth century, as North Atlantic
states pursued industrial and territorial organization, governments participated exten-
sively in their national infrastructural development, from surveying and road building
to research funding and training. Government intervention in this era of free trade
also included critical import substitution strategies, such as technical exhibitions, patent
65
For factor-price convergence across the non-Atlantic world, see Jeffrey G. Williamson, Land,
Labor, and Globalization in the Third World, 18701940, Journal of Economic History 62, no. 1
(2002): 5585.
66
Kevin H. ORourke, Europe and the Causes of Globalization, 1790 to 2000, in Europe and
Globalization, ed. Henryk Kierzkowski (Basingstoke, 2002), 6486, 8182.
916 Lang
protections, risk limitations, investment planning, start-up support, loans, credits, sub-
sidies, monopoly grants, and, in the United States, massive tariffs to protect iron and
steel.
67
The railroads themselves are most famous in this regard. In mid-century, most
industrializing states built and ran their rail lines with public funds or else issued
grants, concessions, and guarantees to private investors. Belgium nanced its own
national system and then allowed it to sustain noncompetitive decits. In France,
government engineers designed the Paris-centered network with capital provisions
coming from public and private sources. The latter were usually backed by aids, loans,
and guarantees, while state authorities were responsible for nearly all of the land,
tracks, bridges, tunnels, stations, and equipment. The Prussian state railway was -
nanced either by government investments or by government guarantees after the fail-
ure of early private ventures. In southern Germany, most of the network was national.
In Russia and Sweden, trunk lines were built and run by the state. In the United States,
where the system was private, nearly 200 million acres of land were granted to the
rail companies, which also received astounding subsidies, such as the $65 million
loan guarantee to connect the coasts. British rail was the one system nanced entirely
by risk-bearing investors, but to say this ignores British India, where, in this age of
free trade, railway investors enjoyed guaranteed, above-market returns.
68
This neoclassical history also ignores the role of state coercion. Military needs often
spurred technological innovation and improvements, while rail lines themselves were
commonly built with troop transport in mind. It is at least arguable that repeal of the
Corn Laws represented a strategy to retard competitive industrialization by creating
an export market for the continents agricultural products and primary goods, in order,
in the words of one free trade proponent, to render all the world tributary to us.
Neoclassical accounts have little room for the imperial aspects of the free trade era.
As the World Banks Branko Milanovic notes, liberal economists are conceptually
limited by their core methodological construct: the self-interested individual . . . [for
whom] there is no external coercion.
69
This bias is compounded by the untenable
chestnut that the nineteenth century stands out as an unusually peaceful one in the
context of Europes bloody history (ORourke and Williamson, 77). But bloody
here refers exclusively to interstate combat. The interrelation of internal violence and
policy during the liberalizing eranational revolutions, peasant uprisings, and of
course, ongoing worker and union suppressioncan hardly be consigned to domestic
history when assessing degrees of convergence. It is also unclear why, in an analysis
of globalization, the alleged insignicance of violence for Europe should be restricted
to European actors. African-American plantation slaves were laboring on some of the
most capitalized rms in the world, the factories of the eld. U.S. slave society,
67
For a state-by-state survey, Ha-Joon Chang, Kicking Away the Ladder: Development in Historical
Perspective (London, 2002), 1368.
68
Ibid., as well as Barry Supple, The State and the Industrial Revolution, in The Fontana Eco-
nomic History of Europe, vol. 3, The Industrial Revolution, ed. Carlo M. Cipolla (London, 1973),
32749, 344; on the United States, Carter Goodrich, Government Promotion of American Canals and
Railroads, 18001890 (New York, 1960), and Richard Kozul-Wright, The Myth of Anglo-Saxon
Capitalism: Reconstructing the History of the American State, in The Role of the State in Economic
Change, ed. Ha-Joon Chang and Robert Rowthorn (Oxford, 1995), 81113.
69
Benard Semmel, The Rise of Free Trade Imperialism: Classical Political Economy, the Empire
of Free Trade, and Imperialism, 17501850 (Cambridge, 1970), 148; Branko Milanovic, The Two
Faces of Globalization: Against Globalization as We Know It, World Bank (Washington, DC,
2003), 8.
enforced at all levels of government, accounted for fully half the nations exports
while generating nearly 80 percent of the British cotton supply in the years after the
Corn Laws repeal. Cheap U.S. cotton reduced costs to British textile manufacture far
more than either technological innovations or improvements in labor productivity.
70
In addition, a long list of North, Central, and South American interstate and civil
wars helped to determine for each country the trajectory of its national development
and the character of its relation to Europe. The War of the Triple Alliance, for example,
crushed Indian development schemes in the South American interior and secured the
export-dependent policies of Argentina and Brazil. Likewise, in the north, the U.S.
Army pushed back the Mexican frontier and cleared the lands of their Indian inhab-
itants. The Civil War ended slavery but not the well-policed wage suppression of the
sharecropping system. At the same time, the Union victory guaranteed the westward
expansion of free farming and industrialization. The United States emerged as a very
large and unied economy, drawing substantial investments from Europe as well as
a massive inow of European immigrants.
71
Economic integration also owed from direct and unambiguous international co-
ercion deployed by the European states themselves. Gunboat diplomacy is often de-
scribed as European pressure, though bombardment often supplanted the mere
threat of force. As free traders celebrated reductions in tariffs, several European states
and the United States were strong-arming foreign lands into guarantees of extrater-
ritoriality, unsupervised trade, and, most often, very low customs duties. Navies also
commonly went ashore in the interest of bondholders and investors.
72
Williamson
does not exactly ignore these facts; he and ORourke concede, for Asia at least, that
the dramatic switch to free trade was imposed by gunboat diplomacy. But their
characterization denotes a brief instance of muscle exing; it minimizes the enduring
measure of coercion during the subsequent march down the liberal path (54). Asym-
metrical treaties remained in force for decades. Japan was deprived of customs au-
tonomy until 1911 (even as it imposed the same on Korea starting in 1876). Ottoman
obligations outlasted the empire. China waited until 1929 to be able to determine its
own tariffs.
Finally, of course, economic intervention by the state took the form of direct co-
lonial control. The violence of colonial seizures was not uncommon in mid-century,
as Robinson and Gallagher indelicately pointed out some time ago.
73
Moreover, sup-
pression of war-scale uprisings, such as Sepoy, as well as the daily microlevel en-
forcement of occupation and extraction attest to the importance of state violence
during this period of world trade. ORourke and Williamson again concede the pres-
70
Stanley L. Engerman, Slavery and Its Consequences for the South in the Nineteenth Century,
in The Cambridge Economic History of the United States, vol. 2, The Long Nineteenth Century, ed.
Stanley L. Engerman and Robert E. Gallman (Cambridge, 2000), 32966; D. A. Farnie, The English
Cotton Industry and the World Market, 18151896 (Oxford, 1979), 13738, 82.
71
On the War of the Triple Alliance, Bradford Burns, The Poverty of Progress: Latin America in
the Nineteenth Century (Berkeley, CA, 1980); on the importance of both Paraguay and the U.S. Civil
War, Michael Geyer and Charles Bright, Global Violence and Nationalizing Wars in Eurasia and
America: The Geopolitics of War in the Mid-Nineteenth Century, Comparative Studies in Society
and History 38, no. 4 (1996): 61957, 63848.
72
John Gallagher and Ronald Robinson, The Imperialism of Free Trade, Economic History Re-
view, second series, 6, no. 1 (1953): 115.
73
Ibid., 23.
918 Lang
ence of coercion, but only as the initial prying open of trade, with no regard for the
ongoing role of force. Yet, while the United States and most European governments
protected their textile manufacturers with either import prohibitions or duties from 30
to 80 percent, British control eliminated Indian tariffs entirely, bringing in an ava-
lanche of Lancashire merchandise. In the 1850s, Britain dramatically expanded state-
backed railroad construction in pursuit of cotton supplies. Industrial imports to India
were exploding precisely as Britain pressed much of the subcontinent into primary-
products exports.
74
In nearly all cases, colonial powers forcibly controlled the trans-
portation of goods, limited local tariffs, and legislated, restricted, or banned various
manufactures, imports, and exports to favor the metropolis.
75
The neoclassical economists entirely ignore colonialisms economic relevance to
the participants; they also say nothing of colonialisms specic interconnections to
the broader world economy. As is well known, most Indian surplus revenues in the
1830s were transferred immediately to the state opium monopoly. The narcotic was
then sold to China, largely in exchange for tea, whose tariff-supported retail in turn
bankrolled much of Britains further colonization of India. Following the OpiumWars,
of course, British surpluses swelled and developed further as British-Indian teas
produced by largely coerced laborbegan to crowd out the Chinese export market.
The siphoning of wealth from both China and India enabled Britain to venture into
the world market with substantial amounts of capital, which were largely used in turn
to nance the transport revolution. These coerced surpluses with Asia, furthermore,
allowed Britain to run large decits with its Euro-American trading partnersthe
trade boom core that ORourke and Williamson call globalization.
76
The neoclassical model can ignore the enduring signicance of colonialism by
treating it as a singular big bang that initiates free trade. This follows from its narrow
emphasis on prices. In general, the neoclassicists price approach is a useful tool for
rening perspectives on global integration; it is insufcient, however, for an overall
assessment or periodization of this process. Though they have different disciplinary
perspectives and agendas, Williamson duplicates Held et al. in treating the economy
as an autonomous sphere against which politics is measured by its degree of control
or interference. In this case, undue attention to prices biases analysis toward seeing
the state solely in terms of tariff distortions. But from massive nancial interven-
tions, through the daily enforcement of labor, to the sheer deployment of military
force, political power helped to create and expand markets in the nineteenth century.
The lifting of import restrictions constituted only one aspect of national economic
policy, and for non-Europeans it was often an imposed, asymmetrical arrangement.
The description of the mid-century world economy as liberal or free trading is unten-
able, and this abstraction of state and economy again falls short of an adequate history
of global integration.
In this regard, scholars of the early modern period hold an analytic advantage.
Unburdened by the nineteenth centurys competing universalizations of state and
economy, these observers are in many instances able to recognize the mutable and
reciprocal force of each. What remains questionable for this period, though, is the
74
E. J. Hobsbawm, Industry and Empire (Harmondsworth, 1968), 149; Bairoch, Economics and
World History, 89; Farnie, English Cotton Industry, 137.
75
Gallagher and Robinson, The Imperialism of Free Trade.
76
Frederic Wakeman, The Canton Trade and the Opium War, in The Cambridge History of China,
ed. Denis Twitchett and John K. Fairbank, vol. 10, Late Ching, 18001911, pt. 1, ed. John K.
Fairbank (Cambridge, 1978), 173; Kenneth Pomeranz, The Great Divergence: Europe, China, and
the Making of the Modern World Economy (Princeton, NJ, 2000), 285.
applicability of a worldwide scale of analysis. Some early modern and eighteenth-
century studies regard as global what can perhaps be better described in a more limited
manner as long-distance network linkages. In the next volume under discussion, this
problem is compounded by the treatment of Europe, which to be t into a worldwide
frame is underwritten as a mere dependency of larger global forces.
In his 1998 ReOrient: Global Economy in the Asian Age, Andre Gunder Frank sets
out to demonstrate that contrary to widespread doubts and denials, there was a single
global world economy with a worldwide division of labor and multilateral trade from
1500 onward (52). In his thoroughly structuralist account, class, state, and culture
are all dependent upon the world economic system (43). Frank calls his approach
globological (xv), and he is explicitly guided by political commitments to global
unity and anti-Eurocentrism. Through empirical synthesis and the conjecture common
to economic history, Frank describes a world system in which Europe enjoyed only
a brief hegemony, now declining, but whose nineteenth-century analytic legacy of
particularism stubbornly persists.
Frank regards Afro-Eurasia as a single economic system dating back some ve
thousand years. Starting no later than 1000 CE, Song China began to dominate this
system. Europe was an entirely marginal player, though after 1500 its American ex-
tractions were able to buy it a small place at the Asian table. Frank relies heavily on
the evidence of early modern silver ows, most of which began in America, enriched
Europe, and were largely traded out to a monetizing China for spices and textiles.
Silver, and to a lesser degree other precious metals and coin, were arbitraged and
exchanged for commodities across the globe, making the world market operationally
practical for practically all goods (133).
77
Frank also relies on long-term economic
cycles: he sees a China-centered expansive phase beginning at about 1400 and lasting
into the eighteenth century. Crucially, the subsequent contractive phase had differ-
ential effects on the two sides of Eurasia: Europes relatively high wage levels (due
to its smaller population) and its reliance on a nite silver supply combined to give
it a unique incentive to lower production costs. Europe industrialized while low-wage
labor abundance in China trapped it in the down cycle. Europe subsequently parlayed
its industrial revolution into temporary global dominance, but by the late twentieth
century East Asian economies were once again emerging ascendant.
Franks holism offers an attractive vision of world unity and a challenging critique
of Eurocentric presumptions. As in Held et al.s Global Transformations, these politics
(and here, this method) are explicitly justied through a periodization of global in-
tegration. But, as in Held et al., the periodization is not convincing, as I will dem-
onstrate by examining those components outlined abovecurrency, trade, and eco-
nomic cyclesas well as Franks critique of Eurocentrism. Starting, then, with silver
imports, it appears that these had little inuence on early modern Chinese prices. In
this period, European and Chinese money circulated in independent currency systems,
as indicated by divergent ination rates and land rents. By the eighteenth century,
Chinas booming hinterland development had largely dropped out of silver in favor
of less cumbersome bronze. A new surge of ination resulted from this domestic
expansion; it was unconnected to the international stream of bullion.
78
77
See also the work of Dennis O. Flynn and Arturo Giraldez, most recently, Cycles of Silver:
Global Economic Unity through the Mid-Eighteenth Century, Journal of World History 13, no. 2
(2002): 391427, where a highly integrated global economy begins in the sixteenth century (392).
78
Richard von Glahn, Money Use in China and Changing Patterns of Global Trade in Monetary
Metals, 15001800, in Global Connections and Monetary History, 14701800, ed. Dennis O. Flynn,
Arturo Giraldez, and Richard von Glahn (Aldershot, 2003), 187205.
920 Lang
Without doubt, new commercial opportunities created signicant long-distance in-
terconnections throughout the early modern era.
79
Yet the handful of European trading
posts hardly affected the highly developed inland and maritime commerce of East
Asia.
80
Other than silver, there was little from the western hemisphere to interest China
at this time. Moreover, the high costs of shipping would have limited the growth of
any such trade. Only very expensive, noncompeting goods could offset their long,
costly, and hazardous journeys.
81
Prices for such goods thus varied widely by locale.
Price convergence was lacking even within Europe, where in the late eighteenth cen-
tury wide gaps remained for grain, the regions most traded commodity (Lindert and
Williamson in Bordo et al., 232 n. 3). Though precise numbers are difcult to deter-
mine, several authors estimate that as late as 1820 world trade accounted for only
about 2 percent of all commodities.
82
Like currency, markets for most goods remained
locally or regionally structured in the early modern era.
Given the perceptible separation of world economies, Frank depends all the more
on growth cycles as the deep structure from which local variation can emerge. Among
economists, there is no consensus over the existence of such very long waves. Even
within world-systems studies, descriptions of early modern cycles have differed
sharply.
83
But questions about these waves also arise from within Franks text itself.
In his scenario, European industrial growth sparked just as the Asian world entered
a contractive phase. Frank covers the differential using Gerschenkrons advantages
of backwardness (283, 356). But as Peer Vries points out, a preexisting global econ-
omy would have pushed China to cut overall production costs, lower wages notwith-
standing. Yet producers there continued for about a century to sell their goods suc-
cessfully without industrializing. It does not appear that China had entered into a
cycle of decline, and European and Chinese manufacturers were clearly not in com-
petition. Industrialization therefore cannot be explained via the long cycle of a single
global market.
84
This is not to say that the industrialization was internal to Europe:
in this regard Kenneth Pomeranz points to the crucial distinctions between Chinas
free-labor periphery and Britains American slave economy.
85
Such disconnections
79
Kenneth Pomeranz and Steven Topik, The World That Trade Created: Society, Culture, and the
World Economy, 1400 to the Present (Armonk, NY, 1999).
80
Rhoades Murphey, The Outsiders: Western Experience in India and China (Ann Arbor, MI,
1977).
81
See the now-classic piece by Russell R. Menard, Transport Costs and Long-Range Trade, 1300
1800: Was There a European Transport Revolution in the Early Modern Era? in The Political
Economy of Merchant Empires, ed. James D. Tracy (Cambridge, 1991), 22875; as well as C. Knick
Harley, Ocean Freights and Productivity, 17401913: The Primacy of Mechanical Invention Reaf-
rmed, Journal of Economic History 48, no. 4 (1998): 85176.
82
Maddison, Monitoring the World Economy, 38, reports that merchandise exports accounted for
1 percent of world GDP in 1820; Alan M. Taylor, Globalization, Trade, and Development: Some
Lessons from History, National Bureau of Economic Research Working Paper No. 9326 (Cambridge,
2002), 29, claims total trade measured about 2 percent of world GDP in 1800; Simon Kuznets,
averaging the ratio of imports plus exports to national incomes, estimates world trade at about 23
percent for the early nineteenth century, cited in Patrick Karl OBrien, Intercontinental Trade and
the Development of the Third World since the Industrial Revolution, Journal of World History 8,
no. 1 (1997): 75133, 82.
83
Jack A. Goldstone, Revolution and Rebellion in the Early Modern World (Berkeley, CA, 1991);
Immanuel Wallerstein, The Modern World-System, vol. 2, Mercantilism and the Consolidation of the
European World-Economy, 16001750 (New York, 1980), 79.
84
Peer Vries, Should We Really ReOrient? Itinerario 22, no. 3 (1998): 1938.
85
Pomeranz shows that the Americas allowed Britain to trade out the land-intensive production of
and differentiations between Europe and China cast doubt on the geographic and
temporal scale of Franks deep-structure sequence.
Finally, for Frank, evidence of a single global system yields the theoretical and
political imperative of holism. He considers nonholistic approaches to be Eurocentric
social science, an ideology of domination rooted in the nineteenth century (359, 8).
But difference is not the same as rank, and open-ended differentiation need not imply
a single center. Franks inexible criticism blindsides him into a set of logical and
historical contradictions. One of the volumes theoretical implications states that
commonalities are more important than differences (341). This is a self-canceling
statement insofar as the plural commonalities necessitates differentiation. The claim
might obtain meaning for a delimited set of variables, but it cannot then be univer-
salized into a theory of history. Yet this is precisely Franks goal, to raise social science
to the equation History Theory (350). Such universalizing of historical knowl-
edge is itself a product of Europe, developed in large part from Europes particular
engagement with the wider world and described by Nietzsche as its occidental prej-
udice.
86
In attacking the Eurocentric prejudice, Frank often criticizes Weber, but
Weber understood that there are no detached observers, that every holism derives
from a standpoint. It is not so easy to shake off the European perspective, but that
should not be taken as a defense of Eurocentrism. It is rather to say that the critical
position against it might be better served by a contingency of categories than by a
predetermined hierarchy of dichotomous concepts.
87
The latter indeed remains wed-
ded to the social science of the nineteenth century and its hubristic claim to know
the world historical process itself (359).
Explicitly hesitant about any such global teleology are two absorbing volumes with
roots in British imperial studies, Globalization in World History, edited by A. G.
Hopkins, and The Birth of the Modern World, 17801914, by C. A. Bayly. Unlike
Franks volume, both works present Europe within a polycentric history. These au-
thors regard the worlds various early modern empires as motors of globalization, as
managers of large and expansive social systems. This empire form of globalization,
again according to both authors, was then recongured in the nineteenth century into
a new global system of states. Hopkinss book collects seventeen fascinating essays
that together cover a wide range of geographic regions and historiographic themes.
But for a denition of globalization, Hopkins unfortunately draws from Held et al.s
description of tightening large-scale networks (19).
88
In this degree of generality,
foods and raw materials for a specialization in manufacture. Unlike Chinas free labor peripheries,
American slavery guaranteed both the ow of these resources and a market for nished goods. This
unique plantation periphery and the good fortune of coal were foundational to subsequent British
industrialization (Pomeranz, The Great Divergence).
86
On the emergence of modern history in the context of European relations to the wider world,
Koselleck, Neuzeit, 24753, as well as Reinhart Koselleck, The Eighteenth Century as the
Beginning of Modernity, in The Practice of Conceptual History: Timing History, Spacing Concepts
(Stanford, CA, 2002), 15469; Friedrich Wilhelm Nietzsche, Samtliche Werke: Kritische Studienaus-
gabe in 15 Banden, ed. Giorgio Colli and Mazzino Montinari (Munchen, 196777), vol. 1, Vom
Nutzen und Nachtheil der Historie fur das Leben, 243334, 256.
87
For such a contingency of categories, see, e.g., Walter Johnson, Time and Revolution in African
America: Temporality and the History of Atlantic Slavery, in Bender, Rethinking American History
in a Global Age, 14867.
88
Hopkins continues to echo Held et al. by suggesting the possibility that contemporary globali-
zation is without strong national roots (39).
922 Lang
globalization can be readily reected back to almost any instance of empire, trade
circuit, or migration. It is therefore unclear what the concept adds to the discussion.
Hopkins writes, Globalization is by denition a process that affects the whole
planet (23). He makes this statement in the context of discussing the contemporary
era, and given the spatial bounds of earlier network congurations it is presumably
meant to be limited in that way. What, then, conceptually connects the various his-
torical networks to each other and to globalization in the present? Like the European
merchant empires of its time, the Qing Empire expanded, but it did so in an entirely
different way. Europe obtained specialized imports from its overseas semitropical
colonies through the mercantile union of prot and power. The Qing, by contrast,
converted its adjoining lands into sedentary agricultural communities that reproduced
the interiors production and market patterns. Foreign trade and goods remained only
minimal concerns.
89
What do we gain by describing the Qing Empire as a kind of
globalization? What the authors present, rather than a history of globalization, is
actually a transactional method. They reject self-contained designators for both po-
litical units and disciplinary categories. They show the dynamic relations between
interior and exterior forces that create, sustain, and destroy different social formations.
Globalization and World History mislabels this compelling network approach, its
alleged object of analysis, as globalization.
Baylys stunning work, whose precis constitutes one chapter of Hopkinss volume,
also expertly unpacks the complex, interactive networks of world history. Its multi-
causal and multidirectional dynamic treats a sweeping range of topics whose inter-
relations are set into a historiographical context and delivered with sharp, dense writ-
ing throughout. Moreover, the volumes arguments are not limited to network analysis;
Bayly makes specic claims about the global system itself. Underneath the linkages,
he looks for global conjuncture. He nds the rst of these in the eighteenth century.
Of this large and complex work, I will turn only to this single periodization, the
emergence of a global system in the eighteenth century.
Baylys frame is the long nineteenth century. He details the intensication of world
links during this span and argues that it made societies more uniform in many of their
political, economic, and cultural patterns while at the same time often amplifying the
sense of difference between them. In addition, Bayly endeavors to lessen the impor-
tance given to industrial capitalism as a historiographic turning point. He claims that
conict had, in fact, achieved a global scale, before economic uniformities were
established across much of the world (7). Was there global conjuncture before 1800?
For Bayly, the truly global crisis of the eighteenth century (91) occurred as a
crisis of governance. From the Safavids in the 1720s to the Bourbons in the 1780s,
various regimes collapsed or began their drastic slide at this time. He explains: Re-
gimes across the world were particularly vulnerable to the nancial pressures of war-
fare during this period. The military revolution in Europe . . . had its global dimen-
sion (91). Once again, however, China offers an essential counterexample to claims
of eighteenth-century globalization; it did not suffer the scal crisis at the heart of
Baylys conjuncture. As Bayly does acknowledge, the Qing were able to generate
89
R. Bin Wong, The Search for European Differences and Domination in the Early Modern World:
A View from Asia, American Historical Review 107, no. 2 (2002): 44769. Arguably, Qing practices
were similar to European settler colonies, but the latter had greater economic independence from the
metropole. In any case, unlike the Chinese hinterlands, they would rely on foreign trade for some
time.
funding streams well beyond the capacities of any other eighteenth-century govern-
ment.
90
In his attempt to discern some crisis at this time, Bayly leans heavily on Philip
Kuhns Soulstealers, an account of a Chinese sorcery scare in the 1760s that generated
a degree of dissidence against the Qing dynasty.
91
According to Bayly, the incident
planted seeds for some early nineteenth-century difculties, themselves only a pre-
monition of turbulence rather than the beginning of the collapse of the Qing (103).
Given the caution of this claim and the 150 years separating the sorcery scare from
the 1911 fall of the Qing, comparisons to France seem hard-pressed.
Furthermore, there was no military revolution in eighteenth-century China. The
Qing did not need it. As Bayly notes (90), China was entirely successful in scores of
armed engagements in the 1700s. With almost none of the military modernization and
reorganization witnessed in Europe, China becamein the words of Jeremy Black
one of the most expansionist powers of the century. China increasingly asserted
direct rule over outer locations and successfully suppressed local resistance when it
surfaced. For defense, the Qing likewise had no reason to draw from European ex-
amples. Well into the 1800s, the best Chinese walls could withstand sustained barrage
from the largest British naval guns. In the eighteenth century, the European military
revolution had no effect on China, and without such changes, state revenue pools
remained quite large.
92
Elsewhere in Asia, the inuence and predicament of European armed forces were
not widespread. In Africa, expensive European weapons became variably signicant
along some coastal areas, but in the interior cavalry usually dominated. In Russia,
where Peter the Great did indeed successfully transform the army and the adminis-
tration into a European power, he did so without subsidy or borrowing. Peasant sac-
rice prevented scal crisis.
93
In general, the time scale for technological diffusion
was still too slow to create a worldwide arms dilemma; the world would wait another
century for the global market in arms.
94
Where European weaponry did have an im-
pact, the responses were highly conditioned by local circumstance. Revenue was not
inherently pushed into shortfall, and in some places it remained quite robust. Russia
and China, while on very different paths, were each able to stay in the black and at
the same time deploy major military force. It is difcult to discern behind the crises
of the eighteenth century Baylys global pattern of scal-military pressure.
Overall, these three works covering the early modern period persuasively show in
rich detail the importance of interregional links. Taken together, they give weight to
Baylys contention that it is no longer really possible to write European or Amer-
ican history in the narrow sense (2). But there remains a distinction of analysis
between intersocial links and a global condition. As Troeltsch indicated, a causal
90
See R. Bin Wong, China Transformed: Historical Change and the Limits of European Experience
(Ithaca, NY, 1997), 12935, 237.
91
Philip A. Kuhn, Soulstealers: The Chinese Sorcery Scare of 1768 (Cambridge, MA, 1990).
92
On Chinese expansion, Jeremy Black, War and the World: Military Power and the Fate of Con-
tinents, 14502000 (New Haven, CT, 1998), 84, 11416, 96; on defense, Geoffrey Parker, Europe
and the Wider World, 15001700: The Military Balance, in Tracy, The Political Economy of Mer-
chant Empires, 16195, 19192.
93
Black, War and the World, 10719; David B. Ralston, Importing the European Army: The In-
troduction of European Military Techniques and Institutions into the Extra-European World, 1600
1914 (Chicago, 1990), 4378, 1342.
94
William H. McNeill, The Pursuit of Power: Technology, Armed Force, and Society since A.D.
1000 (Chicago, 1982), 26061.
924 Lang
connection between groups does not make them subordinate elements of a unied
history.
95
Economists vigorously argue against any meaningful integration of world
regions before 1800. Many regional specialists who emphasize long-distance links
are also skeptical of a worldwide framework for the early modern era.
96
As Michael
Geyer and Charles Bright have argued, the eighteenth century was indeed an era of
both expansion and tightening connections across and between several world regions,
but space nonetheless remained crucial. Empires were largely decentered and orga-
nized by various local subcenters. Imperial war was managed at the local level and
usually fought by locally recruited and supplied armies. Relations between regional
centers of power emphasized distance and were mediated by a string of agents and
emissaries. In general, the reproduction of political and economic power was region-
ally autonomous. Empires could overlap, interact, and exchange, but they had not yet
become subject to a global scale of power.
97
GLOBALIZATION AS GEOPOLITICS
It approaches irrefusably, hesitantly, terrible as fate, the great task and question:
how shall the earth as a whole be managed? (Friedrich Nietzsche, 1885)
98
Early modern historians have not persuasively shown the existence of any kind of
global system in their period. Such a global scale of power did not emerge until the
second half of the nineteenth century. As we have seen, the neoclassical economists
describe an unparalleled degree of world economic integration at this time. But the
creation and maintenance of those economic links were inescapably local, territorial,
and political. For the economists, as well as for Held et al. and most globalization
discourse in general, a distorted picture of this global past remains inevitable when
analysis relies on the abstraction of economy and state. The relative interference or
incapacity of states is not a measure of global integration. States are themselves con-
stituted by internal and external worlds that they in turn help to re-create. Analyzing
such transactional effects, as opposed to idealized markets or formal borders, opens
the possibility of actually historicizing globalization.
In a series of articles that redene modern historical time/place designators, Geyer
and Bright show that nineteenth-century global integration and local self-determina-
tion were often mutually reinforcing. As variously noted above, during mid-century
and throughout the world, competing though generally autonomous centers of regional
rule increasingly encountered interregional connections in their reproduction of
power. European interventions and technologies played a signicant part in making
this possible, but the problematics of reproduction in Japan, Russia, the Ottoman
Empire, Germany, southern Africa, Paraguay, and the United States, among others,
were propelled by indigenous and regional trajectories. Even in mid-century China,
European incursions were generally still held to the coast, while peasant and ethnic
95
Ernst Troeltsch, Gesammelte Schriften, vol. 3, Der Historismus und seine Probleme (Tubingen,
1922), 689.
96
Roger Owen, The Middle East in the World Economy, 18001914 (London, 1993), see esp. xxii,
9295; Frederick Cooper, What Is the Concept of Globalization Good For? An African Historians
Perspective, African Affairs 100 (2001): 189213.
97
Geyer and Bright, Global Violence and Nationalizing Wars, 649.
98
Nietzsche, Samtliche Werke, vol. 11, Nachgelassene Fragmente, 18841885, 580.
civil wars were convulsing the empire. Likewise, the start of the Japanese transfor-
mation was largely determined by regional competition with China rather than by
European or global pressures. Yet the resolution of such large-scale regional crises
raised world areas to an aggregated, global level that in turn interlinked reproductive
potentials, ended the possibility of self-sufciency, and made the maintenance of
autonomy a permanent struggle of adaptation and self-renewal. Attempts to manage
the global scale of competition often enhanced, but could also diminish, the devel-
opment of centralized state structures, and such efforts were perforce engaged from
emplaced conditions and perspectives. British state power broadened with the im-
perialism of free trade; Russia and the United States sealed their national markets
while expanding their territories; Germany and Japan intensively engineered their
social orders through strident, eventually militarist, nationalism. In Argentina, Chile,
Thailand, Burma, West Africa, and Eastern and Southern Europe, the new regional
recongurations helped push reorientation toward large-scale agricultural export, ren-
dering state power increasingly dependent on both producers and the imperatives of
the world market. In all cases, domestic class relations and social cohesion were
severely strained, though to various degrees, with highly differentiated state responses
and with equally distinct resultsdemocratic concessions, revolutionary incitements,
ardent nationalism, peasant uprisingsthat themselves then transmitted new global
repercussions.
99
The work of Geyer and Bright supports and further explains the his-
toriography that dates territorialization not to Westphalia but to the second half of the
nineteenth century. Their formulation also shows political and economic histories to
be irreducible to each other, while revealing multivariable systems of local rule in-
terconnecting in the nineteenth century to create a globalized network, at once pen-
etrating and empowering, encompassing as well as delimiting.
Within this context, the new European imperialism was unique in externalizing
its adaptation through an overseas expansion, not as old-style conquest but through
global circuits of control. European powers shifted colonial strategy from surplus
extraction to social organization, seeking to systemize production through a state-
anchored worldwide division of labor. The British military likewise now dispatched
a uid capacity to be present globally, which it obtained through logistical networks
of force and supply as opposed to a staged chain of command. These imperial circuits
of social and military control endeavored to manage the global eld. Imperialism had
become conscious of itself as a world ordering concept.
100
With the gold standard,
furthermore, European powers organized and directed among themselves the man-
agement of the world economy. Unprecedented levels of trade allowed capital exports
from the systems core to be balanced by the export of nished goods, while regions
outside of Europe were designed to service their debts with the export of primary
goods. Instability was controlled by Europes central banks serving as national lenders
of last resort, each in turn assisted by the others when necessary, as well as by private
99
Charles Bright and Michael Geyer, For a Unied History of the World in the Twentieth Century,
Radical History Review 39 (1987): 6991; Michael Geyer and Charles Bright, World History in a
Global Age, American Historical Review 100, no. 4 (1995): 103460, and Global Violence and
Nationalizing Wars. On Japanese competition with China, see Heita Kawakatsus thesis, discussed
by Wong in The Search for European Differences (461) (Kawakatsu Heita, Nihon no kogyoka o
meguru giatsu to Ajia ken kyoso, in Hamashita Takeshi and Kawakatsu Heita, Ajia Koeki Ken to
Nihon Kogyoka, 15001900 [Tokyo, 1991]).
100
Geyer and Bright, Global Violence and Nationalizing Wars, 651; Bright and Geyer, For a
Unied History, 76.
926 Lang
capital ows that could benet from the management of a crisis (by entering into an
exchange rate that would improve once stabilized).
101
Yet the European effort to order world affairs was unraveling in the very process
of its production. First, as distant zones integrated and imperial ties tightened, local
resistance and self-renewal strengthened. Foundation of the Indian National Congress,
the reign of the anti-Western Abbas II in Egypt, persistent Vietnamese demonstrations,
the indigenous modernization drive in Indonesia, the Boer war, large-scale Filipino
resistance to U.S. occupation, the Japanese defeat of Russia, the uprising over the
division of Bengal, the Maji Maji rebellion, the Parliamentary assertion in Persia, the
Ottoman struggle to keep Macedonia and the resulting Young Turk revolt, ibn Sauds
reconquest of the Nejd and the resurgence of Wahhabism, the Mexican Revolution,
the reforms, uprisings, and eventual collapse of the Qing dynasty: these are the best
known examples of many such sites where imperial organization met forceful oppo-
sition aiming at local autonomy. Several of these efforts were unsuccessful in their
stated objectives, but to European incursion they proved difcult and costly, variously
limiting the degree of European control and grounding national and radical counter-
struggles for decades to come.
102
Second, imperial management enlarged competitive difculties between the Eu-
ropean states themselves. Despite the many agreements over colonial settlement, the
prospects of global power could not help but aggravate European tensions. Expanding
and tightening integration increased and recongured the interactions of relevant
force. For example, the Russo-Japanese Warwhat Hajo Holborn called the rst
global crisissent out percussive effects that recoiled either directly onto Europe
or through the relay of other regions: the hurried, successful conclusion of the Anglo-
French entente cordiale as France feared losing its Russian support; this ententes use
of loans and the war settlement to keep Russia out of the German camp; Germanys
subsequent isolation over Morocco; the Anglo-Russian rapprochement settling Cen-
tral Asian spheres and creating the fateful Triple Entente; the revival of Russias
Balkan agenda; Austrias aggressive Bosnian stance against a presumably weakened
Russia; Schlieffens underestimation of Russian strength; the heightening of the Yel-
low Peril discourse; the undermining of Romonov authority; the subsequent revolu-
tion, concessions, and revolutionary legacy in Russia; and several of the anticolonial
insurrections listed above, which victoriously turned European technology and tech-
niques against European powersall were inuenced by this single event.
103
Neither
gestures toward organized territorial dispensation nor wishful presumptions of an
analogue between European and world dynamics could contain the complex and in-
terdependent networks of global power. In 1904, H. J. Mackinder announced to the
Royal Geographical Society: From the present time forth, in the post-Columbian age,
we shall again have to deal with a closed political system, and none the less it will
be one of worldwide scope. Every explosion of social forces, instead of being dissi-
pated in a surrounding circuit of unknown space and barbaric chaos, will be sharply
101
Eichengreen, Globalizing Capital, 3538, 4243.
102
On the European signicance of these events: Jan Romein, The Watershed of Two Eras: Europe
in 1900 (Middletown, CT, 1978); Geoffrey Barraclough, An Introduction to Contemporary History
(Harmondsworth, 1967), 15398; Bright and Geyer, For a Unied History, 76.
103
Hajo Holborn, The Political Collapse of Europe (New York, 1951), 69; Ludwig Dehio, The
Precarious Balance; Four Centuries of the European Power Struggle (New York, 1962), 234; see
also William L. Langer, The Diplomacy of Imperialism, 18901902, 2nd ed. (New York, 1965); and
Norman Rich, Great Power Diplomacy, 18141914 (New York, 1992), on imperial blowback.
reechoed from the far side of the globe, and weak elements in the political and eco-
nomic organism of the world will be shattered in consequence.
104
Similar analysis
emerged from each of the imperial states. Certainly, such geopolitical doctrine denoted
an intensication of territoriality, a redoubled demand for the further consolidation
of state power.
105
Yet this itself derived from the theorys foundational recognition of
a new, insuperable, and volatile globality that, according to Mackinder, was about to
implode upon the descendents of Columbus.
Third, survival of the gold standardmutually enhancing to elites at its core
relied on political circumstances that could not be long sustained. According to
Eichengreen, the gold system depended on both the credibility and the cooperation
of participant states. The former required that monetary authorities single-mindedly
pursue the goal of currency convertibility. By the end of the century, however, this
agenda had become a domestic political problem. In Western Europe, expansion of
the franchise and the rise of working-class parties created the demand that policies
be redirected from convertibility and the balance of trade toward the national elimi-
nation of unemployment. In the United States, export-oriented farmers fought the
deationary system with the Populist call for soft money, while the U.S. system of
political representation amplied such agricultural interests through the Senate. In
several Southern European and South American countries, political inuence in favor
of ination and depreciation entirely upended credibility by suspending gold conver-
sion. Meanwhile, the geopolitical condition vexing relations between imperial states
was likewise eroding their willingness to cooperate on gold. Even before World
War I, the political basis for the international monetary system was in steep decline.
106
Fourth, deepening internationalization of the economy intensied political tensions
between European states. While many Europeans prospered from the integration of
world markets, abundant imports could also imperil the rewarding prices obtained for
relatively scarce, domestically produced goods. As import pressures increased, coun-
tries spiked tariffs to blunt the negative effects on politically powerful sectors of the
national economy. Countermeasures and emulations ensued. From the end of the
nineteenth century until the First World War, Germany, France, Italy, Sweden, Nor-
way, Spain, and Portugal all substantially raised grain and manufacturing tariffsthe
backlash discussed by ORourke and Williamson. Additional protections targeted
against European exports sheltered manufacturing in the United States, Canada, Aus-
tralia, Argentina, Uruguay, Brazil, and Venezuela. The competitive squeeze between
European states was further compressed as domestic constituencies were threatened
and as export room in Europe and elsewhere declined. At the same time, unrestricted
migrant inows appeared to threaten political authority and cultural order. Great Brit-
ain, Germany, France, the United States, Canada, Australia, and Argentina all sought
to insulate themselves from the global labor market; each resurrected or newly insti-
tuted various border and employment controls to create a sharp division between
citizens and aliens. These immigration policies, on top of the tariff walls, served in
general to homogenize, nationalize, and militarize the identity of domestic popula-
tionswhat Aristide Zolberg calls the naturalization of nativism.
107
104
Halford John Mackinder, The Geographical Pivot of History (1904; London, reprint 1951), 30.
105
Maier, Consigning the Twentieth Century, 816; similarly, Ruggie, Territoriality and Beyond,
168.
106
Eichengreen, Golden Fetters, and Globalizing Capital.
107
Bairoch, Economics and World History, 5, shows that tariffs had no long-term negative effect
928 Lang
Internationalization of the economy also snared European powers with the rising
cost of security-related resources. In the early twentieth century, rival states entered
into a deepening arms race. Here again, blowback from the Russo-Japanese War
proved decisive. Russia started a rearmament drive, while Germany, sensing advan-
tage, began to militarize its diplomacy and increase arms expenditures. Britain and
France of course responded with military expansions of their own and joint war plan-
ning with Russia. Budgets in Austria-Hungary, Italy, Serbia, and Romania rose as
well. The series of crises in Morocco and Bosnia contributed to a self-perpetuating
cycle of redressing military imbalances. In opposition to local producers who suffered
price declines, statesas consumerscompeted for resources that were fetching
higher earnings elsewhere. Britain, France, and Germany encountered increased costs
in accessing easily exportable capital. All three as well as Russia and Austro-Hungary
also faced difculty mobilizing laborers, for whom industrial wages were everywhere
rising; in the east, returns to peasants were increasing as well. States responded var-
iously, but in general they pooled labor by increasing the reserve army, innovated
military doctrine for a short, less costly war, and sponsored strident nationalism to
persuade resource holders to overlook reduced compensation. This situation made
strategic assessments highly complex and uncertain. States charted their market-
compromised circumstances yet could only make conjectures about their rivals, whose
own responses were interpreted as preparation for war. Such perceptions reinforced
an arms race that with every measure and countermeasure further amplied the stakes
of resource mobilization. After its setback in the second Moroccan crisis, Germany,
now fearing a widening inferiority, initiated a massive acceleration of land strength
and a new phase of the race. As military budgets grew, the possibility of worsening
constraints in the future threatened to nullify for each state any advantage perceived
in the present. Two years after Morocco, the European blocs entered into war, each
state panicked by the potential of an unfavorable future.
108
Although the war of 1914 started in Europe, it was thus from the beginning a
on export growth and probably contributed to the eras increasing internationalization. Important here
is the short-term decline in export opportunity, and from that the appearance of a zero-sumcompetition
that hardened national economic identities. In addition to the states cited, similar nativizing policies
were instituted in Italy, though these were in its management of outows (John C. Torpey, The
Invention of the Passport: Surveillance, Citizenship, and the State [Cambridge, 2000], 93121; An-
dreas Fahrmeir, Passports and the Status of Aliens, in The Mechanics of Internationalism: Culture,
Society, and Politics from the 1840s to the First World War, ed. Martin H. Geyer and Johannes
Paulmann [Oxford, 2001], 93119; Aristide R. Zolberg, Global Movements, Global Walls: Re-
sponses to Migration, 18851925, in Global History and Migrations, ed. Wang Gungwu [Boulder,
CO, 1997], 279307; Colin Holmes, Hostile Images of Immigrants and Refugees in Nineteenth-
and Twentieth-Century Britain, in Migration, Migration History, History, ed. Jan Lucassen and Leo
Lucassen [Bern, 1999], 31734; Aristide R. Zolberg, The Great Wall against China: Responses to
the First Immigration Crisis, 18851925, in Lucassen and Lucassen, Migration, 291315, 315).
108
On the arms race and the start of war, David G. Herrmann, The Arming of Europe and the
Making of the First World War (Princeton, NJ, 1996); and D. Stevenson, Armaments and the Coming
of War: Europe, 19041914 (Oxford, 1996). On resource costs, David M. Rowe, World Economic
Expansion and National Security in PreWorld War I Europe, International Organization 53, no. 2
(1999): 195231, and Globalization, Conscription, and Anti-militarismin PreWorld War I Europe,
Comparative Social Research 20 (2002): 14570. For an argument that the German and Austrian
military-nancial complex was uniquely constricted, see Niall Ferguson, Germany and the Origins
of the First World War: New Perspectives, Historical Journal 35, no. 3 (1992): 72552, Public
Finance and National Security: The Domestic Origins of the First World War Revisited, Past and
Present 142 (1994): 14168, and The Pity of War (New York, 1999), 10542.
world war: Geoffrey Barraclough, whose late career was devoted to historicizing
modern Europe within a world historical dynamic, maintained that the understanding
of World War I needed to be grounded in the late nineteenth-century emergence of
global power.
109
For Europe, the deployment of this power simultaneously structured
two countervailing tendencies. On the one hand, it enhanced the process of state
aggrandizement, while also contributing to a conjoint chauvinization of national iden-
tity. On the other hand, states faced new pressures from both their interior and their
exterior, and adjustment mechanisms directed at one sent complicating feedback to
both. Leading European states were becoming richer, more effectively organized, and
more powerful just as their affairs grew increasingly unstable and ever more difcult
to assess and manage. Multilateral agreements did not help: ostensibly political and
ostensibly economic arrangements, while beneting participating interests, could not
contain the political-economic turbulence that they and the entire endeavor were cre-
ating. The war emerged out of this milieu of global power. And it set into motion a
subsequent series of global strugglesthe Depression, World War II, decolonization,
and the cold warin which competing social formations and localities battled over
the conditions of an integrated world.
110
CONCLUSION
Globality describes the interregional reproduction of power that became networked
worldwide in the late nineteenth century. It denotes the interrelation of social systems
on a global scale. It is not a single social organization, and locality is not the hybrid
of a general condition. Globality has no goal, and it entails no normative implications
for governance. There is also no global economy. As always, capitalism constrains
its participants, but how this obtains necessarily depends on the distribution of
decision-making capacity at all levels as well as across levels. Markets are social
constructions, built by consumers, workers, rms, and states, and they are further
inuenced and varied by history, culture, geography, and chance. This does not mean,
however, that economy is simply a function of politics. States are themselves the
negotiation of forces from within and without. Like market operations, state power is
a constant arbitration and appropriation of conditions, actors, and resources. The over-
riding problem in most discussions of globalization is the categorical reduction of
both economics and politics, abstracting and essentializing one from the other and
rendering them competitive rather than mutually constructive. For over a century,
globality has been produced by diverse conditions and various agents in the struggle
for control and self-determination. Local, regional, and interregional dynamics have
combined to destabilize the regionally self-sufcient reproduction of power, creating
with every interposition new cycles of local, regional, and interregional inputs. Once
we remove the placeless notions of an autonomous economy and a sovereign state,
109
Barraclough, Contemporary History, 116; Geoffrey Barraclough, History in a Changing World
(Oxford, 1957), European Unity in Thought and Action (Oxford, 1963), Turning Points in World
History (New York, 1977), and From Agadir to Armageddon: Anatomy of a Crisis (New York, 1982).
110
Twentieth-century histories from the perspective of global power: Bright and Geyer, For a
Unied History, 7888; William R. Keylor, The Twentieth-Century World: An International History,
4th ed. (Oxford, 2001); Ian Clark, Globalization and Fragmentation (Oxford, 1997). See as well
Michael Geyer, Concerning the Question: Is Imperialism a Useful Category of Historical Analysis,
Radical History Review 75 (1993): 6572.
930 Lang
the site of decision and the ow of capital are no longer set into opposition. We also
shed the narcissism of the now with which the modern has always dened itself as
a present epochally unique.
111
To understand globalization as the production and reproduction of necessarily local
and emplaced circumstances is to insist on historical explanation, as opposed to a
teleological narrative of a master process. And explanations are themselves historical.
If contemporary history has deep roots in the critical years of the late nineteenth
century, why did globalization discourse only explode in recent times? After World
War II, the Bretton Woods System created an international nancial architecture fo-
cused on promoting national growth. The classical gold standard of fty years before
had depended on economic decisions being isolated from the demands of national
populations. Democratic pressures before 1914 had already made the system difcult
to sustain. After World War II, the needs and expectations of populations made its
revival impossible. The closing of Bretton Woods decreased the depth of systemic
support for managing growth, but most core states maintained the postwar social
contract of directing economic policy toward national growth and social welfare. Even
in Britain and the United States, where Margaret Thatcher and Ronald Reagan argued
for the disengagement of politics from economics, state interventions and protections
actually increased. What occurred was not the impossible separation of public decision
from private wealth but a move to free economic policy from popular pressures. The
rst small boom in globalization literature emerged in this period, predominantly in
journals of business and economics. International capital movements, offshore pro-
duction, and worldwide trade had increased since Bretton Woods, but not to epochal
levels requiring a new vocabulary. Necessary for globalization in this phase was
the neoliberal rhetoric that abstracted economic and political spheres, granting the
former a deterritorialized quality. This literature actually declined for a short while,
but with the end of the cold war the number of works on globalization skyrocketed.
Economics was joined by massive outputs from sociology and political science to
make globalization the leitmotif of our age.
This second and considerably larger phase of the discourse was symptomatic of an
ideological crisis that emerged from the collapse of the Soviet system. After 1914,
the great struggles between competing social formations helped states to articulate
their economic priorities in international political terms. For corporate capitalism,
communism, and the various authoritarian and fascist nationalisms, economics was
mobilization. The economy was presented not only as a distribution of resources but
also as a weapon. Even the neoliberal agenda, which so stridently demanded an au-
tonomous economy, nonetheless dened itself as at war with an opposing ideology
embodied by specic states, above all the Soviet Union. After the cold war, however,
the major powers could no longer justify state organization of the economy within
the frame of large-scale conict. For the ideology of these advanced capitalist states,
political and economic tracks lost the signposts of their parallel logic. Fukuyamas
famous volume of 1992 marked not the end of ideology but the crisis facing the
ideological grounding of capitalism within a political identitywhat he called his-
tory.
112
The left did better than neoliberals like Fukuyama: Bill Clinton, Tony Blair,
111
Koselleck, Futures Past. On globalization discourse specically, see also Andreas Wimmers
discussion of temporalo-centrism, in Globalizations avant la Lettre: A Comparative View of Iso-
morphization and Heteromorphization in an Inter-connecting World, Comparative Studies in Society
and History 43, no. 3 (2001): 43566.
112
Francis Fukuyama, The End of History and the Last Man (New York, 1992).
and the entire third way came to power proclaiming for the state the role of efcient
regulator in the reproduction of capital. It is certainly correct to dene globalization
as a neoliberal agenda,
113
but this describes only the rst phase of its discourse. The
second phase has served up as well the agendas of conservatives, third-way liberals,
social democrats, Marxists, and cosmopolitans who have each sought to reclaim a
political object during this crisis and this opportunity of ideological formation.
For the poor and the weak, wealth and borders divide. Billions live in closed,
inescapable worlds. For the rich and the powerful, the judicious reproduction of capital
is itself offered as the meaning of political community. The recent turn in North
Atlantic elections against third-way governments suggests that this may not be
enough. At the same time, the events of September 11, the subsequent War on Ter-
rorism, and the U.S.-Iraq War tender the possibility of a new political object. In
October 2001, President Bush spoke from Travis Air Force Base, a logistics depot in
California that describes its primary mission as providing rapid global mobility.
He said: The terrorists attacked the World Trade Center, and we will defeat them by
expanding and encouraging world trade.
114
113
Philip McMichael, Globalization: Myths and Realities, Rural Sociology 61, no. 1 (1996): 25
55, is the strongest among the many proponents.
114
Quoted from Travis Air Force Base homepage, https://www.travis.af.mil; Bush Links Terror
Attacks to Trade Bill, New York Times, October 18, 2001, C6.

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