After Developmentalism and Globalization, What?

Author(s): Immanuel Wallerstein

Source: Social Forces, Vol. 83, No. 3 (Mar., 2005), pp. 1263-1278
Published by: University of North Carolina Press
Stable URL: http://www.jstor.org/stable/3598277
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After Developmentalism and Globalization,
What?*

IMMANUEL WALLERSTEIN, Yale University

In 1900, in preparationfor the Exposition Universelle in Paris,the French Ministry

of Colonies asked Camille Guy, the head of its geographical service, to produce a
book entitled Les coloniesfranfaises: la mise en valeur de notre domaine coloniale.
A literal translation of mise en valeur is "making into value." The dictionary,
however, translates"mise en valeur"as "development."At the time, this expression
was preferred, when talking about economic phenomena in the colonies, to the
perfectly acceptable French word, "developpement"If one then goes to Les Usuels
de Robert:Dictionnaire des Expressionset Locutionsfigurees (1979) to learn more
about the meaning of the expression "mettreen valeur,"one finds the explanation
that it is used as a metaphor meaning "to exploit, draw profit from."
Basically,this was the view of the pan-European world during the colonial era
concerning economic development in the rest of the world. Development was a
set of concrete actions effectuated by Europeans to exploit and draw profit from
the resources of the non-European world. There were a number of assumptions in
this view: Non-Europeans would not be able or perhaps even willing to "develop"
their resources without the active intrusion of the pan-European world. But such
development representeda material and moral good for the world. It was therefore
the moral and political duty of the pan-Europeans to exploit the resources of
these countries. There was consequently nothing wrong with the fact that, as a
reward, the pan-Europeans who exploited the resources drew profit from them,
since a secondary advantage would go to the persons whose resources were being
exploited in this way.
This rationale of course completely omitted discussion of the cost in life and
limb to the local people of such exploitation. The conventional calculus was
that these costs were, as we would say in today's euphemisms, the necessary and
inevitable "collateraldamage" of Europe's "civilizing mission."
The tone of the discussion began to change after 1945, primarily as a result
of the strength of anticolonial sentiments and movements in Asia and Africa,

*
Keynoteaddressat conference,"DevelopmentChallengesforthe21st Century,"CornellUniversity,
Oct. 1, 2004.

O The Universityof North CarolinaPress SocialForces,March2005, 83(3):1263-1278

1264/ SocialForces83:3,March2005
and a new sense of collectiveassertivenessin LatinAmerica.It is at this point
that "development"came to be used as a code word for the belief that it was
possible for the countries of the South to "develop"themselves,as opposed to
"beingdeveloped"by the North. The new assumptionwas that, if the countries
of the South would only adopt the properpolicies,they would one day,some
time in the future, become as technologicallymodern and as wealthy as the
countriesof the North.
At some point in the post-1945 period, LatinAmericanauthors began to
call this new ideology "desarollismo" or "developmentalism." The ideology of
developmentalismtook a numberof differentforms.The SovietUnion calledit
instituting"socialism" whichbecamedefinedas the laststagebefore"communism."
The UnitedStatescalledit "economicdevelopment." Ideologuesin the Southoften
used the two terms interchangeably. Amidst this worldwideconsensus,all the
statesof the North-the United States,the SovietUnion (and its EastEuropean
satellites),the WestEuropeancolonial (now becomingex-colonial)powers,and
the Nordic countriesplus Canada-began to offer"aid"and adviceconcerning
this developmentthat everyonefavored.The EconomicCommissionfor Latin
America(CEPAL)developeda new languageof"core-periphery" relations,used
to a of
primarily justify program "import-substitution industrialization."And
more radical Latin American (and other) intellectualsdeveloped a language
about"dependency," which,they said,neededto be fought againstand overcome
in orderthat dependentcountriesbe in a position to develop.
The terminology may have differed but the one thing that was agreed
upon by everyonewas that developmentwas indeed possible,if only ... When
thereforethe United Nations declaredthat the 1970s would be the "decadeof
development,"the term and the objectiveseemed virtuallya piety.Yet,as we
know,the 1970sturnedout to be a verybad decadefor most of the countriesof
the South.It was the decadeof the two successiveoil priceincreasesinstitutedby
OPECand of stagflationin the North.The consequentrise in the cost of imports
for countriesin the South combinedwith a sharpdecline in the value of their
exportsbecauseof the stagnationin the world-economycreatedacute balance
of paymentsdifficultiesfor just about every one of these countries (including
those in the so-calledsocialistbloc), with the sole exceptionof those whichwere
oil-exportingstates.
The oil-exportingstates acquiredincrediblylarge surpluses,a largepart of
whichthey depositedin banksin the UnitedStatesand Germany,who thereupon
neededto find a remunerativeuse for this extracapital.Theyfound it in loans to
stateswith acutebalanceof paymentsdifficulties.Theseloans,activelypromoted
by the banksthemselves,solvedboth problems:findingan outlet for the surplus
money in the accounts of the banks of the North and solving the liquidity
problemsof the virtuallyinsolventstates of the South. But, alas,the loans led
to cumulativeinterestpaymentswhich,by 1980,had led to even greaterbalance
of payments difficultiesin these states. Loans unfortunatelyare supposed to
 AfterDevelopmentalism
andGlobalization,
What?/ 1265
be repaid. The world thus arrived at the suddenly discoveredso-called debt
crisis-Poland in 1980,Mexico in 1982,and then all over the place.
It was easy enough to find the villain in the piece.The fingerwas pointed at
developmentalism, so universallypraisedjusta decadebefore.Import-substitution
industrializationwas now perceivedas corruptprotectionism.State-buildingwas
deconstructedas feedinga bloatedbureaucracy.Financialaid was now analyzed
as money poured down a sink, if not a gutter.And parastatalstructures,far
from being virtuous effortsat pulling oneself up by one's own bootstraps,were
exposed as deadeningbarriersto fruitful entrepreneurialachievement.It was
decidedthat loans to statesin distress,to be beneficial,needed to be hedgedby
requirementsthat these statescut wastefulstateexpenditureson such deferrable
items as schoolsand health.It was furtherproclaimedthat stateenterpriseswere
almost by definitioninefficientand should be privatizedas rapidlyas possible,
since private enterprises were again almost by definition responsive to the
"market"and thereforemaximallyefficient.Or at least that was the consensus
in Washington.
Academicbuzzwordsand fadsarefickleand usuallylastbut a decadeor two.
Development was suddenly out. Globalizationarrivedin its wake. University
professors,foundationexecutives,book publishers,and op-ed columnistsall saw
the light.Tobe sure,the optic,or bettersaidthe remedies,had changed.Now,the
wayto move forwardwasnot to import-substitute but to export-orientproductive
activities.Down not only with nationalizedindustriesbut with capitaltransfer
controls;up with transparent,unhinderedflows of capital.In placeof one-party
regimes,let us all togetherstudygovernance(a new word,splendidlyeruditeand
quite inscrutable,if not meaningless).Above all, let us face Meccafive times a
day and intone AllahuAkhbarTINA-There is No Alternative.
The new dogmas took root in the 1980s amidst the decaying rot of
developmentalistdreams.They flourishedin the 1990sbathedby the sparkleof
the "neweconomy"in which the United Statesand easternAsia were supposed
to be leading the world to its economic glory. But alas, the sheen began to
tarnish.The currencycrisisin Eastand SoutheastAsia in 1997 (whichspreadto
Russiaand Brazil),the slide downwardof the WorldTradeOrganizationfrom
Seattleto Cancun,the fadingof Davos and the spectacularrise of PortoAlegre,
al-Qaedaand September11, followedby the Bushfiascoin Iraqand the current
accountscrisisof the United States-all this and more leads one to suspectthat
globalizationas rhetoricmaybe going quicklythe wayof developmentalism. And
hence our question-After Developmentalismand Globalization,What?
Letus not be too acerbicabout fadedtheorizing.The whole discussionfrom
1945 to today has indeed been one long effort to take seriouslythe realitythat
the world-systemis not only polarizedbut polarizing,and thatthis realityis both
morallyand politicallyintolerable.Forthe countriesat the bottom,thereseemed
nothing more urgentthan figuringout how to improvetheir situation,and first
of all economically.Afterall, all these people had to do was see a movie and they
1266 / SocialForces 83:3,March2005
would know thattherewereotherpeopleand placesin the worldthatwerebetter
off, far betteroff, than they were.As for the countriesat the top, they realized,
howeverdimly,that the "huddledmassesyearningto breathefree"represented
a permanentdangerto worldorderand theirown prosperity,and that therefore
something,somehowhad to be done to dampenthe tinderbox.
So, the intellectualanalysesand the derivedpolicy effortsrepresentedby the
discussionabout developmentand globalizationwere serious and respectable,
if in retrospectquite misguidedin manyways.The firstquestionwe need to ask
now is, is it at all possible for every part of the world to attain-one day in a
plausiblynot too remote future-the standardof living of say Denmark (and
perhapsalso similarpoliticaland culturalinstitutions)?The second question is,
if it is not, is it possiblefor the presentlopsidedand highlyinegalitarianworld-
systemto persist,more or less as such?And the thirdquestionis, if it is not, what
kinds of alternativespresentthemselvesto all of us now?

Is it at all possible for every part of the world to attain-one day in a

plausiblynot too remote future-the standardof living of say Denmark
(and perhapsalso similarpoliticaland culturalinstitutions)?
There is no question that Denmark-and most OECD (Organisation for
Economic Co-operation and Development) countries-have a quite decent
standardof living for a substantialproportionof theirpopulation.The standard
measureof internalvariationof income,the Ginicurve,showsquitelow numbers
for most OECD countries,and by world standardsreasonablygood ones for
all of them (e.g., see Atkinson,Rainwater,and Smeeding).To be sure,there are
manypoor peoplein thesecountries,but comparedto almostanycountryof the
South, far fewer.So, of course,people in these poorer countriesaspireto be as
rich as people in Denmark.In the last few years,the world economic presshas
been full of stories about the remarkableratesof growth of China-a country
which not too long ago was consideredto be one of the poorest-along with
much speculationaboutwhetheror not and to whatdegreetheseratesof growth
can continuein the futureand therebytransformChinainto a relativelywealthy
countryin terms of GDP per capita.
Let us leave aside the fact that many, many other countries have shown
remarkablegrowth spurts for as much as up to 20-30 years,which rates then
nonethelesspeteredout. There are, for example,the recent cases of the Soviet
Union and Yugoslavia.Let us also leave out of the equation the long list of
countrieswhose GDP was betterin the furtherpast than in the present.Let us
assume for a moment that China'seconomic growthcontinuesunhinderedfor
anothertwentyyears,and that China'sGDP per capitaapproaches,let us say,if
 AfterDevelopmentalism What?/ 1267
andGlobalization,
not that of Denmarkat leastthat of Portugalor even Italy.Letus even speculate
that up to 50% of its populationbenefits significantlyfrom this growth spurt,
which is then reflectedin their real income.
Is it credibleto hold everythingelse constant,and to assumethat,at the very
least,everyoneelse remainswherethey are today in terms of standardof living?
Where is the surplus value to come from that would permit 50% of China's
population to consume at the level of 50% of Italy'spopulation,while all the
rest of the world consumes at a level at least as high as at present?Is this all
supposedto come from the so-calledgreaterproductivityof world (or Chinese)
production?It is clearthat the skilledworkersof Ohio and the Ruhrvalley do
not think so. They think they would pay for it, that they are alreadypayingfor
it, by significantlyreducedstandardsof living.Arethey reallyso wrong?Has this
not been happeningin the past decade?
The first piece of evidenceis the entirepast historyof the capitalistworld-
economy.In over five hundredyears of its existence,the gap between the top
and the bottom, the core and the periphery,has never gotten smaller,always
larger.What is there in the presentsituationthat should lead us to assumethat
this patternwould not continue?Of course,overthose five hundredyears,there
is no questionthat some countrieshave improvedtheir relativestandingin the
distributionof wealthin the world-system.Thus, it could be claimedthat these
countrieshad "developed"in some sense.But it is also true that other countries
arelower in relativewealthrankingsthan earlier,some of them spectacularlyso.
And, although our statisticaldata is at most of even minimal qualityonly for
the last 75-100 years,such comparativestudies as we have do show a constant
trimodaldistributionof wealthin the world-system,with a few countriesmoving
from one categoryto another.'
The second piece of evidence is that high levels of profit, and thereforeof
the possibilityof accumulatingsurplusvalue,correlatesdirectlywith the relative
degree of monopolization of productiveactivity.2What we have been calling
developmentfor the last fiftyyearsor so is basicallythe abilityof some countries
to erect productiveenterprisesof a type consideredto be highly profitable.To
the extent that they succeed in doing this, they therebyreduce the degree of
monopolization of production in this particulararena and hence reduce the
degreeof profitabilityof such production.The historicpatternof successiveso-
calledleadingindustries-from textilesto steeland automobilesto electronicsto
computertechnology-is clearevidenceof this.The U.S.pharmaceutical industry
is right now fighting a rear-guardbattle againstjust such decline in potential
profitability.Can Boeing and Airbusmaintaintheir presentprofit levels in the
face of competitionby a putativeChineseaircraftconstructionindustrytwenty
or thirtyyearsfrom now?
So, basically,of two things one. Eitherthe rising,so-callednewly-developing
countrieswill be crushedby some highly destructiveprocess-warfare, plague,
or civil war.And in this case,the existingeconomic centersof accumulationwill
1268 / SocialForces 83:3,March2005
remainon top, and the polarizationwill be stillmore acute.Or the rising,newly-
developingcountrieswill be able to reproducesome of the major productive
processesof the present centers.And in this case, either the polarizationwill
simplybe inverted(whichis unlikely)or therewill be a flatteningof the curve.But
in this lattercase,the abilityto accumulatesurplusvalue in the world-economy
takenas a whole will diminishseverely,and the raisond'etre of a capitalistworld-
economy will be undermined.In none of these scenariosdoes every country
become a Denmark.
If therehas come to be a generalmorosityabout economicdevelopmentand
the positivebenefitsof globalization,it is, I would argue,becausethe sense that
we arein a cul-de-sachasbegunto creepin on more and morepeople-scholars,
politicians,and aboveall ordinaryworkers.The optimismof the 1950sand 1960s,
which was momentarilyrevivedin the 1990s,is no longerwith us.
I personallycan see no way in which, within the frameworkof a capitalist
world-economy,we can approacha generalequalizationof the distributionof
wealth in the world, and even less an equalizationthat would have everyone
consume at the level of the modal Danish consumer. I say this, taking into
account all possible technologicaladvancesas well as increasesin that elusive
concept,productivity.

II

If it is not [possible for all countries to achieve a Danish standardof

living within the frameworkof the world-systemin which we live], is it
possible for the present lopsided and highly inegalitarianworld-system
to persist,more or less as such?
I doubt it. But of coursewe must be carefulhere,since predictionsof dramatic
structuralchangehavebeen made so frequentlyover the past two centuriesand
have turned out to be inaccurateover a medium term because some crucial
elementswereleft out of the analyses.
The major explanation of purported prospectivefundamentalstructural
change has been dissatisfactionof the exploited and oppressed.As conditions
worsened,the people at the bottom, or some verylargegroup,weredestined-it
was argued-to rebel.Therewould be whathas usuallybeen calleda revolution.
I shall not resume the argumentsand counterarguments,which are no doubt
quite familiarto almost anyonewho has been seriouslystudyingthe historyof
the modernworld-system.
The twentiethcenturywas,among other things,the moment of a long series
of nationaluprisingsand socialmovementswhichproclaimedtheirrevolutionary
intentsand whichachievedstatepowerin one formor another.The high point of
thesemovementswasthe period1945-1970,the periodpreciselyof the flourishing
 andGlobalization,
AfterDevelopmentalism What?/ 1269
of developmentalism,which was in some sense the credo of these movements.
But we also know that the period 1970-2000 saw the downfallof most of these
movementsin power,or at least a drasticrevisionin their policies.This was the
period of the flourishingof globalization,whose logic these movements-those
still in poweror those now seekingto play a role of parliamentaryopposition-
sullenly accepted.So, we have the era of triumphalismfollowed by the era of
disillusionment.
Some of the cadresof these movementsadjustedto what were thought to
be the new realitiesand othersjumped ship, either into passivewithdrawalor
into joining activelythe erstwhileenemy.In the 1980sand until the mid-1990s,
antisystemicmovementsworldwidewere in a bad way. By 1995, however,the
momentarysheen of neoliberalismhad begun to wear off and there ensued a
worldwide search for new antisystemicstrategies.The story from Chiapasto
Seattleto Porto Alegrehas been that of the emergenceof a new kind of world
antisystemicmovement,sometimescalledthesedaysaltermondialisme. My name
for it is the spirit of Porto Alegre and I think it is going to be an important
elementin the world politicalstrugglesof the next 25-50 years.I shallreturnto
it in my discussionof realalternativesnow.
However,I do not believethat a new version of revolutionarymovementis
the fundamentalfactorin what I see as the structuralcollapseof the capitalist
world-economy.Systemscollapsenot primarilybecauseof rebellionfrom below
but becauseof the weaknessesof the dominantclassesand the impossibilityof
their maintainingtheir level of gain and privilege.It is only when the existing
system is weakened in terms of its own logic that the push from below can
possiblybe effective.
The basic strengthof capitalismas a system has been twofold. On the one
hand, it has demonstratedan ability to ensure, against all odds, the endless
accumulationof capital.And on the other hand, it has put into place political
structuresthat have made it possibleto guaranteethis endlessaccumulationof
capitalwithout being dethronedby the rashand dissatisfied"dangerousclasses."
The basic weaknessof capitalismas an historicalsystemtoday is that successis
leadingto failure(as Schumpetertaughtus normallyhappens).As a consequence
today,both the abilityto guaranteethe endlessaccumulationof capitaland the
political structuresthat have kept the dangerousclasses in line are collapsing
simultaneously.
The successof capitalismin ensuringthe endlessaccumulationof capitalhas
been in its abilityto keepthe threebasiccostsof production-costs of personnel,
costs of inputs, and taxation-from escalatingtoo fast. However,it has done
this by mechanismsthat have been exhaustingthemselvesover historicaltime.
The systemhas now begun to reacha point where these costs are dramatically
too high to make productionan adequatesource of capitalaccumulation.The
capitaliststratahave turned to financialspeculationas a substitute.Financial
speculation,however,is intrinsicallya transitorymechanism,sinceit is dependent
1270 / SocialForces 83:3,March2005
on confidence,and confidencein the medium run is underminedby the very
speculationitself.Allow me to illustrateeach of these points.
The costs of personnel are a function of the ongoing, never-endingclass
struggle.Whatthe workershaveon theirside is the concentrationof production
(forreasonsof efficiency)and hencetheirabilityovertime to organizethemselves
in both the workplaceand the politicalarenato put pressureson the employers
to increasetheirremuneration.Tobe sure,employersalwaysfightbackby playing
one set of workersoff againstanother.Buttherearelimitsto doingthiswithinthe
frameworkof a singlecountryor a singlelocalarea,sincetherearepoliticalmeans
by which the workerscan encrusttheir advantages(legallyand/or culturally).
Wheneverwe are in a KondratieffA-phase,employers,faced with militant
workerdemands,usuallypreferto allow remunerationto rise somewhat,since
workstoppagesdo them more immediatedamagethan concessions.But as soon
as we are in a KondratieffB-phase,it becomesimperativefor an employerwho
hopes to survivethe bad times to reducethe remunerationpackage,sincethereis
acutepricecompetition.It is at thispoint thatemployershavehistoricallyresorted
to relocation-the "runaway factory"-transferringtheirproductionto zonesthat
have"historically"-lower ratesof remuneration.Butexactlywhathistoryaccounts
for thesehistorically-lowerrates?The answeris rathersimple-the existenceof a
large pool of rurallabor,for whom urban,wagedemployment,at whateverlevel
of remuneration,representsa net increasein realincome for the household.So,
as remunerationgoes up, more or less permanently,in one areaof the world-
economy,it is compensatedin terms of the world-economyas a whole by the
appearanceof new cohorts of workerswho will acceptlower remunerationfor
the identicalwork,holding of courseefficiencyconstant.
The problem with this solution to the regularlyrepeatedproblem of the
owner/producers is that after 25-50 years the workers in this new zone of
productionare able to overcometheir initialurbandisorientationand political
ignorance and proceed down the same path of class struggle as did others
previouslyin other areasof the world.The zone in questionthereuponceasesto
be a zone of historically-lowerremuneration,or at least not to the same degree.
Sooner or later,the employersare required,in their self-interest,to flee again,
relocatingto yet anotherzone. This constantgeographicalshift of the zones of
productionhas workedquite well over the centuriesbut does have an Achilles
heel. The world is runningout of new zones into which to relocate.This is what
we mean by the deruralizationof the world,which is going on apace,and at a
very acceleratedrate since 1945.The proportionof world populationthat lives
in cities went from 30% to 60% between 1950 and 2000 (see Neubauer).The
capitalistworld-economyshouldrun out of suchzonesentirelywithin25 yearsat
the most.Therearealreadytoo few.And with modernmeansof communication,
the time period for new zones to learnthe lessons of how to organizehas been
drasticallyreduced.Hence, the ability of employersto keep remunerationin
checkhas been drasticallycurtailed.
 AfterDevelopmentalism
andGlobalization,
What?/ 1271
Thecostsof inputsis dependenton whatpercentageof the inputsthe employer
is requiredto pay.To the extentthat he can get inputs free,his costs remainlow.
The major mechanismby which employershave over the centuriesbeen able
to avoid paymentfor inputs is by shiftingthe cost to others.This is called the
externalizationof costs.The threeprincipalcosts that havebeen externalizedare
detoxification,renewalof primaryresources,and infrastructure.
Detoxificationis easyto handlein the beginning.One dumpswastesomewhere
that is public or unoccupied.This costs next to nothing. The costs are usually
not immediate,but delayed.The eventual difficultiesbecome the problem of
the "public"-either as individuals or collectivelyas governments.Clean-up,
when it is undertaken,is seldom paid for by the original user. In premodern
times, rulersmoved to differentcastlesas they ran out of sewagedumps.In the
capitalistworld-economy,producersdo more or less the same. The problem
here is identicalto the problem of runawayfactoriesand remunerationlevels.
We arerunningout of new prospectivedumps.In addition,the collectivecost of
toxificationhas caughtup with us, or at leastwe aremore awareof it becauseof
scientificadvances.Hence,the worldseeksto detoxifywaste.Thisis calledconcern
with the ecology.And as concern mounts, the question of who pays comes to
the forefront.Thereis increasingpressureto makethe userof the resourceswho
leavestoxic wastepay the costs of detoxification.This is calledinternalizationof
costs. To the extent that governmentsimpose such internalizationof costs, the
overallcosts of productionrise, sometimesquite steeply.
The issueof the renewalof primaryresourcesis basicallyanalogous.If forests
arecut down, they may renewthemselvesvia naturalprocesses,but often slowly.
And the fasterforestsarecut down (becauseof increasedworldproduction),the
harderit is for the naturalrenewalprocessto takeplace in meaningfultime. So
here too, as the ecologicalconcernshave come to the fore, both governments
and social actorshave put pressureon users either to restrainuse or to invest
in renewal.And to the extent that governmentsimpose internalizationof these
costs, the costs of productionrise.
Finally,the sameis true of infrastructure.
Infrastructure, almostby definition,
is expenditureon costlyactivitiesthatcannotbe attributedto a singleproducer-
for example,constructingpublic roadwaysover which transportationof goods
takes place. But the fact that these costs cannot be consideredthe costs of a
single producerdoes not mean that they cannot be consideredthe costs of a
multitudeof producers.Furthermore, the cost of suchinfrastructurehas escalated
geometrically.Yes,they are public goods, but the public can be specifiedup to
a point. And once again, to the extent that governmentsimpose even partial
internalizationof such costs,the costs of productionrise.
The third basic cost of productionis taxation.Any comparisonof the total
level of taxation in the world, or in any part of the world, with the world of
a centuryago revealsthat everyoneis paying higher taxes today,whateverthe
oscillationof the rates.Whataccountsfor this?Therearethreemajorexpenditures
1272 / SocialForces 83:3,March2005
of all governments-the costsof collectivesecurity(armies,police,etc.),the costs
of all kindsof publicwelfare,and the costs of administration(most importantly,
the costs of collectingthe taxes).Why have these costs of governmentrisen so
steeply?
The costs of securityhave risen simply as a resultof technologicaladvance.
The toys securityforcesuse are everyday in everyway more expensive.Afterall,
securityis a gamein whichall sidesalwaystry to havemorethantheiropponents.
It is like an endlessauctionin which the bids are alwaysbeing raised.Perhapsif
we had a generalizednuclearholocaust,and the survivingworld went back to
bows and arrows,these costs would go down. But in the wake of anythingless,
I see no way to expectsuch a reduction.
In addition,the costs of welfarehave been going up steadilyand nothing is
slowingthem down, despiteall the hoopla about doing that. They are going up
for threereasons.The firstis thatthe politicsof the capitalistworld-economyhave
pushed the dominantstratato make concessionsto the dangerousclasses,who
have been demandingthree things-education, health services,and guarantees
of lifelong income. Furthermore,the level of the demandshas been going up
steadilyand becoming more geographicallyextensive.In addition, people are
living longer (partlythe consequenceof preciselythese welfaremeasures),and
hence the collectivecosts have increasedbecauseof the increasein the number
of beneficiaries.The second reasonis that advancesin technologyin education
and healthhaveincreasedthe costs of providingthe appropriatemachinery(just
as in the case of expenditureson security).And finally,the producersin each
of these domains have taken advantageof this government-subsidizedpublic
demandto take a big cut of the pie.
Welfare,as the conservativecomplainthas said,has become an entitlement.
And it is difficultto see how any governmentcould survivea truly significant
cutbackin these expenditures.But of course,someone must pay for this. And
producersin the end pay, either directlyor via their employeeswho demand
higher remunerationpreciselyto pay these costs.
We do not have good data on the steadyincreaseof all these costs, but they
are considerable.On the other hand, we cannot have a rise in the sales price
of world goods to match the increaseof productioncosts preciselybecauseof
the enormous expansionof world productionwhich has reducedthe multiple
monopolizationsand increasedworldcompetition.So the bottom line is thatthe
costs of productionhaverisenfasterthan the salespricesof production,and this
meansa profitsqueeze,which translatesinto difficultiesin accumulatingcapital
throughproduction.This squeezehas been evidentoverallfor some thirtyyears
already,which accounts for the speculativerage that has encompassedworld
capitalistssince the 1970sand which shows no signs of letting up. But bubbles
burst.Balloonscannot be infinitelyexpanded.
To be sure, capitalists collectively fight back. This is what neoliberal
globalizationis all about-a massivepoliticalattemptto roll backremuneration
 What?/ 1273
andGlobalization,
AfterDevelopmentalism
costs, to counterdemandsfor internalizationof costs, and of course to reduce
levels of taxation.As has happenedwith every previous such counteroffensive
againstrisingcosts,it has succeededpartially,but only verypartially.Evenafterall
the cutbacksby the most reactionaryregimes,the costs of productionin the first
decadeof the twenty-firstcenturyare markedlyhigherthan they were in 1945.
I think of this as the ratcheteffect-two steps forwardand one step backward
add up to a secularrisingcurve.
As the underlying economic structures of the capitalist world-economy
have been moving in the direction of reachingan asymptotewhich makes it
increasinglydifficultto accumulatecapital,the politicalstructuresthathavebeen
holding the dangerousclassesin checkhave also run into trouble.
The period of developmentalism,1945-1970, was also the period of the
triumph of the historic antisystemic movements, which came into power
in one form or another almost everywhere.Their biggest promise had been
the developmentalistdream.When that failed, the support of their followers
disintegrated.The movements,whether they called themselvescommunist or
social-democrat or national liberation movements, fell from power almost
everywhere.The period of globalization, 1970-2000, was the period of deep
disillusionmentwith the historicantisystemicmovements.They fell from grace
and areunlikelyto attractthe deep loyaltyof the mass of the populationsagain.
They may be supportedelectorallyas better than the other guys, but they no
longer are deemedworthyof the faith they representedfor a golden future.
The decline of these movements-the so-called Old Left-is not in fact a
plus for the smooth functioningof the capitalistworld-economy.While these
movements were antisystemicin their goals, they were disciplined structures
which controlled the spontaneous radical impulses of their followers. They
mobilizedfor specificactions,but theyalsodemobilizedfollowers,especiallywhen
they werein government,insistingon the benefitsin a distantfuture,as opposed
to untrammeleddisturbancesin the present.The collapseof these movements
representsthe collapse on constraintson the dangerousclasses,who thereby
become dangerousagain.The spreadinganarchyof the twenty-firstcenturyis
the clearreflectionof this shift.
The capitalistworld-economyis todaya very unstablestructure.It has never
been more so. It is very vulnerableto sudden and swift destructivecurrents.

III

If it is not, what kinds of alternativespresent themselves to all of us

now?
It is not very comforting to anyone in countries of the South to say that the
presentworld-systemis in structuralcrisisand that we are in a transitionfrom
it to some otherworld-systemoverthe next 25-50 years.Theywill want to know
1274 / SocialForces 83:3,March2005
what happensin the meantime,and what if anythingthey can or should do to
improvethe lot of the populationsof these countriesright now. Peopletend to
live in the present,as indeed they should. On the other hand, it is important
to know what are the constraintsof the present in order that our actions be
maximallyuseful,in the sense that they furtherthe objectiveswe seek in some
meaningfulway. So let me indicatewhat I think is the scenarioover the next
25-50 years,and what that implies for the immediatepresent.
The scenario over the next 25-50 years is twofold. On the one hand, the
collapseof our existinghistoricalsystemis most likelyfor all the reasonsI laid
out just previously.On the other hand, what will replacethe existing system
is completelyuncertain,inherentlyunpredictable,although all of us can have
input into that uncertainoutcome.It is inherentlyuncertainbecause,whenever
we are in a systemicbifurcation,there is no way of knowing in advancewhich
fork in the roadwe shall collectivelytake.This is the messageof the sciencesof
complexity(see Prigogine).
On the other hand, preciselybecausethis is a period of transitionin which
the existing system is far from equilibrium,with wild and chaotic oscillations
in all domains,the pressuresto returnto equilibriumare extremelyweak.This
meansthat,in effect,we arein the domainof"freewill"and thereforeour actions,
individualand collective,havea directand largeimpacton the historicalchoices
with which the world is faced.In a sense,to translatethis into our concerns,we
may say that the objectiveof "development" which countriesand scholarshave
been pursuingfor some fiftyyearsnow arefarmore realizablein the next 25-50
yearsthan they everwereup to now. But of coursethereis no guarantee,for the
outcome is uncertain.
In the largergeopoliticalarena,there are presentlythreeprincipalcleavages.
Thereis firstthe triadicstrugglebetweenthe UnitedStates,westernEurope,and
Japan/East Asiato be the principallocus of capitalaccumulationin the capitalist
world-economy.There is secondly the long-standingstrugglebetween North
and South for distributionof the world surplus.And there is the new struggle
that revolvesaround the structuralcrisis of the capitalistworld-economyand
centerson which of the two possibleforksthe worldwill takein completingthe
transitionto a new system.
The first two strugglesare traditionalwithin the frameworkof the modern
world-system.The so-calledtriad are roughlyequal contestantsin the attempt
to reorganizethe world-system'sproductionand financialsystems.As with all
such triadicstruggles,thereis pressureto reducethe triadto a dyad,which may
occur in the next decade or so. I have long arguedthat the most likely pair is
the United Statesand Japan/EastAsia againstwesternEurope/Russia(e.g., see
Wallerstein).But I shall not repeat this argument here, since I consider this
strugglesecondaryto the issue of overcomingthe polarizationof the existing
system,that is, permittingwhat we have called "development"throughoutthe
world-system.
 What?/ 1275
andGlobalization,
AfterDevelopmentalism
The second struggle,that between North and South, has of course been a
central focus of development issues for the last fifty years. Indeed, the great
differencebetween the era of developmentalismand the era of globalization
has been the relativestrengthof the two sides.While in the first era, the South
seemedto be improvingits position, if only slightly,the second periodhas been
one of a triumphantpushbackby the North.But this pushbackhas now come to
a close,with the deadlockin the WorldTradeOrganizationand the split among
the spokesmenof the North about the wisdom of the Washingtonconsensus.
I think here of the increasinglyopen dissent of such figuresas JosephStiglitz,
JeffreySachs,andGeorgeSoros,amongmanyothers,andthe remarkable softening
of the rigiditiesof the InternationalMonetaryFund in the post-2000 period. I
do not expectthat in the coming decadestherewill be much push off-centerin
this contest.
It is the third cleavagewhich reflectsthe new situation,that of the structural
crisiswith its consequentchaos in the world-systemand the bifurcationthat is
occurring.This is the split between the spirit of Davos and the spirit of Porto
Alegre,which I mentioned previously.I should explain what I think are the
centralissues here.The struggleis not about whetheror not we are in favorof
capitalismas a world-system.The struggleis aboutwhat should replaceit, given
the implosionof the presentworld-system.Thetwo replacementpossibilitieshave
no real names and have no detailedoutlines.What is in question is essentially
whether the replacementsystem will be hierarchicaland polarizing (that is,
like the present system,or worse) or will be instead relativelydemocraticand
egalitarian.These are basic moral choices, and being on one side of the other
dictatesour politics.
The contours of the actual political playersare still uncertain.The side of
the spiritof Davos is split betweenthose whose vision of the futureinvolvesan
unremittingharshnessof strategyand institution-buildingand those who insist
that such a vision would createan untenablesystem,which could not last. At
the moment, it is a very dividedcamp.The side of the spiritof PortoAlegrehas
other problems.They constitutepoliticallymerelya loose allianceof variegated
movements all over the world which, today at least, meet togetherwithin the
frameworkof the WorldSocial Forum (WSF).Collectively,they have no clear
strategyas yet. But they do have a good deal of grassrootssupport,and they are
clearabout what they oppose.
The question is what those who would uphold the spirit of Porto Alegre
should reallydo to advancethis "otherworld"they assertis possible.And this is
a double question.Whatis it that those few governmentswho sharetheirvision,
at least up to a point, should do, and what the multiplemovementsshould do.
Governmentsdealwith the short-runissues.Movementscan dealwith both short-
run and middle-runissues.Both kinds of issues affectthe longer-runtransition
process.And short-runissues affect our daily lives immediately.An intelligent
politicalstrategymust move on all fronts at once.
1276 / Social Forces 83:3,March2005
Thebiggestshort-runissueis the continuingdriveof the neoliberalglobalizers
to achievea one-sided expansionof open borders-open in the South,but not
reallyopen in the North.This is the heartof the persistentdiscussionwithin the
frameworkof the WorldTradeOrganization,and of all the bilateraldiscussions
being conducted most notably by the United States but also secondarilyby
the EuropeanUnion and its members-the creation of multiple "freetrade
agreements" like NAFTA,CAFTA,etc. Basicallywhatthe UnitedStatespushesfor
is guaranteesfor its monopolies (so-calledintellectualproperty)and accessfor
its financialinstitutionsin returnfor limited tariff concessionson agricultural
and low-valueindustrialgoods producedin countriesof the South.
The offensivewithinthe WTOwas stalledat Cancunby a coalitionof medium
powersof the South-Brazil, India,SouthAfrica,etc.-who put forwarda simple
demand:free trade that works both ways. If the North wants us to open our
bordersto them,they said in effect,it must open its bordersto us. But the North
is basicallyunableto acceptthis kind of deal for two reasons.It would resultin
considerablyincreasedunemploymentand downsizedincomein countriesof the
North,whichis politicallyimpossiblefor governmentssubjectto electoralcontests
to accept.And it is not clearto the triadwhichof them wouldprofitmost,or lose
least,from such arrangements,and thereforethey hesitate.Afterall, the triad is
engagedwith tariff/subsidycontroversieswith eachother,and arrangementswith
the Southwould weakentheirpoliticalpositionsin this economicallyeven more
importantconflictfrom the point of view of the countriesof the North.
One can drawtwo conclusionsfrom this. This is a politicalquarreldoomed
to a standstill. And it is politically very important for the countries of the
South to maintainthis stance,from their own point of view. This is the single
most importantaction these governmentscan take to furtherthe possibilityof
maintainingor raisingthe standardof living in their countries.To the sirensof
the neoliberaldogmas, these countries are now respondingskeptically,"show
me,"and this skepticismis justified.
Of course,thesegovernmentshaveto remainin power.And the biggestthreat
to that is externalinterferencein their politics.Whatthe largercountriesof the
South are now doing, and will speed up doing in the next decade,is seekingto
enterthe nuclearclub.Whatthis will accomplishis to largelyneutralizeexternal
militarythreatand therebyminimizeexternalpoliticalthreat.And the thirdthing
one can demandof these governmentsis socialwelfaredistributionwithin their
countries,whichof coursecould includelow-leveldevelopmentprojects(suchas
diggingwells,etc.).Whatone cannotexpectof thesecountriesis thatsome policy
on their part is going to turn them into a.Denmarkin the next 10-20-30 years.
It's not going to happen and is basicallya diversionfrom an intelligentpolicy.
The role of progressivegovernmentsis primarilyto makesurethat conditionsin
their countriesand the world do not get still worse in the decadesto come.
It is the movementsthat can do more than the governments,althoughthe
 AfterDevelopmentalism
andGlobalization,
What?/ 1277
movementsneed to keep minimallyprogressivegovernmentsin power and not
engagein leftistinfantilistcritiquesaboutthe lackof achievementsthatarein fact
impossibleto expect.And here we must point out an importantelementthat is
often lost from observation.The firsttwo geopoliticalcleavagesare geographic:
conflictsamong the Triadand North-Southconflicts.But the conflict between
the spiritof Davosand the spiritof PortoAlegrehas no geography.It cuts across
the entire world, as do the movements.It is a class struggle,a moral struggle,
not a geographicstruggle.
In the medium run, what the movements can best do is to push
decommodificationwhereverthey can, and to the extent that they can. No one
can be quite sure how this would work. It will take a lot of experimentation
to find viable formulas.And such experimentationis going on. It is going on,
we must remember,within a basicallyhostile environment,in which there are
systemicpressuresto undermineany such attempts,and which can corruptthe
participantswith not too much difficulty.But decommodificationnot only stems
the drivefor neoliberalextensionsbut builds the basis for an alternatepolitical
culture.
Of course,the theoristsof capitalismhavelong derideddecommodification,
arguing that it is illusory, that it goes against some presumed innate social
psychologyof humankind,that it is inefficient,and that it guaranteeslack of
economic growth and thereforeof poverty.All of this is false. We have only
to look at two major institutions of the modern world-universities and
hospitals-to realizethat, at least up to twenty years ago, no one questioned
that they shouldbe run as nonprofitinstitutions,withoutshareholdersor profit-
takers.And it would be hard to argueseriouslythat, for that reason,they have
been inefficient,unreceptiveto technologicaladvances,incapableof attracting
competentpersonnelto run them, or unable to performthe basic servicesfor
which they were created.
We don't know how these principleswould work, if applied to large-scale
productionlikesteelproductionor small-scale,moreartisanalproduction.Butto
dismissthis out of handis simplyblindand in an erawhen productiveenterprises
arebecomingfarlessprofitablethanpreviously,preciselybecauseof the economic
growthwhichthe capitalistworld-economyhasbred,is foolish.Pushingalternate
forms of developmentalong these lines has a potentialfor answeringproblems
not only of the South but of the decliningindustrialregionsof the North.
In any case, as I have insisted,the issue is not what will magicallysolve the
immediatedilemmasof our world-systembut the basison whichwe shallcreate
the successorworld-system.And to addressthat seriously,we must first of all
comprehendwith some claritythe historicaldevelopmentof our presentsystem,
appreciateits structuraldilemmastoday,and open our mind to radicalalternatives
for the future.And we must do all this, not merelyacademicallybut practically,
that is, living in the presentand concernedwith the immediateneeds of people
1278 / SocialForces 83:3,March2005
as well as longer-run transformations. We must therefore fight both defensively
and offensively. And if we do it well, we may, but only may, come out ahead in
the lifetimes of some of the younger members of this audience.

Notes
1.Theclassicarticleis thatby GiovanniArrighiandJessicaDrangel(1986).Arrighiis currently
updatingthis argumentin a forthcomingarticle.
2. Although this is prima facie logical, it seldom enters into analysesof mainstream
economists.

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