The Imagined Economies of Globalization

the imagined economies of globalization

the imagined economies of globalization angus cameron & ronen palan

SAGE Publications

London • Thousand Oaks • New Delhi

To Leah Kharibian and Katja Palan © Angus Cameron and Ronen Palan 2004 First published 2004 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act, 1988, this publication may be reproduced, stored or transmitted in any form, or by any means, only with the prior permission in writing of the publishers, or in the case of reprographic reproduction, in accordance with the terms of licences issued by the Copyright Licensing Agency. Inquiries concerning reproduction outside those terms should be sent to the publishers. SAGE Publications Ltd 6 Bonhill Street London EC2A 4PU SAGE Publications Inc. 2455 Teller Road Thousand Oaks, California 91320 SAGE Publications India Pvt Ltd B-42, Panchsheel Enclave Post Box 4109 New Delhi 100 017 British Library Cataloguing in Publication data A catalogue record for this book is available from the British Library ISBN 0 7619 7210 2 ISBN 0 7619 7211 0 (pbk) Library of Congress Control Number available

Typeset by C&M Digitals (P) Ltd., Chennai, India Printed in Great Britain by Athenaeum Press, Gateshead

Contents

Acknowledgements

vi

Introduction

1

Part 1 1 Perception, Representation, Theory Construction and the Globalization Debate

25

2 Performative Discourse and Social Form

46

3 Configuring the Global: Globalization as Spatio-Temporal Narrative

69

Part 2 4 Business Globalization and the Offshore Economy

89

5 The Private Economy of the Post-National State

109

6 The Anti-Economy of Social Exclusion

130

7 Conclusion

152

Notes

162

Bibliography

172

Index

184

Acknowledgements

The distant origins of this book lie in a series of obscenely long lunches held at Sussex University in the summer of 1995. Many people contributed to our discussions during this period and, if we do not mention them by name here, we extend our gratitude to them anyway. Of those who contributed more directly to its production, we would like to thank Ash Amin, Ray Hudson, Gordon MacLeod, Mike Bradshaw, Colin Williams and Roger Lee. Particular thanks are due to Bob Jessop, Ben Rosamund, Adam Tickell, Jamie Peck, Robbie Shilliam and Kees Van Der Pijl, whose strong support for this book from the outset made it so much more difficult, but also so much more enjoyable, to write. We would also like to thank our friends and co-workers on the Review of International Political Economy past and present. Special thanks go to Lucy Robinson and David Mainwaring at Sage, for their extreme patience in waiting for the final manuscript.

Introduction

What, if anything, is the relationship between the ‘facts’ and ‘fictions’ of globalization? What, in other words, is the relationship between the concrete processes and institutions of globalization – ‘global’ brands and firms, institutions of ‘global’ governance, globalizing technologies, etc. – and the various stories, myths, ideologies and rhetoric that surround them? To what extent do the latter affect the former rather than merely describe them? And to what extent can ‘globalization’ be thought of as a ‘real’ objective process as opposed to a form of communal story-telling driven by parochial interests? These questions may at first appear to be of interest only to academic social scientists with a penchant for obscure theoretical and philosophical debates. However, these are precisely the kinds of questions that have gradually been rising to the top of the globalization agenda, troubling, it seems, even the less theoretically inclined commentators. To take just one example, the Dean of the Yale School of Management, Jeffrey Garten, recently asked a range of leading corporate chairs, chief executive officers (CEOs) and company presidents about the ways their corporations were bracing themselves for ‘being global’ (Garten 2001). As one might expect, Garten begins his study from the conventional position according to which globalization is viewed as an objective process of market integration on a global scale, driven by developments in transportation and communication technologies. He treats globalization as a testable empirical proposition, citing approvingly a McKinsey study that purports to show that while 20 per cent of goods and services currently produced enter international (and therefore global) trade flows, the proportion could increase to 80 per cent within thirty years (2001, 76). Taking globalization as a measurable and testable phenomenon in this way tends to cover a familiar and limited range of issues: to what extent have corporations truly ‘gone global’? Are financial markets operating on a truly global scale? What is the role of the state, if any, in this new global world? How should firms best position themselves to take advantage of these changes? Garten is primarily interested in just these issues but, in spite of his ostensibly very conventional view of globalization, he also asks a very different set of questions. Rather than devote his study to objective processes (although he clearly believes such things exist), his study revolves around interviews with the world’s business leaders about their beliefs and opinions. In other words, Garten seeks to analyse objective processes of globalization by gathering together the subjective opinions, beliefs, fears and predictions

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THE IMAGINED ECONOMIES OF GLOBALIZATION

held by corporate managers. He recalls, for instance, the words of Michael Bonsignore, chairman and CEO of Honeywell, who tells Garten that, the merger that created DaimlerChrysler was really one of the pivotal events in my thinking. Boeing–McDonnell Douglas, Exxon–Mobil – you saw these combinations and you thought ‘My goodness, all bets are off. There is no more conventional wisdom on what is possible. (Garten 2001, 71)

True to his words, a year after this interview Bonsignore launched a huge merger between Honeywell and GE, and, in doing so, affirmed and helped further extend a trend seen as central to globalization. Similarly, Garten also shows how James Wolfensohn, the president of the World Bank, affected changes in the World Bank’s thinking – inculcating his own vision of a global economic future into the collective thinking of an organization that had historically been both conservative and strongly wedded to the notion of the discrete national economy. In fact, reading Garten’s book one gets the distinct impression that far from describing an objective and exogenous phenomenon, the sort of changes and trends that he associates with globalization are a complex interplay of the strategies and tactical manoeuvres of large corporations, international organizations and states. These organizations are seeking to identify a ‘meaning’ for globalization from which they then extrapolate implications for the strategic futures of their respective organizations. They employ armies of analysts and consultants to help them predict and then prepare for a world yet to come into existence. Might this imply that what is taken to be empirical evidence for globalization is nothing more than the material effects of coping tactics adopted by these corporations combined with the competitive strategies of states? The merger of Daimler and Chrysler may indeed be taken as concrete evidence of the globalization of the automotive sector and, by extension, of the world economy as a whole. But we should not forget that ‘globalization’ itself – at least globalization as an objective fact – did not produce the merger. Rather, it was put forward as an audacious bid by the two companies to take advantage of what their CEOs anticipated was the likely impact of ‘globalization’ in the future. Globalization is, therefore, often used as a form of shorthand to encapsulate the multiplicity of cognitive and institutional processes which result in phenomena such as corporate mergers – but it should not be confused for the processes themselves. However, somewhere in the process of responding to these various phenomena the fact that globalization is ‘shorthand’ tends to be forgotten. As a result, many commentators do not seem to notice that in the process of adapting to and preparing for globalization, company managers and state administrators also contribute to the very process they claim to be responding to and, in doing so, contribute to and extend its meaning. Globalization, therefore, is

Introduction

3

not a simple and unmediated process that can be described objectively. Rather, it is a mediated concept – what we know about globalization comes to us through the filter of theories and images that prescribe both its form and consequences and our responses to them. Globalization is not just a phenomenon. It is also a story. Garten’s study is in fact typical of the ambiguity surrounding the academic treatment of globalization. On the one hand, we would like to adopt a ‘scientific’ approach, and treat our subject matter as objectively and dispassionately as possible. By convention our theories are constructed from the perspective of the detached observer, as if our thinking and reflection do not intervene or affect in any way the subject under investigation. The language of theory is presented as a neutral tool, the theorist (or narrator) setting him- or herself outside the social phenomenon they seek to explain. On the other hand, we know that this is never the case. We know that in the social world, ideas, perceptions, representations and theories actively shape the very reality that is under investigation. We know that policymakers, CEOs, NGOs, anti-capitalist protesters and new social movements do not react to ‘globalization’ as such. Rather, they react at best to a mediating discourse which tells them what globalization is, how it affects their lives and, most crucially, how it will affect them in the future. The aggregate reaction and response to the mediating discourse, in turn, is an important component shaping the ‘reality’ of globalization itself. Social scientific theories are, therefore, very different from theories in the physical sciences – something often overlooked in the globalization debate. Social scientific theories are not purely descriptive, nor are they purely prescriptive – they are part of the very process of societal change they claim to describe and analyse. As Andrew Sayer notes, ‘People are selfinterpreting beings who can learn from and change their interpretations so that they can act and respond in novel ways, thereby producing novel stimuli for subsequent actions’ (Sayer 1992, 234). This is true even if the theories in question are wrong. Even if globalization could be demonstrated to be no more than a ‘myth’ as some have indeed claimed (Shipman 2002), this would not invalidate the theory. Rather, the question needs to be posed differently. The issue here is not simply whether or not a given theory is true in the conventional sense – that is, an empirically testable proposition – but whether the stories contained within it are believed by sufficient numbers of people prepared to invest serious time and money in them. If enough such people exist, and if they command sufficient economic, political, social and cultural resources, then any myth, however outrageous or outlandish, to some extent becomes a ‘reality’. If the president of Honeywell believes in a ‘global’ future, and manages to persuade his board of directors to share his vision and if they are collectively prepared to do something about that ‘future’, then that future comes one step closer. If enough policy-makers and CEOs believe that in thirty years time 80 per cent of goods and services

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THE IMAGINED ECONOMIES OF GLOBALIZATION

produced will enter international trade flows, then it is incumbent on them that they prepare their states and companies for that eventuality. In the course of that preparation, they will effect important changes in the nature of that objective ‘reality’ for which they are preparing. Of course, the ‘reality’ that eventually arises from their attempts to enact a theory may bear little resemblance to what they actually predicted and prepared for – indeed it is highly unlikely to do so. But the fact remains that theories and perceptions must be considered important causal factors in the changes that we witness – even the most ‘objective’ social scientist to some extent sees that which they expect and/or have been prepared to see (cf. Feyerabend 1993). Not every myth, however, is believed and not every story is acted upon. Why, then, are the various stories of globalization, those told by its proponents and opponents alike, so readily believed by so many? The reasons why particular stories of social, political and economic reality become acceptable, are taken as truth or ‘common sense’, are varied and complex. Material interest certainly plays a role, but the reasons why certain theories are accepted and others are not cannot be reduced to mere ideological ploys propagated by interested parties. In fact, as Regis Debray (1981) argued, the cultural and historical specificity of mythologies means that a general theory of myth-making is probably impossible. One thing is clear, at the very least these stories become common sense because they are constructed historically in a way that generates plausibility. This suggests, in turn, that cultural theories and literary criticism may be of much greater use for political science and political economy than is normally acknowledged. The historiographer Paul Ricoeur (1981) argues compellingly that social theories, including history, should be considered as a special example of story-telling. They are no different in essence, he maintains, from other forms of story-telling, except in the ways they are deployed, consumed and reproduced as representations of objective reality – as truth. Social theories and historical analysis employ the same techniques of narrative construction that are common in all other fictions, myths and legends, differing from the latter not in their internal structure, but in the assumed relationship they have to the ‘external’ world. This implies, in turn, that the generation and reproduction of social theories as stories is a dialogic and evolutionary process which takes place not only in the world ‘out there’, but in the forms of inter-personal and inter-institutional narrative construction we are all, wittingly or not, engaged in. This is, therefore, equally true of that range of stories we (currently) call globalization theory. The process of theory construction as narrative construction, of generating plausible stories about plausible worlds, therefore has important implications for the way we treat theory. We can no longer accept the conventional notion that theories are external to the realities they seek to describe – as if they inhabit a world parallel to social reality. Rather, we can only understand the role of theory, belief, narrative and so on, as integral

Introduction

5

parts of the production of social reality itself. In the case of globalization, we will argue here, the relationship between its ‘objective’ processes and manifestations and the construction of theories about it is in itself undertheorized and, furthermore, is partly obscured, because in time the historical evolution of the theory has gone unnoticed or been forgotten. We will examine, therefore, in this book the processes of production and consumption of stories about globalization. This is a complex process, and crucially, we would argue, not one confined to formal academic or policy debates. From a legal and economic perspective, which tends on the whole to be where we acquire our knowledge about globalization, the act of merger between Daimler and Chrysler, for instance, was a ‘transaction’, a unit of transfer of legal control, an exchange of ownership titles and the moment of the creation of a new legal entity. From a sociological perspective – the one that we seek to advance in this book – the merger was an ‘act’, a social performance, conducted for the benefit of observers. This act is not viewed by its various audiences in any naïve or unmediated way. Rather, the act is interpreted by a host of professional observers, analysts and academics, as well as ordinary members of the public, who construct a picture of its significance, place it in an historical context, and frame it in a more or less coherent narrative of social development. This emerging narrative in turn serves to suggest a limited range of plausible implications of these developments for the future. Out of this welter of observations, performances, interpretations and predictions certain collective stories then emerge. These are the partial and heterogeneous narratives by which any society informs itself about itself and in response to which its members can prepare for future action. We should make it plain from the outset that we are not claiming to have made some startling discovery about the nature of social reality. Far from it; the power of naming and narrating social realities has been recognized for centuries as one of the most powerful aspects of social reproduction and regulation. Listen to Thomas Hobbes, normally credited with being the father of the ‘realist’ theory of international relations, writing in Leviathan in 1651: the most noble and profitable invention of all other, was that of SPEECH, consisting of Names or Appellations, and their Connexion; whereby men register their Thoughts; recall them when they are past; and also declare them one to another for mutual utility and conversation; without which, there had been among men, neither Common-wealth, nor Society, nor Contract, nor Peace. (1951, 100)

For Hobbes, society itself is a function of speech and of naming because it is only through speech that mankind can develop the communicative structures required to manage complex and abstract practices and concepts.

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THE IMAGINED ECONOMIES OF GLOBALIZATION

Speech, therefore, consists of common social narratives, what Hobbes calls ‘universals’, that define the domain of the social. Hobbes continues; There being nothing in the world Universall but Names; for the things named are every one of them Individual and Singular. (1951, 100)

Hobbes, the alleged ‘realist’, was obviously perfectly aware of the epistemological gap between the world of things and the realm of words – a problematic that is often thought to emerge in Western philosophy only between Hegel in the eighteenth century and contemporary deconstruction theories. Hobbes was clearly aware that we are discussing not the real in any unmediated and unreflective way, but rather ‘universalls’ – names or abstractions. Stripped of the hype, globalization is at root a concept, a universal name, in Hobbes’ terminology. But because the act of naming is also an act of constitution and universalization (objectification), it is not a disinterested or innocent act. Indeed, the act of naming and the construction of stories around these names are so important that we cannot understand ‘globalization’ (or, for that matter, any other social phenomenon) independently of the processes of communal story-telling and the rules of narrative construction. As Alfred Schutz once said: I can look upon the world presenting itself to me as one that is completed, constituted, and to be taken for granted, but, when I do this, I leave out of my awareness the intentional operations of my consciousness within which their meanings have already been constituted. (quoted in Bloor 1983, 9)

This should be viewed as a warning to any social theory that seeks to present itself as objective by ignoring the processes by which meanings are constituted. Schutz concludes from this that a ‘reflexive’ glance is necessary, ‘by which we are to catch ourselves in the act of conferring meaning’ (p. 9). This reflexive production of meaning is fundamental not only to understand how Hobbes’ Universalls are constituted, but also to the unique human capacity of preparing for an uncertain future. A key theme of this book, therefore, is that this elemental reflexivity must be incorporated as a central epistemological assumption and accommodated in any informed social scientific thought. All too often, however, it is not. But this propensity for ‘reflexive self regulation’ (Onuf 1989, 62) must be incorporated not only in order to better understand contemporary developments, but also to guide us to the extent that it is possible, to future possibilities of action, to the novel directions that may be taken. This book, therefore, offers a reflexive glance into the shaping of the stories of globalization. But although in the course of our argument we place great stress on the rules of narrative construction, this is not intended

Introduction

7

to invalidate approaches to globalization as an analytic or descriptive construct. Neither do we wish to validate them. Nor do we want merely to force more careful thought about the quality of some of the assertions that are made in the name of globalization – their status, their applicability, their relationship to the practice of business and states. Our aim is far more ambitious. We will show that, over and above the various concrete processes of technological, economic and institutional change which are commonly presented as the essence of globalization, the more fundamental significance of the concept is the role it is playing in rewriting the collective imagery of society. Again, we are not saying, in principle, something particularly new: a constant theme in cultural theory of the late twentieth century has been that of the disempowering nature of modern global capitalism which has engendered, as Christopher Lasch famously put it, a ‘culture of narcissism’ in Western societies (Lasch 1979). There has been much concern with the debilitating effects of mass consumerism and the pressures of ‘exhausting modernities’ (Brennan 2002, Bauman 1998a). But the link between these ‘cultural’ phenomena (which tend to be analysed on a microand/or ‘domestic’ scale) and narratives of global political economy is rarely made. What we argue in this book is that contained within the complex dialogic relationships between rhetoric, perception, practice and institutional adaptation, is a subtle rewriting of the basic spatial imaginary of the state, and hence of the entire social field. This is not, however, the process conventionally associated with globalization – that of the scalar transcendence of the territorial nation-state and its replacement by a larger ‘global’ domain. Rather, the pervasive adoption of the narratives of globalization is having the effect of altering the very meaning of spatiality within and across contemporary states. We are aware, of course, that the reflexive nature of social change complicates matters, and we are in danger of falling into an abyss of endless recursive loops, as each observation, analysis or utterance becomes a social ‘act’ adding to the array of acts under investigation. Like the mutually reinforcing perceptions and misperceptions in R.D. Laing’s collection of poems, Knots, observation of another’s observation becomes in itself an observation to be observed, and so on ‘da capo sine fine’ (1970, 13). Not surprisingly, many economists and social scientists shy away from these apparently never-ending loops of mutual causality. Yet, the reflexive nature of social change cannot be ignored, and indeed, remains an underlying, if often forgotten theme in social investigation. The ‘myths’ of globalization should not, this implies, be taken as a reason to dismiss the concept, but are as important, if not more so, as its ‘empirical’ reality – indeed, they are an integral part of that reality. The book is founded on the proposition that in place of the single, unified spatiality of the nation-state, globalization opens up a multiplicity of spatial domains each characterized by different modes of social being and

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identity. The image of the bounded, sovereign, territorial space of the state which equated to the ‘imagined community’ of the nation (Anderson 1991) is being replaced by a fundamentally different image of the state whereby the relationship between state, citizen, economy and polity is redrawn. To put it differently, the imagined community of the territorial nation-state, the dominant and perhaps constitutive imagery of political life in the past two centuries, is very rapidly giving way to a series of imagined economies which maintain the fiction of the state – and indeed perpetuate it as a legal entity – but situate it within a radically different set of boundaries and notions of social space. So the state continues to play an important role: but it is a very different state. The transformation of the state takes place through the deterritorialization and denationalization of myths of identity and belonging particular to the nation-state of the nineteenth and twentieth centuries, which in turn necessarily imply a radical recasting of the spaces of the political. Of course, the political domain was never entirely national, nor has it now become entirely globalized, nor are we arguing that globalization necessarily and inevitably generates these effects. We argue simply and empirically that the prevailing narratives of political action and engagement are changing, and they are changing in and through the production of the particular imagery of globalization.

Narratives and practice Although many analysts often seem to forget it, social and political theory involves the articulation and mobilization of metaphors and images – images that are not purely decorative but are intended, however indirectly, to have concrete outcomes as they are ‘applied’. Writing theory, therefore, draws on the knowledge and techniques of narrative construction which, like its literary, musical or artistic counterparts, is rule-bound. Consequently, theories of historiography, the specialized branch of investigation that examines how theologians, philosophers, historians and scientists tell their stories, can provide an important insight into the processes that are under investigation in this book, namely, those associated with globalization and, as we shall come on to explain in due course, social exclusion. In saying that, we do not want to give the impression that everything can be reduced to a mere discourse – if by that we mean elevating words above ‘things’ to produce what Pierre Bourdieu dismissed as ‘an intellectualist theory of knowledge’ (1991, 235). For a particular discourse to be persuasive, to play a powerful mediating role in human practice, it must correspond in some way to the active experience of participants: it must, in other words, be subject to what Freud would describe as a ‘reality check’. The plausibility of a narrative relies on this reality check, though this does not mean that the narrative must correspond to some crude positivist

Introduction

9

or empiricist criteria of truth in order to be plausible.1 There is a complex relationship between practices and structures on the one hand, which to all intents and purposes, ‘appear external to the individual and have power of coercion over him’ (Durkheim 1937, 5) and, on the other, the subjective area of practice, the actions and decisions of individuals with different levels of responsibility and power, which ultimately cannot be predicted or legislated for (Bourdieu 1976). Indeed, when one of these two approaches, the objective and the subjective, is privileged over the other, mistakes are inevitable. Paying attention to the communal story-telling in the constitution of heuristic concepts has two important implications for this study. First, there are important differences between the type of concepts, ideas and research methods that function well in academic work, and the type of concepts, ideas and narratives that are effective in policy discourse. Policymaking, whether by business or government, is indeed based on a different order of theory than the conventional academic one (Thrift 1998a, 162). Whereas for the former, the objectivist tendencies characteristic of academic studies emphasize certainty, rationality and objective historical forces, the latter, the policy-makers, whether in business or in government, tend to think about issues such as globalization in very different terms. Business is interested in globalization not for aesthetic reasons but primarily as a challenge and an opportunity for profit-making; business asks itself how can it prepare for it, not simply in order to adapt and survive, but also, crucially, because it may be materially advantageous to do so – there is profit to be made. Theory in business and policy-making is essentially the art of futurology. A century ago, Thorstein Veblen (1904) argued that the anticipation of future development is a key aspect of capital formation. As for the ‘captains of industry’, anticipation of future earning is capitalized in the stock market and debentures, and then set to work in the reorganization of industry. Capitalization of future earnings and the task of preparing for the future is, therefore, the fundamental task of the modern business strategist.2 The anticipation of the future, whether capitalized through stock markets by firms, or whether it is used for political contestation and emerging political programmes, necessarily operates through narratives that themselves operate within bounded spaces of opportunity – we are all, this implies, forced to choose our future from a limited set of possibilities. All theories, including those of globalization, do not therefore simply mediate between thought and reality (as though these things occupied different positions on the same static temporal plane), but also mediate between the past, present and future. This is because, as John Commons dryly remarked, ‘man lives in the future but acts in the present’ (1961, 58). Living in the future but acting in the present requires a narrative that connects the two; it requires, in other words, a narrative that renders a

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conception of progression through time intelligible. Globalization is such a very attractive and powerful concept for policy-makers not least because it is about the future, about preparation for the future, and hence about the capitalization of future earnings. For corporate policy-makers globalization is far more important as a vital source and opportunity for profit and ‘wealth creation’ than it is as a theory of social change. The central assumption of the many organizations that fund studies of globalization and of the countless executive and academic seminars for its analysis and discussion, is that the better prepared we are, the better we will fare when the global future comes to pass. Knowledge about globalization therefore has a current as well as a predicted future value. But as everyone ‘prepares’ for this anticipated and/or feared future, the indeterminacy of the discourse combined with practical actions leads to a compression of historical time as the future is drawn, through competitive emulation, into the present. Thus, as business invests heavily in logistical and operational facilities to embrace the opportunities of ‘globalization’, and as states adapt their institutions to cope with the supposedly ‘new’ political and economic terrain they have predicted, both set in motion processes that accelerate the creation of the very thing they prepare for. If we understand this predictive process as one of the basic dynamics of the relationship between perception and conception in relation to globalization, we immediately sense that much academic reflection is missing an important point about the nature of the ‘story-telling’ in contemporary history. Academic reflection, which also constructs a history from the past, through the present to the future, has tended to be too static, too one-dimensional in its story-telling, and has as a consequence failed to appreciate the much more complex picture that has already emerged in the area of policy-making. The second important dimension brought in by taking the rules of narrative construction seriously is that overt narratives always contain other ‘covert’ narratives. In fact, predicting the future itself has a history – and previous predictions have become institutionalized into the fabric of what we take to be the structure of the world economy. There are, for example, other histories of globalization (cf. Hopkins 2002). Globalization has appeared in other guises within communal stories that predicted different futures. As the discourse has developed, we have witnessed a compression and repression of the history of globalization itself, as elements of previous stories subside or disappear altogether to make way for a new story that renders the current presentation of globalization coherent with its past. But the institutional effect of the previous predictions is not lost; it is still with us in some way. So, for example, stories about the crisis of the state in the 1970s (O’Connor 1973; Habermas 1975), the challenge of the ‘evil empire’ and the exhaustion of natural resources in the 1980s, the rise of Japanese and south-east Asian industrial hegemony in the 1980s and 1990s, and the current ‘clash of civilizations’ and the threat from radical Islam in the

Introduction

11

Middle East (Achcar 2002), all of which have formed elements of the larger narrative of globalization, have to a greater or lesser extent dissipated over time. But they leave traces that can be unearthed and help understand the process of change. As de Certeau notes: In their respective turns, each ‘new’ time provides the place for a discourse considering whatever preceded it to be ‘dead,’ but welcoming a ‘past’ that had already been specified by former ruptures … The labour designated by this breakage is self-motivated. In the past from which it is distinguished, it promotes a selection between what can be understood and what must be forgotten in order to obtain the representation of a present intelligibility. (1988, 4; emphasis in original)

The ‘present intelligibility’ of globalization – and with it the contemporary state – therefore paradoxically entails an intricate process of forgetting; a complex delimitation of what is acceptable, desirable, possible and, above all, normal to contemporary life. But knowledge of these past stories is useful in understanding the formation of contemporary discourses of globalization in particular and social formations more generally. Although redundant in the current formation, these secondary stories of globalization have elicited certain responses at varying levels at different times with specific institutional and social outcomes. Our task in this book will be, therefore, partly to reconstruct this history of global futures that have at various times contributed to the formation of theories of globalization. This is significant because it will demonstrate that the dominant narrative of globalization contains a hidden, foundational narrative (in fact, a set of narratives), in which past, present and future are ‘re-written’.

The ‘lost’ national economy But why should the redrawing of conceptual boundaries be so significant? Why place the emphasis on rhetoric and perception? Surely the ‘real’ legal and physical boundaries between societies and economies continue to function much as they always have – irrespective of any conceptualization? The meaning of an alleged change in the concept of the spatiality of the nationstate can be interpreted only within an interpretation of the meaning of the nation-state itself. What discursive baggage does the concept of the nationstate carry? What kinds of practice does the concept legitimize? The answer to these questions, of course, cannot be simple – there never was just one fiction of the state but rather a set of normative expectations interpreted and applied in local contexts and according to local conditions. The national state of the industrialized north is manifestly very different from

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the post-imperial state of the south, and the east Asian state of the early twenty-first century is not the same as the European state of the nineteenth century, however much conventional state theory may seek to establish them as equivalents (cf. Anderson 1998). Despite the many empirical differences between states, there has been nevertheless what the French sociologist Dominique Schnapper calls ‘the idea of the state’ (1998) – a pervasive and idealized, if not as universal as we tend to think, notion of the nature of society and its relationship to the state. This ideal-typical conception of the state has long provided simultaneously both a ‘normal’ format of state–society relationship, and a legitimizing ideology of this same format called the nation-state (Delanty 2001). So long as this idea of the state is generally accepted – is plausible – the world can be seen as ‘naturally’ divided into ‘nations’ or ‘peoples’. These nations and people construct institutional structures that advance their unique notion of the ‘good life’. The state serves (or at least should serve) as the political expression and the institutional arm of the nation. The state, therefore, should advance the economic, cultural and political goals of the nation as a whole. The nature of the ‘national economy’ has conventionally been understood in similar terms, as a servant to the nation. The ‘world economy’ has, therefore, traditionally been conceived of as aggregate discrete ‘national’ economies separated along political boundaries. It is because of this traditional conception of state, nation and economy as territorially and normatively co-extensive that Zygmunt Bauman maintains that the development of the modern nation-state accompanied the rise of calculative rationality. The specific category of the nation-state is founded on the notion of society as an organized and mechanical organization of people (Bauman 1992, 6). In a similar vein, Nicos Poulantzas saw the nation-state as an historically specific matrix of spatial and temporal forms, the precise combination of which would alter over time as the nature of economy and society altered (1978). In both cases, this need to selfconsciously design, monitor and adapt ‘society’ reveals that it has always been a fundamentally reflexive form of social organization. In that sense it may be argued that from its earliest formal manifestations, the state has been constantly (re-)created in pursuit of changing needs and conceptions of the nation. The material reality of the ‘nation’, of course, was represented in the state – hence these are mutually constitutive concepts.3 There were certain logical imperatives embedded in the concept of the nation which also pervade political discourse. They served as ‘intuitive’ truths and, therefore, as common narratives. An immanent and discrete collectivity represents the nation-state, as Bauman notes, as a self-organizing historical entity sharing in the formation and execution of collective goals. The matter of collective goals is simultaneously a question about ethics, i.e., which of these goals are honourable, and a question about technique: how a self-organizing community is best to achieve such goals (Schnapper 1998;

Introduction

13

Palan 2003). The representation of economic closure, of an homogenized ‘national economy’, was central to the idea of the subordination of market forces to the goals of the state. It may be debated at length whether there was indeed ever a ‘nation’, let alone a ‘national economy’, that corresponded to the ideal of closure (we would argue that there was not), however, the imperative of the logic of the nation legitimized a particular political economy centred on the closure of the state. The idea that the state was the political arm of the nation or the community was translated into the practice that the community had a responsibility to educate its population, to provide them with work, healthcare and so on. The state, as the collective arm of the nation, had the right to control and subordinate market forces for the benefit of the nation. The identification of the ‘nation’ as constitutive of the social body generates a series of logical propositions, which the state must then enact. The ‘nation’ was predicated upon the presupposition that its members share in some epic spiritual journey.4 The agglomerations of people who happen to reside within a given political boundary and/or share linguistic or other attributes were viewed as having a common destiny. In this context patriotic feelings were translated into various forms of nationalist ideology which ascribed meaning to the collectivity and to the role of the individual within it (Anderson 1991; Smith 1992). Consequently, nationalist theory is strongly prescriptive in that it suggests that the ‘spiritual unity’ of the nation must be translated into both a responsibility on the part of each individual towards the whole and, in turn, a responsibility on the part of the nation towards the individual. The lofty goals of the nation necessitated that the individual, legally and morally constituted as a ‘member’ (citizen), subordinate him or herself to the ‘common good’.5 Each member of the nation was charged with responsibility towards maintaining the physical and spiritual continuity of the ‘father/motherland’ and with providing future generations with the right conditions to continue the journey. Throughout its history, therefore, the nation has performed a central constitutive role with regard to the state, informing and legitimizing new forms of social organizations and new forms of surveillance. This is equally true with regard to specific formation of the national economy. The strongly territorial idea of the nation-state was from the outset closely bound up with the extension of regulatory control over the assets and transactions of the national population and the emergent institutions of the private and public sectors. From the late Middle Ages to the midnineteenth century a gradual but very deliberate process of carving out and consolidating the ‘fiscal state’ took place throughout Europe (Bonney 1998) – a process that subsequently informed processes of ‘nation-building’ throughout the world.6 At the same time as delineating demographic, political and juridical spaces, the state border also serves to separate and create the ‘domestic’ and the ‘international’ economies as discrete spaces. Some

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conception of a bounded political economy is, for example, a prerequisite for the regulation of all forms of inter-national trade, a concept that has no meaning except in a world economy divided by national borders. The image is of an inter-national economy with the emphasis on the reflexively mediated goals of mutually recognized state economic and political sovereignty. John Maynard Keynes, for example, argued that in order that ‘free’ trade achieves its intended goals, capital markets should be strictly controlled by national governments. Even neo-liberal economists argue enthusiastically for a goal of global free trade as an instrument of ‘national’ economic growth and welfare maximization. Whereas the national economy was understood in the nineteenth century as the material base for the spiritual pursuits of the nation, a power base from the strategic and spiritual goals of the nation, the same ‘national economy’ in the twenty-first century implies something very different: the primacy of a national form of regulation in support of capitalist accumulation. An imaginary vision of a national economy was set to legitimize the shared goal of the new interventionist state. The Bretton Woods agreement, for instance, imposed strict limitations on international movements of capital in order to protect the new national macroeconomic planning measures of the 1930s (Helleiner 1994, ch. 2.) Notwithstanding its contradictions, the assumed relationship of spatial correlation between economy and society contains an assumption of subordination that remains commonplace throughout the social sciences. Among sociologists it is represented most clearly in the work of the structural functionalists. Talcott Parsons, for instance, viewed the economy and politics as two functional sub-systems of the ‘social system’. Similarly David Easton (1953) followed the Marginalists in defining the political system as an alternative mode of ‘resource allocation’ analogous to that of the economy. These ideas were then echoed in the first wave of development theory, namely ‘modernization’, which was predicated on the necessity of the creation of ‘proper’ (economically, politically and morally) conditions for the economic success of the nation-state in a world economy (e.g. Rostow 1960). But in advocating a particular political system, modernization theorists and liberal economists, together with the rest of the literature predicated on the concept of a ‘national economy’, were already acknowledging the centrality of political choice. The notion of the national ‘system’ – which is in practice the discrete ‘political’ and ‘economic’ systems of the state working in combination as the ‘national economy’ – implied not only a discrete separation from external environments (the world market, other ‘sovereign’ states), but also a self-organizing and self-producing capacity on the part of the nation-state itself. National economic policy is, after all, a matter of choice, a choice which is, ostensibly at least, open to ‘the nation’. The nation may choose to adopt open borders and a free trade policy, or it may

Introduction

15

choose instead a varying degree of protectionist policies. Economists have on the whole argued in favour of the former and against the latter, but the issue of choice, and hence the ideological debate surrounding national choices, was central to the political debate. During the golden years of the sovereign national economy, therefore, the period between roughly 1930 and 1980, we saw impassioned debates as to which national economic policy was to be taken.7 It was a period characterized throughout the world by a battle between ‘isolationists’ and ‘universalists’, between advocates of protectionist, nationalist and socialist policies, and advocates of free trade and open borders. Under this ideological guise, governments of all political persuasions and degrees of democracy presented their constituencies with a stark choice between ‘going it alone’ or submerging the national economy in an increasingly transnationalized economy. These sorts of political debates were predicated on a single central assumption, namely that the state was the sole and proper intermediary between the demands of the international market and the demands of its citizens for social and economic equality and other social goals. The ‘myth’ of the nation-state can be seen broadly as a guide for action. The problem that globalization poses, so the argument goes, is precisely that by ‘eroding’, and ‘undermining’ not only the state, but also the ‘idea’ of the state, the entire format of political life that dominated the past two centuries is also under threat.

The trifurcation of the state What then, is this new narrative of state and society that has emerged to replace the old one? How do the new imagined economies of globalization differ from the imagined community of the nation-state? The dominant, if paradoxically hidden, imagery of globalization, the imagery that is at the base of policy-making, we argue, is not the conventional cartography of two-dimensional lines delineating spaces of territory, a shift from the national to the global, but a tri-partite ‘cognitive map’ distinguishing between distinct socio-economic spaces characterized in part by different socio-economic velocities. As this suggests, globalization does not create a global system that is little more than the ‘state-writ-large’ – by which we mean, having essentially similar attributes to the familiar system of nationstates as described above, albeit now operating on a vastly larger scale. Rather, in the emerging imagined economies of the state the various systems of authority and sovereignty can no longer be seen to occupy the same spaces as they did in the territorial state and nor are their boundaries coextensive. They are posited instead in an array of different normative and cognitive spaces whereby the boundaries of the state (which have never been depicted as so secure and so ‘real’ as they are in the context of debates

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THE IMAGINED ECONOMIES OF GLOBALIZATION

Private sector

Third sector/ social economy

Public sector

Offshore

Private

Anti-

Institutions: World/global economy Global markets Global firms Merchant banking Global cities Media corporations Global governance (WTO, UN, OECD, World Bank, etc.) TNCs Alliance capitalism

Institutions: National economy National state bodies Formal labour market Local state bodies Domestic firms Borders Domestic market Retail banking

Institutions: Local/peripheral economy Community Family Neighbourhood Welfare state Informal labour market

Processes: Globalization Technicization Securitization Virtualization Growth

Processes: Privatization Liberalization Deregulation Modernization Globalization Growth

Normative characteristics: Economic Dynamic Site of competition Impersonal Apolitical Fluid Future-oriented Developing Expanding Technological ‘Real’

Normative characteristics: Political Dynamic Competitive Entrepreneurial Flexible Globalizing Privatizing Enabling (business) Modernizing Market-led Employed Onshore

‘Mainstream’ Economy (‘Social inclusion’)

Processes: Dependency Stagnation Decline Exclusion Marginalization Obsolescence Normative characteristics: Static Uncompetitive Inflexible Pre-global Residual Dependent (aid or welfare) Un- or de-skilled Outmoded Third world Unemployed Underclass ‘Welfare’ and/or ‘informal’ economy (‘social exclusion’)

Change in status only available through: Flexibilization, Retraining, Reskilling, Insertion, Integration, Modernization, Development, Formalization, etc. FIGURE 1 COGNITIVE MAP OF THE IMAGINED ECONOMIES OF GLOBALIZATION AND SOCIAL EXCLUSION

Introduction

17

on globalization) are rendered multiple, complex and dynamic. For the purposes of our argument, we have labelled these emergent spatialities as the offshore, private and anti-economies. This trifurcation of socio-economic space does not mean that the emergent spatialities are equivalent. Rather, there is a distinct hierarchy between them and an unavoidable historical dynamic. This hierarchy can be expressed in two ways. First, the status of placeless globality (the so-called ‘borderless world’), exemplified here by the offshore economy, has a strongly normative content in relation to the other two. Globality, whether understood as a consequence of inexorable and concrete historical processes or as part of general social theory, is presented as an ideal socioeconomic destination for the other two, which must adapt themselves – or, rather, those people, places and institutions that they contain – to become more global. Second, a distinction is drawn between a space of globality and ‘near globality’ – characterized by competitiveness, fluidity, flexibility and ‘social inclusion’ – and a space of non-globality and/or anti-globality – characterized by boundedness, stasis, redundancy and a specific form of archaic ‘localness’, that of ‘social exclusion’. Despite the hype, people still inhabit – as the anti-globalizers are correct to point out – the world of states, and these states, if anything, are playing an ever bigger role in the control, organization and surveillance of daily life. But what the anti-globalizers (that is, those who deny that globalization is taking place) appear to ignore is the fact that these are very different sorts of states from the ideals of the nation-state to which they appeal. To begin with, a good portion of ‘national’ economic activity, particularly finance, has increasingly shifted towards a de-territorialized ‘space of flows’ (Castells 1996). This ‘offshore’ economy consists of largely unregulated legal spaces, external to but nevertheless supported by the state system and which appear to be perfectly suited for capitalist accumulation (Palan 2003). This space of the offshore economy has long been confused by the hyperglobalizers (whether proponents or opponents) with globalization itself. When such commentators talk about a global market, global trade or global finance, what they have in mind is essentially the offshore financial market. But however significant it might be, the offshore economy is far from encompassing the entire range of human activities in the modern world. On the contrary, for the greater proportion of humanity that is touched by globalization,8 the experience of global finance and offshore is mediated in one of two formats. These we describe as the private economy – or competition state (Cerny 1994) – and the anti-economy – a space of ‘exclusion’ lying beyond the norms and practices of the emergent global order. The private economy or the competition state is the increasingly dominant discourse of statehood in the context of globalization. This in itself shows the folly of the hyperglobalizers. No longer content to organize national life within its boundaries, the modern state seeks to legitimize itself

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THE IMAGINED ECONOMIES OF GLOBALIZATION

as a competitive entity operating in a globalized world – which means, as we will see, a world that acknowledges the centrality of offshore. This conception of the private economy has been expressed in a number of ways by several different authors and in many policy programmes, but in all instances refers to the need for the state, real or perceived, to ‘adapt’ to globalization. This adaptation, in all cases, involves a gradual withdrawal from the direct ownership of the means of production (usually through a process of privatization), coupled with various measures to increase the competitiveness of domestic workforces (for example, through (re-)training programmes, wage and productivity deals and/or the curtailment of union power), lower regulatory barriers to both domestic and international investment (for example, through the creation of export processing zones) and so on. Both ways of describing the adaptive moves of the state combine to transform the ‘public’ space of the nation-state into a realm that is essentially private and economic in terms of its normative character. This does not, of course, mean that the public character of the state has disappeared, but rather that with the fragmentation and dislocation of the spatial unity of the nation-state, the public realm has ceased to be the definitive one. This is, for example, clearly expressed in the discourse of ‘governance’, as differentiated from ‘government’ in many globalization debates. Rather than the primary role of the state being the reproduction of the ‘nation’, therefore, it is increasingly geared far more towards the reproduction of the private national economy against normative standards set by an ideal-typical economic ‘globality’. In its role as a normative space, however, the private economy of the contemporary state also plays another, significant function – that of policing the boundaries of the ‘real’ state. As such, the private economy of the state, however much it may be separate (at least theoretically) from offshore, in fact combines with it to form a single, if differentiated, space of ‘inclusion’. The private economy, therefore, also serves as the central axis upon which the mapping of the spaces of globalization is currently configured and in response to which a wide series of policy measures are enacted by states, firms and other international actors. The creation of this normative space of inclusion reveals a third aspect of globalization – one that has gained least attention and which has tended to be kept separate in the public and academic imagination; that of ‘social exclusion’. How and why have the poor come to be understood as the socially excluded? How, indeed, is it possible to conceive of a notion of social exclusion at all? Where is the space beyond the social to which the poor have been consigned? Where, for that matter, is the space of social inclusion? We want to argue that the emergence of both the concepts of globalization and social exclusion (both first appear in the 1970s) is not coincidental. Rather, globalization and social exclusion both represent attempts to capture something essential taking place in the nature of social spatiality and specifically the spatiality of the nation-state. The concept of

Introduction

19

social exclusion entails a subtle (and occasionally not so subtle) respatialization of social relations and, quite specifically, an elision of social and economic identities. As a leading critic of the concept of social exclusion, Ruth Levitas, argues, the way [social exclusion] is currently being used actually obscures the questions of material inequality it was originally intended to illuminate: it has been co-opted into a different discourse, with different purposes and different effects … It presents ‘society’ as experiencing a rising standard of living by defining those who have not done so, who have become poorer, as ‘excluded’ from society, as outside it. (Levitas 1996, 7)

The curious spatiality of social exclusion alluded to by Levitas is a consequence of a profound dislocation of established conceptions of the normal relationships between economy, society and state. It produces a situation whereby the poor can be seen as outside of ‘society’, because the fundamental meaning of the ‘social’ is undergoing a significant change. Indeed, some have declared that these changes herald a ‘death of the social’ (Rose 1996, 1998; Delanty 2001) or a society entering a ‘state of siege’ (Bauman 2002). Increasingly, to borrow Scott Lash’s pithy phrase, the poor are constituted as a ‘class not in but of civil society’ (1994, 133). It appears to us, therefore, that the discourse of social exclusion opens up a third imagined economy within the contemporary state – a space of anti-economy where the rules of globalism and privatism do not, or do not yet, apply. By calling this the ‘anti’ economy we are not suggesting that spaces and places of poverty and exclusion are in any sense ‘uneconomic’. Rather, we are suggesting that in the emergent normative spatial hierarchy, certain modes of existence that were once accommodated within ‘the idea of the state’ (Schnapper 1998) have effectively been written out of ‘normal’ society – normality being defined in terms of proximity to ideals of ‘global’ economic participation and consumption. The power of the discourse of globalization is the underlying but always implicit assumption concerning the immanent and mutually constitutive nature of these three spatialities. These three overlapping elements simultaneously delineate the content of the ‘global’ and generate a spatial and temporal hierarchy for the state in relation to it. Each is distinguished by different normative characteristics, types and levels of institution, dynamic historical processes, degrees of territorial embeddedness, and levels of access to reflexivity as an instrumental resource. The tripartite scheme above summarizes our attempts to map together the elements of the configured imaginary of contemporary techno-economic globalization. The offshore, private and anti-economies presented here are constituted within and constitutive of the narrative configurations of globalization. The three categories are not intended as fixed or wholly separate

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spatial categories, but rather combine to form an overlapping hierarchy of normative economic domains which are located within and across states to varying degrees, are subject to varying degrees of political and legal influence, and are constituted through differing institutional structures. Whilst each of these concepts, offshore, private and anti-economy, contain a strong implication of spatiality, these ‘spaces’ do not, and indeed are not intended in our narrative to conform to a conventional territorial geography, nor are they wholly separate from it. Their relationship to conventional territorial spatialities is best envisaged as becoming less place bound, and therefore increasingly ‘placeless’, with increasing globality. The relative degree of access to and mobility between these three domains by individuals and firms has significant consequences for their respective degrees of access to the fruits of the world economy. Each element of this scheme has both a discursive and a concrete institutional form already, though they are understood to be in a process of active evolution. These cognitive spaces, it should be stressed, are only partly descriptive of tangible spatialities. Although each can be associated with particular spaces, places and institutions, their importance lies less in what they describe than in what they narrate. In representing a dynamic respatialization of social and economic relations, the discourses of globalization and exclusion posit the immanent development of new spatial forms to which policy-makers, industrialists, jurists and ordinary people must adapt. The evidence for the existence of these cognitive spaces lies, therefore, as much in the pronouncements and futurologies of politicians and business leaders – which will lead to concrete institutional changes – as it does in tangible phenomena.

The global politics of poverty and the poverty of ‘global politics’ In the course of its growing plausibility and acceptance, a concept with the power of globalization entails the recasting and, in some cases, the forgetting of older stories (de Certeau 1988). Nowhere is this more true than in the case of poverty. As the basic metaphors of social life have changed, so specific sets of social relationships, which relied on older forms of social solidarity, have also changed. In the case of the poor, who have, for centuries, ‘always been with us’ – in other words constituted as part of a social whole to which ‘us’, the non-poor, have a responsibility – they have been renamed as the ‘socially excluded’, placed somehow ‘outside’ of society. The effects of this recasting of poverty as exclusion are, as a number of commentators have argued, profound indeed (for example, cf. Levitas 1996, 1998; Byrne 1999; Bauman 1998b; Rose 1996, 1998; Procacci 1978, 1999). In a world where identity is forged through consumption and is itself

Introduction

21

consumed, the poor have achieved, in Bauman’s (1998b) terms, the status of ‘flawed consumers’. As such they are ‘cast out of the realm of moral obligations’, in a society where mutual obligation on the basis of belonging has been replaced by mutual obligation to consume. However, and just as alarming, the respatialization of social relations which both of these concepts represent has far-reaching consequences for the possibilities of what ‘we’ can do about poverty. As the basic metaphors of social life are being transformed, as we are passing from the imagined community and into a world of disjointed and fluid imagined economies, so the possibilities of politics also change. This is not just because existing political institutions might be simply rescaled (for example, through the creation of ‘global’ institutions of governance such as the WTO or the International Criminal Court in place of/additional to national institutions), but because the meaning of the political itself must change. How can we resolve the increasing dislocation of geographies of economies from geographies of societies and polities? For some, the solution to the respatialization of the political engendered by globalization is straightforward; political engagement itself must ‘go global’. And some forms of political action have indeed ‘gone global’ on the streets of Seattle, Milan, London, Johannesburg and anywhere else the travelling circus of ‘global governance’ comes briefly to earth. Calls are also heard, often as part of the same strategy, to ‘go local’, to resist the inexorable rise of faceless global institutions by reinvesting in community and place. Colin Hines (2000), for example, has gone so far as to propose ‘localization’ as the most appropriate and salient manner of resistance to globalization as though somehow simply going in the opposite spatial direction will serve to reinvent older forms of political and social solidarity. For all that we may share some of the concerns of the various anti-globalization movements that have developed in recent years, this is not what we mean here by the political. The anti-globalization movement is one aspect of a politics of globalization (that is, a politics that is reactive to globalization taken as fact) but does not represent, in our view, a particularly coherent response to the changes outlined above – the vertical and normative fragmentation of the very idea of society and, by extension, the possibility of an effective polity. In short, until we understand the complex respatialization of social life of which globalization and social exclusion are two important narrative components, the nature of the political will remain elusive. Of one thing we can be sure, however: the politics of the imagined community of the nation-state cannot pass easily into a viable politics for the imagined economies of globalization. Our reasons for writing this book are, therefore, quite deliberately and explicitly political, though we do not write in pursuit of a pregiven political agenda. Rather, the fundamental purpose of developing this argument represents an attempt to investigate and discover the boundaries of the domain of the political that emerge from our understanding of the emergent

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spatiality of the contemporary world. It is our contention that the political (either in the general sense or in the form of specific political responses) cannot simply or easily be read off from contemporary debates about globalization and/or exclusion, because to do so takes them too literally as descriptors of concrete phenomena. Rather, the spatialization of the political must necessarily be linked directly to the complex spatialities of the social that are being produced through the transformation of the fundamental imaginaries of the state. If this politics has, for the time being at least, a small ‘p’, this is because it is to be found less in the actions and pronouncements of the ‘official’ political debate – the public globalizers and their public opponents and the formal debate on exclusion – than in the ways the various narratives of globalization and exclusion have come to be incorporated and institutionalized in everyday life. If this suggests a much more mundane account of globalization and social exclusion than that provided by the passions of high politics, then this, we argue, is precisely because both globalization and social exclusion have become mundane. It is their utter normality – a normality that has been achieved with a quite extraordinary speed – wherein lies their power.

Structure of the book In arguing for the veracity of the respatialization of the contemporary state outlined above, we need to go through a series of steps. Before we get to the three chapters that make the substantive case for the existence of our three imagined economies – the offshore, private and anti – we need to outline in more detail the foundations of our argument. To do this, Part One consists of three broadly theoretical chapters. The first outlines the main current positions in the academic and policy debates on globalization, and its relations to theory construction and perception, both to establish the dominant conceptualizations of the debate and to identify any weaknesses and omissions. In devoting this chapter to the discussion of globalization we are not seeking to privilege this particular debate over that of social exclusion which, as we have already suggested, is closely linked to it. Rather, we are acknowledging the fact that globalization, however conceived, is the touchstone for the process of respatialization we are arguing for here. Globalization has acquired, in Bob Jessop’s (2002) terms, an ‘ecological dominance’ in current social debate, a dominance that we have no choice but to acknowledge. Following from this we lay out in greater detail our theoretical position, using elements of the globalization debate to explore the relationship between theory and reality; narrative and performance. In doing so we draw on the work of historiographers, literary theorists and theologians as much as we do economists, political economists and political scientists to

Introduction

23

explore the significance of narrative forms and structures in negotiating spatial change. Chapter 3 follows on from this, exploring in greater detail the dialogic process of socio-spatial change, arguing that the establishment of a narrative as powerful as that of globalization entails dual processes of retroscription and proscription – a simultaneous rewriting of the past and future which seeks to establish and maintain plausible stories about the present. Part Two consists of three chapters which examine each of our three imagined economies in turn, considering both their empirical forms – institutions, processes, people and places – as well as the ways in which they relate to each other in the production of a new spatial imaginary for the contemporary state. Our concluding chapter reflects on the implications of the production of this imaginary and specifically explores the nature of ‘the political’ within which it might be appropriate, possible and/or necessary to intervene in and alter it.

PA RT O N E

1 Perception, Representation, Theory Construction and the Globalization Debate

This book analyses the concrete processes of globalization through a study of the historical relationships between narratives of social reality and processes of institutional change. The basic argument that we make is nothing new: namely, that there are no objective relationships between observer and observed. As a result, the very process of observing a social phenomenon such as globalization, and therefore participating in, as some authors describe it, a process of ‘communal story telling’ (Ricoeur 1981), interferes in what is assumed to be a wholly externalized, ‘objective’ process. But clearly it is not enough to assert in a theoretical and abstract fashion the existence of some relationship between narratives and institutional change, we need to demonstrate concretely how these relationships have developed into their contemporary forms. We are, of course, not the first to have noted the importance of theory, perception and rhetoric, and not the first to attempt the ambitious task of incorporating these concepts into an analysis of globalization.1 Despite this, although only rarely explicitly acknowledged, the relationship between representation and phenomena, between narrative and globalization, is present, if only obliquely, in the majority of studies. But an analysis of this relationship is conducted often tacitly and rarely in a systematic way. Furthermore, by and large there is little attempt at drawing on the social scientific theories that deal specifically with the relationship between history and narration. This chapter examines the manner by which the relationship between globalization and narration has been portrayed so far. The chapter is not intended to be comprehensive, and it does not reproduce the progressivist ‘wave’ thesis that characterizes many histories of globalization. Indeed, in the first section of the chapter we argue against such progressivist accounts, partly because they tend to misrepresent globalization theory as evolutionary, and partly because, in doing so, they leave out

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older, apparently cruder versions of globalization, which none the less have played an important role in their time. After that, we go on to demonstrate the ways in which the problematic relationship between globalization and representation has been treated so far. For convenience of presentation, we divide existing approaches into four, characterized as mainstream, Marxist, Gramscian and culturalist approaches. We will examine each in turn, concluding with the way we propose to use methodologies drawn from cultural studies and literary criticism in our study.

The ‘wave’ thesis One of the favoured devices among academics in analysing globalization is the notion of phases or periodization. In a recent book, Charles Albert Michalet, himself the author of one of the earliest accounts of globalization (1976), identifies three phases in the evolution of globalization: the multilateral system of the early 1950s and 1960s; the internationalization phase of the 1970s that saw a period of massive relocation of manufacturing and assembly lines to the Third World; and globalization proper which began in the 1980s (Michalet 2002). In a previous study, one of us (Palan and Abbott 1996) described a similar progression in the globalization debate from the point where state and globalization were viewed as two incompatible structures, to a more nuanced approach whereby state and globalization are viewed as mutually constitutive. There are many other such accounts, the common thread running through them being the notion of evolution and progression; the idea that both globalization in practice and the globalization debate have evolved through phases, including phases of learned experience. The notion of progression and periodization is undoubtedly a useful device. But there are problems. The implicit assumption in academic accounts is that through discussion, debates, etc. the latest studies of globalization have learned from and transcended past analysis, as well as engaged in new empirical analysis, and as a result provide us with a fuller picture of the processes at work. However, if there is, indeed, a relationship between theory and practice, between narration and institutional change, then the older, apparently less sophisticated accounts must have played a role in shaping the very institutional change that the latter ‘fuller’ accounts seek to describe. The problem is that the wave theories tend to gloss over this historical relationship and, as a result, the latest, ‘fuller’ accounts are in danger of submerging the earlier histories, losing something important about the dynamics of the process. To take one of the better examples of the ‘wave’ thesis, Hay and Marsh’s edited collection of essays Demystifying Globalization (2000) presents the evolution of theories of globalization in terms of a series of

Perception, Representation and Theory

27

‘phases’ or ‘waves’ coming in a roughly chronological sequence. The first wave, dubbed ‘business globalization’, is largely dismissed for its ‘exaggerated parody of, and wild extrapolation from, contemporary events’, and because it is marked by a ‘casual empiricism’ (2000, 4). Business globalization consists of those accounts which, although particularly popular among business and management theorists, are also perpetrated by academics, journalists and many politicians. It is a body of theory that announces, with scant attention to the complexities of the issues at stake, the advent of a ‘borderless world’ (Ohmae 1990) marked by the ‘end of sovereignty’ (Camilleri and Falk 1992), the ‘end of the nation-state’ (Ohmae 1991) and the ‘end of geography’ (O’Brien 1992). This is the view of globalization as a powerful, driven and homogenous planetary force that is undermining the state system. The evidence used in support of business globalization is often crude, selective and of questionable validity; a fact that tends to confirm the suspicions of its critics that the theory is used instrumentally to justify questionable corporate and/or state activities. The second wave of globalization theory evolved as a critical response to the first, with theorists employing rigorous and critical empirical analysis to question and refute some of the wilder claims of their predecessors. This second wave…has pointed to a number of factors, each of which, taken on their own, puncture fairly convincingly such a global mythology. Taken together they constitute a devastating refutation of the business globalization thesis. (Hay and Marsh 2000, 5)

Second wave theorists such as Elmar Altvater (1993), Scott Lash (1994), Paul Hirst and Graeme Thompson (1996), Michael Mann (1997), Ellen Meiksins Wood (1997), have sought to unpick the claims of the first wave in two main ways. First, they argue that much of the empirical evidence used to demonstrate the globalization thesis points to the formation of a ‘triadic-core’ (Castells 1998) of the world economy (consisting of the US, Europe and East Asia) rather than anything truly ‘global’ and that this itself is nothing new. The great ‘novelty’ claimed on behalf of globalization, therefore, is either no more than an attempt to repackage older forms of (imperialist) capitalist domination in a new form or simply mistaken. Second, and following from the first, they demonstrate that far from withering away or being eradicated by globalization, the state persists as the primary location of political, economic and cultural identity. From this, most conclude either that globalization is no more than a myth of contemporary capitalism or that, if it exists at all, it is more fragmentary and contingent than its more slavish promoters would have us believe (Mann 1997). This second wave has given way, however, to a third. The third wave of globalization studies is broadly in agreement with the findings of

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the second, but has a more theoretically informed and critical take on globalization, and shifts the locus of attention from the macro to the micro. Hay and Marsh place themselves within this third wave: we reverse the conventional direction of causality appealed to in the literature on globalization. We ask not what globalization (as a process without a subject) might explain, but how the insertion of subjects into processes might help to explain the phenomena widely identified as ‘globalization’. Globalization (in so far as it can be identified as a tendency) becomes then for us not so much ‘that doing the explaining’ (the explanans) as ‘that to be explained’ (the explanandum)’. (2000, 6; emphasis in original)

‘Third wave’ theories take globalization seriously, but not as a purely external, causal process. Rather, globalization processes – understood to be multiple and often fragmentary (Dicken et al. 1997) – are examined critically to identify the political and economic dynamics underlying their ‘structuration’ (Hay and Marsh 2000, 7). Third wave theories bring together the empirical evidence of the second wave and a more reflexive and critical understanding of the nature of historical change to ‘demystify’ globalization – in other words to lay bare the means by which globalizing processes have come into being and have been recognised collectively as ‘globalization’. This characterization of successive waves of globalization theory (each coming progressively closer to the ‘truth’ of the process) is in may ways quite convincing and we do not wish to dispute that the ‘third wave’ is of considerably more sophistication and interest than the first. Indeed, this book itself probably falls within the ambit of the third wave. There is, however, a problem here concerning the nature of ‘truth’ with respect to globalization. The wave thesis asserts very strongly that from the array of available globalization theories, some are ‘better’ than others in that over time and through critical reflection they have become empirically more accurate, rigorous and complete and theoretically more sophisticated. As exercises in social scientific analysis, the second and third waves are presented as more measured and dispassionate with respect to their subject. Business globalization, by contrast, is dismissed as empirically flawed, theoretically naïve, ideological (or just plain ignorant) and anything but disinterested. Because business globalization ‘theory’ is unscientific and used instrumentally and ‘unscrupulously’ by corporations and states, it is therefore false and does not need to be taken seriously or subjected to any detailed analysis in its own right (Hay and Marsh 2000, 4). But however over-simplified and dubious business globalization theories may appear to the academic observer, they have none the less played, as we will see in this book, an important role in shaping the institutional

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manifestations of globalization. This point is, in fact, conceded by Hay and Marsh themselves: [The first wave] is still extremely influential amongst the self-styled media gurus of the ‘information age’ as it is amongst political and business élites and, indeed, among certain sections of the academic Left. It is tirelessly rehearsed in the editorial columns and business pages of the financial, tabloid and broadsheet media alike and is often associated with a certain neo-liberal triumphalism and the view (rather more widely held) that there is simply no alternative to neo-liberalism within the contours of the new global political economy. (2000, 4)

Strange, then, that such pervasive and persuasive theories can simply be dismissed, particularly by those who wish to advance a reflexive understanding of the processes of globalization. Indeed, it appears that business theories are pervasive and persuasive not least because they are crude and simple! But what does simplicity and crudity mean here? It means a particular type of narrative that is not particularly favoured among academics, but appears perfectly respectable to the business and policy-making communities (Thrift 1998b). Furthermore, ‘tireless rehearsals’ of these theories cannot be dismissed outright but must be viewed as perhaps the most significant aspect of their impact. For such crude theories are consumed and reproduced by those who soak up this torrent of media comment and analysis, further promoting and strengthening a particular narration of globalization which despite its flaws is ‘still’ extremely influential – in other words, serves as a guide for action. The problem with the belief that social scientific rigour can bring us closer to the truth about globalization – can ‘demystify’ it – is that empirical rigour and theoretical sophistication do not necessarily seem to have anything to do with plausibility. There are, therefore, different narratives of globalization particular to specific communities, and different voices through which they are articulated. What may appear to be the most sophisticated account in one voice for one of these communities is not necessarily the ‘latest’ or the ‘best’ for the others. Conversely, the ‘best’ theories may not necessarily be the most influential theories, and if they are not, they will play a lesser role in shaping institutional change than the cruder theories. The relationships between these different narratives, and between narrative and practice, cannot be resolved on a purely theoretical plane. It is an historical and hence ultimately an empirical relationship. For this reason, although much of this book concerns narratives and performances of globalization and the multiplicity of interpretations and voices they involve, our story is essentially empirical. This suggests that we need to differentiate the various theoretical approaches to globalization in other ways; ways that do not assume that globalization is a phenomenon that can be ‘known’ through the application

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of better theory, better methodology or the collation of more detailed statistics. In keeping with these claims, we differentiate between the various accounts of globalization not in progressivist terms, but rather in the way they treat the relationship between narratives and concrete phenomena. This allows us to identify four broad and to some extent overlapping categories within the globalization literature: mainstream, Marxist, Gramscian and culturalist. Whilst these may have developed at different times and in relation to/reaction against each other, we are not asserting any strong chronological succession in these categories. Rather, we understand these various takes on the nature of the relationship between representation and reality with respect to globalization as coexisting, but performing different functions for different sets of producers and consumers of globalization theory.

Mainstream approaches – globalization as truth We describe mainstream theories of globalization as those that take the concept more or less literally – as referring directly to real, concrete phenomena which have led or will inevitably lead towards the creation of a world characterized by the dominance of political and economic systems constituted on a global scale. As one might expect, this category contains the overwhelming majority of accounts of globalization, including those labelled ‘business globalization’ above. Whilst this category certainly includes those accounts of globalization produced by and aimed at the business community, it is by no means confined to it. Indeed, pretty much all ‘everyday’ accounts of globalization, including those produced by its most vocal opponents in the anti-globalization/anti-capitalist ‘movement’, fall into this category. That these accounts may take globalization literally, however, does not mean that they are necessarily unreflexive about the significance of representation and narration. Conventional social scientific praxis (as found, for example, in much orthodox economics and political science), although routinely recognizing the role of ‘ideologies’ and, as a consequence of the ‘constructivist turn’, the importance of rule constructions and norms (Sandholtz 1999), nevertheless generally treats the relationships between ‘words and things’ as a diversion; a noise, that can either safely be ignored, or alternatively, should be overcome. There are, first and foremost, the spheres of ‘real’ economics – the practice of resource distribution, production, consumption, and so on – and the sphere of ‘real’ politics – that area of human activity dedicated to the distribution of power and the organization of collective human needs and desires. The conflicting material interests of different classes and status groups shape these spheres, and those with the greatest access to resources and power manipulate the objective needs of

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society to their advantage. In doing so, as well as mobilizing the material and institutional resources of economic and political power, these classes harness the sphere of symbols and ideology to advance their parochial interests.2 The powerful role played by ideology and political symbolism is, therefore, a well-established theme even in conventional political thought. But the task of the political scientists, it is believed, is to ‘see through’ these ideologies and identify the real issues, material interests or thirst for power masked by ideology. Conventional social science, therefore, seeks objectivity by avoiding the alleged ‘pitfalls’ of ideology and representation by concentrating on ‘hard facts’. Not surprisingly, such approaches to globalization engage in heated debates over the phenomena (what counts as evidence to prove or deny the existence of globalization), and pay scant attention to the problems of how any of this is linked to questions of representation. All too often the assumption seems to be that the systems of representation, discourse and meaning that the concept contains and reproduces serve only to obfuscate the ‘real’ data and are not, therefore, themselves an integral part of the data used by the social scientists.3 Globalization is therefore treated as an objective ‘external’ force – ‘a variable’ in the words of David Lake (1999). Coming from backgrounds in business and mainstream political science, the largely untheorized and unreflexive theories of globalization which make up the bulk of mainstream approaches are perhaps predictable. However, there are other sections of the debate which still take globalization largely at face value, but which seek to develop more sophisticated and informed responses to it. Lake himself advances some of the more interesting ideas about globalization from a methodological individualist position. Questioning the conventional assumption that ‘globalization is a primary motor behind current trends toward expanded global governance’ (1999, 42), he argues that globalization is creating a ‘governance deficit’ because current forms of global governance structure are ‘reflected in the persistence of the early industrialising model in the United States … [and are] premised upon a large private sector that reflected the early American economy, the constitution left large residual rights of control to individuals and the states’ (1999, 45). Indeed, Lake could not be more forceful in his critique: The same inertia that prevented the United States from developing greater ‘state capacity’ is today preventing the realisation of greater or more effective global governance. The private actors prospering in the interstices of political authority are not leading the charge for super-national entities designed to regulate their behaviour more effectively. (1999, 46)

For Lake, although globalization is still an exogenous ‘variable’, it cannot explain everything. On the contrary, its concrete effects on state and global governance must be interrogated in terms of long-standing institutional

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structures, which affect the capacity of powerful actors to force through change. Essentially Lake is blaming the particular institutional mindset of US business culture for lacking the vision and imagination to create effective global institutions. Tacitly, Lake is acknowledging the central role played by narratives of, in this case, ‘proper’ economic, political and business practice in shaping institutional futures. However, since this is still a mainstream account of globalization, Lake has no need to forefront the possibility that globalization itself may be constituted in and through these same narratives. Lake shares with his target audience an understanding that the relationship between narratives of globalization and the institutions and practices they describe is self-evident – globalization is a fact and theories about it represent attempts to quantify, describe and predict the dimensions of that fact. In spite of the claims he actually makes, the realm of ideas and narratives – that of ‘theory’ – is regarded as passive and descriptive with respect to ‘real’ globalization. The same can be said of an entirely different branch of globalization theories, theories of ‘cosmopolitan democracy’. An example of the more sophisticated end of the mainstream approach, globalization is interpreted by this school of thought as heralding the rise of a global human consciousness and the possibility of a more fluid and multi-scalar – hence cosmopolitan – form of post-national democratic participation. According to Martin Shaw, for example, globalization can be interpreted as ‘the third wave of democratic revolutions’ (2001, 629). In a similarly utopian vein, Daniele Archibugi argues for the establishment of democratic international institutions which will manage the global system much in the way state institutions have traditionally managed national society. His very concrete and grounded proposal for the formation of a fully fledged International Criminal Court is, however, shot through with narratives about the ‘true’ nature of global society. For example: Cosmopolitan democracy suggests the creation of institutions and channels of representation for all individuals, not just for a single class. The objective is not the abolition of classes, but the more modest one of ensuring that the demands of citizens, irrespective of their class, are directly represented in global affairs. It means resolutions being taken by the majority, rather than by a single class … To be a cosmopolitan now is no longer simply to feel oneself a citizen of the world but also, and above all, a citizen for the world. (2002, 32; emphasis in original)

However laudable these suggestions may be, epistemologically they are constructed on a theoretical framework in which concrete institutions are to be established in response to real, global phenomena which generate, in turn, the capacity of individuals to ‘feel’ that they are ‘citizens for the world’. Echoing the universality of globalization, the subjective ‘effects’ of globalization can

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be mobilized to advance individual and collective narratives of identity and belonging for the creation of institutional forms of cosmopolitan democracy. Whether identity can be deliberately marshalled in this way is a matter of debate – it presupposes a very great deal about the way individual and collective identities are forged. However, the significance from our point of view is the largely tacit acknowledgement of the centrality of ideas and narratives about the self, and the self in relation to emergent spatialities of state and global systems, upon which this ostensibly ‘rational’ and ‘practical’ policy proposal is founded. Even where theories of cosmopolitan democracy appear to be at their most concrete, they are based fundamentally on changing social, political and economic narratives. David Held, for example, asserts that, ‘Globalization is best understood as a spatial phenomenon, lying on a continuum with the “local” at one end and the “global” at the other’ (1998, 13). In appealing to the idea of a ‘spatial phenomenon’, Held is both asserting the concrete reality of the emerging global system whilst, at the same time, imposing his own quasi-territorial imagery upon it. Held’s account, therefore, clearly involves the creative use of the instruments of narrative construction – descriptive metaphors which are designed to present a convincing image of a new scalar geography of world affairs. However, the role played by these representations is ambiguous. On the one hand there is a tacit acknowledgement of the significance of narrative representations in shaping the future direction of globalization. The purpose of Held’s image of the continuum and the broader argument of which it is a part is fundamentally one of political agenda-setting. Held is using a specific representation of the global system to open up new spaces of democratic engagement and participation and, along with Archibugi and many others, creates new institutions of governance and regulation appropriate to those spaces. He is, therefore, using these narrative tools instrumentally to provoke the establishment of new political institutions and processes that will be appropriate to and necessary in the new global order. On the other hand, the global order itself is placed outside of this realm of representation – Held presents globalization as a set of processes that exists independently of his particular descriptions of it. The attempt to ‘reimagine’ cosmopolitan democratic participation, therefore, involves the application of alternative ideas onto a pre-existent tendency within the world economy of globalization. It is certainly the case that these ideas are intended to alter the course of globalization, but the process itself is understood meanwhile to be logically and empirically prior to this ideological intervention. What is interesting about these various positions is not the relative veracity of their conflicting accounts of the consequences of globalization, but their degree of conceptual commonality. Drawn from the entire political spectrum, they view globalization as a logical and necessary outcome of

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a spatial expansion brought about through a form of time–space compression driven primarily by economic and technological change. The shift from nation-state to globality is essentially horizontal – the space of socioeconomic organization covers a wider area of territory – and hence the political issues faced by ‘society’ are the same, albeit within a wider spatial framework. For the cosmopolitan democrats, globalization is the extension and expansion of the liberal democratic model world-wide; for pro-market liberals, globalization implies the spatial expansion of the liberal state model. For the others, globalization is essentially the outflanking of the state and hence a shift in the balance of forces in national politics. And yet, these fundamentally empiricist claims are underpinned by a subtle constructivism – the instrumental and purposive nature of the descriptions used betrays cognition, however vague, that the ‘reality’ of globalization now and in the future is one based on interpretation and representation. Although we have represented mainstream approaches to globalization through academic works that are at least partly reflective about the complexities of their subject, authors who are neither social scientists nor business theorists produce the vast majority of such accounts. By far the greater number of accounts of globalization are generated by journalists, policy analysts, policy-makers, management consultants and other commentators for whom the reality of globalization is simply a fact to be reported on, adapted to or coped with. In addition to these articulated accounts, the increasing institutionalization of the idea of globality – particularly with respect to economic activities – means that an increasing majority of the population, especially in industrialized societies, encounter narratives of globalization on a daily basis through advertising, the symbolism of product brands, participation in banking and credit systems and so on.4 These aspects of the narratives of globalization are generally (and not just by mainstream approaches) treated as unproblematic artefacts – after-effects of the institutionalization of the emerging global reality. As such, their other function – that of carrying and reproducing effective and affective stories about the facticity of globalization – is simply ignored. We will return to the significance of these routine narrative ‘performances’ of globalization in the following chapters. For now we need to consider the way in which other sections of the academic community have responded to mainstream accounts.

Marxist approaches – globalization as false consciousness Marxist accounts of globalization form the greater part of those characterized as ‘second wave’ theories – bringing a critical rigour lacking in literalist ‘first wave’ accounts. It would be wrong to suggest, however, that these critical and oppositional approaches entirely shed the literalism of those

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they criticize. Indeed, a significant proportion of such accounts also takes globalization literally – differing from the literalists only in that the reality of globalization is seen as both negative and as simply the most recent expression of a pernicious world capitalism which is itself taken as ‘real’. In terms of the way issues of representation are understood, therefore, Marxists of various hues assume that there is a clear functional relationship between representation, ideology and power: power (generally equated with capital) instrumentally and cynically employing representations of globalization to legitimize itself. Essentially the picture is of a collective hypocrisy and/or conspiracy built into conventional descriptions of globalization as exogenous and inexorable. Marxist and various forms of radical anarchist and ecological critiques point out that the version of globalization promulgated by politicians, business people and neo-liberal economists which claims that globalization is a product of irreversible technological and economic change, is in itself an ideological representation intended to serve identifiable interests. The advantage in presenting globalization as an objective, ‘natural’ force, and hence as an exogenous event, is that it leaves government with little choice but to accept the dictates of the market. It leaves governments with ‘no alternative’ but to accept what under close critical scrutiny appears to resemble the neo-liberal fantasy of so-called perfect market competition. ‘Perfect’, not in terms of open competition (mergers, acquisitions, oligopolistic cartels, are all practices used by business to avoid the scourge of ‘perfect’ competition) or even in terms of equal access and support for Third World agricultural goods, but ‘perfect’ in terms of reduced government intervention, taxation and redistributive policies. The failure of governance noted by David Lake is explained from a Marxist perspective not as a failure, but rather an intentional policy aimed at reducing or removing the various regulation, taxation and redistribution policies of the Fordist state. At the same time, the presentation of globalization as an exogenous ‘variable’ is accompanied by the assertion that (a) policies of trade liberalization, financial deregulation and, more recently, tax harmonization and standardization have clearly advanced globalization; and (b) that in any case, national governments, particularly those of the core capitalist economies, have been active in promoting the very globalization that is assumed by mainstream theorists to undermine the state. Since the supposedly exogenous, technology-driven process is in fact an internalized policy goal of core states, it follows that any attempt to present it as an objective external force is therefore a political act. The deployment of globalization as a neo-liberal ideology is therefore presented as the creation of a false consciousness foisted on an unsuspecting world by the power-mongers of big capital. From a strongly ‘anti-globalization’ perspective, for example, Barry Gills argues that,

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‘Globalization’ has become an extremely broad concept that can encompass everything, thus rendering the term either meaningless, confusing, or seductive to the unwary. However, when the concept is expressed as ‘neoliberal economic globalization’ its meaning becomes clearer. (2000, 4–5)

He continues: The main historical thrust of neoliberal economic globalization is to bring about a situtation in which private capital and ‘the market’ alone determine the restructuring of economic, political and cultural life, making alternative values or institutions subordinate. (2000, 5)

This commonly held view of the relentless subordination of alternative forms of social organization to the market via the ideology of globalization is widely accepted. It is, however, every bit as seductive a view as the neoliberal version denounced for its confusing seductiveness. Just as for the certainties of the ‘no alternative’ liberal version of globalization, there is no need to bother here with the complexities of a reflexive order. On the contrary, the picture is straightforward: there are those who wish to confuse and seduce in the name of globalization, using it to conceal their true agenda, which is to bring about a new phase of capitalist domination and repression. Standing against this are those who ‘reject’ and ‘resist’ this ‘project’. The apparent advantage of such a position is that it implies a clear agenda for political engagement – the enemy is known, all we have to do is expose, denounce and fight it. But there are clearly problems with this approach. First, the denunciation of globalization and capitalism, which is explicitly the denunciation of globalization as capitalism, clearly conflates the two. Opposition to globalization, therefore, simply becomes a flat denunciation of capitalism in its ‘latest stage’. This is not an analysis of globalization, however, but a polemic against capitalism in general, as though they are one and the same thing. In our view, this is clearly not the case – capitalism is not a single, undifferentiated entity and is not ‘global’ in any complete sense – and the one should therefore not be confused with the other. Second, since we already know in advance what policy-makers mean when they employ the language of globalization, there is no particular point in paying close attention to their utterances. Why should we concern ourselves with the detailed minutiae of ‘their’ deceptions and lies when we already know their not-too-well-hidden agenda? To engage with the detailed content of discourses of globalization is at best pointless and at the worst positively dangerous, since we risk taking it seriously on its (their) own terms and, in doing so, participate in the reproduction of the lie. However, by the same token, there is no particular reason why we should pay attention to the ‘language of resistance’ since the agenda of the ‘anti-globalizers’ of this kind is also apparently perfectly legible. More

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problematic from our point of view is that such forceful, straightforward views of life, unfortunately often lead progressives and radicals straight into the camp of conservatives, nationalists and racists. The rejection of globalization, as the latest stage of capitalism, seems to be advanced in what often appears as nostalgic yearning either for the ‘national’ stage of capitalism, which suddenly seems to have been not so bad after all, or to some equally nostalgic vision of ‘community’, a nineteenth-century romantic idea denuded of class struggle, albeit dressed up as the ‘alternative’.5 The extraordinary degree of overlap between the agendas of communitarian and nationalist opponents to globalization, despite ostensibly being situated at opposite ends of the political spectrum, is just one illustration of this (Rupert 2000). In terms of the role of representation, the cruder end of the Marxist approach is almost as literal in its analysis of globalization as that which it opposes. The only difference is that ‘real’ globalization for the Marxists is a class-derived ideology – a series of cynical and expedient representations used to mask the truth of the ‘global gamble’ (Gowan 1999) from a hapless public. The issue of representation itself, as with the literalist approach, is of little interest because it is already known and thus can be ignored.

Gramscian approaches – globalization as hegemony Other approaches, including the more sophisticated Marxian ones, are careful to avoid such a stark and over-simplified view. Various commentators, who take their inspiration in one way or another from Antonio Gramsci, reject the view that theory and policy statements merely mask the agenda of an otherwise coherent group intent on bending the world to their will. Gramscian approaches accept, as indeed most mainstream theorists would happily acknowledge, that the globalization agenda is capitalist through and through. There is no debate about that. However, class hegemony, as Gramsci taught, is an on-going and dynamic process requiring intricate political strategies of alliance formation, complex processes of ideological adaptation, constant reinterpretation of events and processes, and the careful management of capitalist affairs, including the institutionalization of power gains. On this reading then, ‘globalization’ is understood to be a dynamic, multiple, and evolving set of processes and institutional responses, the precise trajectories of which are not easily predictable (Dicken et al. 1997; Peck and Tickell 2002). As such, the representation of this fluid and multifaceted concept cannot be reduced to a simple all-encompassing ideology, and nor can it be interpreted as a simple mask concealing hidden, but none the less clearly known intentions. Whatever the consequences of globalization, which has so far certainly failed to fulfil its promises for the vast majority of the

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world’s population, these outcomes are not simply the result of mean-spirited class-conscious strategies. Rather, ‘ideas’ including, but not reducible to ideologies, are embedded in practices and vice versa. The practices of the business manager and the political bureaucrat shape and are in turn shaped by their ‘perspective’ of the world, a perspective experienced subjectively as genuine, and their perceptions of what is feasible and desirable. Stephen Gill, for example, interprets the thick maze of transnational regulations, standardization and norms of conduct that have evolved over the past three decades as a form of new ‘global constitutionalism’ (Gill 1998).6 Unlike Lake, who views these changes as evidence of a deficit of governance due to a combination of the traditional power of ‘private actors’ in Anglo-Saxon social formations, and an inevitable ‘inertia’ on the part of the institutions of the nation-state, for Gill this is an intended outcome driven by identifiable class alliances. To say that this is intended, however, is not to allege the type of nefarious conspiracy implied by the radical opponents of globalization. Rather, the purposive trajectory of globalization on the Gramscian reading is a product of a complex mixture of ingrained practices and discourses within particular class fragments, combining with different elements, gradually adapting to new conditions and emerging modes of understanding and representation. Global constitutionalism is driven primarily in the form of ‘problem-solving’, and it is aimed to facilitate trade, investment and the free movement of capital because this is considered a ‘public good’. Here, the whole category of ‘representation’ is seen in an entirely different light. Theories, discussions, debates, reports and so on are not insignificant to the understanding of processes of change as the literalists would have it, nor are they merely masks or ideologies to fool the masses. On the contrary, the whole gamut of what falls under the blanket category of ‘representation’ constitutes the way by which change takes place in the form of problem-solving, advantage-taking and adaptation. The practical and pragmatic character of much of the debate shows how important perception and representation are to policy-making. The key point is one of access, because the ‘practical’ debates and practices of business managers and bankers are quite different from the ‘practical’ debates and practices of Third World peasants. It so happens that for complex historical reasons the former have been able to create and reproduce a hegemonic position relative to the latter and hence play a far more prominent role in determining policy in the age of globalization. In this sense, Marsden’s observation that there are three related global ‘conversations’ – a conversation of the market, a conversation of practice and a conversation of community – might be brought into a Gramscian reading. The language of the market is the grammar and vocabulary that enables people to identify themselves as competitive individuals in a world dominated by the production and consumption of commodities. It is global

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in its reach, and it is a form of symbolic exchange that reproduces certain forms of capitalist accumulation. According to Marsden, the conversation of the market ‘consists of the system of symbols that define and calculate comparative advantage. It mediates a worldwide conversation about competition and consumption’ (1993, 496). The conversation of the market has to be distinguished, however, from the conversation of practice, which comprises ‘the system of symbols that finds likewise patterns in behaviour and calculates the consequences of actions. It mediates a world-wide conversation about human organization and efficiency’ (p. 496). Social change, therefore, does not come about purely as a consequence of quantitative calculation, nor is it simply the outcome of power and force; it is the edifice of customs and habits that render human interaction feasible world-wide. Finally, the conversation of community ‘consists of the system of symbols that defines identity in terms of responsibility and commitment. It mediates a world-wide conversation about how to repay debts to the past and how to understand hopes for the future’ (p. 496). These three ongoing and evolving conversations combine into a metalingual ‘monoculture’ which underpins and adds cohesion to the multiple and fluid elements of globalization. The hegemony of class is therefore articulated and maintained primarily through such a ‘monoculture’, which itself is heterogeneous and consists of different conversations. Indeed, the apparent plurality of the different conversations is a source of power, because it belies the underlying homogeneity of the monoculture. It may be argued that the hegemonic powers of the ‘market’ – ‘Westernization’, ‘Americanization’, ‘McDonaldization’ and so on (cf. Taylor 1999) – are driven primarily through these conversations – as opposed to intended, goal-oriented and political actions of business. This is language that is spread through the world, Marsden notes, by popular culture: commercially driven movies and TV programs, popular music and pulp fiction. Indeed, the global reach of the modern media makes this language truly international, ‘a world-wide idiom of human aspirations’ (1993, 499). There is, none the less, an important debate going on. From the Gramscian position, however complex and nuanced the treatment of representation might be, it is not the ‘language’ that is of interest, but the market itself, or, more appropriately, the logic of capital. Language is ultimately seen as a fetishized form of the market, the medium through which capital’s commodification tendencies are described and articulated. Capital itself has penetrated language and custom, so that representation and custom are effectively the voice of capital, considered to be an omnipotent social power. The form of circulation and communication of such ideas, the privatization of the media which allows the intended spread of a very particular ‘monocultural language’, are evidence of the class nature of these processes. Indeed, the language is not simply a conduit or instrument of

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domination, but ‘enables people to identify themselves as competitive individuals in a world dominated by the production and consumption of commodities’ (Marsden 1993, 503). It allows people to creatively and constructively engage in their own domination, while assigning them a certain form of identity which they then become proud of.

Culturalist approaches – globalization as narrative and performance The centrality accorded to the language in Gramscian approaches overlaps with a range of other theories we have brought together here as ‘culturalist’. By labelling them in this way, we are not suggesting that they all somehow subscribe to some common ‘culturalist’ agenda. No such thing exists. Rather, we are trying to identify an area of common theoretical and methodological ground that they share with respect to issues of representation. Specifically these approaches, despite emanating from diverse theoretical positions, overcome the ambiguities produced by treating globalization as an exogenous fact. Rather, they treat globalization critically in the same way that they would treat any other historically specific social concept – as a complex nexus of ideas, narratives, institutions and processes, drawn together in a manner that attempts to encapsulate and say something meaningful about the nature of contemporary social reality. Most importantly, all of these approaches question the representation of globalization as a fact ‘out there’ and stress the complex, disputed and contingent nature of the production of globalization as a social narrative and performance. As Wendy Larner and Richard Le Heron put it: What concerns us [Larner and Le Heron] is that most theorizations of globalization done from the core (e.g. global cities, world financial restructuring), are outlined as ‘the’ stories about globalization (e.g. disrupting the nationstate and the arrival of global processes), or from the core but positioning globalization as an afterthought to nation-centred analyses. (2002, 415)

In rejecting these ‘core stories’ (which also, on our reading, involves rejecting the predominant story about these stories – the ‘wave’ thesis), and calling for an approach based on ‘post-structuralist political economy’, Larner and Le Heron not only refute claims that globalization can be reduced to a set of empirical and/or ideological ‘facts’ but also decry the ‘undeconstructed’ methodologies and theories that underpin them. They call for a more ‘situated’ and ‘contextualized’ treatment of the concept of globalization, recognizing the reflexive nature of the process of the production of globalization as an idea, as well as a set of practices and processes. Globalization is no longer treated as an exogenous phenomenon and nor can

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it be reduced to empirical analysis of processes and institutions – however constituted. Rather, in claiming that globalization is a governmentality – after Foucault etc. (Dean 1999) – they draw in the insights of post-structuralist theory concerning the mutually constitutive and dialogic relationship between ‘words and things’ (Foucault 1970). In their words: globalization can be understood as a governmentality; both a spatial imaginary and a set of practices through which people and places are understood in particular forms. This opens up room to examine the progressive/regressive elements in neo-liberalizing spaces around competing views of subjectivities… How are economies, populations and individuals constituted (both discursively and technically)? How do people imagine themselves? Both of these questions require us to denaturalize, make specific and be more nominalistic about terms like economy, society and agency. (Larner and Le Heron 2002, 415)

Although very much a minority voice in the debate on the meaning and implications of globalization, such calls have been growing in recent years as commentators from longer established traditions come up against the limits of treating globalization as an empirical fact. This is partly because a more reflective and careful reading of ‘business globalization’ theory reveals an extraordinarily complex and rich but ambiguous narrative taking place at the ostensibly cruder end of the debate. It is also because as globalization has risen up the political agenda, the inadequacies of reactive oppositional positions have become all too obvious. Despite the vast amount of media attention that has been given to events such as the ‘Battle for Seattle’, no coherent oppositional position has developed, no positive or very convincing alternatives have been formulated and, in any case, the spread of globalization in practice continues unabated. One of the more important expressions of this rising interest in the role of narrative and representation has emerged from sources that might in the past have been considered supportive of the anti-globalization ‘movement’ and to represent the Marxist approach outlined above. Hardt and Negri’s Empire, as its title suggests, does indeed retain much of the tone and style of conventional Marxist/Gramscian political theory – indeed it is quite explicitly an attempt to reinvigorate communism for the twenty-first century. Whilst the authors clearly have tremendous sympathy with such positions,7 they reject them in their own analysis by coming to the startling conclusion that ‘Empire’ (a term they use in preference to the loaded, partial and empirically compromised concept of globalization) represents a positive political opportunity: Empire is a step forward in order to do away with any nostalgia for the power structures that preceded it and [we] refuse any political strategy that

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involves returning to that old arrangement, such as trying to resurrect the nation-state to protect against global capital. We claim that Empire is better in the same way that Marx insists that capitalism is better than the forms of society and modes of production that came before it. Marx’s view is grounded on a healthy and lucid disgust for the parochial and rigid hierarchies that preceded capitalist society as well as on a recognition that the potential for liberation is increased in the new situation. In the same way today we can see that Empire does away with the cruel regimes of modern power and also increases the potential for liberation. (Hardt and Negri 2000, 43–4)

The emergence of Empire offers renewed emancipatory and revolutionary possibilities, precisely because it involves a fundamental rewriting of the terrain of the political. Just as the development of the capitalist state for all its problems and contradictions represented for Marx and Engels a marked improvement on the ‘idiocy of rural life’ and the feudal past, so Hardt and Negri see in the partiality and fragility of the ontology of globalization opportunities for renewed revolutionary praxis. Crucially, this involves for them a reflexive engagement with the narratives of globalization on the part of ‘the multitude’, rather than the misplaced nostalgia of localist and nationalist agendas. They go so far as to propose a rather openended political manifesto – or rather an account of what a political manifesto would have to encompass to deal with Empire. In their words: Today a manifesto, a political discourse, should aspire to fulfil a Spinozist prophetic function, the function of an immanent desire that organizes the multitude. There is not finally here any determinism or utopia: that is rather a radical counterpower, ontologically grounded not on any ‘vide pour le future’ but on the actual activity of the multitude, its creation, production and power – a materialist teleology. (2000, 66; emphasis in original)

By stressing practice (actual activity) along with prophecy and desire in the promotion of a ‘materialist teleology’, this is a discourse that seeks to challenge globalization both as a set of processes and institutions and, at the same time, as a set of stories about the future. A ‘materialist teleology’ is a contradiction in terms if we accept, as the majority of anti-globalization and orthodox Marxist positions do, that the ‘material’ is the empirical. Here, Hardt and Negri present us with an ontology that is comprised as much by narratives, representation, ‘immanent desires’ and their embodiment through performance and practice, as it is by concrete institutions. This is not to suggest that such institutions are of no significance, rather that an exclusive focus on their concrete and ideological functioning – what Larner and Le Heron refer to as the ‘core stories’ – misses the point that they are but artefacts of a wider and more varied materiality.

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Myth, discourse and reality: the semisphere The account of approaches to globalization given above is necessarily brief and is not intended to be in any way comprehensive. There will no doubt be, therefore, other examples of globalization theory which fall outside or across the categories outlined above. For our purposes this not important – these categories are intended to be illustrative rather than definitive. What we have tried to demonstrate is, above all, that it is incorrect to argue that the question of representation has not been included in the globalization debate so far and remains somehow to be added. In fact, the problematic relationship between practices and ideas runs throughout all the various approaches to the concept, the major difference between them being the ways in which they incorporate reflexive consideration of these problems into their accounts of the concept or, more commonly, simply ignore their presence altogether. That said, even some of the most sophisticated and theoretically informed accounts of globalization do not seem to have finally come to grips with the function of representation with respect to a concept as powerful as globalization. Even its most ardent critics are to a large degree held in thrall by the possibility that globalization might well be ‘real’. If, as we believe, our thematization is broadly correct, however, then it suggests, as Larner and Le Heron do, a need for an alternative conceptualization of globalization focusing specifically on this problematic relationship between practice and narration. If, therefore, we are to transcend the ‘undeconstructed methodologies’ of the broad swathe of globalization theory, where should we look for alternatives? More importantly, perhaps, where should we look for alternatives that bring us closer to the subject at hand without reproducing the largely unreflexive ‘distance’ of mainstream and many Marxist approaches from their subject, and without descending into the intellectualist obscurantism of seeing everything as ‘text’ – the absolute relativism of crude postmodernism. The approach we will outline in the next two chapters, and apply throughout this book, tries to break out of the strait-jacket of globalization theory, by drawing on a synthesis of anthropology, historiography, cultural studies, literary criticism and psychoanalysis – all disciplines for which questions of narrativity, representation and identity are core considerations. Our approach is, therefore, concerned primarily with the basic tenets of human social organization – globalization and, by extension, social exclusion, being presented not as new social ‘facts’, but as partial and contingent attempts to manage human society in unique historical circumstances. The fundamental principles of such an approach are summarized well by Elemér Hankiss: Humankind has always had to create, and continuously recreate, a micro world for itself within a not too hospitable universe. Throughout the

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millennia of their history, people have developed two strategies for this purpose. (2001, 47)

Hankiss distinguishes these two strategies as the ‘Promethean’ and the ‘Apollonian’: ‘The technological, scientific, or Promethean strategy seeks to control the world physically and socially; to use resources of this world to create a more or less closed human universe which protects and fosters human life’ (2001, 47); the Apollonian strategy is the history of ‘how human communities have generated and continuously regenerated spheres of symbols intended to protect them in a dangerous and fearful world’ (2001, 48). Hankiss argues, therefore, that ‘from the very beginning of human history people have had to work and fight not only for their physical but also their “spiritual” survival. And they have done so by surrounding themselves with the spheres of symbols’ (2001, 49). Furthermore, ‘the two strategies, the technical and the symbolic, overlap’ (2001, 49). Daniel Bougnoux says the same thing when he writes: ‘Man … inhabits a world not made of things, but which is a ‘forest of symbols’ in which representations (not only verbal representations) constitute the familiar order … this empire of signs enfolds our natural world like a semisphere’ (Bougnoux 1993, 93; our translation). We inhabit therefore, in practical terms, not a world of ‘things’ – if by this we mean some purely objective world prior to the symbolic assignment of the object – nor a world of ‘ideas’ – a purely subjective world prior to objects. Rather, we inhabit what Bougnoux calls the ‘semisphere’: our feet may be firmly stuck on the ground, but our bodies move through a plasma of symbolic exchanges. Whether we are aware of it or not, the semisphere is made up, in Lacanian terms, of neither words nor things (Stavrakakis 1999). To complicate matters further, human psychology has evolved in such a way so that we live, and can only function well, as if we inhabit a world of things – the ‘real’ in Lacanian terms – and also that we tend to think of more complex phenomena as extensions of this ‘reality’. A failure of the subject to construct itself in its early childhood as a separate entity inhabiting a world of ‘things’, results in a pathology in adulthood in which the real and the hallucinatory are hopelessly mixed. At a second level of this ‘reality’, common sense, mundane concepts, as well as the language of power and authority – what Bourdieu (1991) refers to as ‘authorised language’ – provide us with a world that is simple, comprehensible and straightforward. The necessity for people to live their daily lives in ways that accept and operationalize this ordinary and normal world belies the subtlety and complexity of the psychological and social processes that are taking place. For example, to put it in the context of globalization, Jonathan Friedman notes that:

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The entities that are usually spoken of as constituents of global social reality – nation-states, regions, ethnic groups, etc. – are commonly understood as socially constructed aspects of total social processes. They are practiced and must be continuously so in order to exist at all. Institutionalization, culturalization (the creation of rules, codes, ‘models for’) are the primary practices involved in the stabilization of social process, as they necessarily involve a conscious replication of structure. (1993, 208)

The theoretical implication of such an understanding is to shift the balance of our investigation from a static emphasis on state and globalization as ‘natural’ physical forces or entities, to social forces that require dynamic processes of institutional replication and culturalization. So that, as we will see, the terms and concepts we use – national, state, global, included, excluded, rich, poor, and so on – are in themselves forms of institutionalization that require considerable social energy to maintain even a semblance of continuity. Before discussing the specific narrative renegotiations of continuity with respect to globalization, the next chapter lays out in greater detail the theoretical approach we are taking.

2 Performative Discourse and Social Form

The difference between history and science is not that history does and science does not employ organising schemes which go beyond what is given. Both do. The difference has to do with the kind of organising schemes employed. History tells stories. (Arthur Danto, cited in Mink 1974, 110) Economics … is a form of storytelling. Economic stories, however, are frequently taken as true and can have direct consequences in the material lives of individuals. Further, all narrative genres carry with them ideological implications and place limits on what it is possible to do, think, or be, within their boundaries. (Koritz and Koritz 1999, 408)

That there is a relationship between theories and realities has been the stock in trade of much Western philosophy, at least since Plato likened our knowledge of the world to the interpretation of shadows cast on the wall of a cave. This is a vast subject that we have no intention of covering here in a comprehensive way. That said, we do need to establish for the purposes of this book quite how we understand this relationship and what its implications are for the study of globalization and social exclusion. That is the task of this chapter. Broadly speaking, we draw on two sets of important debates: first, the tradition of thought that is concerned with the relationship between history and text, among which the names of Michel Foucault, Pierre Bourdieu, Cornelius Castoriadis, Michel de Certeau, Paul Ricoeur and Stephen Greenblatt are perhaps best known.1 Second, we will draw upon another, parallel tradition that is concerned with the relationship between space, narration and social praxis, within which Henri LeFebvre, Marshall Sahlins, David Harvey and Nicos Poulantzas have made significant contributions. By employing interpretative techniques drawn originally from linguistics, sociology, historiography and literary criticism, we wish to develop a positive theory of both globalization and social exclusion as narratives. In doing so, we would like to learn something about the processes that are taking place, but not to be restricted to dealing with these concepts solely within their own narrow terms of reference. We examine them both for their own merits but also, and perhaps more importantly, because of what the specifics of their manifestation and reproduction tell us about social reality at a more fundamental level. In other words, we take the narratives of globalization and social exclusion seriously, but not literally.

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History as narrative in the work of Paul Ricoeur Following the arguments developed by the literary theorists Scholes and Kellogg (1968), in a short, brilliant essay in the 1960s entitled ‘The Narrative Function’, Paul Ricoeur (1981) summarized as well as advanced many of the ideas underpinning our approach to the relationship between action and narration. Ricoeur’s aim in his essay was to show, according to his editor, ‘the structural unity of historical and fictional narratives’ (Thompson 1981, 274). Crucial to Ricoeur’s reading is the idea of the erosion of the ‘narrative distance’ between author and subject. Ricoeur rejects the common pretence that the narrator stands wholly outside of the tale he or she tells, and in doing so identifies a new kind of narrator, the histor. The significant difference between the essentially modern histor and the traditional historian, the ‘singer of tales’, is that the modern histor derives his or her authority, ‘from the documents which he reads and no longer from the tradition that he receives’ (1981, 280). The two type of historians, the traditional and the modern, ultimately serve similar functions, but they relate to their object of enquiry in different ways – the premodern historian reiterates established and traditional stories about the world and derives authority from a specific knowledge of the stories told and an institutionalized relationship to the texts (for example, the relationship between an ordained priest and the text of the Bible).2 The histor, by contrast, is not bound by inherited traditions or reliant on the same kind of institutional power. Rather, the histor constructs coherent narratives about the past, present and future, through the selection and compilation of documentary and empirical evidence about the ‘real’ world. But the shift in the roles of these narrators ‘takes place within the very concept of a ‘point of view’ which characterises the narrator as such and which must be placed on the same level as the configurational and reflective nature of the narrative act’ (1981, 280).3 Now, the anxiety raised by such an understanding of the task of history arises from its alleged implication of complete relativism (or nihilism). If any work of history, and the reality to which it refers, is nothing but a constructed narrative, then historical theory tells us more about the narrator than about the subject of narration, which is a nihilist preoccupation.4 Consequently, the danger is that all stories are equally valid and, therefore, that everyone’s truth, whether it belongs to Marx, Hitler, or Bush, is equally valid. This accusation of relativism, whilst common in relation to non-positivist social theories, is, in our judgement, not relevant unless one takes the notion of social constructivism to an extreme. The American philosopher Nelson Goodman (1978), who was repeatedly attacked for his unashamed and explicit relativism, dismissed his critics by pointing out that he never claimed that truth or reality were ever entirely open to interpretation and reconstruction.5 Whilst ‘worlds’ are made in the

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sense that they are human constructions, they are not made out of thin air. Rather, ‘worldmaking as we know it always starts from worlds already on hand; the making is a remaking’ (1978, 6). In other words, we are simply back to the basic proposition, namely, of the relationship between text and social reality, not of the privileging of one over another. As Clare Colebrook notes, ‘a text cannot be divorced from the process of its reception, for such process plays an active role in the meaning and effect of text’ (1997, 112). The necessity of a prior world, or, in Goodman’s conception, a multiplicity of worlds, implies that for all that history may be produced and made, it is made out of pre-existing conceptions of reality that are, to a greater or lesser degree, transformed through a range of processes. Goodman lists these as ‘composition and decomposition’, ‘weighting’, ‘ordering’, ‘deletion and supplementation’ and ‘deformation’. All of these processes allow for the possibility of new elements of reality to be created (and we would argue some aspects of the globalization/exclusion debates have this created nature), but also set the limiting condition that whatever new elements may be added to the world, they must also incorporate, albeit in a changed way, elements of existing worlds.6 Why, then, does such a limited set of narratives dominate in particular places and at particular times? Well, one answer (or one set of theories) maintains that the success of one discourse over another is a product of power: the strength of the dominant narrative does not derive from its intrinsic truth-value, but from the fact that it serves the interests of certain social groups. The idea that social discourses are controlled and promoted in this way, by socio-economic classes, gender groups, racial groups, powerful faiths and so on, is often associated with Marxist theories of ideology.7 An example of the way the narratives of history are seen to be constructed in such approaches can be found in the idea popularized by Robert Cox in international relations that ‘history is written by someone and for someone’. Many have read into Cox the idea that writing history is purely an instrumental pursuit, as if historical studies are used merely to serve someone’s interests. Ricoeur avoids both the extreme relativism of an entirely ‘intellectualized’ account of social reality and the instrumentalism of Marxian class analysis. For him, the parochial interests of historians and/or those they serve is only part of the story. Certainly ‘interest operates as a factor of selection of what seems important to a particular historian. The latter retains from the past only what, in his estimation, should not be forgotten, what is memorable in the strict sense’ (1981, 295). However, Ricoeur’s basic premise is that ‘the game of telling is included in the reality told’ (1981, 294); it is not something that can be avoided or overcome, and most importantly, it is not easily manipulated.8 The ‘narrative function’, to use his own phrase, is simply a central, constitutive and unavoidable dimension of human society. This is an important point. The

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rejection of the clear distinction between ideology and the real, and the idea that history, economics and science can be treated as forms of story-telling, raises two sets of important questions. First, to what extent can we develop a general theory of the relationship between history, praxis and narration? Second, how should we theorize the relationship between the rules of narrative construction – since all forms of story-telling are rule-bound activities – and the narrative itself – the text, the picture, the article, the speech, etc. – which is routinely taken to be a faithful representation of reality ‘out there’? As in the case of narrative and practice, there is no clear distinction between the two: how we understand the rules of narrative construction necessarily affects our understanding of the relationship between history and the text. With respect to the first set of questions, Clare Colebrook’s study of the narrative function asserts that the relationship between text and history cannot be given in a pre-formulated theory; on the contrary, the interaction between text and the world, between the materiality of the text and its produced meaning and between art and history should be the object of investigation in each critical practice. (1997, 26)

We should move away, she argues, from a general theory of narrative structure ‘towards the idea of text as practice’ (1997, 28). That is, text, whether literary or scientific, is a component of the very objective world that is under study; it is a material practice like any other material practice. Lacking a general theory of the relationship between text and the world, the second set of questions, concerning the relationship between the rules of narrative construction and the narrative itself, plays a more prominent role. If a narrative has this pervasive and foundational, but historically and socially specific, character, the issue of what then constitutes an historical ‘fact’ comes to the fore. The relationship between rules and utterances is centrally constitutive, as it is the historically specific rules of narration, Bourdieu’s ‘authorized language’, that fundamentally determines the nature of ‘fact’ in any given narrative. In a similar vein, Ricoeur rejects the positivist conception of the fact as a ‘singular statement’ – a simple, one-dimensional event which the historian inserts into the right place in the correct chronology. By positing such ‘facts’ as having a multi-faceted and reflexive nature, Ricoeur fundamentally alters their meaning as elements in narrative forms. [I]f we take account of the fact that historical events derive their historical status not only from their articulation in singular statements, but also from these singular statements in configurations of a certain sort which properly constitute a narrative, then what we must place at the centre of

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the epistemological discussion is no longer the nature of historical explanation but its function. (1981, 276; emphasis in original)

Historical events translated into narratives are not the links in some predetermined chronological chain, but also function as part of the definition of the chain itself. As such, ‘to be historical … an event must be defined in terms of contribution to a plot’ (Ricoeur 1981, 277; emphasis added). In the same way as a literary author imagines characters and events which will populate and articulate the plot of a novel so that the ending is plausible, so the historian (and with regard to the narratives of globalization and social exclusion, we will argue below, the economist, the journalist, the politician and the ‘person-in-the-street’) also writes with a plausible end in mind. Ricoeur again: [A]story describes a sequence of actions and experiences of a certain number of characters, whether real or imaginary. These characters are represented in situations which change or to the changes of which they react. These changes, in turn, reveal hidden aspects of the situation and the characters, giving rise to a new predicament which calls for thought or action or both. The response to this predicament brings the story to its conclusion. Accordingly to follow a story is to understand the successive actions, thoughts and feeling as displaying a particular directedness … in this sense, the ‘conclusion’ of the story is the pole of attraction. (1981, 277)

The historian, then, does not record events ‘as they happen’, but selects information and ‘facts’, fills gaps and draws ‘logical’ connections to meet a standard of narrative plausibility. Events are therefore recounted at least in part because they contribute to a desired and/or predetermined conclusion – and this, in turn, has profound consequences for the way in which we comprehend the nature of descriptions of the social world. But we have to be subtle about this matter: as Ricoeur asserts, ‘rather than being predictable, a conclusion must be acceptable’ (1981, 277; emphasis in original). The narration does not have to be linear or teleological, it merely has to be acceptable, and that means, in turn, that there may be many plausible endings in historical narratives. Looking back from the conclusion towards the episodes that led up to it, we must be able to say that this end required those events and that chain of action. But this retrospective glance is made possible by the teleologically guided movement of our expectations when we follow the story. Such is the paradox of the contingency ‘acceptable after all’, which characterizes the understanding of any story. (1981, 277)

Ricoeur is suggesting here, plausibly in our view, that since historical narratives have essentially the same form as fictional ones, they too are

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written in a manner whereby the entirety of the plot is written into every stage of the story – and just as a painter employs certain techniques to create the illusion of depth and time on a two-dimensional canvas, so the historian employs certain techniques to create an illusion of the progression of time and space. Furthermore, both the producers and consumers of such narratives are equipped with the relevant epistemological tools needed to follow the story in the proper way. For this reason, despite the fact that no one seriously defends positivist conceptions of historical fact, they are so crucial to our comprehension of narratives about the ‘real’ world that we (including the ‘we’ who do this for a living and should know better) find it almost impossible to dispense with them. Western traditions of historical explanation and social science more generally are by now so far removed from their epistemological foundations that they can no longer see them. Despite this, these foundations are continually bolstered by narrative practices of which we are only dimly aware and yet we reproduce them on a daily basis.

Crafting the narration of globalization: the act of framing Let us develop these ideas more concretely in the light of the globalization and exclusion debates. Like all social theories, theoretical and empirical studies of globalization and social exclusion are advanced through a series of controversies articulated in the form of political, journalistic, economic and academic pronouncements (although, we hasten to add, they cannot be reduced to such pronouncements). The debates and arguments that surround these pronouncements are aimed, however indirectly and perhaps without intention, at eliciting certain responses from a range of institutional actors – states, firms, political parties and so on – and, ultimately, from society as a whole (this is, of course, true of this book as well). Responses to pronouncements concerning social reality – the actual policy responses of the various actors addressed – are arrived at by what seems to be, and is certainly claimed to be, rational calculation. Quite often we are able, therefore, to retrace the steps that have led certain actors to pursue particular policies. We are also able to see in these processes a relationship between interests and policies.9 In the social sciences, quite often that process of retracing the rational calculations of actors in a particular social setting and over a given historical time-period is taken to be a complete causal explanation. But these sorts of explanations overlook the fact that an important theoretical step takes place prior to such ‘rational’ calculation: the all-important act of framing a debate, which is a technique of narrative construction. What does this mean? The idea of framing suggests that in order to identify and differentiate between outcomes and their stimuli, the participants in any debate must first generate, implicitly or explicitly, an area of broad agreement over how

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and where lines of differentiation are to be drawn. In other words, to make themselves heard, to bring certain areas of disagreement into sharp relief and to make political points clear, advisers, consultants, policy-makers and theoreticians must establish discursively an area of common understanding. This is so because the very possibility of such a separation is obtainable only if the parameters of the debate are well understood by its participants. The elements of debates concerning the meaning and transformation of social reality are embedded, therefore, in a broader discourse that ‘frames’ the specific discourse within a set of common terms of reference. One way of illustrating the importance of this common ‘framing’ is to examine what happens when a debate is conducted across the boundaries of two separate frames. In the aftermath of the September 11th 2001 terrorist attacks on the United States, a Muslim priest from the West Bank town of Tul Karem was reported to have offered a solution to the crisis in his Friday prayer; President Bush should convert to Islam and all would be well. Now, this may have been a logical and rational solution from the perspective of the priest in Tul Karem – the whole world would adopt Islam, establish a world Islamic State and peace would come on earth – but clearly it was an absurd proposition as far as the American establishment was concerned. Here we see the power of framing. What seems to the cleric from Tul Karem a wholly serious and logical proposition within the frames of meaning he inhabits – Islam and the politics of the West Bank – is so completely outside the frames of reference of the US establishment as to seem at best an absurd joke and at worst wholly offensive. In fact, all we are witnessing is the (very unequal) meeting of two distinct frames of reference; two mutually exclusive frameworks each boasting their own histors. Notwithstanding these differences, during the process of coalition-building conducted by George Bush and Tony Blair prior to and during the subsequent offensive on Afghanistan, an active process of reframing of precisely these political and theological debates took place. It may have been more limited than the priest from Tul Karem would have wanted, but it did produce a reasonably common frame of reference within which Western and Islamic governments could, if only temporarily, meet. Bush may not have converted to Islam, but he certainly began to make references to the Koran very quickly indeed! Here the framing was done for instrumental political purposes. In academic work the framing is less instrumental and intentional, but serves none the less as an important preparatory and ongoing theoretical operation. It is a narrative device which persuades the reader and/or participant of the importance of political and social messages and requires them to respond in particular ways. In the case of the priest from Tul Karem the dissonance between the two frames is obvious. In most cases, however, framing takes place much more subtly, and is often unrecognized by participants.

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Martin Heidegger, for example, demonstrates how the emergence of modern thought, specifically the Newtonian revolution, was in essence a revolution in ‘framing’. Newton was able to develop his theories because of the axiom being with ‘every body’. That means the distinction between earthly and celestial bodies has become obsolete. The universe is no longer divided into two well-separated realms … all natural bodies are essentially of the same kind … Accordingly, the distinguishing of certain places also disappears. Each body can in principle be in any place. The concept of place itself is changed; place no longer is where the body belongs according to its inner nature, but only a position in relation to other positions. (1983, 286)

As a result, ‘nature is now the realm of the uniform space–time context of motion’ (1983, 292). This act of framing created the possibility that the mode of questioning and the cognitive determination of nature are now no longer ruled by traditional opinions and concepts. Bodies have no concealed qualities, powers, and capacities. Natural bodies are now what they show themselves only in the relations of places and time points and in the measures of mass and working forces. (1983, 292)

Heidegger does not tell us in this essay precisely how the new frame has come about, but it is clear that the new framing, or epistemology as some would call it, employed spatial metaphors and linguistic constructs, as well as informed perceptions of space, time and the material world, to produce a new understanding of the world. It was done, moreover, in a way that abstract and, indeed, what were at the time considered rather artificial metaphors of space–time became in time so naturally interwoven into daily praxis, so imperceptible, that they passed from reflective thought.10 There are, therefore, different degrees and depths to ‘framing’. It is much easier for us to perceive and acknowledge the bounded frames of George W Bush and the priest from Tul Karem, because they are subject to processes of active and deliberate negotiation. The protagonists may not be aware that they are doing this, but the effect of their discursive and practical interactions, however indirect, always serves to redraw the boundaries of the debates in which they participate. It is far more difficult to ‘see through’ the longer historical processes wherein the framing involves (in Newton’s case) natural and physical relationships that appear to be ‘real’ and, therefore, less negotiable and closer to direct experience. Although clearly subject to a process of vigorous negotiation, the framing of the globalization debate operates at a deeper and less perceptible level than the Bush/Priest case, but does not involve epochal epistemological shifts of the kind discussed by Heidegger.

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At whatever level it is forged, however, a frame acts in two main ways: first, it delineates the boundaries of a debate by defining what is ‘proper’ to (and therefore what is properly left out of) it – much in the way the touchline of a football pitch differentiates between the inner space of the game where the rules apply and the outer space where they do not. At the deepest level, epistemological framing bounds the horizons of thought itself (Foucault 1972). Second, the frame establishes differential spaces within a debate, by defining the primary positions and arguments and the dividing lines between them – just as the lines on a football pitch establish the different teams’ ‘territories’. Once achieved, discursive framing renders the development of a position beyond its own limits, from which it can be attacked or stand as an alternative, very difficult (but not impossible).11

Globalization and social exclusion as acts of narrative framing An insight into the operation of framing around and through the concepts of globalization and social exclusion is to be found in the ongoing debate concerning the ‘future’ of the nation-state – future in inverted commas because, as we saw in the introduction, the debate emphasizes the imminent demise of the nation-state. Much of the discussion about the meaning of globalization and exclusion is framed precisely within parameters set by our common understanding of what the nation-state has been in the past, is now, and ought to be in the future. Many globalization theorists, for example, are explicit in their belief that the state is about to wither away, or at the very least to undergo fundamental change as a result of the disaggregation of national territory; others reject this prognosis and in fact reject the very concept of globalization as mere hype. They do so largely in defence of the idea of the nation-state, which they claim, with apparently considerable empirical evidence to support their argument, is as lively as ever. The relationship of social exclusion to the state is more ambiguous. At the very least, however, it implies a process of differentiation of the normative space of the state and the creation of an externalized domain which, if it does not threaten the state as a whole, reconstitutes certain core responsibilities of the state with respect to particular groups. In both cases, it is important to note that even when the whole purpose of the debate has been to declare the death of the state, these debates are predicated on the establishment of common frames of reference based firmly on the conventional conception of the territorially bounded nation-state. To debate the relationship between the state and globalization, in order that these concepts can function properly as descriptors and predictors of the future of the state, they have to be constituted within an epistemological frame whereby both the territorial state and the extra-territorial spaces opened up by globalization and social exclusion can be seen to

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inhabit the same spatio-temporal plane. Not surprisingly, the easier way of doing this is favoured. Hence, the ‘global’ system explicitly predicted by the concept of globalization takes a form that is essentially similar to but larger than the territorial nation-state; it is routinely accorded a concrete and apparently conventional spatial representation. According to this view, even relative to the largest continental states controlling significant portions of the earth’s land mass, globalization implies processes on a larger, planetary scale. Hence, the problem for the state is that an increasing portion of human activities is operating on a geographical scale larger than the state. This sort of spatial essentialism runs through the entire globalization debate and it is taken so much for granted that many fail to notice that it really is not empirically verifiable at all. To take one plausible argument against this type of naturalized framing of globalization, it is argued that the state is a concrete social organization with its own historical institutions and boundaries, while globalization is no more than a concept; a term used to describe a series of otherwise disconnected processes. Strictly speaking, the relationship between globalization and the state is one between a concrete institutional structure and a descriptive concept; that is to say, since they belong to separate epistemological orders, the extent to which they can interact is questionable. How could a mere concept change an institution as established and enduring, as real, as the nation-state? The concept of globalization may be able to say something about the state, but in belonging to a different order of existence cannot affect it directly. Globalization as a concept is therefore presented as external to the concrete reality of the state. However, as Justin Rosenberg (2002) has pointed out, a curious slippage has taken place within the contemporary debate whereby theories of globalization, that is theories that seek to explain the processes that have led to globalization, in other words theories that seek to explain the processes whose aggregate outcome may merit the appellation globalization, have somehow turned into what he calls globalization theories, that is theories according to which globalization has itself become the causal factor. Theories that describe social change leading to globalization turn out, all of a sudden, to be theories that explain social change as caused by it. This sort of slippage arises precisely because of the ways in which the nature of the epistemological framing of the debate itself changes. Because of the overwhelming concern with the spatial dimensions of economics and politics in conventional accounts of globalization, it has very rapidly turned from being employed as a speculative and sometimes voluntaristic concept (e.g. Ohmae 1990), to being treated as a spatio-temporal reality, equivalent to, and interacting with, the state (e.g. Giddens 1998). By the same token, the state itself has also been transformed through these processes of representation. Its territoriality, which has for many years been the inviolable and indivisible basis of the nation-state’s sovereign

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integrity, has become more fragmentary and fluid. In order to occupy the same frame of reference, we can see a process taking place whereby the global has come to be constructed more in terms of the state and the state in terms of the global. These two concepts, which for so long have seemed to be mutually exclusive, suddenly seem to be made of the very same stuff. So long as we do not enquire too closely into the precise nature of that ‘stuff’ – that we accept it as common sense and natural – the material reality of both is not only secured but becomes mutually constitutive. Globalization has not only become more ‘real’ (‘reality’ being articulated as the territorial conventions of the nation-state), reality has also become more global! Let us be clear, however, that our interest in the minutiae of the construction of the epistemological framing of globalization and social exclusion is not born of a desire to somehow improve or replace this framing with another that is somehow better or more sophisticated. Here and elsewhere in this book, we are not interested in showing the deficiencies of current framing in order to replace them at last with the ‘right’ framing. Rather, our aim is to be better aware of the complex relationships between certain theoretical and conceptual processes, including the operation of framing of arguments and subsequent policy responses. We want to demonstrate that policy is not reacting passively to ‘structural forces’ (merely adapting to something that is already existing), but rather that it operates within a context of intervening and intermediating cognitive processes. Indeed, a similar process of framing can be seen to take place in the context of social exclusion. As we will see, the concept of exclusion is rendered comprehensible in the light of the concept of inclusion. And the not too subtle message in the globalization and social exclusion literature is that the space of inclusion, though rarely defined explicitly (because it is so natural that it does not need defining), is in most cases understood to be that of the nation-state. However, whilst at one level this seems to confirm the status of the nation-state as the prime organization constituted in and constitutive of social space and, therefore, the provider of welfare and social cohesion, it also denies, or at least fundamentally alters, the role of the state vis-à-vis its citizens. By constituting a ‘space beyond’ the social, the debate on social exclusion, simply by presenting particular categories of the poor as ‘the excluded’, serves to disaggregate the spatial contiguity of the nationstate in a manner exactly parallel to that of globalization. Again, the territorial integrity of the state is both asserted and rendered more complex as the spatial requirements of the exclusion debate become naturalized. In this case, ‘reality’ (again the reality of the territorial state) has become more locally exclusive as exclusion has become more locally ‘real’. The nation-state (or, rather, a retrospectively developed ‘idea’ of the nation-state) serves, as we will see, as the point of departure against which

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difference can be gauged – a background and counterfoil for our understanding of globalization and social exclusion. The state has become the ‘white wall’, as Deleuze and Guattari (1987) call it, that provides the very possibility of signification. The surprising centrality of the state, framing the prevailing imageries of globalization – including those who firmly predict the end of the state – is a central component in our interpretation.

Framing time The frames of reference of the territorial state and those of globalization and exclusion are brought together in order that a specific set of processes can be articulated. They are intended to create a set of common terms through which a story unfolding through time can be told. This means that the temporal dimension itself must also be brought into line with the frames of reference of these debates – time itself must be configured to fit with the normative requirements of the unfolding narratives of the globalized and excluded world. Whatever else it may be, globalization is explicitly a story of temporal change – it posits up front the idea that the world is becoming ‘more global’. This teleological aspect of globalization, although it has been noted many times, has not led to much consideration of the way in which time is represented through the concept. Rather, the teleology of globalization has tended to be treated, particularly in Marxist analyses of ‘false consciousness’, as a convenient fiction used instrumentally to legitimize specific institutional changes brought in by powerful and interested actors. The temporal expectations of globalization are certainly deployed in this way, to justify all manner of specific changes in the nature of economies and societies (Peck 1998), but to reduce the temporal aspects of globalization to these activities misses some of its more profound implications. Specifically, globalization, in combination with social exclusion, represents the opening up of new normative temporal domains – the differentiated velocities of social life anticipated by Virilio (1986), Bauman (2002) and others. How does this come about? Here, Ricoeur’s analysis of the narrative function offers a clue. One of the big mistakes made by conventional historiographers, he argues, is that they view narrative as narrowly ‘bound to a strictly chronological order’ (1981, 278). If we accept this conception of linear sequential time – which, given that this is the way we experience the passage of time, is not hard to do – then the idea of history as narrative seems to be commonsensical. If time itself is sequential, then the task of the properly disinterested historian or social scientist is to excavate and narrate the ‘real’ sequences of ‘real’ history. However, this apparently natural process of strictly sequential, linear temporality has the effect of locking social life into a pre-determined

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‘structural’ unfolding of the system. If this were true then our capacity to influence the future would be reduced to zero – human life would simply be governed by ‘blind fate’ or an extreme form of structural determinism. Just as knowledge of social reality does not come to us in a ready-made, unmediated manner, so this is also true of social time. The stories we tell ourselves about ourselves (and not by any means only those of historians) are very specifically stories about the passage of time. They tell us what used to be, what will be (quite explicitly in the case of globalization) and, perhaps most importantly of all, how we are moving from the interpreted past to the anticipated future. As Ricoeur argues, any narration combines, in varying proportions, two dimensions: a chronological dimension and a non-chronological dimension. The first may be called the ‘episodic dimension’ of the narrative. Within the art of following a story, this dimension is expressed in the expectation of contingencies which affect the story’s development; hence it gives rise to questions such as: and so? And then? What happened next? What was the outcome? Etc. (1981, 278)

The episodic dimension holds a considerable power over the individual and collective imagination, not least because it seems to correspond to our lived experience of the passage of time. However, as a narrative account of the passage of time, any such history is a representation; like a ‘realist’ painting which tries to fool the eye into believing that the painted object is real, narrative seeks to represent historical events in a manner comprehensible to minds trained to think of time as sequential. This suggests, as Nelson Goodman (1978, 20) powerfully put it, that ‘reality in a world, like realism in a painting, is largely a matter of habit’.12 The realist habit of narrating history as episodic sequence is much in evidence in conventional theories of globalization. Such accounts seek to answer precisely the sort of questions that Ricouer poses: ‘And so? And then? What happened next? What was the outcome?’ However, as the quote above suggests, Ricoeur adds a second non-chronological dimension to the function of the historical narrative which runs counter to the ‘logic of the episodic sequence’. He borrows from Louis Mink the notion that any narrative, including historical narratives which claim to merely describe the found world, also constitute a simultaneous process of configuration of an entire period. Narrative, Ricoeur claims, does not consist simply in adding episodes to one another; it also constructs meaningful totalities out of scattered events. This aspect of the art of narrating is reflected, on the side of following a story, in the attempt to ‘grasp together’ successive events. The art of narrating, as well as the corresponding art of following a story, therefore require that we are able

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to extract a configuration from a succession. (1981, 278; emphasis in original)

This leads Ricoeur to an important conclusion: ‘every narrative can be conceived in terms of the competition between its episodic dimension and its configurational dimension, between sequence and figure’ (1981, 278). The narrative is a form of contestation, and any narrative displays complexity far beyond the mere chronological addition of facts. To broaden the argument further, the act of narrating any account of social reality and its development entails simultaneous processes of definition, interpretation and, in the more general sense, exclusion – the story of social reality is not merely ‘found’ and related, but is actively, if not consciously made. As Ricoeur’s editor and translator John Thompson argues, human action may be regarded as a text: ‘action, like a text, is a meaningful entity which must be constructed as a whole’ (1981, 15). The competition between the episodic and the configural will play a central role in our own narrative. We will seek to demonstrate that the simple imagery of globalization, as an end point beyond which the world can be reflexively rebuilt, is the product of a far more complex configural narrative than is commonly acknowledged.

Framing space Just as positivist conceptions of historical fact have been challenged by critical theorists and the hermeneutics tradition, so conventional conceptions of the nature of social space have been critically reappraised. In much the same way that critical historiographers have explored the constructed nature of historical narratives, recent critical geographers and others have responded to that fact that such narratives are always presented in spatial terms (cf. Crang and Thrift 2000). Furthermore, the spatial framing of historical arguments and the ‘visualization’ of events is not simply a neutral process independent of the events that are taking place ‘out there’. As a consequence the idea that space itself is not the natural, given substance we assume but that it is ‘produced’ has gained considerable currency in recent years. Space conceived as something actively and discursively produced can no longer be seen, as in conventional mainstream geography, as the passive backdrop against which the events of history are played out (Soja 1989). The idea that social space has a form distinct from physical space and that it is, moreover, socially reproduced, has been a consistent theme in a growing body of theoretical work in anthropology (e.g. Shapiro 1997; 1999), critical and social geography (Soja 1989; Harvey 1990; Thrift 1996; Keil 1998; Crang and Thrift 2000), literary theory (Berman 1984; Ross 1988, 1995; Moretti 1999) and sociology (Poulantzas 1978; Davis 1990;

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Lefebvre 1991; Zukin 1993; Castoriadis 1998).13 Although this has its roots in some of the earliest challenges to the spatial orthodoxies of academic geography, for example in the ‘social geography’ of the French anarchist and communard Elisée Reclus in the 1870s (Ross 1988), the development of this more critical and constructivist approach to social space is much more recent – dating primarily from the 1970s and a ‘reassertion of space in critical social theory’ (Soja 1989). At one level, the production of space refers to something we are less interested in here, namely the creation and transformation of the ‘real’ spaces of architecture and topography, in which the ‘background’ of social interaction, the city, the landscape and so on, the apparently neutral and unchanging backdrops to life, are viewed no longer as merely neutral containers but living, dynamic, affective and rich in symbolism. Even the most evident physical barrier, the limits of the earth, is in part a socially constructed limit, best exemplified in the commonsense adage, ‘the sky is the limit’. As Paul Virilio has demonstrated, however, we are living in an era in which literally the sky is no longer the limit. For Virilio, the technology that has effectively removed our physical barriers, also serves to remove barriers to the imagination. The limitless sky is for him the harbinger of a different sort of social relationship embedded in a new conception of territory where space, and indeed social reality as a whole, is ‘virtualized’ and internalized (Virilio 1997; Der Derian 1998). The task of such hermeneutic approaches to social space, therefore, is to ‘read’ the rich semiological map, stripped of its ‘naturalized’ symbolic value. But the issue of the production of space is not only about providing a more complex description of the landscape or reading of the ‘semiotic compasses’ of everyday life; to view the world of artefacts and architecture as a form of communication. Such approaches are very important, but of greater significance here is the notion that space generally, and not simply certain spaces, is discursively reproduced. As such, space itself, or spatiality, to use Soja’s terminology (1989), needs to be understood as a dialectic process that is constituted in and by all social forms, processes and practices. Perhaps the best known and most influential theorist of socio-spatial production, the French philosopher Henri Lefebvre, argued that a complex and dialectic spatiality is a fundamental aspect of social reality: Social relations, which are concrete abstractions, have no real existence save in and through space. Their underpinning is spatial. In each particular case, the connection between this underpinning and the relations it supports calls for analysis. Such an analysis must imply and explain a genesis and constitute a critique of those institutions, substitutions, transpositions, metaphorizations, anaphorizations, and so forth, that have transformed the space under consideration. (1991, 404; emphasis in original)

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Social and spatial relationships, Lefebvre claims, are mutually constitutive or, to put it terms of the narrative function outlined above, the social narrative is a spatial narrative. Our capacity to affect, think, imagine, speak, indeed to act in any manner whatsoever in society, is both enabled and bounded by a mental ‘map’ which is at the same time a spatial map. Such a map includes co-ordinates for the familiar concrete spatial forms that set limits on our physical movement – hard, solid spaces through which we cannot move and liquid, gaseous spaces that we can traverse. And yet, over and above these, it is the spatiality of our metaphors and our knowledge of the spatio-temporal environment that they reproduce, that contribute complexity to the plot and which create rhythms and conclusions. Social relations are, therefore, spatial relations; their concreteness is ipso facto spatial; ‘their underpinning is spatial’, says Lefebvre. This view, in turn, contains a dynamic theory of change: it assumes that spatial forms are never static, and considering that they underpin social relations, it follows that ‘social relations’ – the principles we can infer by analysis – themselves are undergoing continuous if not constant change. As this suggests, the production of the spatial environment is subject to a process of ‘emplotment’ similar to that of the historical narrative proposed by Ricoeur and others. That the former is plotted across space rather than time constitutes a significant difference, but not one that prevents us from applying to spatial narratives the same sort of critique that Ricoeur applies to historical ones. To adapt Ricoeur’s terminology, social narratives not only ‘extract a configuration from a succession’ – succession being a chronological temporal distribution – but also extract a configuration from a spatial distribution. Whereas the tension in the historical narrative is that between chronology and simultaneity – between, in Ricoeur’s terms, the episodic and configural function of the narrative – in spatial terms the tension lies between ‘territoriality’ and simultaneity. Here the simultaneous aspect of spatiality is different, however, in that it refers less directly to temporal simultaneity – things happening at the same time – than to spatial simultaneity – the co-presence, co-extension and overlapping of spatial forms that are expected and/or claimed to be discrete, internally and externally coherent and contiguous. Again, therefore, spatial narratives contain a hidden configural function which stands in tension to the foregrounded territorial function. Describing the landscape also encapsulates it, categorizes it and alters it. Just as, ‘the whole novel is present on every page’ (Weigand, quoted in Mink 1974, 114) – in order that we reach the acceptable conclusion – so we can read the entire spatial order at every point on the social landscape. This does not mean that social space is undifferentiated, rather that the pattern of differentiation is present in all of the various elements of the spatial narrative.

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So, for example, as we have already pointed out, conventional readings of the territorial state posit a very strong form of territorial coherence within national borders and a very strong form of territorial rupture at the border. This is reproduced through the languages and practices of law, economics (the ‘national economy’), politics, citizenship, ‘official’ language, culture, sport, religion and so on. Few would defend the idea that these many different spatial forms actually correspond to each other, or to the lines on the map – indeed such an idea is indefensible – but most of us nevertheless act as though this were the case. Indeed because, as in the case of the historical narrative, our spatial experience and expression is grounded in pervasive epistemologies and their institutional expressions which predetermine what constitutes space and how space is to be both read and inhabited, it is extremely difficult to act other than in accordance with prevailing spatial orthodoxies. By the same token, the theories of spatial causality that are contained within such orthodoxies render the reading, let alone transformation, of spatial dynamics very opaque. For example, Kathleen Kirby shows how the Enlightenment concept of the ‘individual’, the naturalized ‘individual-as-actor’ that we take for granted today, is a fundamentally spatial category.14 Or rather, she demonstrates how awareness of the spatial metaphor embedded in certain concepts helps explain a more general problematic of narration of the role of the individual in society. [P]roblems with the Enlightenment individual derive it seems from its spatial form. The ‘individual’ (it has become commonplace to point out), is ‘undivided’ within itself, and unquestionably separate from other subjects and the external environment as a whole. Graphically, the ‘individual’ might be pictured as a closed circle: its smooth contours ensure its clear division from its location, as well as assure its internal coherence and coherence and consistency. (1996, 38)

The implications of such conceptions, she continues, are profound: Inside the circle of the rational self all is consistent, co-operating; outside lies a vacuum in which objects appear within their own bubbles, self-sufficient Ego. Will, thought, perception, might be depicted as rays issuing outward from this solitary mind to play over the surface of Objects. (1996, 38)

This spatial reading of the individual begs a question about the nature of the line of causality that resulted in such a conception of the selfcontained, bounded self. Is it the case, for example, that the notion of the modern ‘individual’ has produced alongside it a ‘proper’ spatialization within which that particular historical construction of the self can be articulated and can function effectively? Or was it the other way around – did

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changing conceptualizations of space and concomitant spatial practices (for example, the organization of productive labour into specialist units separate both from each other and from the domestic sphere) impact on the nature of the individual? Neither explanation seems convincing on its own but rather both seem to be simultaneous processes, the one implying and reinforcing the other. Whatever is the case, the epistemological framing of spatial dynamics, such that they appear as and are claimed to be ontologies, only rarely reaches the realm of public debate. It is our contention that the debates on globalization and social exclusion, as fundamentally and unavoidably spatial narratives, provide just such a rare moment – a very open and public narrative re-configuration of sociospatial form which is re-plotting our basic social maps in ways we simply cannot ignore. As such, what is interesting about globalization and social exclusion is not that they involve a reconfiguration of spatial form; as implied above, this is immanent to social life. Social space is dynamic and therefore is continuously, if not constantly, reconfigured. Rather, what is important about globalization and exclusion is that the reconfiguration is of such a magnitude, and is taking place at such a pace, that it cannot remain hidden – it is forced out into the open. Since we, as academic commentators, politicians, journalists, economists and ordinary individuals are unaccustomed to dealing with such grand shifts in our basic conceptual framing at the level of explicit discourse, perhaps we should not be so surprised that the resulting attempts to figure out what is going on have tended rather to miss the target. By trying to deal with socio-spatial change at the level of the empirical – which is familiar and comfortable territory to a social science praxis still steeped in the predilections of positivism – we might expect to find silences around matters of epistemology and hermeneutics.

Framing the social If social life is made possible through the internalization of precognitive ‘maps’ of the social world, which encapsulate the content and delineate the boundaries of our discursive frames, where do we find them and how are they plotted in the first place? Clearly, conventional cartography presents us with one set of spatial co-ordinates – those most familiar as maps corresponding, however abstractly, to territories. However, for all their apparent groundedness in the physical forms of the landscape, such maps – particularly ‘political’ maps outlining the boundaries of national and sub-national state spaces – represent not ‘real’ spaces but political, economic and juridical boundaries imposed by people. As such, the boundaries of political maps are graphic symbols which embody the configural narratives of a prevailing spatio-temporal order.

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Whilst conventional maps are those that we recognize most readily and most uncritically, the configurations they contain are also narrated through other media whose mapping function is less obvious. The literary historian Franco Moretti observes that ‘literary maps’ – in other words, those maps implied and contained within fictional narratives – constitute important elements in the reproduction of spatio-temporal conceptions. Fictional narratives, Moretti argues, contain their own ‘geography’ which allows the reader to see two things: First, they highlight the … place-bound nature of literary forms; each of them with its peculiar geometry, its boundaries, its spatial taboos and favourite routes. And then, maps bring to light the internal logic of narrative: the semiotic domain around which the plot coalesces and self-organizes. Literary form thus appears as the result of two conflicting, and equally significant forces: one working from the outside, and one from the inside. It is the usual, and at bottom the only real issue of literary history: society, rhetoric and their interaction. (1999, 5)

The relationship of the literary novel to the production of space has, therefore, a dual character. On the one hand it serves to ‘write’ the spatiality of, in the case of Moretti’s work, the nation-state, not as it is in any empirical sense, but as it ought to be according to the normative predilections of the time, the author and ultimately the reader. The nation-state of the countless ‘fictions’, novels and social commentaries then merged, in time, with an ‘empirical’ nation-state constructed in the image of the imaginary one. This is Ricoeur’s argument about the merging of fictional and historical narratives. The novels that Moretti analyses are written within the context of a prevailing and hegemonic spatial imaginary which acts as a constraint, whether the authors or readers are aware of it or not, on the possible spaces that can be written. This corresponds to the delimited notion of ‘worldmaking’ developed by Nelson Goodman and outlined above. We might also add a third dimension to this, which is in fact implied throughout Moretti’s subsequent account of the relationship between the modern novel and the nationstate, that the imaginary maps that are produced by literature and the other arts are not socially ‘neutral’ with regard to their subjects. The depiction of the landscape of England in the eighteenth-century novel was not, therefore, innocent but, as Moretti notes, operated a form of ‘literary exclusion’ whereby the nation-state was reduced to a small area of central England, highly gendered and entirely divorced from the rest of the UK. Benedict Anderson’s (1991) famous account of the production of ‘imagined communities’ of the nation-state also examines the significant role played by fictional narratives in contributing to the formation of nationalisms and nation-states. He goes one step further, however, adding ‘the census, the map and the museum’ to various forms of vernacular and

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nationalist literature to explain the ways in which the territory of the state also came to delineate, at least in theory, the boundaries of the national culture. But the literary novel, and as Anderson shows, the whole paraphernalia of other communicative technologies, was in the process of producing (or rather affirming) an historically evolving notion of collective identities. These were not necessarily co-extensive with political boundaries, although interesting relationships evolved between the institutions of the state, political ideologies, and these broader ‘cultural’ socio-spatial formats, to generate between them a complex mapping of the nation-state. Indeed, considering that each nation-state drew on different, histories, different novels, operating within different territories, if sharing much in terms of institutional and political innovation, the concept of the nation-state can only be an ‘idealtype’; each nation-state produced a different, if in many ways similar, format. State theory, generally speaking, is interested in commonality, in finding the basic, universal principle. But this ‘academic’ pursuit is itself a component of the modern way of ‘story-telling’, its universalizing and homogenizing structure plays precisely the same role. Goodman makes a similar point with respect to the naïve empiricism of the sciences: Truth, far from being a solemn and severe master, is a docile and obedient servant. The scientist who supposes that he is single-mindedly dedicated to the search for truth deceives himself… He seeks system, simplicity, scope; and when satisfied on these scores he tailors truth to fit. He as much decrees as discovers the laws he sets forth, as much designs as discerns the patterns he delineates. (1978, 18)

The same is, of course, true of the social ‘sciences’. This implies that the relationship between concepts of globalization and social exclusion and those social sciences that claim to stand back from them and debate them at a distance is in practice much more intimate. Put another way, could we have thought of globalization or social exclusion, let alone institutionalize them in theory and practice, without the century or so old world of the social sciences? Globalization as fa–s How then do we propose to advance our investigation? In his famous study of the role of mythology in human societies, Ernst Cassirer demonstrates how thoroughly high modern Western cultures are drenched with atavistic fears and superstitions (Cassirer 1955). Such mythologies are not merely hangovers from a primitive past that we have yet to eliminate; they are integral to the very fabric of modernism and, by extension, to any and all politics. Myths do not simply play a legitimizing role. Émile Durkheim

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notes that ‘representation is not a simple image or reality, a motionless shadow projected onto us by things. It is rather a force that stirs up around us a whole whirlwind of organic and psychological phenomena’ (1984, 53). Representations, the stories we tell ourselves about ourselves and about the world we live in, are guides to action and forces of change in themselves, stimulating and constraining the entire gamut of human emotion, from happiness to despair, from violence to love. Societies are not simple or closed systems, they contain multiple levels and many different narratives. Nevertheless, an overlap between Hankiss’ ‘Promethean’ and ‘Apollonian’15 strategies is achieved at every historical period with the aid of what may be described as a foundational story. These foundational stories, without which social life would be devoid of meaning, have been central to Western philosophy and social theory for centuries. In Western philosophy, religion, particularly within the JudaeoChristian tradition, has conventionally provided a source for these myths, claiming originary and divine truths as the basis for social order. As modern philosophy has moved away from religious essentialism, so new secular foundations have been found in, for example, constructions built around ideas of ‘human nature’, economic ‘realism’, structural functionalism, psychoanalysis, the ‘nation’, and so on. In each case, these founding stories are constructed with the aid of differing and often multiple narrative structures, but the presence of such mythologies themselves remains constant. Similarly, contemporary societies also develop their own myths of origin without which they have no picture of themselves. In The Practice of Everyday Life, Michel de Certeau develops an account of human praxis which is founded upon an instituted and formally sanctioned mythic space. He employs the ancient Latin noun fa-s to describe what he calls a ‘mystical foundation’, without which human action cannot take place. ‘The creation of the fa-s – the institution of the foundation’, he remarks, ‘was conducted by special priests called ‘fetia-les’ who would conduct rituals which would ‘create the field’ necessary for political and military operations’ (1984, 124). The establishment of the fa-s, the socially constructed field or space necessary for political action, has historically not been confined to the Romans. Indeed, we argue that until recently – particularly in northern Europe, north America and other parts of the industrialized world – the ‘nation’ has played very precisely this role of the fa-s, serving as a foundational myth in modern society. For all its prevalence, the founding myth of the nation, as demonstrated most famously by Benedict Anderson (1991), does not take a single form across time and space, but comes into being, in part at least, to serve the prevailing interests and powers at work in a given place (Delanty 2000, 2001). In whatever form, however, the nation – particularly when institutionalized as the nation-state – has functioned historically as simultaneously a concept, a praxis, a political programme, a set of institutions and a ‘social fact’ (in a

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Durkheimian sense) all rolled into one. Combining all these elements, the concept of the nation ‘opens a space and provides a foundation for the operations of the military men, diplomats or merchants who dare to cross the frontiers’ (de Certeau 1984, 124). From such a perspective, the current debate on globalization, which on all sides tries to find a truth behind ideology and symbols, is missing a crucial point. Whether one belongs to the ‘booster’ or ‘hypercritic’ (Dicken et al. 1997) factions that have polarized the debate in recent years, it is not possible to somehow strip the ideology and/or discourse out of globalization, either to demonstrate its ‘real’ nature, or to refute its existence altogether. Rather, globalization can only be properly understood in the context and as an integral part of an emergent fa-s, one being deployed skilfully to replace and/or reform that established around the central fiction of the nation. Just like its predecessor, globalization is simultaneously a concept, a praxis, a political programme, (increasingly) a set of institutions and a social fact, all rolled into one. It is for this reason that debates about factuality of globalization have proved to be so fruitless. This is not to suggest that there is no empirical evidence to support the claims made for globalization – far from it, and we will analyse particular aspects of that evidence in subsequent chapters. It is, however, to state that anyone attempting to treat globalization as being only one of these things (as either a concept, an ideology, a political programme, an institutional structure, or a social fact) at once mis-recognizes its social and political function and, unwittingly, reaffirms its mythology.16 Although it is all around us, thoroughly infiltrating and shaping the world we inhabit, the narratives that underpin and give force to the concept of globalization as an articulation of a contemporary fa-s have been largely misunderstood. As a result the power, rhythm, nature and effects of globalization are also misunderstood. Our aim in this book is not to argue that globalization is the contemporary fa-s in any complete sense. That would be to misunderstand the way in which the fa-s itself functions as a precognitive framework for social identity and praxis and, in so doing, to reduce it to a single set of processes and institutional arrangements, those that have come collectively to be labelled ‘globalization’. As Montrose argues: ‘a closed and static, singular and homogenous notion of ideology must be succeeded by one that is heterogeneous and unstable, permeable and processual’ (quoted in Colebrook 1997, 25). In our description, we emphasize precisely these qualities of globalization as fa-s, heterogeneity, instability and permeability. We are not even particularly bothered whether the reader will accept the correlation between globalization and de Certeau’s notion of the fa-s. Rather, we will ask you to suspend judgement, to accept provisionally that any society, at any time, necessarily operates within some kind of fa-s and that globalization might be an integral and very significant part of its contemporary manifestation. We therefore also ask that our argument is

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judged less on its methodological and theoretical assumptions than on its concrete descriptions and interpretations. We will examine the phenomena of globalization (and by ‘phenomena’ we refer as much to the conceptual aspects of globalization as we do to its empirical manifestation) as evidence of changes in the contemporary fa-s of Western (post-) industrial societies – changes that are having consequences far beyond the spatial and conceptual limits of those societies. In analysing globalization as part of a history of the production of the contemporary fa-s, we propose a distinctive perspective on changes taking place in the contemporary world and in particular the changing construction of the normative socio-spatial relationships between globalization, nation, state and citizens.

Conclusion What we have argued in this chapter is that our conceptions and perceptions of social reality are framed for and by us in a number of different, but overlapping ways. First, an a priori framing, the epistemological plane without which social communication and meaning cannot take place because it is immanent to the social itself, delimits what can and cannot be said and done. For all that this clearly imposes constraints on social knowledge and action, such a plane also provides the foundation upon which debates about knowledge and action can take place at all. We are all bound to occupy such epistemological planes, even if we are aware of their existence and can be reflexive about the limitations on us that they imply. Being reflexive about the existence of gravity does not mean that we can abandon it. Unlike gravity, however, the epistemological plane is not an external reality, but an internal, social one. As such, whilst we may not be able to escape it, we can at least alter its dimensions; our conceptual foundations change – sometimes, as Thomas Kuhn (1962) most famously observed, quite suddenly – even if we still have to have them in some form or another. The conceptual foundations of the nation-state are, whether we are aware of it or not, being transformed by the related discourses of socio-spatial change that are globalization and social exclusion. As the passions aroused by both concepts and/or processes indicate, the effects of their incorporation into the fa-s of the contemporary nation-state are being keenly felt. However, responding to them effectively presupposes that we understand them for what they are. Resisting a narrative is, after all, a very different thing to resisting a set of concrete institutions – not least because if we misrecognize the meaning of those institutions, as evidence of the fa-s rather than the fa-s itself, we can end up reinforcing them by reproducing the very narratives on which they are based. The next chapter examines this process of framing in greater detail, by tracing the processes through which sociospatial epistemological frames are reproduced.

3 Configuring the Global: Globalization as Spatio-Temporal Narrative

[S]ocial science must include in its theory of the social world a theory of the theory effect which, by helping to impose a more or less authorized way of seeing the social world, helps to construct the reality of that world. The word or, a fortiori, the dictum, the proverb and all the stereotyped or ritual forms of expression … imply a certain claim to symbolic authority as the socially recognized power to impose a certain vision of the social world, i.e. of the divisions of the social world. (Bourdieu 1991, 106) Every story is a travel story – a spatial practice. (de Certeau 1984, 115)

As we have seen in the previous two chapters, narratives, and a tacit acknowledgement of the vital role they play in determining institutional change, pervade the literature on globalization. That the literature itself, except in a very few cases, does not reflect on this systematically means, as the quote from Bourdieu above suggests, that it lacks a ‘theory of the theory effect’ – it is unaware, somewhat ironically, of the source of its own powers of persuasion and reproduction. Without a general awareness of the significance of theory, let alone the particular role played by narratives, the debate has been unable to take advantage of the theories we surveyed in the previous chapter. Often, it seems, the globalization debate has become lost in its own rhetoric and, because it does not see rhetoric as constitutive of the ‘real’, cannot find its way out (Rosenberg 2002). How, though, do the ritualized expressions of globalization impose their vision? By what process can narratives become institutions? How can a narrative configure time and space? The purpose of this chapter is to suggest one way of understanding these processes both generally and specifically in relation to narratives of globalization and exclusion. We introduce a way of visualizing the narrative configuration of social space, taking the form of a configural cycle which, we argue, can be identified in both sets of discourses. We then examine each of the four phases that make up this cycle in detail, linking them directly to elements of the globalization/exclusion literature.

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Spatial form Proscribed

Spatial responses (e.g. coping, resisting, managing,…)

Retroscribed

Spatial trajectory (e.g. local to national to global)

Theory of causality. (e.g. economic determinism, nationalism, imperialism, etc.)

FIGURE 2

(RE-)PRODUCING SPATIAL FORM

The configural process Although in practice narrative configuration is an immensely complex and nuanced process, for the sake of convenience we shall divide our exploration of the narrative construction of the dominant thinking on globalization into four distinct phases. These phases, although presented above as sequential for the purposes of clarity, are effectively simultaneously produced (configured) as integral parts of a spatial story, irrespective of who is telling it or how it is being articulated. These four are: spatial form itself (including, but not reducible to, ‘real’ concrete spaces); a conception of the trajectory of spatial change; a theory of causality associated with that trajectory; and a series of spatial responses to the spatio-temporal matrix thus constructed. We can visualize this process schematically in Figure 2.1 The first phase of this cycle consists of a stated (in other words, narrated, represented and performed) conception of spatial form which is either taken to exist now, to have existed in the past and/or which is predicted in the future – the global, for instance, in the case of globalization. As this implies, it consists not of one spatial account, but two, which between them generate an impression of historical time. These two accounts are: first, a retroscriptive account which provides the origins of the spatial narrative; and second, a proscriptive account, which provides the end point. These two accounts are mutually constitutive – the beginning

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and end of the spatial story are written, as we saw in the previous chapter, with respect to each other. This two-phased spatial story implies a series of moves that rationalize, legitimize and describe (that is, emplot) the assumed and/or claimed transition from one to the other. The second phase, implied in the first, involves the identification of a spatial trajectory – the direction of spatial change. This spatial movement also translates into a time vector, producing the impression of sequential chronology. The third phase then defines a causal dynamic in relation to this trajectory – a mechanism or process is identified as the motor behind this change. In the case of the nation-state, for instance, the most-cited ‘cause’ of its spatial consolidation, at least in conventional accounts, is the existence of a ‘nation’ which demanded territorial unity to match cultural homogeneity (cf. Anderson 1991, 1998). In the case of globalization, the underlying process is almost routinely said to be economic; the power and reach of capital bursting through conventional territorial boundaries to create a ‘borderless world’ (Ohmae 1991). The fourth phase of this process consists of the various responses taken by actors (individual, corporate, institutional, etc.) to the unfolding spatial narrative. In the case of globalization, such responses have in the recent past taken the form of, to mention but a few examples, corporate restructuring, product rebranding, welfare retrenchment, fiscal reorganization, labour-market adjustment and, most visibly of all, violent mass protest. These various responses bring us back full circle, informed by and informing emergent spatial forms. In the next sections, we trace the ‘travel story’ of conventional accounts of globalization and exclusion by examining each of these four phases in turn.

Phase 1 – spatial form: retroscription and proscription Although the cyclical nature of the diagram above suggests that a particular spatial form should contain the starting point for the process of spatial reproduction, the narrative function analysed in the previous chapter implies the emplotment of a whole process and the hence the simultaneous production of the beginning and the end. For any story must have a beginning, an end and a narrative that links the two in a credible, chronological line – and the story of globalization is no different. The story is written, however, at a certain present, and thus involves the simultaneous conceptualization of a point of past departure and a point of future arrival (however vague) – a double-writing of past and future in the image of the present. This is an important point; we normally tend to take theoretical representations of chronological time at face value as though they corresponded to experiential time. The chronology of a social scientific narrative is supposed to echo the chronology of events in the ‘real’ world. Because such scientific narratives are presented as though separate (spatially and

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temporally) from the real world they describe, their constitutive nature is suppressed. But, if we think of this privileged class of narrative as ‘travel stories told’, and if we understand such stories, after de Certeau, to be ‘spatial practices’, then we must treat theory differently. As Ricoeur argued, the conclusion of any narrative is built into its plot – the end is written into the beginning and vice versa. The strongly implied sequential chronology in the narrative of globalization is a retrospectively ‘constructed’ chronology articulated through narratives of spatial and scalar change. So that what is presented as two sets of objective historical conditions, separated in time – the nation-state and the national economy, on the one hand, and the global economy on the other – in fact comprise two mutually constitutive elements in the narrative of globalization.2 Following in this line of thought, we note that in the first of these definitional phases the retroscriptive, mainstream globalization debates equip the coming global system with a point of departure – a state of nature against which the changes it represents can be gauged. In fact, nearly all accounts of globalization posit the same starting point from which the process of globalization is said to constitute a departure – the nation-state. The retroscriptive phase implies, indeed builds, a foundation for the second, proscriptive phase. Here a future, in this case represented by the image of ‘global’ spatial form, is posited as the end point of a process of transformation. Although contested, this implies a global space that differs fundamentally from the space of the territorial state and constitutes, variously, its compromise or destruction. The impression of chronological time, of movement between the point of departure and the point of arrival, is produced through the spatial discrepancy between these two historical points. Since globalization is spatially larger than, and in fact contains, the nation-state, the reader is left to fill in the gap between the two spatial orders by imagining a period of transition from one to the other. The period of time between the beginning and end of this process (neither of which need be defined very clearly so long as they are plausible in relation to each other) is then left to be ‘filled in’ by the reader who must conclude that it stretches between them.3 This form of narration glosses over the fact that for all the empirical evidence that can be brought to bear to demonstrate an historical transition from territorial state to non-territorial global space, neither can be reduced to the empirical evidence. Of course, there was never a moment in time when a particular ‘fixed’ form of a ‘nation-state’ reigned supreme, nor is there a moment in time when an idealized ‘global’ system will come into being. Rather, both the point of departure and the end point are imagined, but, because both are plausible, they ‘impose a more or less authorized way of seeing the social world’ (Bourdieu 1991, 106). The two concepts are therefore not merely describing a situation, rather what takes place is a double, quasi-chronological moment of retroscription and proscription

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through which the beginning and end of the transitional process in question are simultaneously defined in relation to each other.4 This is not to say necessarily that there was never any real transition between one phase and another; at this stage we are merely inviting the reader to pay greater attention to the narrative structure that has emerged to describe these developments, and to ask ourselves in turn whether under close scrutiny the narrative is not found wanting. The transition is, for example, often presented as an unproblematic ‘given’. For example, Ellen Meiksins Wood sums up the central claims of globalization theory as follows: Globalization … is in the first instance concerned with geographic space and political jurisdiction. What defines the present historical moment is supposed to be the breaching, transcendence or obliteration of national boundaries by economic agencies, and, correspondingly, the weakening of political authorities whose jurisdiction is confined within those boundaries – manifest not only in the expansion of markets but in the transnational organization of corporations, the more or less free movement of capital across national borders, and so on. (1997, 552; emphasis added)5

Globalization is assumed to have compromised a particular, known and established past, one characterized by ‘national boundaries’ and national economies. A conception of chronological time is smuggled into such accounts through these violent transitional metaphors of breaching, transcending and obliterating. The retroscriptive sweep of the globalization and exclusion debates presents the nation-state in a new light; as one unit in a coherent world of discrete national economies, maintained by sovereign states that to a greater or lesser degree represented the ‘natural’ boundaries of the ‘peoplenation’ (Poulantzas 1978). This may seem self-evident – it is certainly presented as such – but it is not. In fact, not long ago few sociologists and state theorists would have been prepared to accept such a description of the nation-state at face value (see for instance Jessop 1999; Mann 1984; Poggi 1978). And yet, many modern sociologists seem to have accepted this process of retroscription as a factual description, as if it were the non-theoretical element in the story of the changes represented by globalization. So, for example, Riccardo Petrella describes a very familiar process by which ‘Global markets are putting an end to the national economy and national capitalism as the most pertinent and effective basis for the organization and management of the production and distribution of wealth’ (1996, 62).6 Similarly, in his account of the coming ‘borderless world’, Ohmae (1991) can simply assume that in the past the political and economic boundaries of the state were identical. In these accounts, readers are invited to focus their attention on a single statement – that globalization is putting

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an end to the ‘national economy’ and the sovereign nation-state. Whilst this seems to many to be an obvious statement, given the transformation of the nature of the world economy in recent decades, the particular way it is couched is important to its meaning and function. In the case of Petrella’s assertions about the global economy, for example, the very architecture of his argument – its syntax – creates a hierarchy among the sets of facts presented, and the relation of the observer to them. This hierarchy leads the reader unwittingly to participate in, and therefore accept, that the second part, the one alluding to the national economy, is the less contentious element in the sentence. It is presented as unproblematic, not because we all know exactly what the ‘national economy’ might be, but because the syntactical structure of the sentence creates a powerful relationship between the past, present and future. Considering that the future is less known than the past or present, the future, represented by the concept of globalization, is the element within this statement that is treated as the more speculative aspect of the sentence. In contrast to the relatively unknown ‘global’ future, the past and present, captured in the concept of the national economy, are naturally deemed better known. So that in the contemporary spatial imaginary – the common sense of spatial experience and expectation – the nature of the national economy appears, by virtue of the structure of the argument, a solid ‘fact’. This is demonstrated by the fact that Petrella sees no need to define in any detail the content or meaning of the national economy or, elsewhere, the nation-state. Rather, he and many other scholars, devote their time to the more speculative element in their accounts: globalization. The structure of the sentence simply presumes a prior, self-evident definition of these two contentious spatio-economic and spatio-political concepts as opposites of that which is represented by the global. The existence of the discrete ‘national economy’ and the ‘fully sovereign’ nation-state – which as Fernand Braudel (1979) claimed, existed empirically only very briefly during the 1860s and 1870s and then in only a handful of European states – becomes both ‘given’ and ‘known’ phenomena against which the future can be gauged. Having established this ‘past’ for globalization, attention turns to the newly self-evident fact that globalization represents some kind of assault on it – obliteration, transcendence, breaching, and so on.

Phase 2 – the trajectory of spatial change As we have argued in the previous chapter, a relationship between the past and the future, between state and globalization, has to be narrated convincingly by the mechanics of the epistemological framing. In other words, state and globalization must share something in common to enter into a relationship with one another. Conceptually, the narrative must present them as inhabiting a common epistemological plane. Only once this plane

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is established can the imagery of historical movement be produced through implied changes in the nature of that epistemological plane. In the case of the globalization debate, that historical–chronological movement is narrated through the vehicle of the shift in geographical scale. State and globalization are thus placed on the same spatial terrain – they are deemed to be made of the same ‘stuff’. Ellen Meiksins Wood tells us this when she asserts strongly that ‘Globalization … is in the first instance concerned with geographic space’. David Held, as noted above (p. 33), does the same when he characterizes globalization as a spatial phenomenon. He continues: [Globalization] denotes a shift in the spatial form of human organization and activity to transcontinental or interregional patterns of activity, interaction and the exercise of power (1998, 13; emphasis added)

The picture drawn by Wood, Held and many others is that of a proliferation of spaces and scales of action which do not alter the nature of space itself. The assumption of spatial continuity frames local, national and global together so that they can be compared and contrasted. Once the idea of a continuum is accepted, taken as given, an historical semblance is generated to the plot through the metaphor of ‘stretching’. All of a sudden it simply ‘makes sense’ that globalization implies the stretching and deepening of social relations and institutions across space and time such that, on the one hand, day-to-day activities are increasingly influenced by events happening on the other side of the globe and, on the other, the practices and decisions of local groups and communities can have significant global reverberations. (Held 1998, 13)

Without entering into a debate about the veracity of the empirics Held appeals to, we can see how they are being configured into a coherent historical narrative; at least, one coherent enough to be plausible. Whether such spatial relations actually exist or not, the way they are presented here appears to provide evidence and weight to the argument that some form of spatial stretching is going on. The power of this sort of construction lies in its authoritative linking of selected empirics with apparently self-evident metaphors of movement between them. The metaphor of stretching, which implies a gradual, continual movement, is interpreted by the reader unwittingly as an historical explanation for the changes from the local to the global: so that under the guise of a spatial metaphor, it provides a crucial temporal link. That the metaphor of spatial ‘stretching’ is just that – a metaphor – is lost, with the result that what is a theory is presented as an unproblematic description of reality ‘out there’. However, as was argued in the previous chapter, metaphors and other linguistic devices used to describe social and spatial forms are never

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so innocent.7 The metaphors and analogies used within a narrative entail a configural function. They are not external to theory – they are an integral component of the theory. Although Held’s account of the spatial ‘continuum’ between local and global is unusual for being made explicit (most commentators simply assume that this is the case), it is none the less typical of the way a theoretical link between territorial state and globalization is established. From an analytical perspective it is interesting to note, therefore, that under the guise of apparently simple descriptive metaphors, it frames a set of political arguments about the future role of the state. The metaphor asserts, in effect, that globalization and the state share the same spatio-temporal domain. The metaphor is employed to ‘frame’ the argument, except that globalization is a more complex spatial terrain than that of the state. Whereas the political, economic and social activities of the nation-state were defined by and contained within its territorial boundaries, these activities at a global level are bounded only by the limits of the globe itself. And here comes the crucial message: the metaphor of spatial continuum is used by Held to persuade us of the political consequences of breaking down the hermetic nature of the state boundary and the consequent opening up of different spatial scales. This shows that, without enquiring into the truth-content of the argument – whether it can stand up to close empirical scrutiny and/or falsification – the structure of the narrative employed produces a subtle but powerful statement about the historical and chronological relationship between nation-state and global system, each of which is ‘discovered’ in contrast with the other.

Phase 3 – theory of causality Whatever the spatial trajectory of globalization is understood to be, any such change necessarily implies a causal dynamic. In the context of globalization, the causal dynamics most often cited, or at least implied, are those of economic and technological change. The expansion and transformation of the world economy, the internationalization of production, the development of the Internet, increasing use of computerized systems, the creation of the 24-hour global financial system and so on are routinely paraded as the forces driving the deterritorialization of formerly ‘national’ economies. Other manifestations of globalization, such as ‘global culture’ (Featherstone 1990; Walzer 1995), and ‘institutions of global governance’ which, respectively, have been presented as the successors to nationally organized cultural and political systems are generally seen to have come in the wake of economic globalization as after-effects. As with so much of the mainstream discourse of globalization, this fundamental techno-economic determinism tends simply to be assumed – techno-economic globalization being presented as having an essentially neutral, but inexorable dynamism.

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Whilst the recognition of economics as the cause of globalization has become part of the concept’s common sense, the very radical departure that this represents goes curiously unremarked. It is radical because the economism of globalist discourses contrasts sharply with the causal mechanisms underpinning the spatial imaginary of the nation-state which is routinely declared as its immediate predecessor. The causal dynamics of the territorial state were understood to be products of ‘natural’ and/or ‘traditional’ links between the ‘people-nation’, national cultural and linguistic unities and the national territory. The conjuncture of these various elements of the national consciousness produced the ‘imagined communities’ of the nation-states and provided the causal dynamic for their consolidation (Anderson 1991). Economics was also a part of this process, of course, with the economies of scale available to the bureaucratic state assiduously promoted by early advocates of the formation of a ‘national system of political economy’ (List [1844]1885).8 But economics normally came later; it was supposed to be employed by the nation-state to advance determinant goals. Economic changes were rarely presented as the sole causes of national spatial consolidation, nor were they externalized in the way they have been in the context of globalization. The not-too-well-hidden message then becomes one of the economy over society: the triumph of the market over people. Whether this is good or bad, our point is that the debate concerning the relationship between state and globalization, states and market, is not conducted in some neutral discursive realm where scholars are able to evaluate carefully and objectively these propositions: the debate is conducted with a narrative configured in such way that the triumph of the market is built into the story. The fundamental shift in the theory of spatial dynamics that this implies has gone largely unnoticed because of the way that the transition is couched in naturalist metaphors of ‘erosion’. The image of gradual, incremental movement, something that cannot be clearly defined and identified at any particular moment in time, lulls the reader into accepting the unstated proposition that the precise mechanics of transition, the forces and movements, are not something we should concern ourselves with too much – they are either too complex or perhaps too gradual and slow. Since processes of ‘shift’, ‘erosion’ and ‘stretching’ were gradual and natural, the point at which they became irreversible, when pre-existing social relationships were ‘stretched’ to the point of no return, that moment in time is not the significant moment. Indeed, because state and globalization are placed on the same continuum (that is, global is the same as state but more so), but the relationship of causality is not (that is, it represents a shift from political to economic principles), the actual forces of change, those that are shifting geographical scales from one end of the pole to the other, must be seen as external to both state and globalization. This theory again is found at the level of metaphors used. To return to Petrella for example, he argues (and readers will be familiar with the

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pervasiveness of such arguments) that ‘The growing globalization of the economy is eroding one of the basic foundations of the nation-state, i.e. the national economy. The national space is being replaced as the most relevant strategic economic space by the nascent global space’ (1996, 67; emphasis in original). In such accounts the future (articulated through globalization) ‘erodes’ the present and the past, both of which are retrospectively captured by the concept of the ‘national economy’. The use of terms such as ‘erosion’, ‘withering’, ‘fragmenting’, ‘nascent’ and other essentially physical metaphors are common in the globalization debate and, to our mind, are very important to the construction of its meaning. To take what is probably the most common of these, that of erosion, which implies a long-term, gradual, physical process, its importance stems from its ability to convey a number of images simultaneously. First, it contributes to the retroscription of the nation-state/national economy by suggesting that that which is eroded has also a quasi-material form. In other words, the metaphor of erosion contributes to the impression that nationstate may be a ‘natural’ state of affairs, both physically and normatively. The nationalist theory of the sacred unity of people and state, the ideology of the nation-state, is thereby brought in on the sly (Palan 2003, ch. 6). Not surprisingly, the complaints about erosion produced by globalization tend to emerge from nostalgic yearnings for the ‘natural life’ of the nationstate. Second, erosion presents us with an image of a dynamic force that is simultaneously unstoppable and wholly external to that which it erodes. Just as the slow drip of water will wear away the hardest rock, so economic globalization, presented as a long-term, gradual process immanent to the practice of economics itself (and therefore not a product of any state or states), wears away the ‘natural’ boundaries of the territorial state and its economy. Third, as this implies, erosion occurs when two natural phenomena meet – both the nation-state/national economy and the process of globalization (and, by extension, the global system that it is creating) are naturalized. That globalization thus entails one ‘natural’ spatial form ‘naturally’ overcoming another, neatly avoids the problems that would be raised were either of the end points of this process of spatial transformation, or the process itself, to be seen as the products of a human-inspired political economy of space. It also, by reinforcing the image of globalization as external and unstoppable, has a considerable bearing on the range of responses to the process. Interestingly, those who are largely critical of globalization, particularly from the various Marxist positions, replace these ‘naturalist’ processes with much more dramatic and violent ones. Meiksins Wood, for example, refers in the quote above to ‘obliteration’ and ‘breaching’ rather than erosion. The syntactical game here is very similar, in spite of the contrasting language. Globalization is still real, but is an act of violence done to older forms of social organization by (usually) big capital. Instead of lulling the

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reader to sleep with tales of gradual change, the violent language primes the reader to react with anger at the (capitalist) villains who are perpetrating all this obliteration and breaching. Globalization is not, of course, natural here but the nation-state retains something of the communitarian character found in more gradualist accounts. Globalization, by contrast, is externalized in other ways – as a class strategy – but is no less inexorable for that! Whichever of these sequential historical processes of spatial change is employed, underpinning them all is a powerful image of the nation-state. As a sovereign territorial entity, the state’s legitimacy is seen to have rested upon its capacity to mediate between the domestic economy which is its proper sovereign domain, and the external domain of the ‘pre-global’ world market. Although the disruption of this presumed spatial unity is presented as the primary consequence of globalization, it is at the same time constituted as a logical and, indeed, necessary precondition for globalization. Indeed, it is not clear which constitutes the other! Is it the presumably commonly agreed concept of the ‘national economy’ that defines ‘globalization’ as its opposite form? Or is it ‘globalization’ that defines the ‘national economy,’ again the latter being defined simply as the opposite of the former? Concepts are defined and made understood through the constitution of difference (De Saussure 1983). Concepts such as globalization or nation-state have no meaning aside from the implicit comparisons with other concepts. Despite clear appeals to a universal and inclusive planetary spatiality, therefore, for the most part the way the ‘global’ is narrated in the literature is much more limited: it means ‘not the nation-state’. In practice, the two concepts are mutually constitutive and mutually defining within narratives of globalization. It is for this reason that globalization has ‘all of a sudden’ taken on the causal role noted by Rosenberg (2002). Because it is implied to be chronologically subsequent to the ‘nation-state’, it seems logical that it should also be the causal process by which national economies are ‘eroded’ or ‘obliterated’. But this is not a theory, or at least not a proven theory, but a method that Petrella and others usually employ to advance a normative argument. Consequently, what we learn from Petrella, and many others of all political persuasions following similar arguments, is that in their view the global economy cannot coexist with a functioning ‘national’ economy and, of course, vice versa. The reason for this is that the two concepts ‘national economy’ and ‘global economy’ are descriptive of spatial containers and hence must be mutually exclusive because, it is assumed, they inhabit different positions on the same spatial continuum. They are also, however, mutually dependent for their meaning since each provides the opposite set of conditions that defines the other. It is clear that awareness of these linguistic and narrative techniques may help to evaluate with fresh eyes the empirics that are supposed to lend support to conventional narratives of globalization. The retroscriptive and

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proscriptive phases of the debate show us how the emplotment of globalization as an historical phenomenon takes place. They provide the temporal and spatial boundaries that contain the elements of the narrative and in their definition constitute a process of ‘filtering’ which renders some narratives more relevant (that is, having more descriptive and/or causal force) than others. Many accounts of globalization, for example, trace the process back through time to specific, ‘empirical’, moments. Commonly cited points of origin include, for example, the Marshall Plan, which is seen by many as having laid the groundwork for the process of economic internationalization, Americanization and subsequently globalization (Ambrose 1971). Accounts having such a start point are then reinforced by the identification of other empirical moments which contribute to the overall picture (for example, the oil crises of the early 1970s and all that flowed from them). Notwithstanding that these events have had enormous significance on the nature of contemporary political economy, however spatialized, their specific inclusion as elements in the story of globalization is not self-evident (neither event was specifically designed to create a global economy), but rather is an act of retrospective selection to reinforce a developing narrative. As this implies, any act of selection also entails a parallel process of exclusion. In this case, those events with the greatest causal significance in creating a global economy are all essentially economic, not least because they obviously fit the economic ‘conclusion’ to the narrative of globalization most clearly. However plausible the resulting narrative whole, it is one that systematically excludes other stories about the world which might lead to very different conclusions. We will consider these in greater detail when we examine the reinscription of poverty through the twin narratives of globalization and social exclusion in Chapter 6.

Phase 4 – responses and actions Responses to globalization on the part of national governments have been shaped in large part by the way the meaning of the concept has been constructed through the various phases of socio-spatial production outlined above. Importantly, since globalization is seen through the metaphors and acts of framing described to take the form of an external, natural and therefore unstoppable economic force, the proposed general response to ‘globalization’ by these experts has been one of adaptation. Since globalization is something external to the state and inexorable, so the state, through reform of its institutions of political, social and economic governance, must adapt itself to the new, post-territorial, state of nature. There is, indeed, little doubt that this ‘naturalist’ narrative has been deployed effectively as an instrument of change of domestic policy throughout

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the world. It is, in short, a political discourse masquerading under the guise of physical and spatial metaphors. In the UK, for example, Hay and Watson (2001) have identified the use of globalization as a discourse of ‘no alternative’ – a discourse that naturalizes change and precludes any form of alternative development.9 As they put it: ‘animated by perceptions of globalization’s perceived logic of no alternative, Labour now appears to act on the “neo-liberal necessity” of averting capital flight’ (2001, 11).10 More generally, the basis of Anthony Giddens’ ‘Third Way’ politics, which has been highly influential in shaping recent UK policy, is ‘that governance must adjust to the new circumstances of the global age’ (1998, 72; emphasis added). The European Commission’s White Paper on Employment, Growth and Competitiveness (CEC 1994) lays out four policy objectives both for its member states and for Europe as a whole which are explicitly defined as being necessary ‘in the wake of’ globalization (CEC 1994). As Peck (1998) has pointed out, globalization is increasingly ‘deployed’ by national authorities and corporate management as a ‘universal causal agent’ – the catch-all excuse that explains and legitimizes everything. The ‘deployment’ of globalization to rationalize action can be understood in two ways. First, globalization is being used as an ideological ploy, mobilized simply to justify existing parochial interests and/or governmental and/or management incompetence. Hence, for example, the massive overcapacity in the electronics sector world-wide – which has recently resulted in mass redundancies in the mobile communications and semi-conductor industries – is explained as a function of global market ‘adjustment’, rather than wrong-headed and short-sighted investment policies and practices and profiteering. However, such discursive deployment is not only ideological – it is not simply cynically used by governments and firms to cover their mistakes or legitimize unpopular policies. Rather, arguments concerning the nature of globalization can be seen as part of the reflexive nature of policymaking. In other words, irrespective of whether the claims made on behalf of globalization, and enacted through the various processes above, are correct or not, they are nevertheless ‘consumed’ as serious analysis and hence are subsequently deployed as an apparently secure basis for current and future action. Governments and multinational corporations are not, of course, the only actors responding to arguments about globalization. The most obvious alternative reactions to the practices and discourses of globality have come from the various anti-globalization and/or anti-capitalism protesters who have targeted WTO and G8 meetings and the outlets of multinational corporations. As suggested above, however, for all that these protests represent radically different readings of and reactions to globalization, they nevertheless reproduce much the same logic of spatial change. The protesters take the story of globalization seriously, indeed literally, and in reacting

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against it – in trying to impose upon it a different ending – ironically serve to reinforce it. They reinforce it both in the literal sense – steel barriers are erected around G8 meetings, for example, to keep them out – but also in the metaphorical sense. The image of an all-consuming, conspiratorial global capitalist ‘monster’ conjured up by the protesters serves only to reify it further; the monster becomes an integral part of the general fiction of globalization. The argument ceases to be one of whether globalization exists or not, but whether, since it is so clearly a reality, it is good or bad. This is not to suggest that any form of resistance to globalization is ultimately futile or that there is nothing to resist, and nor are we trying to impugn the motives of the majority of the protesters. It is, however, to state that resisting globalization understood as a phenomenon, albeit one that is externalized in a different way, as a ‘conspiracy’ on the part of big government and big capital, does not recognize the subtleties of the ways that narratives about social space operate. Indeed, the focus of resistance against those institutions that directly and explicitly promote globalization misses the point that the reproduction of the process is driven by much more diffuse and mundane forces. Although less vociferous than the protesters, other sections of national populations can be seen to be reacting to the narrative of globalization. The parallel process of ‘localization’ (or ‘glocalization’: Swyngedouw 1992), for example, although often presented as another ‘natural’ product of globalization, is also understood to be an expression of cultural reactions to globalization. Friedman presents the process of localization as a direct and necessary response to globalization. Localization, he argues, is produced as a consequence of the reflexive ‘negotiation of selfhood’ in response to the ‘chaos’ unleashed by ‘global decentralization’ (1990, 312). Localism in cultural terms, Friedman argues, constitutes an attempt to recapture, or indeed create, authenticity and particularism as the ‘specific product of the global transformation of the local society’ (1990, 327). The mobilization of the ‘local community’ as a response to globalization is earnestly promoted, less by such ‘communities’ themselves, than by many of the chief story-tellers of globalization itself. Giddens’ Third Way is perhaps the most striking example of this, combining a phenomenological account of globalization with an explicitly communitarian agenda as a response to it.11 Such mobilizations of ‘authentic’ local cultures as expressions of place and identity are, albeit differently from the anti-capitalism protesters, promoted as sites of resistance to the detached and impersonal globalization of the global economy. The neo-communitarian mantra of ‘think global act local’ and the promotion of such concepts as ‘globalization from below’ (Gills 2000; Hines 2000) are both attempts to mobilize forms of localist political and civic activism presented as an alternative to global capitalism. Again, however, such engagements with the issues surrounding globalization tend to contribute to its reification as something ‘out there’ that can be resisted by reinventing and reasserting the ‘in here’ of local community.12

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This may be a laudable aim, but drawing a boundary between the global and the local serves to contribute to precisely the same processes of retroscriptive and proscriptive spatial definition that are characteristic of mainstream accounts of globalization. By providing, as it were, the other side of the coin, neo-communitarian theorists serve only to make the coin thicker! Whether supportive, adaptive or oppositional, all of these responses to globalization as a process of spatial change, essentially take place within the narrative process itself. They are not, in spite of the various ways by which globalization is constructed as external, separate from the process they seek to describe. As this implies, in order to understand more fully the way that a concept such as globalization works, we need to step back from what has become a very narrow mainstream debate and examine critically the development and function of the concept and the many contradictions it throws up. To understand the way that globalization is serving to re-map the spatiotemporal matrix of the contemporary world, we therefore need to examine the process of retroscription and proscription as a whole and to recognize it for what it is. We also need to examine the causal dynamics of globalization, not as some externalized, neutral process of ‘erosion’ or economic determinism, but as a product of many complex processes, narratives and performances that are not confined only to those institutions and individuals who engage with it deliberately and explicitly.

Completing the cycle As argued above, these four phases, or something very like them, are immanent to any form of narrative spatio-temporal configuration – all ‘stories’ about historical space, past, present or future, irrespective of who tells them or how they come to be related, consist of these elements. This is in part a nominalist argument – the act of naming is an act of selective differentiation, regardless of whether the objects named are physically transformed in any way. The drawing together of the many and disparate ‘facts’ of globalization and their agglomeration within the ‘global’ narrative, brackets them off from the roles they play in other narratives (those of the nation-state most obviously) and provides them with an apparently logical and empirical connection complete with trajectory, cause and consequence. Important though this act of naming is, however, it is only the start of the configural process. Once the process so named becomes accepted as ‘logical’ and ‘natural’, the fact that it is a selective, exclusive, partial and fragmentary collection of previously unrelated (or, at least, differently related) facts disappears from view. As this implies, following de Certeau (quoted above p. 11), the act of configuration is, at the same time, an act of forgetting. The retroscription of the nation-state ‘forgets’ (despite appeals to the contrary; Krasner (1994)) that the state was never sovereign in any absolute

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sense. The proscription of the global future forgets that there are other social dynamics than those of technology and neo-liberal economics. The ‘logical’ trajectory from local to national to global forgets that processes of historical spatial differentiation are neither logical nor mono-directional. These things and many others alongside them must be forgotten because they are elements of older stories; other configurations. The power of the narrative of globalization, therefore, lies as much in the silences it creates as in the clamour of its public debate. Before going on to examine what these silences might be and how they are ‘structured-out’ of the globalization debate in practice, we will consider some of the ways in which the configural narrative of globalization, once initiated, is reproduced.

Narrativity and performativity So far, we have treated what we take to be the dominant imagery of globalization and analysed it as a narrative. But narratives have to be told to be disseminated and reproduced. The way in which the tale of globalization is generally understood to be told within the mainstream academic debate is through the academics themselves, in the form of a rather limited and often very incestuous conversation. Aside from each other, the major source of globalist narratives discussed by academics are those told by industrialists, management consultants, economists, politicians and a plethora of other ‘active globalizers’ – that is, those primarily responsible for constructing the concrete institutional and policy frameworks of the global economy. If this list of contributors seems somewhat restricted, this reflects only the staggering myopia of the mainstream debate. For all its very grand claims to represent a new historical epoch encompassing the whole of humanity on a world-wide scale, those voices that contribute to the formal public debate on the meaning, direction and consequences of globalization (our own included) are suspiciously few in number.13 They are so few because the configuration of globalization is a reflexive act; it is ‘self-motivated’ in de Certeau’s terms. The contributors to the mainstream debate are not only configuring an historic epoch, they are also, very deliberately if not necessarily consciously, configuring it in their own image; they are, therefore, also configuring themselves. The narrative boundaries around the epistemic space of globalization not only define what it is and where it is, but what can be known and said about it, how and by whom. Economists, this is to suggest, have a privileged voice in the globalization debate because it is ‘about economics’. Since they are experts in economics, economists clearly (they believe) have more and better things to say about globalization than, say, narrative theorists, art critics, engineers, priests, waiters, children, train drivers, or indeed anyone else without access to those knowledges and modes of expression that have become the ‘authorized language’ of globalization

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(Bourdieu 1991). In Ricoeur’s terms, those possessing these privileged and privileging idiolects are the histors – powerful not just because of the documents they read, but because they produce, own and interpret the documents in the first place, as well as the idiolect in which they are written. If globalization has its high priests, however, it also has its heretics and they also have a voice. We have already alluded to the voices of protest that have sought to add their own clamour to that already taking place within the fortified meetings of the G8, the WTO, and so on. But, as suggested above, this ‘alternative’ and oppositional globalism is also, albeit in a differently self-appointed way, part of the same discourse. Since often they take globalization literally – more literally indeed even than some of its more ardent promoters – they are not outside the cycle of narrative configuration, but an integral part of it. Who ever heard of a good story, after all, where all the characters agreed with, or liked each other?14 These two groups – the high priests and heretics of globalization – dominate the formal debate, though the former are by far the more significant.15 This is not only because they constitute a powerful majority and can claim to be the ‘experts’, but because it is largely their version of events that has come to constitute the ‘common sense’ of globalization and, as such, it is their version that has entered the realm of everyday practice. This brings us to the group that, despite being largely silent in the formal debate, indeed silenced by it for the most part, nevertheless carry out most of the ‘labour of representation’ of globalization (Bourdieu 1991, 234). For all that academic attention has focused, understandably, on the formal narratives about globalization, it has, at the same time, downplayed its ‘performance’. As we suggested in the introduction, some ‘performances’ of globalization – the merger of Daimler and Chrysler, for example – are incorporated into the debate as evidence. But in addition to these spectacular events are the much more mundane acts which, through constant repetition in daily practice, serve to reinforce narratives of ‘normal’ globalization. As this suggests, the stories of globalization have entered and affected the everyday practices of most people in the industrialized world and many of those beyond it. These practices – using credit cards, accessing the Internet, investing in stock markets, buying ‘global’ branded products, consuming global ‘lifestyles’, to name but a few – do of course appear in the mainstream globalization literature. However, they are, for the most part, treated as evidence of the existence of globalization; they are used to demonstrate that the institutional framework of the global economy is real, to the extent that ordinary people can and/or must be part of it. Treated in this way, ordinary consumers, bank customers and workers are taken to be bit players in the unfolding and external global drama. Their behaviours are, therefore, viewed as the after-effects of a prior globalizing process – the mainstream debate writes such behaviour as a response to globalization. This seems

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to us a very partial and limited way of understanding the role of everyday practice in reproducing discourses of spatio-temporal reality. For a configural spatio-temporal narrative to be effective, the role of practice is fundamental at every stage – it is precisely the behaviour of ‘ordinary’ (that is, non-expert and non-reflective) people that normalizes the epistemological frame of a discourse. It is their activities, their ‘performances’ of global narratives, that ultimately produce the ‘reality’ of globalization itself. Cornelius Castoriadis argues precisely this point in his account of the Imaginary Institution of Society, asserting that the ‘imaginary’ structure (in Lacanian terms) provides the medium through which everyday practices and problems are mediated and comprehended. ‘When it is asserted that the imaginary plays a role with respect to the institution only because there are “real” problems that people are not able to solve’, writes Castoriadis, this is to forget, on the one hand, that people manage to solve these problems, precisely to the extent that they do solve them, only because they are capable of the imaginary; and, on the other hand, that these real problems can be problems, can be constituted as these specific problems, presenting themselves to a particular epoch or a particular society as a task to be completed, only in relation to an imaginary central to the given epoch or society. (1987, 133)

In other words, the practical expectations carried within the narratives of social reality simultaneously inscribe the ‘imaginer,’ the ‘imagined’ and the time–space of imagination. People adapt to new imaginaries, new configurations, not through theorizing them in loud public debates, but through problem-solving activities that are mediated through historically and geographically specific imaginary constructs. If globalization presents itself as a series of ‘problems’, that is, unfamiliar sets of social conditions, systems, institutions and so on, these are as much problems of imagination (for example, imagining the ‘economy’ to be global rather than national), as they are problems of ‘reality’ (for example, national economy is real, global economy is a theoretical construct). This is because the configural nature of spatio-temporal narratives (imaginaries) also involves altering the nature of the ‘reality’ itself, in this case, such that the concepts of the national and global economies can be brought within a common frame of reference. The effects of this can be very partial and very subtle. Whilst much of the academic debate has concerned itself with establishing ‘truths’ about globalization – either producing evidence to prove its existence or, vice versa, to deny it utterly – globalization, in practice, requires no such proof. Nor, for that matter, is it required to be particularly coherent or meaningful to be effective in its effects on everyday practice. Nelson Goodman captures the fragmentary nature of practical perception and cognition in his analysis of an ‘habitual’ reality:

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For the man-in-the-street, most versions [of the world] from science, art, and perception, depart in some ways from the familiar serviceable world he has jerry-built from fragments of scientific and artistic tradition and from his own struggle for survival. This world, indeed, is the one most often taken as real; for reality in a world, like realism in a picture, is largely a matter of habit. (1978, 20)

If reality in general is, for all practical purposes, ‘jerry-built’ and fragmentary, but none the less real for it, then the truth-seekers of the globalization debate (or any other for that matter) seem to have missed the point. What matters in terms of the reproduction of the realities of globalization is not whether or not it can be proved, but whether or not narratives about it can be used to cobble together versions of the world which are sufficiently coherent to be habituated in practice. When Goodman’s ‘man-in-the-street’ uses his credit card, and in so doing contributes to the further expansion of the global credit economy, it is not because he has accepted the empirical proofs of globalization, or even that he is aware of the concept at all. Nevertheless, he still contributes to the reproduction of the narratives of globalization by consuming ‘global’ products and lifestyles in a ‘global’ manner and by accepting as immediate, concrete reality a series of distant and/or virtual economic transactions of which he has little or no comprehension. Globalization, this implies, is not real but it is normal. Put another way, globalization is taken to be real because the various retroscriptive and proscriptive narratives about it have become normalized in and through practice, thus rendering it plausible. Writing about what he called the ‘scriptural economy’ of modern Western society – a society in which the ‘orality’ of the premoderns has been subsumed into a complex network of written ‘voices’ – de Certeau places considerable emphasis on the mutually reinforcing and dialectic relationship between credibility and practice: The credibility of a discourse is what first makes believers act in accord with it. It produces practitioners. To make people believe is to make them act. But by a curious circularity, the ability to make people act – to write and to machine bodies – is precisely what makes people believe. (1974, 148; emphasis in original)

On this reading, globalization is at one level an act of faith – all that is required to make it real in practice is a sufficient degree of belief that it is real or, at the very least, a sufficient degree of normalization such that people, like our credit card user above, have no need to doubt it. Later in the same passage, de Certeau goes on to state very clearly how such credibility is established:

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normative discourse ‘operates’ only if it has already become a story, a text articulated on something real and historicized (une loi historiée et historicisée), recounted by bodies. Its being made into a story is the presupposition of its producing further stories and thereby making itself believed … From initiation ceremonies to tortures, every social orthodoxy makes use of instruments to give itself the form of a story and to produce the credibility attached to a discourse articulated by bodies. (1974, 149; emphasis in original)

The story of globalization carries the force that it does precisely because it is a story that has been easily and readily incorporated into normal practices, normal institutions, normal expectations. It matters not one iota that this new global ‘normalcy’ has involved a radical rewriting of the past and some very far-fetched predictions for the future, and nor does it matter that the concept is fragmentary and incoherent. After all, the concept of the nation-state was (and still is) fragmentary and incoherent – to such an extent that it has arguably never existed in any complete, demonstrably ‘real’ form – but has nevertheless served admirably as the functional, normal reality for many of the world’s citizens for a very long time. Globalization is not real in any absolute sense, but it has proved to be sufficiently real – it is, in Ricoeur’s terms, ‘acceptable’ to its own conclusion.

PA RT T W O

4 Business Globalization and the Offshore Economy

There is something odd at the very heart of the globalization debate. The simplified version of ‘business globalization’, which presents globalization as an homogeneous, global force undermining state and society, has been far more influential than perhaps it merits on grounds of empirical rigour or theoretical sophistication. The theory implicitly (and at times, explicitly) suggests that globalization evolved gradually in the background of the world economy, but at some point in the 1980s reached a critical proportion such that states were forced to wake up and adapt to the new reality.1 On this reading, globalization is something external to the state, and worse, circumvents all those political processes, including regulatory and democratic processes, that take place within the boundaries of the state. Since globalization occupies a domain beyond the purview of any conventional politics, many reach the easy and apparently obvious conclusion that it is driven purely by technology and the (allegedly) natural inclination of people to truck, barter and trade. The implied chronology of events suggests forcefully that once globalization has established itself, states are simply forced to adapt to it. The chronology of events implied by business globalization has a superficial rationality about it, but it proves rather contradictory under closer examination. This is because whilst it posits globalization as a fait accompli, something that can only be adjusted to retrospectively, at the same time it depicts globalization as a teleology; as something that may reveal its potential in the present, but which will only reach full maturity in the future. So the globalization that business globalization speaks of is simultaneously present as well as about-to-be-present. This odd combination of past, present and future embedded in the same concept, and the propensity of its advocates to conveniently forget the role of the advanced industrial states in promoting globalization (Michalet 2002) and the gains

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for ‘their’ multinational businesses, have persuaded many that the theory is not much more than an ideology. For its critics, globalization presented as something external and irreversible under the slogan of ‘there is no alternative’, clearly serves political aims. All this is well known and has been debated ad nauseam. The question that has not been asked often enough, however, is where these crude images of globalization come from in the first place? And why have they proved so powerful and enduring? Are we seriously to believe that they have their origins in a mistaken interpretation of the evidence, as Hirst and Thompson (1996) suggest? Is it a conspiratorial ideology, as Barry Gills and others (2000) suggest? Or could it perhaps be a product of powerful foresight, an ability many of its proponents seem all too happy to credit themselves with; anticipating the future as it takes shape in the present? These are important questions because, as we will demonstrate, by identifying the origins of the imagery of business globalization, we can better understand its continuing power and not only clarify the reasons for the peculiar but generally accepted chronology according to which globalization has evolved outside the life of the state system, only to be ‘discovered’ at the moment it becomes a reality, but also demonstrate how it has helped shape the underlying imagery of the state that we discuss in this book. We suggest, therefore, an alternative interpretation for the emergence of business globalization theory. In doing so, we are not dismissing the existing debate as irrelevant; far from it. But we do present a different explanation for the way the dominant imagery has emerged, and has then been incorporated into ongoing debates to legitimate far-reaching transformations of state and politics. The simplistic imageries of business globalization are, in our view, not entirely wrong or cynically opportunistic. Rather, they identify, select, exaggerate and reify certain existing trends and practices as though they represent globalization as a whole, without acknowledging or analysing their limitations. This process of selection produces the imagery most commonly associated with globality – 24-hour markets, placeless currencies, transnationalized networked production systems and so on – all of which seem to typify contemporary economic activity as existing beyond and without regard to the boundaries of the territorial state. This common imagery, however, has its origins in a subtle elision that has taken place between the evolving narrative of globalization and more specific developments that emerged in the 1970s: those of ‘offshore’.2 So, when globalization is asserted as a placeless and stateless, planetary force, what commentators are actually referring to, apparently unwittingly, is only one part, albeit a very important one, of a putative global system, that part currently embodied in the institutions and practices of the offshore economy. Furthermore, because of the ‘off-shore’ character of these developments, they appear to be both outside the state and, therefore, to herald the advent of a borderless world (Ohmae 1990). These easy assumptions are, as we will see, largely mistaken.

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This chapter examines the role played by both the theory and practice of offshore in the development of the contemporary fa-s in two main ways. First, we examine briefly the institutional and legal form of the ‘real’ offshore economy itself, partly to establish clearly what we mean by it, and partly to excavate some of the other stories about it.3 Specifically, we want to expose the close connections, both historically and contemporaneously, between specific nation-states and offshore institutions. Second, we examine critically the spatial narratives contained within the idea of offshore to assess the role it plays in the normative spatial and temporal configuration of globalization.

The institutional dimensions of offshore What, then, is ‘offshore’? And how could it be confused for globalization? Although the offshore economy is now a well established and extremely significant element in the contemporary world economy, and although its origins can be traced back for a very long time, the precise definition of ‘offshore’ is elusive. The better-known aspects of the offshore economy are the offshore financial markets, or the Euromarkets, and tax havens. But as one of us has argued in previous publications, in practice offshore is a much broader category that consists of all sorts of ‘sovereign’ spaces essentially defined by their relative lack of regulation and taxation compared to nation-states (Palan 1998a, 2003). Of these, we emphasize four main elements that, whilst distinct in their institutional form, mode of operation and their relationship to conventional economic spaces, nevertheless share certain important characteristics. The four are: offshore financial markets, offshore financial centres, tax havens and export processing zones (EPZs). Before we discuss the question of the relationship between these spaces and the imageries of globalization, we will briefly describe each of these in turn before going on to discuss the role they play in relation to discourses of globalization and exclusion.

The offshore financial markets As with the concept of offshore more generally, there is little agreement among financial experts as to the precise definition of offshore finance. Distinction is drawn, for example, between international, multinational and offshore banking, all of which are closely intertwined but can nevertheless be distinguished according to the way they trade, their participants, the currencies with which they deal and their regulatory location. We do not wish to be drawn into this very complex debate here and so will concentrate on that aspect of the offshore financial markets which seems most to typify the characteristics of offshore – the Euromarket.

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The Euromarket has two distinguishing characteristics. First, it is essentially a medium for lending and borrowing the world’s most important convertible currencies. It is a ‘wholesale’ or inter-bank market in which the commercial banks are its principal intermediaries. They collect deposits and use excess liquidity to lend or transfer to other banks in the inter-bank market and the process is repeated until the funds are lent to business enterprises. Second, what distinguishes Eurocurrency transactions from conventional ‘domestic’ or even ‘international’ banking activities is that these markets operate outside the jurisdiction of the national authority that would normally regulate trading in a particular currency. They are therefore not subject to state regulations such as reserve requirements, reporting or, most importantly, taxation. In that sense, the offshore financial market must be distinguished from international market trading in US dollars or other convertible currencies. A market for a particular currency can be international, but still regulated by the state in which the transaction is taking place. So that, for example, an international loan provided by a New York bank is subject to the financial regulation of New York State and any national regulations imposed by the Federal US Government. A properly ‘offshore’ market, on the other hand, is one in which the regulatory authorities of the guarantor state give up their regulatory role voluntarily or because the market operates beyond that state’s, indeed any state’s, regulatory reach. The Euromarket itself began life as an inter-national, rather than a fully offshore market. Starting in the early 1950s, a market in US dollars emerged in Europe as a small inter-bank operation used primarily by a few European commercial and central banks. This market was developed to ease liquidity problems produced by the cost of reconstruction after the Second World War. European economies were so heavily dependent upon US exports and finance that some way needed to be found to ease the passage of funds through the world financial system. The international market in US dollars was a convenient means of circumventing the bureaucracy of the US financial system, as well as making inter-bank, dollar-denominated loans quicker and easier to organize. Although the point at which the offshore Euromarkets properly emerged is subject to debate, it is generally acknowledged that a market that was not directly regulated by any state emerged in the autumn of 1957 (Burn 1999, 2000). The most plausible explanation for this change focuses on the policies and institutional structure of the British government. During the 1957 Suez Crisis and the ensuing run on sterling, the British government imposed tight restrictions on trading in sterling and raised interest rates to slow movement. To get around these measures, British-based banks began actively to solicit $US deposits to use in trade credits (Sengupta 1988, 26). Although still ostensibly British-based, these dollar transactions were considered to be taking place outside of the exchange rate system, reserve

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requirements or any other regulations of the British state, and therefore outside all state regulation.4 In 1963 this rapidly expanding Eurodollar loan market was supplemented by the emergence of the Eurobond market based, then as now, in the City of London. From the late 1940s to 1963, an increasing portion of international loans were expressed in $US and were managed by US banks. But the imposition of the 1963 Interest Equalization Tax (IET), which imposed a levy of up to 15 per cent on all subsequent purchases by Americans of foreign debt and equity, effectively barred foreign borrowers from the New York financial markets.5 This stimulated the creation of the Eurobond market which consists of bonds underwritten by international banking syndicates and therefore not subject to any country’s securities laws (Park 1994). Again, the British government was active in the creation of this reactive innovation (Burn 2000). The Euromarket became, to all intents and purposes, the first unregulated ‘global’ wholesale financial market. Because it is not considered to be located in or regulated by any one state, the market inhabits a kind of juridical ‘commons’, analogous to the status of the high seas in Law of the Sea (Palan 2003). For this reason, the Euromarket and the currencies in which it trades are sometimes considered to be ‘stateless money’ (Roberts 1994). In contrast to the Law of the Sea, however, the legal status of the Euromarket has never been codified in any multilateral setting or document which means, effectively, that the Euromarket persists due to the willingness of states to sustain it.6 As a result, as we will see below, the Euromarket has a material existence in various types of financial centres. It maintains, however, its ‘offshore’ status due to a variety of provisions and legal arrangements that different states have put in place to distinguish it from ‘onshore’ spaces of regulation. In that sense, the Euromarket is only fictionally ‘offshore’, for it lives its life in the familiar financial centres of the world. In spite of the allusion to ‘shores’, of which more below, the boundary between offshore and onshore is more likely to be found running down the corridors of international banks than along the political boundaries of the state. Notwithstanding this, the Euromarket remains largely unregulated because of the fiction of its existence beyond the jurisdiction of any state. Because of that same fiction, the Euromarket is considered to be a global financial market.

Offshore financial centres Whilst the offshore financial market is fully integrated, internally coherent and, therefore, apparently ‘global’, it is not located ‘offshore’ in any literal sense. Rather, it is situated in and between different types of financial centre all of which are located, physically and juridically, in major ‘onshore’ cities. In that sense, offshore finance is not at all external to the state, but the

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‘spaces of flow’, as Castells calls them, are materially located in the state. But as we will presently see, states have established a variety of unique juridical arrangements to sustain the fiction of the offshore financial market. The literature distinguishes three types of ‘offshore’ financial centres, or three different legal arrangements: the so-called ‘spontaneous’ offshore sites, such as London and Hong Kong; variations of International Banking Facilities (IBF) (or onshore–offshore centres) such as New York and Tokyo; and tax havens. These three categories should be considered ‘ideal types’, as each offshore financial centre and tax haven offers its own unique ‘bundle’ of financial regulations. Because of their importance to the concept of offshore we will treat tax havens in the next section. Here we will examine the spontaneous IFCs, through the example of London, and the IBFs. The best known and the most important of the ‘spontaneous’ offshore centres is the City of London.7 It is so designated because London’s Euromarket facilities allegedly emerged spontaneously, without official direction or even notice. London’s position as the heart of the offshore financial market can be traced back to attempts by successive British governments to re-establish London as the centre of global financial activities after the Second World War.8 Under provisions put in place during the Second World War, British banks were not allowed to deal in foreign currencies. However, under the 1947 Exchange Control Act, some British banks were given permission to deal in foreign currencies, leading to the opening of the Foreign Exchange Market in London in December 1951. Although all other currencies could now be traded freely, the 1947 Act maintained restrictions on sterling, which could only be bought and sold by designated banks. A deteriorating balance of trade and the 1957 run on sterling, prompted the imposition of restrictions on credit, including banning re-financing in sterling. This then led to an unparalleled expansion of overseas borrowing and lending. In this way, the Bank of England in effect walled-off sterling, but allowed dealings in other currencies free of regulations (Grant 1967). After 1957, Britain progressively relaxed exchange controls, culminating in the 1979 UK Banking Act, the first act of the incoming Thatcher government, which removed all exchange controls. Since then, the City of London has been effectively considered as an offshore financial market in its own right. An International Banking Facility (IBF) is a more stringent type of offshore centre, in which companies must apply for a licence to trade. Unlike the ‘spontaneous’ offshore centre, IBFs have been set up in order to compete with other offshore centres (Lewis 1999). The first IBF was the Asian Currency Union (ACU) set up in Singapore in 1969 in response to the increased foreign exchange expenditure in the region caused by the IndoChina war and other conflicts in the mid 1960s. A tightening of credit in

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1967 and 1968 contributed to rising interest rates in the Eurodollar market, meaning that tapping existing dollar balances in the Asia-Pacific region became attractive to many banks. Singapore took advantage of this by setting up facilities that gave incentives for branches of international banks to relocate to Singapore. Its first licence went to the Bank of America to set up a special international department to handle transactions for non-residents. As with all other Euromarket operations, the ACU required banks to maintain a separate set of accounts in which are recorded all transactions with non-residents. Although banks operating within the ACU are not subject to exchange controls, they are required to submit the detailed monthly reports of their transactions to the government (Hodjera 1978). As other elements of the offshore economy have become increasingly important in the world economy, so many governments have established IBFs as a means of both participating in the offshore economy and controlling its effects on domestic institutions and markets. The New York IBF, for example, came about as the result of a prolonged and complicated battle between the US Treasury, the Swiss government and a number of Caribbean tax havens. With the active encouragement of the New York banking community, particularly Citibank and Chase (Naylor 1987), the US Treasury came to the conclusion that since it could not beat the rise of offshore, it had no choice but to encourage its own offshore centres (Hines and Rice 1994). A swift volte-face took place, culminating in the establishment on 3 December 1981 of the first New York IBF. A decade later, more than 540 IBFs had been established across the US to take advantage of the cost and tax benefits they offer: New York had the largest number (over 250), California had 100 and Florida 80. However, as they are quite restrictive relative to other offshore centres, interest in IBFs has waned lately (Lewis 1999).

Tax havens The third type of offshore financial centres are tax havens. Tax havens, with their attendant imagery of small tropical islands, jet set lifestyles and legal ambiguity, remain the best-known elements of the offshore economy. That said, despite their importance both to the popular imagery of offshore and to its real institutional structure, tax havens present their own definitional problems. This is because today practically every offshore centre can function as a tax haven to foreign residents (Ginsburg 1991). The Gordon Report to the US Treasury Department states that ‘there is no single, clear, objective test which permits the identification of a country as a tax haven’ (OECD 1987, 21). However, Adam Starchild provides a useful working definition when he states that tax havens are ‘countries that have enacted tax legislation especially designed to attract the

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formation of branches and subsidiaries of parent companies based in heavily-taxed industrial nations’ (Starchild 1993, 1). Following in a similar vein, Richard Johns defines tax havens as products of deliberate state policies that aim ‘to attract thereto international trade-oriented activities by minimisation of taxes and the reduction or elimination of other restrictions on business operations’ (Johns 1983, 20). The different ways of defining tax havens as distinct from other offshore centres mean that estimates of their number vary greatly. However, the latest IMF study lists seventy jurisdictions, estimated to manage some $2.1 trillion in assets, with business growing at up to 15 per cent a year (Stewart 1996). The emergence of the modern tax havens was a complex affair. In one form or another ‘asset havens’, where rich families and individuals can protect some or all of their wealth, have existed for a long time. During the interwar years, tax shelters were devised primarily for and by wealthy families rather than corporations (Picciotto 1999). Since 1945, tax havens proper began to proliferate alongside the massive expansion of foreign direct investment (FDI) by multinational enterprises. The growth of tax havens was also stimulated indirectly by the efforts of the US government to use the tax system to encourage the international investment programmes of US companies. Profits from overseas subsidiaries of US companies were taxed only when remitted home, providing ample incentive for these firms to relocate, even if only to ‘brass-plate’ offices, in tax havens. Although there are as many varieties of tax haven legislation as there are such jurisdictions, it is common none the less to distinguish three classes of tax havens: those with zero income tax and corporate licence fees; those with low income tax; those where taxes are only levied on domestic earnings, with foreign earnings subject to low or zero taxation. Notwithstanding the great variations among tax havens, they tend to share the following attributes: • Minimal or no personal or corporate taxation. • Effective bank secrecy laws. Quite often bank or state officials are barred by law from disclosing the origins, character and name of holders of funds. • Few, preferably no restrictions on regulations concerning financial transactions, together with the maintenance of a code of anonymity and secrecy. • The territory must possess political and economic stability – hence, preferred jurisdictions are dependencies of large, prosperous and stable states (for example, the Channel Islands and the Isle of Man, which are both UK dependencies). • It should either be supported by a large international financial market or alternatively be equipped with sophisticated information exchange facilities and/or within easy reach of a major financial centre. Gibraltar, for instance, has invested heavily in its communications infrastructure.

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• Tax havens have agreements with major countries to avoid double taxation and regulation. As pressure has built on tax havens in recent years, particularly over bank secrecy measures, some of these attributes have begun to be of less significance. The precise package offered by each tax haven also varies depending on the type of service they offer. Some exploit particular niche markets in financial services based on their proximity to particular markets or because they are able to offer specific regulatory environments tailored to market needs. Others, particularly the longer established, larger tax havens (Switzerland, the City of London, the Channel Islands, etc.) offer a broader range of individual and corporate services. These islands of no or low regulation have both proliferated and expanded. Today, the offshore financial market comprises several different markets and deals in a variety of currencies. These include: Eurocurrency deposits, Eurocurrency bank loans, Euronotes, Eurobonds, Euroequities and the foreign exchange market ‘as a particular ‘infrastructure’ for all cross-border transactions’(Filipovic 1997, 21). Although by its very nature it is hard to quantify offshore finance, it is estimated that nearly 80 per cent of international banking transactions are now made in Eurocurrencies and that up to 88 per cent of international loans are Euroloans. Estimates of the amounts passing through the foreign exchange market (the market most associated with the turbulence of the global financial markets) vary between $1 trillion and $4 trillion daily. These figures are somewhat misleading since the velocity of transactions, particularly with the increasing automation of payments systems, means that the actual amount of capital on the move is much smaller than the aggregate of transactions. None the less, there has been a steady rise in daily trading on foreign exchange markets during the 1990s, only slightly dented by the appearance of the Euro.

Export Processing Zones (EPZs) The same principles of sovereign bifurcation that gave rise to the offshore financial market and the offshore financial centres, also gave rise to other offshore platforms such as export processing zones. EPZs are small areas of national territory, usually in close proximity to major international transport hubs, which are dedicated to manufacturing for export. Normally no customs duties are charged for importing raw materials, components, machinery, equipment and supplies used to produce manufactured goods, provided these are then exported. EPZs also offer exporting firms favourable investment, planning, labour legislation and trade conditions compared with the remainder of the host country. Within EPZs all the physical infrastructure and services necessary for manufacturing are

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provided: roads, power supplies, transport facilities, low-rent buildings, etc. In a number of cases, restrictions on foreign ownership which apply in the country as a whole are waived for overseas firms locating in the zones. Export processing zones can be seen, therefore, as the manufacturing equivalent of tax havens. In some countries, EPZs are indistinguishable from modern business complexes, but in many others they take the form of ring-fenced enclaves of industrial monoculture. But as a recent ILO study observes, ‘no matter what form EPZs take, the free trade, foreign-investment and export-driven ethos of the modern economy has transformed them into “vehicles of globalization”’ (ILO 1998). Export processing zones evolved from two sources. One line can be traced back to the establishment of the Shannon airport EPZ in the Republic of Ireland in 1959, which evolved out of the conventional dutyfree areas common to most international airports. Another source were the free trade zones established in the US by the Roosevelt administration in the 1930s which served as the model for Puerto Rico’s export processing zone. As late as 1966 there were only two export processing zones in developing countries, one in India and one in Puerto Rico. As with tax havens, their numbers began to grow rapidly in the 1970s and by 1986 there were 116 of them world-wide. It is estimated that globally some 1.3 million workers were employed across 116 EPZs in 1988. The overwhelming majority of these zones are now located in the Caribbean (48 per cent) and East Asia (42 per cent). However, Asia accounts for over 60 per cent of those employed in such areas, with the majority of EPZs concentrated in Singapore and Hong Kong. Almost all of today’s 845 EPZs were established after 1971. The annual value of merchandise handled by EPZs is in excess of $110 billion. The ILO (1998) estimates the total number of people working in export processing zones at 27 million world-wide, 90 per cent of whom are female.9

What is ‘global’ about the offshore financial market? Even the fairly cursory overview of the empirics of offshore given above reveals a complex picture. It is complex both in that offshore is articulated through a variety of institutional forms and practices that have developed at different times and for different reasons, but also because of the various ways in which these institutions and practices relate to the more conventional economic geographies of the state. All are products of nation-state policy programmes, but all relate to the state in different ways. The confusion between offshore and globalization is easy to understand, for offshore plays an important role in facilitating the type of globalization that is associated with the theories of business globalization. The offshore

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financial markets, for example, are said to be ‘global’ in character. But the term ‘global’ is worth examining carefully because it goes to the very heart of the elision we referred to in the introduction to this chapter. We will take Carmichael and Pomerleano’s definition of the financial system as our starting point: ‘The most fundamental contribution that any financial system makes is to channel resources from individuals and companies with surplus resources to those with resources deficits’ (Carmichael and Pomerleano 2002, 1). Financial systems can be classified as efficient or not according to the quality of this channelling of resources that they provide.10 Nevertheless, the concept of a global financial system suggests that the ‘efficient’ channelling of resources from individuals and companies with surplus resources to those with resource deficits takes place nowadays on a planetary scale. That is, to use the words of Carmichael and Pomerleano, that the trading in financial promises is now global in character (p. 1). The problem for globalization theory, however, is that in one sense the financial system can be said to have been ‘global’, or at least pan-European, from about the twelfth century, and certainly from the sixteenth century, in that it affected resource allocation on a planetary scale (Braudel 1979), although it must be admitted that the range of participants in this Europeandominated financial system was rather restricted. Equally, a similarly ‘global’ financial system was highly developed towards the end of the nineteenth century and up to the First World War. Again, while international lending as a percentage of total lending, domestic and international, was high, the range of participants remained restricted to Europe, North America and a few outsiders. Many are asking, therefore, in what sense, the modern financial system is either new or indeed global (Hirst and Thompson 1996). The answer is compounded and, in fact, ‘unscientific’. It appears that the term ‘global financial market’ normally implies the integration of national financial markets into a larger, global one. But that in itself does not mark any fundamental change with the past. True, the modern global offshore market can be distinguished from its predecessors due to the sheer volume of activities and the real-time contemporaneous character of financial transactions. These remove the sense of uniqueness attached to a particular location, or financial centre, and create a sense of an integrated contemporaneous market operating on a planetary scale. But as we have seen, while the offshore financial market operates at real-time speeds through different financial centres scattered all over the world, the truly distinctive characteristic of the offshore market is not only its sheer size, spatial extension and speed, but also, and perhaps primarily, its unique legal status. The offshore financial markets are those most fully independent of the state, as they occupy, or at least seem to occupy, an entirely nonnational or at least non-territorial legal space. The unique juridical status of the Euromarket changes, however, the meaning of the term ‘global’ with reference to the financial system in a

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subtle way. Global, in the case of the financial system, does not denote simply the geographical dimension of activities, or the process of ‘time–space compression’ brought about by the use of advanced information and communications technologies (Harvey 1990). These effects have been achieved primarily not through the technology, but more specifically because the offshore financial markets are operating within unique juridical spaces which are not territorial in nature. The offshore financial market is therefore neither national nor global in the conventional geographical meaning of the terms, but inhabits an entirely different space which is not subject to territorial boundaries. We must bear in mind, though, that the whole gamut of regulation which the Euromarket manages to evade largely evolved from the 1930s onward. In that sense, the unregulated financial market is a resurrection of the earlier types of freer global financial market, only now operating in entirely new circumstances (Helleiner 1994). In fact, as we have seen, the special juridical status of the Euromarket as ‘offshore’ is a product not necessarily of changes in the nature of the financial market, but of changes in the nature of the state and the creation of a more robust concept of sovereign self-determination (Palan 2002, 2003). The offshore character of finance, combined with the sheer volume of activities, creates, therefore, a third meaning of global: global in the sense that the potential for growth and participation in the financial market is global because it is very hard to place political restrictions on participation. But this is the result not of globalization undermining the state or of finance evading state regulation, as it is normally understood, but rather, of the state (or rather a good number of states) creating certain spaces that are not subject to their regulation and hence to political boundaries. Within offshore there are consequently a considerable number of activities that may be plausibly described as ‘global’ in nature. However, if they are global this is not because of any planetary-scaled spatial extension or the ‘stretching of space’, but rather because in being in various ways ‘off-shore’, they do not appear as circumscribed by state boundaries. In that sense the globality of offshore is not simply transnational, as presented by the theory of ‘stretched’ space (Chapter 3), but rather, denotes a more restricted and negative meaning – the partial evasion and/or exteriorization of conventional legal spaces.

The confusion of globalization with offshore The global financial market is, therefore, not global in the conventional sense of the word. However, the confusion of offshore with globalization, and the enduring notion of globalization as something that completely evades political boundaries, articulated primarily using the imagery of offshore, shapes the thinking in policy circles about globalization.

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To take one example, one of the key aspects of the functioning of globalization in general and offshore in particular is the idea of the ‘open economy’. As with most of the socio-economic terms we have encountered in this book, this is another term that is often used rather carelessly and with little thought to its implications. An ‘open’ as differentiated from a ‘closed’ economy is a metaphor that acknowledges simultaneously the international and/or global nature of economic activity, coupled with a recognition of the continued centrality of the state in economic management. The creation of offshore spaces is only possible in the context of ‘open’ economies which imply, if nothing else, that economic boundaries are reduced and/or are even non-existent for certain sections of economic activity (for example, borders are relatively open for capital and trade flows, but relatively closed for labour flows). As this implies, openness is not an ‘absolute’ attribute of national economies any more than an economy could be absolutely ‘closed’. However, the differentiation of these two states of economic being crucially allows for the exteriorization of certain steering problems associated with contemporary economic management. An ‘open’ economy operating primarily through the Euromarkets, for example, has far less scope for public borrowing and investment management because of the volatility of the international investment markets. It is now generally accepted that conventional, Keynesian macro-management policies, particularly running large and relatively long-term budget deficits, are impossible in circumstances whereby other aspects of the economy such as interest rates cannot be controlled effectively by the national government without driving investment out of the economy. All this is well understood. It was certainly understood by Keynes and the other architects of the Bretton Woods agreement. Keynes, however, clearly did not identify the cause of the problem with ‘globalization’, but saw such deleterious effects on macro-economic policy as the consequences of the free and unregulated international financial flows. Keynes and Harry White concluded, therefore, that capital movement must be restricted in the post-war arrangement (Helleiner 1994). However, if the dynamics of an ‘open economy’, which are the direct effects of an unregulated, transnational wholesale financial market, are presented as the effects of globalization, as currently happens across the board, then two things tend to happen. First, the externalized process of globalization rather than specific institutions of the offshore wholesale financial markets is viewed as the principal causal factor impacting on the state. Second, arguments then ‘logically’ follow about how globalization ‘forces’ adjustments in macro-economic policy (Held et al. 1999, 183). At the same time, however, the precise nature of the pressure globalization exerts on the state becomes blurred; it is no longer to do with the particular institutions of the offshore financial market, but with a much bigger and less specific process called globalization. Suddenly we find ourselves once again in the realm of

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imprecise but powerful metaphors in lieu of analysis. This can have serious consequences. ‘Resisting’ globalization, the cartoon monster conflated with offshore seen as all-pervasive and all-threatening, is a much more heroic and/or futile project than, say, regulating the offshore financial market. In this construction, the view has emerged that states are left without any option but to adjust to globalization, because ‘there is no alternative’. This essentialist view of globalization produces all sorts of misinterpretations. For example, considering that the Bretton Woods agreement collapsed in the midst of great acrimony, and considering that the concept of the ‘open economy’ does not recognize the unique juridical status of the Euromarket, it is easy to believe, as many apparently have done, that the dynamics of offshore – presented as globalization – have somehow evolved ‘outside’ the framework of the state system and without their knowledge. There is a measure of truth in this, in that for all that offshore has been produced and maintained by particular states, no one intended, let alone planned, that it would take the form and scale that it has. Notwithstanding this, the idea of offshore as wholly exterior has become firmly established, helping to explain why globalization is often thought to have appeared out of the blue on the day that states ‘discovered’ that the traditional tools of macro-economic policy were no longer available.11 Once again, the complex but intimate relationship between offshore and the state is misunderstood. Contrary to appearances, offshore is sustained by the very principles of sovereignty that it is claimed to have undermined: export processing zones are territorial enclaves produced by the state; tax havens are taking advantage of the right to write the law and grant legal title; the Euromarket is a direct result of the decision of the UK government not to apply its sovereignty over certain types of financial operations that take place in its territory. The practice of ‘sovereignty’ (if not the idea), this suggests, remains unaffected by the non-territorial nature of the spaces of offshore. The fact is that the association of sovereignty with territory has had only a relatively brief and temporary history within particular narratives of the nation-state that are now being very quickly ‘forgotten’. Notwithstanding these and many other possible caveats, the equation of offshore and globalization has proved both plausible and enduring. Of course, those that have played some of the most prominent roles in the development of ‘global’ financial markets have contributed greatly to this confusion – essentially defining their own activities in terms of globalization. Perhaps the most notable of these is the financier George Soros, who is widely attributed with having orchestrated the campaign against sterling which forced the UK out of the European exchange rate mechanism (ERM) in 1987. Soros has since become a leading critic of ‘globalization’, arguing precisely, from his own extensive experience, that it threatens macroeconomic sovereignty (Soros 1999). Of course, Soros’ account, like so many others, is a retrospective one, discovering on looking back that what he and

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many others were doing during the 1980s was articulating globalization. That they were doing it through the specific institutional structures of offshore, organized by and through the very states he sought to undermine, is therefore given a retroscriptive wash of globality.

Offshore and narrative Once we are clear about the apparent confusion between offshore and globalization, this allows us in turn to retrace the history of a particular narrative of globalization, and show how it is underpinned by another narrative. The elision of the narratives of offshore and globalization, the fact that ‘real’ offshore institutions and practices have never lived up to the imagery they are used to convey – in the sense that offshore was never able to conquer the entire global economy – does not really matter. In providing a certain ‘empirical’ basis for the narrative of business globalization, offshore is arguably of more enduring importance than its concrete forms. This means, of course, that we find ourselves in the apparently ludicrous situation whereby the foundational story of globalization – its most potent empirical evidence – can only act as such if we ignore so much that is known of its past history and current practice. How are we to explain this? Not surprisingly perhaps, we are arguing that what has been appropriated into the discourse of globalization as ‘offshore’ bears only a rough resemblance to the practices of offshore institutions. As this implies, the offshore that is employed within the discourse of business globalization is a highly selective configural story in its own right – it is used to tell a very particular story about the spatial forms of economic globality. What, then, is the spatial form claimed by offshore and how might the concept contribute to the configural process outlined in Chapter 3? The most obvious spatial claim articulated in the concept of offshore is, clearly, that of the ‘shore’ itself. The narrative of offshore borrows a conventional spatial form (or, at least, one that carries an air of familiarity and plausibility so long as it is not analysed too closely), and uses it to distinguish between economic spaces of which only one bears any resemblance to conventional, territorial space.12 Importantly, it is this apparently conventional space which is only rarely defined in accounts of offshore – the implied space of ‘onshore’. Running through the discourse of offshore (globalization) is, therefore, a hidden message about ‘onshore’ – the state. Paradoxically, business globalization can simultaneously declare the end of the state by demanding certain policies of adaptation from the very state that is about to ‘wither away’. The primary focus on offshore, which is therefore presented as the ‘new’ or ‘different’ space that needs to be defined, allows the spatiality of onshore – the nation-state – to be assumed, as we saw in Chapter 3, to be the ordinary, territorial space of the state.

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Of course, as a spatial narrative the past spatial form from which offshore represents the departure cannot simply be assumed. Rather, offshore, like any other spatial narrative, entails a process of retroscription and proscription in which both past and future spatial forms are written with respect to each other. As far as the imagery of globalization is concerned, the incorporation of the spatial narrative of offshore performs two main functions. First, and most obviously, it creates a spatial distinction between different economic and juridical spaces. However, the nature of the spatiality of offshore is neither simple nor self-evident. Most significantly, it does not draw a distinction between two different but essentially similar spaces – as though onshore and offshore were spatial equivalents separated by a boundary in the same way as, say, France and Germany. Rather, offshore serves to distinguish between spaces differentiated by particular normative characteristics. Second, and chief amongst these normative characteristics, offshore carries with it a narrative of speed – the differentiation between on-and offshore spaces is drawn in terms of socioeconomic velocities.

Space As noted above, the spatial alternative opened up by offshore does not take the form of a space equivalent to that of the territorial nation-state. It is, rather, a different spatiality altogether, one which has a particular institutional structure, which articulates a different set of normative characteristics than those of other, older spatial forms. Offshore does not dispense with ideas of citizenship, law, sovereignty, identity, belonging, and so on, all of which have long been associated with the state. It does, however, profoundly alter the meaning of these various characteristics of the state by opening up a space in which they function differently and, in doing so, also alters the meaning of these things with respect to the state itself. We have examined the major institutional manifestations above, at least in terms of their actual evolution and current functions. What is more important here, however, are the normative characteristics with which these institutions are imbued and, by extension, the narratives they contain about the nature of contemporary socio-economic space. As suggested in our mapping of the imagined economies of globalization (Introduction, p. 16), offshore as globality is accorded a number of characteristics. Offshore is presented as a primarily economic space. As such it is apolitical and impersonal, dynamic and fluid; it is a site of disinterested and placeless economic interaction. This image is, if anything, enhanced by another set of images routinely associated with offshore – those of criminality, money laundering and tax evasion. The economic neutrality of offshore is such, this suggests, that it does not distinguish on moral or political grounds between different

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sources and types of funds. Offshore is presented, therefore, as the hard edge of the world economy, a frontier-land that is simultaneously a site of opportunity and, because it is governed by purely economic rules, occasional opportunism. Importantly, this space is presented as one that is both new and inevitable. It is new, in that offshore is understood to be the key innovation of globalization – the new, defining spatial form of the global age. It is inevitable because it is understood to have been produced by the pure functioning of the market itself. In one sense, the ‘inevitability’ of the emergence of the space of offshore contains an element of truth. This is because the basic conceptual feature that allows offshore to exist in the first place has a much longer heritage than the current institutions and practices of the offshore economy. In fact, the possibility of offshore, far from being an innovation developed after and in reaction to the overbearing regulations of the nation-state, is immanent to the ‘sovereign’ state form itself. The possibility if not necessarily the practice of offshore was coeval with the very idea of the sovereign state (Palan 2003) and, for all that its use has proliferated and been attached to particular practices and institutions in recent years, it has from the outset been an integral part of the functioning of both national and world economies. The deliberate way in which the fiction of the nation-state (and with it the correlative fiction of the exterior space now called offshore) was created, suggests that far from being the natural spiritual unity claimed by conventional state theory, the ‘imagined community’ (Anderson 1991) of the nation-state was every bit as much a legal, social and political innovation as offshore is considered today. Seen in this light, particularly as the latent spatiality of offshore can only be understood as coeval with the state itself, the more recent manifestations of offshore seem less revolutionary than its opponents seem to believe. The innovation of offshore lies less, therefore, in the creation of fictive spaces beyond the state than in the normative reorganization of the prevailing spatial fiction of the state. The contemporary rise of offshore, in other words, tells us a story about the relationship between the state and the economy which, whilst not entirely new because it draws on pre-existing systems and structures, appears to be new in that it differs from the conventions of state sovereignty we have come to accept as truth.

Speed Offshore introduces another important normative element into the imagery of globalization, that of differential ‘speeds’. Written into the specific narrative of offshore, and the more general one of globalization itself, is an account of differing socio-economic velocities. As noted above and on the cognitive map of globalization, a key feature of offshore is understood to

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be its dynamism – it is presented as a domain of change, fluidity and innovation; it is the ‘space of flows’ (Castells 1996). This dynamism does not take the form of some absolute condition (though this is to some extent how it is presented), but is a relative condition. Offshore (and by extension globality) are dynamic relative to the state. As this implies, dynamism and speed are features of the ‘ideal-typical’ globality which offshore represents, as though the coming borderless world will be one of pure speed, sheer velocity and constant acceleration (Virilio 1986). Just as no one seriously argues that the global system currently exists, nor does anyone argue that such an utterly dynamic political economy is likely or, indeed, possible.13 However, notwithstanding this, the discourse of speed still performs a very important role, as we will see, in contemporary policy discourses. Since the nation-state in some form or other clearly coexists with this space of globality, this image of globalization introduces simultaneously a ‘two-speed globalization’. As we will see in the next chapter, lagging behind the dynamic space of offshore are laggard sectors – the ‘onshore’ economy – which have not, or have not yet ‘come up to speed’ with globalization. This imagery is proscriptive, in that it attaches to the supposedly high velocity globalization of the future key attributes of innovation and dynamism. Global finance, then, is viewed not only as ‘global’ and ‘unregulated’, but also as intrinsically innovatory and dynamic. This highly innovative ‘space of flow’ is then considered as representative of future globality – that which lies spatially and temporally beyond the ‘shores’ of the current state in more ways than one. The image thus carries a strongly normative dimension: innovation, intensity and energy are associated with globality, and those people and places that have as yet failed to catch up, are considered deemed to be literally ‘behind the times’. Although the empirics of offshore are presented in such a way that its future global spatiality is taken as self-evident – we can already see the form of the future in the present configuration of the most dynamic aspects of the world economy – this is, of course, a teleology. The empirics of offshore are not, therefore, self-evident, but are selectively compiled, as in all narratives, in such a way that they are, in Ricoeur’s terms, ‘acceptable’ to a presumed conclusion. Offshore/globalization is, therefore, also retroscriptive. It presents us with an image of the future defined negatively in relation to an older, redundant form of ‘onshore’ socio-economic organization. ‘Onshore’ is no longer simply defined as those elements of the world economy in which states have retained full regulation and taxation, but also those that have been less innovative and dynamic. As in the case of globalization more generally, the conventional nation-state surrounded by protective ‘closed’ economic borders is used here as the ‘white wall’ against which change is to be defined. That offshore is itself physically located within national territories and is, moreover, defined by national authorities and preserved in their national

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self-interest is written out of the story of offshore as globality. It might, after all, contradict the unfolding plot. As with globalization more generally, we can see within the discourse of offshore an analogous configural process. The term comes equipped with a similar spatial trajectory, similar dynamics (competition, technology, economic efficiency and mobility) and a similarly constraining set of outcomes. Offshore, presented as dynamic and innovative, suggests that onshore, that is, areas and sectors still under state regulation and taxation, is not so dynamic and innovative. The conclusion appears to be self-evident: there is clearly a struggle going on between the modernizing tendencies of the world economy, and the retarding tendencies of the state. A good section of the anti-globalization Left only help cement this image by appearing nostalgic about the good old days when the state or, worse, the ‘community’ was in control of its own destiny. Thus, offshore itself is a powerful metaphor providing a normative ‘space beyond’, which states have no choice but to acknowledge and accommodate. This is true even if we know the history of the development of offshore and can identify a point in the past at which, as it were, the genie was let out of the bottle. Even if, this is to say, offshore can be seen to have been a product of more or less deliberate policy in the past, no one predicted or intended its phenomenal rise in recent years, or could stop it or even rein it in even if they wanted to now that it has been established.

Conclusion The confusion between offshore and globalization is a key moment in the development of globalization theory. It helps above all to configure the conventional imagery of globalization by lending it both the appearance of empirical validity and a set of attractive normative characteristics. The crudity of business globalization, which reproduces the ideal-typical characteristics of offshore, is not, therefore, simply venal or ‘wrong’. Without its participants being aware of it, business globalization is, rather, an act of narrative framing that seeks to legitimize certain desirable aspects of the contemporary world economy as the products of external, offshore activities. As such, it borrows an imagery of horizontal spatial extension, in which globalization is spatially larger than the state, to explain what is more accurately a process of vertical dismemberment. As the particular constructions of offshore spatiality and velocity are incorporated into the coping strategies of states, so the ‘logic’ of the common space of the nation gives way to a fragmentary logic of separation and difference. The world is not, therefore, becoming gradually more global in the simple sense that is often understood. Rather, globality-as-offshore is a set of normative characteristics either adopted by those individuals with sufficient wealth and/or

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dynamism to ‘escape’ into the world beyond the laggard state, or which are ascribed legally to particular regions or industrial sectors considered by states to be strategic employers and earners. As such, offshore is fundamentally and paradoxically an expression of the continued salience of the ‘sovereign’ state. Offshore does undermine a particular idea of the state, but only in that it serves to rewrite, retroscriptively and proscriptively, the particular role of the state in its own narrative image. The chapter that follows outlines what happens to those aspects of the state not amenable to being fully absorbed into the normative domain of offshore.

5 The Private Economy of the Post-National State

The development of the space of offshore, crucial to the meaning of globalization, does not in any sense, then, signal the death of the state. True, certain dimensions of state activity long seen as quintessential aspects of sovereignty seem to be undermined by the opening up of the ‘new’ space of offshore. But the very possibility of an offshore economy hinges upon the existence of an ‘onshore’; the ‘sovereign’ state. The type of globalization described by business globalization, therefore, also hinges on the continuing functioning of the state and sovereignty, albeit in significantly altered forms. Inevitably, therefore, but contrary to common assumptions, business globalization theory advances some very specific messages about the state and about its role in the world economy, at the same time that it makes its hyperbolic claims for globality. A careful examination of the way the debates about globalization and the state have evolved with respect to each other during the 1980s and the 1990s reveals the emergence of a subtle and powerful discourse centring on narratives about the future role of the state. Whilst, as we noted in Chapter 2, attention tends to be focused on that which is considered new, that is, the global, these configural discourses also narrate, advocate and in part bring about a fundamental transformation of the relationship between state, economy and society. A number of different analysts have sought to capture these processes under a range of different titles, including the ‘enabling’ state (Gilbert and Gilbert 1989), the ‘trading’ state (Rosencrance 1986), the ‘market’ state (Bobbitt 2002), the Schumpeterian workfare state (Jessop 1999) or the ‘competition’ state (Cerny 1990). In all cases, and despite very different political and theoretical foundations, these various definitions are trying to account for the same set of phenomena – a shift in the orientation of state activity, indeed a change in the very principle of statehood, away from established functions associated with the nation – the latter viewed as a spiritual, political and cultural community – towards a more outward-looking, competitive and fundamentally economic principle. In all cases the state is presented with a dilemma: it must reconcile the needs of the market with the often conflicting demands of a national society that continues to demand and expect social cohesion and economic prosperity (Offe 1984). This dilemma was recognized during the 1970s as a ‘crisis of the state’ (O’Connor 1973; Habermas 1975; Wolfe 1977), and it is no coincidence

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that this debate takes place at the same time as the first oil crises and the beginning of the period of very rapid expansion of offshore institutions. The subsequent rise of the concept of globalization and, with it, the concept of the competition state can be seen, therefore, as a process of re-narrating the state in response to this ‘crisis’. In fact, as we will see in the next chapter, all three components of the three-tiered imagery of globalization – offshore, the national-private economy and anti-economy – have their origins in the same set of circumstances and evolve at more or less the same time. How, though, have events that seemed to threaten the very fabric of the state in the 1970s come to strongly reassert the state at the beginning of the twentyfirst century? And what form does this reconfigured state take? The purpose of this chapter and the next is to explore other sociospatial domains that have been coeval with the rise of the offshore, both as a set of institutions and as a set of narratives about the ‘proper’ location and function of the state. Our argument here is that as the logic of fragmentation and differentiation has been progressively internalized by contemporary states, so the nature of the state has changed. The nation-state persists as an idea, but the content of that idea has fundamentally altered as different organizing principles have come to the fore with the widespread acceptance and adoption of the narrative of globalization.1 Specifically, we argue here, a new narrative of the state has emerged whereby conventional principles of territorial unity and exception, social and (multi-) cultural holism and common purpose have been replaced by ‘privatism’.2 By this we do not simply mean that aspects of the national economy have been ‘privatized’ – though this is certainly part of the process – but, more fundamentally, that the ‘idea of state’ itself has moved from a ‘public’ principle of universal inclusion (implying an identification of and engagement with a single population of citizens) to a ‘private’ principle of competitiveness.3 It is for this reason that we have characterized this cognitive space of the state as the ‘private economy’ – a space of competitive engagement which distinguishes between different populations across and within state territories, according to their relationship to the norms of economic globality. As this implies, the ‘idea of the state’ is no longer based on territorial, cultural, social, linguistic, or any other form of identity associated with the territory or demography of the nation-state, but on particular types of economic participation associated with the sovereignty of the ‘competition state’.

The rise of the competition state The link between offshore and the competition state runs deep. One of the primary dynamics behind the very rapid opening up of the space of offshore since the 1970s has been the capacity and willingness of states to commercialize significant aspects of their hitherto sacrosanct sovereign rights; most

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notably, the right of citizenship and/or abode. If we examine the motives of states for doing so, from the UK to the Cayman Islands, we find that, whatever their ostensible purpose, they have at root been seeking to raise ‘rent’ from the world economy. They have discovered that the best way to do this is to marketize some of their basic sovereign attributes, by de-regulating their financial laws, enacting various bank secrecy laws and lowering taxes. In doing so, these states have created a variety of different fiscal spaces within and across their territories which enhance the profitability of certain types of private sector activity (Palan 2002a, 2003). Where investment and capital have been successfully ‘lured’ in this way, the states in question have gained considerable income and power. In fact, some aspects of offshore, those that involve the legal delimitation of particular regions or industrial sectors (most notably tax havens and EPZs) may be seen as specific instances of competition state strategy (Palan and Abbott 1996). However, for all the importance of these practical and expedient outcomes of the rise of the competition state, it has a more fundamental importance. Aside from its specific manifestations, we interpret the various discourses of the competition state alluded to above both individually and collectively as important components in the delineation of the contemporary fa-s. That said, the fa-s as presented by de Certeau is an ambiguous entity, constituting a spatial domain on the margins of reality and ideology. As a normatively established ground for action and inclusion, the fa-s is essentially a political concept elided with a geo-social description. It is both an empirical domain and a normative discourse and, because these two functions are mutually constitutive, they are also very difficult to disentangle analytically. This, however, is precisely what we need to do to understand the ways in which the ‘nation’ state has come to be reconfigured through globalization as the ‘competition’ state – or vice versa, how the reconfiguration of state and politics leads to the inevitable conclusion that globalization takes place. At one level the competition state seems to have a very real, concrete expression – it is a concept used descriptively to encapsulate the actual behaviour of contemporary state actors. This empiricist conception certainly underpins the more populist and politically ‘realist’ end of the debate, such as Bobbitt’s (2002) idea of the ‘market state’, which has been much discussed in media and policy circles in North America and Europe. However, underpinning these apparently simple empirical arguments lies a much more multivalent and complex conception of the development of state as a competitive entity. Whilst appealing to apparently simple histories of state evolution, such empirical accounts in fact draw selectively on a number of existing debates and histories which are reconfigured into a complex imagery of globalization. What emerges from these various histories is a kind of ‘meta-story’, a conventional account of the evolution of the competition state. This meta-story is roughly as follows.

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Starting in the early 1970s – as a consequence of oil shocks, the realization of the military limits of US power in Vietnam and the ongoing Cold War – the world of nation-states discovered itself to be interdependent. States could no longer go it alone, autarky was dead, empires had crumbled and the possibility of the highly regulated and closed economy was fast evaporating. Rapid technological changes, particularly in the area of telecommunications and transportation, combined with the successful implementation of the multilateral trading regime, and the exponential rise in the mobility of capital transformed the conditions under which economic policy could be successfully implemented. In conditions of rapid capital movement, governments could no longer afford to try to control economic growth through the manipulation and management of demand, or the direct ownership of mass-employment industries (Keynesian Fordism). At best, governments could hope to steer their economies and shift attention and resources to the production of the macro-economic or environmental conditions supportive of private accumulation of capital. State direct intervention in the economy had been considered harmful by economists at least since the days of Adam Smith, but, it was argued, in conditions of ‘open economy’ the many failures of state intervention were brought into sharp relief. State intervention in the economy was considered deleterious on a number of counts. It was inevitable, therefore, that government economic policy would be driven by a medley of considerations, not of all of which were purely economic. Governments would tend to direct investments, and offer other incentives such as subsidies, tax breaks and so on, not necessarily where it was needed by economic rationality, but where it was politically expedient. In pursuing the welfare of the state through the Welfare State, so the argument goes, political intervention was inimical to the welfare of capitalism.4 The legitimacy for change was presented in the following terms: capitalism operates through successive waves of destruction and renewal. Today’s successful industries are tomorrow’s dinosaurs. Failure in the market, expressed by falling rates of profit, growing debt and/or declining markets, forces companies to innovate by raising productivity, improving efficiency, innovating new products and services, or by investing in new and more productive businesses. Those who fail to innovate perish; those who opt for the wrong technology or wrong product perish with them. Open markets, where producers and consumers meet freely, are the best form of legislature determining which technology, product or service is best, and at what price. Economic failure is therefore an essential component of the capitalist system and should ultimately be viewed as a positive force for change. The problem, however, is that the successful industries of the day tend to generate vested interests in maintaining the status quo. This was particularly true of the main period of Fordism (roughly 1935–75), which was

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characterized by huge concentrations of capital and the establishment of large, labour-intensive industries. These subsidized and politically powerful industries had no strong incentive to modernize, improve efficiency or increase productivity. Indeed, given the importance of powerful industrial trade unions as part of the overall governmentality of the state (and not, as they have subsequently come to be considered, as its enemies), there was a positive disincentive to reduce the labour content of production. Not surprisingly, these industries and services were able to manipulate the state to support them not least because the boundaries between state and industry were permeable. This ended with the collapse of Fordism as expressed by a general decline in the rate of profitability in the late 1960s, combined with rising inflation and stagnation and, subsequently, a world-scale manufacturing recession. This situation would have been difficult in the best of times, but in the context of the ‘opening’ economies that began to prevail in the early 1970s – and the reference here is clearly to the Euromarket and the export processing zones – dynamic but politically relatively weak sectors or companies simply took advantage of the situation by relocating elsewhere. These pioneers of transnational production were soon followed by traditional labourintensive industries, such as textiles, footwear, electronics and automotive producers taking advantage of large pools of highly skilled, but relatively cheap, labour in Third World countries. Although there were enormous social and political upheavals as older industrial sectors disappeared from advanced industrialized countries, producing mass unemployment on the way, these effects were localized. The longer-term aggregate effect of the loss of these industries and their employment base was in truth only marginal for ‘national’ economies as a whole. Localized recessions and declines were more than compensated for by the massive expansion of finance, accountancy, consultancy, and so on. That said, the opening of capital markets produced a rapid rise in government debts during the 1970s and 1980s, as OECD states fought to continue with their traditional welfare programs and micro-economic management policies at times of declining fiscal revenues. This was what Joseph O’Connor (1973) famously described as the fiscal crisis of the state. To mitigate this impending crisis, many countries (for example, the UK and France) began programmes of fiscal deregulation to encourage the development of ‘secondary’ financial institutions to help recycle government debt. Following the debâcle of the early 1980s (that is, ‘Third World’ debt), government debts were no longer considered safe. Until Mexico defaulted on interest repayments to the IMF in 1982, it had been assumed that, since a state could not technically go bankrupt, the risks involved, even in huge unsecured loans to impoverished countries, were deemed finite. After Mexico, governments were increasingly scrutinized for their ‘sound’ financial policies (Sinclair 1994), with those pursuing acceptable

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policies being rewarded with lower premiums above the LIBOR5 rate. The volatility and general risk aversion of foreign exchange markets greatly exaggerated the penalties on states deemed by the ‘markets’ to be unsuitable, risky or corrupt. Just as the corporate and banking sectors were able to wield their increasingly sophisticated capacity to evade state regulation and control through offshore to discipline states with wayward fiscal policies, so the ‘public sector’ in the form of the IMF and World Bank sought to instil market discipline on the ‘developing’ world. Structural adjustment programmes, import-substitution policies and other heavy-handed economic interventions were explicitly intended, in the parlance of the time, to make these tardy states ‘safe for capitalism’. With the Cold War adding an even harder edge to the need for ‘closed’ economies to be opened to the market, the logic of openness was imposed (literally in some cases) from all sides. The idea, therefore, that an ‘open’ economy is one that has somehow responded naturally to the imperatives of a disinterested world market is clearly nonsense. Openness was an economic and political strategy precisely intended to enforce conformism to the ideals of US-led, neo-liberal capital. For this reason, the equation of globalization with a conspiratorial neoliberal capitalism is an easy one to make. However, as in the case of the development of offshore, whilst elements were clearly instigated by deliberate policies, the shape of the international economy that emerged from these processes cannot be reduced to these intentional policies – they correspond to the emerging of the modern fa-s.

The history of the competition state: the normative function of trade theory This common history of the rise of the competition state is a very plausible one – it certainly seems to fulfil all the criteria for a ‘reality check’ and, as a consequence, has become something of an article of faith for policymakers, economists and academics alike. Who, after all, could argue with such a clearly articulated and empirically verifiable account of the evolution of the state and the global market? Even a cursory glance at the recent development of most of the world’s nation-states and the ‘third way’ style reconstitution of long-held political truths, particularly for Left-leaning political parties, seems to support the veracity of it. But the ‘new realism’ that underpins the reinvention of the nation-state as the competition state is not quite as simple as it at first appears. This is not to suggest that the various empirics connected to the rise of the competition state did not happen. However, it is to suggest that we are once again confronted with a configural, directed story, as much as we are with a simple, unquestionable, historical succession of events. If we examine critically the development of the narrative of the competition state, we find another example of a set of sedimented

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discourses, the development of which long predates their concrete manifestation as the competition state. The competition state, this implies, was not simply ‘discovered’ as a natural response to an equally ‘discovered’ globalization. Rather, it is an idea with origins deeply embedded in particular Western economic discourses that have had as much to do with the definition of globalization, as they have with the narrative reconfiguration of the function of the state within it. Specifically, theories of the competition state find expression in the long history of Western trade theory as it has developed since at least the eighteenth century. The idea that the state competes for shares of a world market, whilst it seems axiomatic to globalization, and therefore thoroughly new, can in fact be dated at least as far back as Louis XIV’s entrepreneurial minister Jean Colbert, the father of French dirigisme (Cole 1964). The whole basis of dirigisme was the mobilization of the national economy as a whole in the pursuit of economic and political power in a world dominated by, at that time, the rapidly developing imperial economy of the United Kingdom. As trade theory and the concrete policies developed in response to it have developed, so the role of the state with respect to the management of the ‘national’ economy has changed. Adam Smith’s original conception of international trade developed in the Wealth of Nations advocated a complete withdrawal of the state from the active management of the economy, in order that the ‘invisible hand’ of the law of supply and demand could work unhindered. David Ricardo added to this the concept of comparative advantage to explain how the workings of the market would result in the location of particular types of productive activity. These theories, which are still routinely advocated, reversed the presumptions of mercantilism by demonstrating that the same goals of national wealth were better served through free trade. Even if the theory no longer comes close to describing the actual practice of trade, the normative ideal that it is the ‘natural’ tendency of economic activity to find efficiency and equilibrium remains central to the thinking of economists and policymakers. Despite this, the massive complexity of the international economy as it has developed means that states have in fact never left the functioning of the market to its own devices. Rather, trade theory, and with it the trademanagement practices of the state, have undergone a series of significant shifts. Of these, the first and most decisive was the quite early realization that the principle of comparative advantage developed with respect to the trade in goods between discrete national economies did not work in an increasingly complex international economy. Trade did not, as predicted, stem from or ‘naturally’ produce an efficient distribution of economic activity, but was heavily influenced by national economic and military policies. The British Empire, for example, and the system of imperial preference in pricing which persisted until the demise of the Empire in the mid-twentieth

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century, were specifically intended to control and exploit the natural and human resources of parts of the world far beyond the putative boundaries of the UK economy. Even before trade theory was revised by Heckscher and Ohlin early in the twentieth century (to produce the oft-cited ‘Heckscher–Ohlin Model’), it was clear that the distribution of economic wealth and activity in the world was governed by competitive rather than comparative advantage (Flam and Flanders 1991). Long before the term competitive advantage had been coined, many governments, particularly in Europe, were quite deliberately and self-consciously acting to create what later were described as ‘national political economies’ in competition with their neighbours and rivals (cf. List [1844] 1885).6 The rise of the international trade in services (banking and finance, accountancy, consultancy, telecommunications, digital media, software and so on) has, therefore, simply exacerbated, albeit to a phenomenal extent, pre-existing competitive principles of international trade management.7 These products are not amenable to the theory of comparative advantage because they clearly are not dependent on the natural endowment of any particular country. In addition, these products also tend to be of a higher added-value at the point of export and are, in many cases, infinitely replicable (that is, they are not destroyed by consumption) and hence are coveted by states seeking export earnings. The rigours of competitive advantage require that the state engage directly to enhance its attractiveness to mobile capital, its capacities to produce particular types of goods and services and the overall strength and stability of the economic activity within its boundaries from which, through taxation, it ultimately derives its own strength. As this suggests, the exponential rise of international trade (particularly its rise relative to manufacturing, Dicken 2003) and the transformation of the nature of the products traded, has shifted the perceived function of the state with respect to the economy. The Fordist principle that the economic activity was subordinate to and controlled by the state has given way to the postFordist principle that the state is effectively controlled by (or, at least, powerless in the face of) the needs of economic actors (Jessop 2002). More recent amendments of the theory of competitive advantage derive from the need to explain, in order to exploit, this much more fluid, expansive and deterritorialized economic geography.

Theorizing national competitiveness If the principle of national competitiveness can be traced back to the origins of trade theory, it is during the past century or so that it has come to be formulated explicitly through the efforts of economists and trade theorists and codified into the institutional structures of national economies. There have been many contributions to this debate, starting, as we have already mentioned,

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with the Heckscher–Ohlin revisions of classical political economy and we cannot give a comprehensive account of them all here. However, we will consider three of the more important elements of this debate, all of which have contributed to the sedimentation of the idea that an ‘open’ national economy is a fundamental imperative within a globalized economy: New Trade Theory, New (or Endogenous) Growth Theory and Strategic Trade Theory. It should be noted at the outset that these three theoretical contributions do not constitute a seamless or successive development of economic theory and are, in some ways, quite distinct from each other. That said, our interest here is less in their specific content, than in their contribution to the more general reconfiguration of the role of the state with respect to economic management and participation. Seen in this way, despite their differences, all three of these contributions have been significant in normalizing the basic tenets of the competition state. Their effect is not, it should be stressed, merely theoretical; rather all three have, in various ways and at various times, been incorporated into national policy programmes and, increasingly, into the principles of ‘global’ economic management (for example, through the World Bank and the World Trade Organization, of which more below). We will examine each briefly in turn before considering their implications for the state.

New Trade Theory New Trade Theory evolved during the late 1970s and effected an important shift in thinking about the nature of international trade, from theories based on the relative scarcity of resources, to theories based on the principle of increasing returns on investment. As Paul Krugman (1980) argued, Ohlin’s work in the 1930s had already contained the kernel of New Trade Theory. According to Ohlin, factor endowments (land, labour, resources, etc.) may provide the initial spur for trade, but it was the opening of markets that would lead to agglomeration of productive capacity and, crucially, the development of economies of scale. Once significant economies of scale have been achieved by particular firms, they provide an important competitive advantage in their own right and further stimulate trade. The causal dynamic for trade is, therefore, no longer scarce resources, factor endowment or even technological advances, but rather, increasing returns from the competitive advantage provided by economies of scale. The same basic theory could then be applied to the manipulation of economic geography. It provides the theory to understand that the success of certain regions is based on concentrations of factors such as skilled workforces, communications and transportation. For example, a number of studies have demonstrated the competitive advantage of agglomeration in

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such industrial regions as ‘Silicon Valley’, ‘Silicon Glen’ and, more recently, ‘Silicon Fen’, in the electronics and software industries (Krugman 1995; Scott 1998; Blau 1999; Brand et al. 2000). By shifting the emphasis to returns on investment and by showing that national differences are not necessarily the cause of trade but rather the result of trade, New Trade Theory has proved particularly significant from our point of view. Specifically, it provides a clear theoretical justification for the ‘open’ market based on a modified form of the theory of competitive advantage. Its central argument concerning the significance of increasing returns suggests that a national economy open and attractive to investment by private companies combined with free international trade could create a sustainable employment base and boost the fiscal take of the state. Equally, it contains the implicit suggestion that success in international trade was strategically manufactured by active state policies, rather than being based on natural endowments. All these points became central to the narrative of globalization and the competition state.

New Growth Theory New (or Endogenous) Growth Theory evolved out of a critique of neoclassical development theory. Neo-classical development theory used the principle of ‘marginal utility’ to suggest that the freeing of international trade and investment would lead to a convergence in economic performance between advanced and developing countries, as capital shifted to the less developed in search of higher marginal utility (Romer 1986; Lucas 1988).8 In practice this did not happen; on the contrary, divergence greatly increased. Endogenous Growth Theory explained this failure by arguing that the economy-wide benefits of capital accumulation outweigh the eventual limiting consequences of the increased capital invested per worker within a given firm or industry. In a nutshell, the overall marginal productivity of capital does not decline with increasing GDP per capita because of the parallel growth of positive ‘externalities’: primarily, social and political conditions, including government policies. For example, Lucas (1988) argues that externalities arise because investment in human capital enhances the productivity of both the recipients of such capital and the society at large. It follows that policies that enhance public and private investment in human capital, in turn positively affect long-run economic growth. Indeed, following the success of Endogenous Growth Theory, Walker has argued that ‘it is now generally recognized that human capital development enhances economic growth’ (1996, 7). More significantly for our purposes, and specifically with regard to the inculcation of the principle of privatism into the function of state policy, Paul Romer argued that the new theory

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suggests that both the save-more and the spend-more macroeconomic policy prescriptions miss the crux of the matter. Neither adjustments to monetary and fiscal policy, nor increases in the rate of savings and capital accumulation can by themselves generate persistent increases in standards of living. This work suggests that the most important job for economic policy is to create an institutional environment that supports technological change. (1986, 1)

Although very different in origins from New Trade Theory, therefore, the essential logic is much the same. Government is not removed from economic policy altogether, but its role is neither to control nor direct the economy, but to provide a suitable environment for private investment and accumulation. Most importantly, as the quote from Romer strongly suggests, private capital is here not simply adding to the overall functioning of the national economy, but is in some ways replacing core functions of the state itself. Romer rejects conventional top-down macro-economic policies (which had been the traditional battle ground of Right versus Left political parties in the corporatist state) in favour of a privatized form of social engineering – national cohesion through private growth, not state policy.

Strategic Trade Theory The underlying messages of both New Trade Theory and New Growth Theory about the role of the state in the economy spawned a more popular version in Strategic Trade Theory. This made the idea of national governments becoming actively involved in promoting their international competitiveness much more explicit. By the early 1980s despite, or perhaps because of, the rise of neo-liberalism and the wholesale deregulation of financial markets, the agenda was set in the US to seriously debate the merits of a national industrial policy along similar lines to those of Japan or Germany. Even prior to this in 1970, Richard Nixon had accepted the concept of national planning and had then called in 1971 for what he described as a National Growth Policy (Graham 1992, 20). However, it was only following the 1981 recession, with the publication of Magaziner and Reich’s Minding America’s Business (1982), that the basic principles of Strategic Trade Theory were codified.9 Although the debate that ensued in the early 1980s ended up in the defeat of its proponents, two things became clear. First, it was recognized that in practice all states adopted some form of industrial or sectoral growth policy through their trade regulations, taxation, subsidies, workplace controls, environmental standards, and so on. These various elements may not have been consciously brought together as a single growth policy initiative, but the practical effect was much the same if, less efficient. Second,

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as this implies, this disparate array of micro-economic interventions could play a key role in determining the economic performance of the country. Strategic Trade Theory extended these arguments to advocate the formulation of deliberate growth-oriented policies. It begins from assumptions about the nature of oligopolistic markets, where imperfect competition among a small number of large firms, especially in high technology industries, allows them to achieve profit rates in excess of what might normally be expected; what economists call ‘rent’. The idea is that by developing a strategic trade policy states can, at least in theory, maximize the rent-raising potential of their ‘domestic’ industries operating in world markets. Rather than becoming actively involved in the market in its own right as a competitive player, the state provides firms themselves with the strategic advantage by developing, amongst other things, ‘pre-competitive’ subsidies, low-cost production facilities, low-tax and low-regulation business zones (EPZs), ‘flexible’ local labour markets, transport and communication infrastructures, research and development facilities (such as universities), and so on. Although this was only formally theorized in the 1980s, examples of strategic state industrial policy existed many years previously. In the 1950s the Japanese government set up a committee to examine the nature of the steel sector. The committee identified both new, efficient technologies as well as the optimum factory sizes to garner the greatest economies of scale. Through a judicious carrot-and-stick policy, the Japanese government managed to persuade the fifty-odd existing steel companies to merge, producing an oligopoly of three large firms. These optimally sized and technically sophisticated firms were able to compete effectively with established steel producers and went on to become a cornerstone of Japan’s post-war industrial strength in secondary industrial sectors (such as automobiles and shipbuilding). If Japan’s industrial dominance has waned in recent years, this is in part attributable to the general acceptance by other advanced economies of the need to provide high levels of strategic support to growth sectors. The US computing hardware and software industries, whilst not supported by a central planning regime such as MITI in Japan, have nevertheless been supported by the state indirectly by, for example, very high levels of defence spending and the creation of advanced academic research facilities.10 Whilst Strategic Trade Theory was intended to be enacted on a national scale, by national government, it has also led to the creation of competitive industrial regions and the overall regionalization of certain aspects of the world economy. As many economic geographers in particular have observed, the internalization of principles of open competition have led not simply to the development of national economies as a whole, but of those regions where specific workforces, infrastructures or investment policies have created industrial ‘clusters’ (Dunford and Kafkalis 1992; Amin and Thrift 1994; Scott 1998). This has also found expression in

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recent urban geography with particular cities exploiting existing or developing new capacities in certain service industries, to become major economic regions in their own right (Sassen 1996; Amin and Thrift 2002).

Normalizing competitive governance Strategic Trade Theory was controversial, not least because it seemed to many to represent a retrograde step away from the fully open markets sought by free-traders for centuries and into a form of protectionism. Despite this, the competitive principle has been adopted by all advanced industrial states in various forms to the extent that it has become a central norm of economic governance. The recessions of the 1980s brought about a second phase in both the practical application and academic theorization of the principle of competitive advantage. Whilst the major OECD economies were in turmoil and were losing much of their traditional industrial and employment base to the newly competitive economies of the Far East, it was recognized that their redevelopment would have to be based on the development of new technologies aimed at mass-consumer markets. This would ultimately produce the successful Alpine and Nordic models of Post-Fordist industrial development (Amin 1994). Within these ‘models’, states were able to become highly successful in particular niche markets, apparently almost from nothing (for example, the Finnish mobile phone company Nokia). Explanations of this kind of competitive success came from various sources, all of which have served to further entrench the theoretical and practical configuration of the competition state. ‘New-institutionalist’ Theory, for example, led by Michael Porter (1990) at the Harvard Business School, drew attention to the broad institutional structures of accumulation within advanced industrial economies. As such, this was similar to New Growth Theory, only dealing with much more complex and multivalent economic environments than those of developing states. In a comprehensive study, Porter argued that some of the more successful states had been able to convert features of their broad social conditions into a competitive advantage. During the 1980s, for example, a number of European companies responded to the threat posed by the emerging economies of East Asia by competing on quality, kudos and national sentiment, rather than price. In the car industry, for example, BMW, Mercedes, Volvo, Saab, Volkswagen, Renault and others combined the development of small, targeted niche markets whilst engaging in various forms of merger, co-production and strategic alliance to force down costs. The result was a wide range of products tailored to a highly diverse ‘lifestyle’-driven market, but which were based on a number of common product elements (chassis, engine, transmission, etc). built and/or assembled

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in a small number of major production centres. In addition to this were the small, ‘craft-based’ manufacturers producing very high cost, specialist products for exclusive, aspirational markets (TVR, for example). The question that Porter posed about all this was whether there was any connection between the performance of these companies and the national environments in which they operated. He answered with a resounding yes, emphasizing in particular the broader societal and institutional conditions that gave certain sectors their advantage. Unhindered by the model-mania of economists, Porter’s studies seem to give credence to the idea of national industrial policy, indeed, extending the scope of ‘competitive advantage’ (a term that he probably coined) to the entire gamut of social, political and topographical conditions. These various conditions could be marshalled and exploited to provide both the necessary productive conditions and the core markets to support export-led economic growth in highly competitive conditions. Indeed, competition seemed to be the answer to the problems of economic growth. As Dornbusch observed: ‘competition, both within and across borders, is accepted as the basic rule of the markets’ (1993, 4). Moreover, this did not lead, as was feared, to a new wave of protectionism. Even Japan, as many economists observed, maintained an extremely competitive market internally which served as a test-bed for products subsequently exported to the rest of the world (consumer electronics, for example). Japanese firms that survived internal competition and the high demands of the Japanese consumer had little difficulty exporting to the world. The creation of the European Union, which is based precisely on the principle of lowering barriers to competition within and between member states, has also eliminated domestic monopolies that failed to innovate.11 Similarly, the success of US corporations was attributed to their domestic competitive market both within the US itself and subsequently within NAFTA. These various formulations of the competition state have, of course, not been without their critics. In 1994, the leading proponent of New Trade Theory, Paul Krugman, published an article in Foreign Affairs explicitly rejecting the concept of the competition state. For Krugman (1994), drawing a parallel between firm and state (that is, as though the state was adopting the same behavioural characteristics as the firm) was misdirected and misplaced; it was simply a case of bad economics. To the extent that the competition state does not exist anywhere in anything approaching a ‘pure’ form, Krugman may well have been right. But, as noted above and throughout this book, ideas and concepts need not be empirically verifiable to gain widespread currency and to be very effective and affective of policy response. Indeed, notwithstanding its empirical problems, the concept of the competition state has become a paradigmatic expression of the changing relationship between state and globalization.

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The semblance of historical continuity in the development of the ideas and practices of the competition state is important, particularly from the perspective of the emerging fa-s. Its relationship to globalization is, however, contradictory. On the one hand, it locates the many changes entailed in the opening up of the domestic economy to the world market in the context of the long evolution of thinking about state, governance and trade. In that sense it can be seen as prior to or even unrelated to contemporary globalization – indeed globalization is one of its consequences. On the other hand, the idea of the competition state reinforces the view that the rupture produced by these new ideas was not internal to the state itself. Rather, the transformation of the national state to the ‘market’ state is presented as a rational and necessary response to external changes in the world economy ‘out there’; in other words, to globalization. In practice, these assumptions coexist quite happily within the more general discourse of globalization where, as we have seen already, the precise relationship between chicken and egg is always ambiguous.

The disciplined state Whichever is the case, the narrative of the open economy, combined with the promise and/or threat of offshore, has had significant consequences for the practice of statehood. Both the theorization and the practice of the competition state are founded, as we have seen, on the general acceptance that globalization represents a ‘zero-option’. Since it is external and cannot be resisted, states have no choice but to adapt. Since the guiding principle of globalization is (following the lead of offshore) that of openness, fluidity and velocity, the only realistic response is to adapt by accelerating the dynamics of the national economy. The narratives of openness and competitiveness have been built, therefore, into the institutional structures of the contemporary world system. States are, this implies, disciplined (and in fact self-disciplining) by outside pressures should they fail to realize the logic of transition. This disciplining process comes in two main forms. The first comes from capital itself, in the form of the constant threat that whatever investment, employment and income a particular state has managed to attract into its open market, might be withdrawn at any time. Of course the threat is plausible because of the nature of the offshore economy which, as we have seen, is supported and sustained by the state system. Confronted with this threat, a good number of states, and particular regions within them, are under constant pressure to react to changes in the demands of the world’s investors and to constantly (re)market themselves as both the places to be and the places to stay. Such marketing exercises are incorporated, in turn,

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into the domestic politics of the state, as competing political parties make their case as the most ‘business-friendly’. If that was not enough, another source of disciplining pressure emanates from international economic organizations, the so-called ‘institutions of global governance’, that have been established precisely to manage and regulate the global economy. The three most prominent exponents of this are the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO). The World Bank and IMF have a long track record of imposing neo-liberal disciplines on developing states. Structural Adjustment Programmes, Import-Substitution Programmes and the various welfare austerity measures imposed by both organizations have a long and well-documented history of forcing open the markets of developing economies to the rigours of the world market. Notwithstanding the controversial nature of these activities and the dearth of evidence that ‘development’ has been their result, principles which were once imposed only on the poorest states have now been extended to the developed world. Britain, for example, was forced to cut back elements of its Welfare State as early as the 1970s under the conditions of IMF loans. The World Bank has, more recently, published its ‘vision’ of the proper role of the state in the world economy, developing a model of statehood that makes quite explicit the competitive principles upon which it ought to be based. The World Trade Organization is perhaps the most significant institutional manifestation of the trend. The WTO was explicitly established to regulate the global trade in goods and services and has, from the outset, stressed the competitive nature of the global system. Indeed, during the later stages of the fraught negotiations to establish the WTO, its then Director General Peter Sutherland specifically used the threat of being ‘left behind’ by globalization to bring recalcitrant states into line behind the new organization. In fact, the purpose of the WTO as a whole is less to regulate trade per se, than to regulate the behaviour of states engaging in trade. The idea of the open economy is fundamental to the WTO, with the organization having the power to discipline states breaking its rules by raising tariff barriers above established limits. Those limits effectively reinforce the practical application of Strategic Trade Theory by limiting state actions to certain types of ‘pre-competitive’ subsidy and infrastructural development, while prohibiting activities that might have been practised in the past (that is, direct intervention in the economy by the state and the support of loss-making industries for reasons of national interest), but which are now considered inimical to competition. The zero-option of the open economy is not, therefore, something that is simply a logical outcome of market forces – it has been firmly institutionalized within and is enforced by both the private and ‘public’ sector regulators of the global economy. By these various routes, the narratives of globalization have very quickly taken a concrete form in institutional structures

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outside the state. It is clear, however, that the state is seen to survive, in many ways rejuvenated but in a profoundly altered form, under the pressure of globalization. As many authors have pointed out (cf. Mann 1997), the state is showing no sign of withering away in response to globalization, but if anything, ‘globalization’ has in part been produced as a consequence of complex competitive strategies pursued by states in recent decades to capitalize on and further develop globalization (Palan and Abbott 1996). It will be clear by now that ‘sovereign’ states can and do support globalization and, second, that the type of deep market integration we associate with globalization requires a robust transnational system of law rooted firmly in the state system itself (Palan 2002b). As Sgard (2002) argues, the paradox of globalization lies in the fact that today two of its main components, money and the contract, are rooted even more in national economies than ever. There can only ever be, he therefore argues, partial globalization. However, the theory of partial globalization does not leave the state in its former condition, but crucially serves as a catalyst for the reimagination of the nature of the space of the state. The primary consequence has been, therefore, to alter the nature of the internal structure and meaning of the state.

The Schumpeterian workfare state Not all aspects of the state can be ‘globalized’ according to the emerging prescriptions of the new order. This leaves states with the task of ensuring that those parts of their ‘national’ economies that cannot be removed wholesale into the space of offshore itself – labour, infrastructure, land, political systems, wage structures, welfare systems, etc., all things, in other words, which are still organized on territorial principles and which are too inflexible or static to be ‘offshore-ized’ – are attuned to the demands of the world market. States themselves, once they have accepted that they have no choice, make a virtue of necessity and simply internalize the disciplining function. The fraught history of labour relations in many of the advanced industrial states during the 1980s, for example, was precisely a product of older industrial forms, represented by Fordist trade unions, resisting attempts to ‘flexibilize’ their labour. Throughout the industrialized world (except in those parts of the East Asian economy where private sector oriented industrial discipline was already articulated at the level of the individual) governments enacted legislation to curtail any and all ‘noncompetitive’ labour practice, most notably the right to strike. In doing so, they revealed just how completely they had swallowed the line that offshore – here in the guise of mobile investment capital – was the most profitable segment of the economy and the best source of investment and income to generate sufficient private income and fiscal take to ensure the pursuit of ‘national’ goals. These goals, in turn, have been modified and

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tempered wherever they are deemed to have impeded or, ironically enough, competed with the private sector.12 Not surprisingly perhaps, the result of this process has been characterized as involving the ‘hollowing out’ of the state to produce what Jessop (2002) has described as the ‘Schumpeterian Workfare Postnational Regime’ (SWPR). Jessop’s analysis of the post-national state is one where the state does not disappear, but transforms its internal structures and regulatory functions radically. As he puts it: [T]he national state is still the most significant site of struggle among competing global triadic, supranational, national, regional and local forces. This is the point behind the hollowing out metaphor, which is intentionally reminiscent of ‘hollow corporations’ … [T]he hollow state metaphor indicates two trends: first that the national state retains many of its ‘headquarters’ (or crucial political) functions – including the trappings of central executive authority and national sovereignty, as well as the discourses that sustain them and the overall responsibility for maintaining social cohesion; and, second, that its capacities to translate this authority and sovereignty into effective control are becoming limited by a complex displacement of powers upwards, downwards and outwards. (2002, 211–212)

Jessop’s characterization of the contemporary state as post-national, Schumpeterian and workfare-oriented is a sophisticated attempt to capture the essence of state form (or, at least, the advanced industrial state form). The invocation of Schumpeter, who advocated a crypto-socialist form of competitive economics, comes close to the imagery of Cerny’s (1990) competition state, but here the focus of attention is as much on the ‘domestic’ consequences of these changes as it is on the external. Jessop’s image of the contemporary state is, therefore, one that pursues international competitiveness by altering the distribution of responsibilities between itself and significant aspects of the population. As the sobriquet ‘post-national’ suggests, the state no longer applies itself uniformly with respect to an homogeneous, naturally-constituted national population or territory, but applies its regulatory, management and control functions unevenly – differentiating between areas of territory, economic sectors and population groups (cf. Jones 1997). States have, of course, always done this to a greater or lesser degree (along lines of class, gender and ethnicity in particular), but it is only relatively recently that what are still referred to as nation-states have fragmented socially and spatially with the active involvement of the state itself (Rose 1996, 1998). The state does not simply stop intervening in economic and social systems, but ‘rescales’ its interventions with respect to different actors and population groups (Brenner 1999; Jessop 2002). The development of offshore is, clearly, an extreme example of this fragmentation,

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with particular areas of territory being sectioned off to occupy a different fiscal and legal environment altogether – externalized from the space of the nation-state in the classic sense. However, as Jessop and a number of other writers have pointed out over a number of years, the process of fragmentation and spatial redistribution has not been confined to processes of simple selective externalization in the direction of global markets (Jessop 1991, 1993, 1999; Peck and Jones 1995, Tickell and Peck 1995; Jones 1997; Peck 1998). Rather, the state has been ‘forced’, whether by the disciplining ‘logic’ of globalization or the disciplining actions of firms and institutions of global governance, to restructure its internal organization to accommodate the sectoral needs of multiple labour markets, investment trends and footloose capital. The result has been the wholesale scaling back of the national Keynesian welfarist solutions used by the industrial states to maintain demand within domestic economies in the years of reconstruction after 1945 (Offe 1984; Pierson 1991; Esping–Andersen 1996; Jessop 2002). The function of the hollowed-out Schumpeterian state has shifted from one where the primary function of government was to stimulate domestic production for domestic consumption (with the state acting as both producer and consumer of core ‘strategic’ goods and services), to one where both production and consumption operate beyond the managerial capacity and competency of the state. As such, the ‘strategies’ of the state itself have shifted not only as regards what they do in concrete terms, but more significantly in the long run, in terms of the basic goals they seek (Palan and Abbott 1996). As this implies, the normative dimensions of offshore as globalization have become integral to the fabric of the capitalist state and, in the process, certain structures and compromises particular to the nation-state have also changed. This is to some extent a counter-intuitive presentation of the dynamics of state form. After all, within the conventional fiction of the nation-state, the law and the institutional forms it creates are generally considered to be the servants of the state. They may articulate the ‘modes of exception’ on behalf of the sovereign (Agamben 1998), but they are both subordinate and reactive. We are arguing here that this has never been the case other than within the conventional narrative of the state and, even if it appeared to be so during the heyday of the nation-state form, certainly it is no longer the case. Rather, we see the increasing predominance of particular legal formations – specifically offshore as globalization – being mobilized to legitimize, enable, and in some cases force, changes in the nature of the legal structure of the state. This in turn has the effect, often very subtly, of altering the basic institutional fabric of the state with respect to its social, economic and political functions and relationships. We should stress that this is not an attempt to place the law above all else and develop a crudely legalistic account of the contemporary state (albeit that the

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prominence of lawyers in the current world order might seem to justify such a view), but to identify the source of ‘sovereign power’ in the more general and fundamental sense (Agamben 1998).

Conclusion: the death of the social? One of the primary consequences of the rise of the competition-state is clearly the very concept of national social unity. This was, of course, always itself a fiction, but one that nation-states have fought hard to maintain, sometimes for laudable humanitarian reasons, and with generally positive outcomes in terms of improvements in social welfare, education, health care and so on – the basic elements of the Welfare State. The shift of emphasis within the competition state to the principles of the open, private economy over the closed public society carries with it, therefore, significant risks for those sections of national populations who continue to rely on the welfarist functions of the state. Nikolas Rose eloquently sums up this epochal shift, both for its effects on policy programmes and its implications for social theory: shifts in policy appear to be paralleled in a shift within knowledge itself. The approaches often unified under the term ‘post-modernism’, together with a number of more local analyses, suggest that the object ‘society’, in the sense that began to be accorded to it in the nineteenth century (the sum of the bonds and relations between individuals and events – economic, moral, political – within a more or less bounded territory governed by its own laws) has also begun to lose its self-evidence, and ‘sociology’, as the field of knowledge which ratified the existence of this territory, is undergoing something of a crisis of identity. (1996, 328)

Rose’s equation of the process of the fragmentation of conventional social practices associated with the nation-state with the identity crisis of sociology is important. What Rose is alluding to here is nothing less than the disruption of the epistemological frame of the nineteenth-century state (see also Palan 2003, ch. 6). It is notable that in Rose’s construction, not only is the social fragmenting in an empirical sense, but equally importantly, academic sociology (along with all the other less formal sociologies of the press, politicians, economists and other keepers of the ‘national’ flame) as the ratifier (legitimator, configurer, narrator) of the ‘social-as-national’ is facing a crisis of identity. It is important to note that it is not ‘the social’ itself that is in crisis, albeit that it might be changing, but the formal narrators and framers (the histors) of the social as national in the particular form of the nation-state that are having problems. Again, we see the power of framing and the contradictions that it throws up when confronted with

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events that push back its own established boundaries of possibility. The histors of the sovereign nation-state are currently in the unenviable position of having to maintain a formal belief in the territorial state and faith in the security and coherence of its boundaries, whilst at the same time accommodating a praxis of sovereignty which is fractured, commercialized and partial. Confusing times indeed for those still promoting the idea of ‘one nation under God!’ So what is the state becoming in this process of fragmentation and reinscription? The concepts of the competition and Schumpeterian workfare states provide us with a complex and sophisticated picture of certain functional and theoretical aspects of the contemporary state. But what we are after here are the normative dimensions of the state in the context of globalization – what the state ought properly to do in the context of the stretched spatialities of globalization and exclusion. Seen in this light, the role assigned to the territorial state is very clear – it must act as the guarantor of rights and the creator of infrastructure for the pursuit of private accumulation on the part of firms and individuals. The ‘fall of public man’, famously described by Richard Sennett (1986), has been accompanied, on this reading, by a fall of the public state – the domain of public engagement has been atomized, individuated and commodified. This is not to say that the state no longer performs a public role of any kind, rather that the goals of this residual state are to act as guarantor of private ownership rights and to maintain an adequate degree of ‘social cohesion’ not as an end in itself, but simply to enable competitive participation in flexible private labour markets. The normative objects of the state are, therefore, those of the private economy and, as such, the imagined community of the nation has increasingly been supplanted by the imagined economy of the privatized state. The following chapter considers the fate of those who no longer fit the new ‘reality’.

6 The Anti-Economy of Social Exclusion

Poverty, like beauty, lies in the eye of the beholder. Poverty is a value judgement; it is not something one can verify or demonstrate, except by inference and suggestion, even with a measure of error. To say who is poor is to use all sorts of value judgements. The concept has to be limited by the purpose which is to be served by the definition. (Mollie Orshansky, cited in Townsend 1979, 37) In this world, shipmates, sin that pays its way can travel freely, and without a passport; whereas Virtue, if a pauper, is stopped at all frontiers. (Herman Melville, Moby Dick 1851)

There is a strong assumption in the debate on the competition state, an assumption backed up by the various disciplining processes of the global economy outlined above, that the whole of the national population will somehow become ‘competitive’. It certainly ought to. For those advocating the competition state, the transition from one state form to another appears to be an easy one. Just as the whole population of the welfarist nation-state were united in a common purpose, so the whole population of the ‘market state’ shares in the new common goal (Bobbitt 2002). So according to the prophets of the competition state, the purpose of the state may have changed somewhat, from notions of national unity and spiritual community to individual and national competitiveness, but the basic role of members of the ‘national’ population is still to realize their individual responsibility for the collective good. Indeed, for its advocates the move from somewhat vague ideas of spiritual community to the much more immediate, individuated and, therefore, ‘realistic’ notion of competitiveness, represents a positive improvement. But just as not all aspects of the national economy have been absorbed into the realm of offshore, so the ‘private’ economy of the state has its limits. Despite the apparently easy logic of all this, which flows directly from contemporary states’ willingness to internalize and normalize the narrative of globalization-as-offshore, the practical consequences of turning the nation-state into a ‘competition state’ are more problematic. The reorientation of the state towards the norms of economic globality and domestic privatism have proved in practice incapable of accommodating all those whose lives are still inextricably linked to an older state form and an older norm of economic participation. Those that cannot or will not overcome the

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inertia of the past, those who cannot come up to speed with either the global economy or the privatized state, find themselves consigned, in the new language of globalization theory, to another realm; a place where the emergent norms of the imagined economies of globalization do not, or do not yet, apply. We call this space the anti-economy. The anti-economy is an auxiliary imagined realm made largely of spatial ‘pockets’ located in the ‘Third World’, the countryside and the ‘inner cities’, and inhabited by the poor and the unemployed. We call this space the anti-economy, not because it is in any sense ‘uneconomic’ or because it lies beyond the physical boundaries of the national economy, or to suggest that it is a marginal space – on the contrary, it is part of the fabric of the contemporary state. It is designated here as the anti-economy because the emerging fa-s associated with globalization cannot accommodate these people and places within the new ‘global’ rules. On the contrary, such people and places are consigned to a residual space as remnants of older, obsolete norms of economic participation. They are, as Claus Offe puts it, ‘the non-integrable by-products of capitalist development … having their effects only as impediments, threats, and as “ballast”, without any longer usefully contributing to the process of the creation of surplus value’ (1984, 41). However, these people and places are not simply ‘poor’, as they might have been characterized in the past. Rather, they are now seen as ‘excluded’ to a largely independent and self-enclosed economy which can only be explained with in the context of the three-tiered imagery of globalization we describe in this book. Despite being presented as a fundamentally economic phenomenon, the most common way in which this space of ‘archaic obsolescence’ is articulated in the globalization debate is through the concept of social exclusion that has emerged throughout the developed world and, increasingly, elsewhere in recent years (Levitas 1996, 1998; Byrne 1999). The concept of social exclusion represents a dimension of the contemporary fa-s which, whilst immanent to constructions of globalization, offshore and the private state, none the less tends to fall out of the overall picture. Social exclusion is, therefore, often represented as a contingent and temporary condition – a problem to be overcome once the poor and the marginal come up to speed with the new order. This chapter describes those spatialities that are now considered to lie outside the normative spaces of the offshore and private economies; spaces which together comprise a putative domain of ‘inclusion’ which Zygmunt Bauman (1998b) labels, with deliberate irony, the ‘universe of moral obligations’. We trace the formation of a new form of social spatiality, the space of social exclusion and/or underclass, wherein a fragmentary geography of exception and marginalization is created within the territory of the state but beyond the norms of the competitive society. Before going on to consider the implications of this change, we consider the reasons why poverty and

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the poor have been reclassified as the socially excluded in response to narratives of globalization.

The ‘necessity’ of social exclusion If, as suggested above, the concept of social exclusion is an integral part of the fa-s, what role does it play? How does it relate to the other imagined economies? What, in Orshansky’s terms, is the purpose it serves? There are, of course, those who would argue that the purpose or function of ‘social exclusion’ (that is, the poor) is to provide for an endless supply of cheap, exploitable labour for capitalist business (Byrne 1999). We doubt that. The evolution of capitalism during the twentieth century placed an increasing burden on the workers not simply as producers of manufactured goods, but just as importantly, as consumers of goods and services. The willingness and ability of national populations to engage in mass consumption, their ‘consumer confidence’, is critical to the health of all contemporary capitalist economies. Capital, this suggests, gains little from absolute poverty because those utterly incapable of participating in the consumer society are by definition a ‘burden’ on the state which, in turn through the tax and welfare system, translates as a burden on profitability. Reducing or even eliminating absolute poverty is, therefore, a logical capitalist goal. Relative poverty, by contrast, is often seen as beneficial to the functioning of capitalist economies – all the more so as principles of inter- and intra-regional competitiveness have been incorporated into the fabric of ‘national’ economies. Relative poverty is understood to create socioeconomic dynamics which encourage labour-market mobility and flexibility, and to engender efficiency gains through productivity increases, lower costs and enhanced profitability. Relative poverty, therefore, tells us little about the actual consumption habits and capacities of the relatively poor, other than that they are less compared to the relatively rich. Whilst measures of relative poverty are significant with respect to developing norms of economic participation and expectation within a given society (Townsend 1979), it has been strongly argued that they are of little use in determining levels of basic need (Doyal and Gough 1991). It is against the backdrop of the ongoing debate over the nature and meaning of poverty that we address the process by which the poor have come to be ‘rebranded’ as the socially excluded. The ‘purpose’ of social exclusion, in our view, is not simply material in the narrow sense, but discursive. The development of the concept of social exclusion, we argue, plays an important role in answering questions concerning the centrality of people to the effective functioning of the competition state. Although the formal debate on the rise of the competition state revolves around trade flows, rent-seeking, growth stimuli and so on, in fact

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the entire edifice of the competition state, in theory and practice, is concerned in a very fundamental way with ‘human capital’. This is true in two senses. First, the automation of production, the increasing use of information and communication technologies and so on, have not diminished the world economy’s reliance on human workers, particularly in the hightechnology and service sectors. Consequently, without a properly ‘competitive’ domestic workforce to staff growth industries, the possibilities for long-term investment sustainability are seriously weakened, if not impossible. Second, with respect to its own sustainability, the state itself needs people. The rolling back of the Welfare State has not reduced the state’s role either as its own major employer or as a major consumer of the ‘national’ product (Atkinson 1999). The internationalization of production has not diminished the necessity of domestic consumption – indeed the consumer economy has replaced the producer economy in most advanced post-industrial states (Bauman 1998b). The central role of human capital in all this means that the fundamental task of the competition state is to attract the kind of jobs that raise overall standards of living, tax revenues and consumer spending. The primary focus for the competition state is not, therefore, the management of territory, but the management of people. It is, in the final analysis, individual citizens who bear responsibility for the competitiveness of the national economy and so, just as the state itself must submit to the logic and discipline of the ‘open’ economy, so must each member of the (working) population. Human capital was, of course, important to the Keynesian welfare state too – indeed the whole point of the Welfare State was to maintain the national workforce and to provide a safety net for those temporarily unemployed due to transitional problems within the national economy. Full employment was a central goal of Keynesian industrial policy, though less for reasons of international competitiveness than in pursuit of the internal market, social coherence and sustainability. ‘Full’ employment, however, recognized that a certain ‘natural’ rate of unemployment was inevitable in any economy, the rate being around 6 per cent of the population.1 The general acceptance of this spare capacity in a production-based economy was acceptable because the unemployed represented the ‘reserve army of labour’ (Byrne 1999). As such, the role of the state was to maintain this group in a reasonable state of health and general well-being through a redistributive welfare system, for the moment when their services would be required.2 As such, the unemployed may have been temporarily outside of the labour market, but were an integral part of the economy and society of the state – a degree of poverty was factored into the structure of the national state, society and economy. Within the competition state, by contrast, which is necessarily ‘open’ to the global labour market, surplus labour has become an expensive and uncompetitive strain on the resources of the ‘lean’ state. As the idea of the

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open economy has taken hold, ‘human capital’ has been examined more carefully and discovered to consist of two separate groups: the ‘included’, those contributing to the private economy of the state and, therefore, able to reap the benefits of globalization, and the ‘excluded’, those who fail, for one reason or another, to participate. Suddenly, it seems, the poor who were always with us have become the poor we can no longer support. The ‘necessity’ of social exclusion, therefore, refers less to exclusion as a condition than to exclusion as a narrative of social space: it is an exclusion from the large ‘body’ of human capital available to the competition state – a concept which in turn alludes to the probable solution to the problem. The narrative of social exclusion lies, therefore, at an important intersection between the politics of the Left and Right in the contemporary world: to be on the Right today is to assume that a certain wastage of ‘human capital’ is absolutely necessary for the smooth functioning of a modern economy. The Left, of the New Labour type at least, rejects such characterization, insisting on viewing poverty and unemployment as an unnecessary waste of human capital. Despite their contrasting standpoints, both views are compatible with a contemporary fa-s based on the notion of global competitiveness and are, therefore, an integral part of the internalization of the logic of globalization into the social, economic and political fabric of the state. Here, however, we must be cautious because the concept of social exclusion, like so many of the terms we have considered in this book, seems to fare well when subjected to a reality check. The idea of ‘exclusion’ in particular has been easily assimilated into the popular imagination (including, of course, the policy imagination) as describing all too real experiences of the contemporary world. We therefore need to examine the rise of the concept carefully to understand the ways in which it has been incorporated into the contemporary idea of the state.

The rise and rise of social exclusion Social exclusion is a powerful concept which purports to encapsulate the multiple, chronic and cumulative effects of social disadvantage (Madanipour et al. 1998). Those advocating the concept, use it as a more sophisticated way of describing poverty – stressing its capacity to capture the complex, dynamic and multiple characteristics of social marginalization of which material poverty is only one (Silver 1994; Madanipour et al. 1998; Levitas 1996, 1998; Byrne 1999; Hills et al. 2002). Unusually, the concept of social exclusion has a remarkably well-documented history, its earliest use being traced back to Max Weber, who saw exclusionary practices as strategic actions used by different societal groups (Hills et al. 2002). The more recent usage of the concept, however, is commonly dated from a

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speech given in 1974 by René Lenoir, the French Minister for Social Action, who referred to les exclus – 10 per cent of the French population who he claimed were existing beyond civil society because they were not at that time covered by social insurance (Silver 1994). It is interesting to note how social exclusion emerged more or less simultaneously with the concepts of globalization and the competition state. At that point in time, in any case, the ‘excluded’ consisted of: the mentally and the physically handicapped, suicidal people, aged invalids, abused children, drug addicts, delinquents, single parents, multiproblem households, marginal, asocial persons, and other social misfits. (Silver 1994, 532)

Interestingly, given the subsequent history of the term, this list does not refer to the unemployed or any other group whose exclusion might be attributed primarily to economic deprivation. However, the broadening of social exclusion to include economic deprivation happened very quickly in response to rapid changes in the structure of the European economy and society. The term was appropriated by the French Left to describe ‘the ones that economic growth forgot’ during periods of expansion (or, to use our terms, the period of acceleration of the privatized-national economy), and subsequently the growing numbers of the unemployed and the poor that accompanied the recessions of the late 1970s and 1980s (Silver 1994, 534–5; Hills et al. 2002). The popularity of the concept of social exclusion developed throughout mainland Europe alongside the massive social upheavals of the 1970s and 1980s which transformed the social and economic structure of Europe and, ultimately, the world as a whole. The oil shocks of the 1970s, successive recessions and the very rapid demise of much of the traditional European employment base created pockets of severe deprivation and, for the first time, permanent and intractable disemployment.3 For the worst-hit of these areas, many of which were not strangers to difficulty in the past, the elimination of the social and economic substructure brought about unprecedented hardship. As these problems spread throughout the industrialized world, so the application of the concept of social exclusion proliferated rapidly. Already part of mainstream national European policy debates, the term was explicitly adopted by the European Commission in the late 1980s (Room 1995; Hills et al. 2002). Since then, it has become one of the major targets of social and welfare policy at a European level. The first European Council of Ministers resolution dealing directly with the problem of exclusion can be dated back to 1989, followed by the 1994 White Paper on Growth, Competitiveness, Employment: The Challenges and Ways Forward into the 21st Century (CEC 1994), which opened up the policy debate over how to

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tackle what was seen as a growing problem. Since then, extensive research programmes have been launched intended to better define the problem, to identify best practice in resolving it and to shape policy. In addition to being firmly established at a transnational level within Europe, social exclusion has also been adopted by several international organizations. UNESCO cites social exclusion as one of the main targets of the Management of Social Transformation (MOST) programme and placed the issue of social exclusion at the top of the agenda of the 1995 World Development Summit (United Nations Research Institute for Social Development 1995). The World Bank also joined in the fray, with its President, James Wolfensohn, delivering a keynote speech outlining his view of ‘the challenge of inclusion’ at the Bank’s annual meeting in Hong Kong in September 1997. This very rapid proliferation of the concept of social exclusion has led, unsurprisingly, to its application to an extraordinarily wide range of social contexts and an equally diverse range of social problems. Notwithstanding this diversity, in the course of this rapid proliferation the meaning of social exclusion has tended to become increasingly consistent, coalescing around three key themes: first, that social exclusion is primarily defined by economic access; second and more specifically, that it is a consequence of various aspects of economic globalization and is itself, therefore, a global phenomenon; and third, that social exclusion is manifest globally at the level of the local community. We will examine each of these in turn.

Social exclusion and the ‘mainstream’ economy The remarkable shift in the direction of the social exclusion debate from broadly social problems to the primacy of economic deprivation was perhaps inevitable. In the absence of more general quantitative social indicators (social networks, family structures, civic participation, etc.), which are notoriously difficult to gather and do not necessarily provide sufficiently comparative data, it is hardly surprising that economic data should come to be used as a cipher for social inclusion. Most states, after all, collate data regarding income distribution, unemployment, prices, interest rates and so on, giving them a readily available and apparently commonly understood baseline measure for economic participation. This is all the more plausible since there is an undoubted connection between material and social well-being. If that were not enough, the link between social exclusion and economic inclusion is made explicit throughout the policy and academic debates on the concept. The European White Paper on Growth, Competitiveness, Employment, for example, expresses this point very clearly:

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Given the scale of the needs that have to be met, both in the European Union and elsewhere in the world, recovery must be achieved by developing work and employment and not by endorsing basically Malthusian solutions. (CEC 1994, 3)

For ‘Malthusian’ read ‘welfare’ solutions. The White Paper goes on to assert the EU’s responsibility for ‘remaining faithful to the ideals which have come to characterize and represent Europe, of finding a new synthesis of the aims pursued by society (work as a factor of social integration, equality of opportunity) and the requirements of the economy (competitiveness and job creation)’ (CEC 1994, 3). The White Paper, therefore, explicitly lays out a belief that the ‘aims of society’ equate with the competitive needs of the economy and, moreover, that traditional welfare solutions are not appropriate to deal with the socially excluded. In 1997 Michel Hansenne, the Director General of the International Labour Organization (ILO), also laid out the connection between exclusion and unemployment: These phenomena [of social exclusion] are very often a reflection of exclusion from the world of work (long-term unemployment, termination of unemployment benefits, poor level of training of young people and single women, etc.) or precarious employment on the labour market (involuntary part-time work, fixed-term employment, ‘odd-jobbing’). (1997, unpaginated)

Whilst Hansenne concedes that those in employment might also be subject to the many pressures that can contribute to exclusion, his speech was almost wholly oriented towards unemployment as the cause of, and re-employment as the solution to, social exclusion. To some extent, this development in theories of social exclusion is entirely understandable. Unemployment is without doubt a very significant factor in creating the conditions and processes collectively known as social exclusion. It is also true that were many of those people described by the concept to get paid work, the hardships they experience might be alleviated. That said, to see employment as the only solution to social exclusion represents a sweeping transformation in policy-making (Levitas 1996, 1998). Although other causes for exclusion are commonly acknowledged, from around the mid-1990s unemployment is viewed as the single greatest cause of social exclusion world-wide, to which the automatic solution is assumed to be employment – and that is where the link with the three-tiered imagery of globalization is made.4 For all the empirical inaccuracy of this construction of ‘social’ exclusion (Levitas 1996), the equation of social inclusion with paid work and economic activity is crucial to our understanding of the ways in which a particular discourse of poverty is being integrated into the emerging

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cartography of offshore and the competition state. Appeals to social exclusion retain a residual conception of a coherent and solidaristic space of social inclusion – the space of citizenship in all its forms. However, the content of that space, and by extension the defining quality of social citizenship within it, is now defined in relation to the global economy. Civil society, therefore, is no longer identified by a set of core values, rights and responsibilities but by levels of access to, and participation in, ‘opportunities’ in the mainstream economy (Levitas 1996). As John Lovering has pointed out, the key distinction made in the mainstream debate over social exclusion is not between exclusion and inclusion, but between exclusion and ‘competitiveness’ (1998, 35).

Social exclusion ‘in the wake of’ economic globalization Throughout the literature on social exclusion (and to a much lesser extent that of globalization), the new problems and processes of exclusion are presented as consequences of globalization in general and economic globalization in particular.5 This is not to suggest that the whole spectrum of social problems and deprivations is claimed to have been created by globalization, rather that the fragmentation of traditional social practices and structures has added significant new dimensions to pre-existing problems. There are several ways in which globalization is seen to have caused social exclusion. The creation of transnationalized production networks has transformed the relationship between workers and employers. One of the most noted effects has been to bring local and regional workforces in the same industrial sector into direct competition with each other for diminishing employment opportunities in increasingly capital-intensive firms. This has two main effects. First, those with jobs are in a considerably weaker position with regard to their employers than in the past. Second, for those people and places unable to compete for jobs and investment, the effects are catastrophic. The closure of ‘uncompetitive’ coal, steel and shipping industries in the higher cost countries of the developed world during the 1980s created persistent mass unemployment in many areas, leading to extreme poverty and rapidly declining populations (Beynon et al. 1994; Hudson and Williams 1995; Dicken 2003). Whilst this process was originally manifest mainly in the traditional industrial sectors, it is now also true of the most advanced manufacturing plants. The North-East of England, for example, which was devastated by the closure of coal, steel, ship-building and chemical plants during the 1980s, has experienced a renewed round of plant closures during the 1990s in the high-technology industries that (partially) replaced them (Beynon et al. 1994). The dislocation of conventional political structures can also be seen as a contributory factor in the development of social exclusion as a problem

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distinct from poverty. The ‘hollowing out’ of the state (Jessop 2002) in the face of new structures of global governance and the increased salience of local–global interconnections (Amin and Thrift 1994) are widely interpreted as having weakened conventional political structures and undermined democratic accountability. Long a problem in the less developed world, the issue of access to decision-making processes has become increasingly an issue in the industrialized world as, on the one hand, political processes have been privatized and, on the other, structures of conventional political activity have been disrupted. So, for example, the capacity of national governments to legislate in favour of domestic markets has been limited by the transfer of powers previously considered to be the remit of a sovereign government, to transnational organizations, such as the European Union, North American Free Trade Agreement (NAFTA), the World Trade Organization and so on. The result is a ‘democratic deficit’ between nationally based systems of political representation and transnationally organized structures of political authority. The problem of cultural exclusion is seen in particular in relation to the export by the industrial world of products associated with particular lifestyles and values. The process of ‘McDonaldization’ (Ritzer 1999) and the development of other ‘global’ products and media (Coca Cola, CNN, Disney, etc.) have been accused of alienating people from traditional, indigenous cultural forms. This has also been identified in connection with the changing pattern of labour employment brought about by the internationalization of production systems. As noted above (p. 98), over 90 per cent of the 27 million people working in EPZ-based manufacturing plants are women (International Labour Organization 1998). Women are preferred in such plants because they usually command lower wage rates, are more prepared to work part-time, are more flexible in terms of working hours and conditions and are less unionized. The increasing feminization of local and national workforces has obvious consequences for the nature of the family in many parts of the world, since women generally retain responsibility for child-rearing in addition to their paid work, but this has also been identified as the cause of a rise in domestic violence. The greatly increased mobility of people as a result of lower cost and quicker transport networks has greatly increased the intersection of cultures through direct personal contact. The majority of such interactions comes through the massive expansion of international tourism from countries of the industrialized world increasingly to less developed parts of the world. The tourist trade has been blamed for instances of social exclusion whereby local people work for low wages and find their cultures commodified for the consumption of holiday-makers (Urry 1990, 1992). There is also a much more sinister side to this, with the rise of ‘sex-tourism’ and the exploitation of women and children by relatively wealthy men from the industrialized world able to circumvent strict domestic laws (Castells 1998).

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The importance of information technology in the workplace and more generally in society in the north (and increasingly the south) has given rise to intense forms of technological exclusion. The concentration of informationintensive labour in the north has, as noted above, contributed to the creation of what Castells calls the ‘newest international division of labour’ (1996, 106) between the developed and underdeveloped worlds. Even within the developed world, however, there are huge disparities between different age groups, genders and geographical areas, in the level of access to and skill in information and communications technology (ICT), hardware and software. There are, undoubtedly, other effects understood to have been caused by globalization that are described as social exclusion in one form or another. Our purpose here is not to be exhaustive. What we do want to draw attention to, however, is the particular way that the link being drawn between globalization and exclusion is made. Exclusion is generally seen to be a consequence of economic globalization, but this is not presented as evidence of any defect with globalization itself. On the contrary, as is so often the case, globalization is presented as an externalized economic force to which adaptation must be made. It cannot, therefore, bear responsibility for its consequences. We have already explained that the image of externality derives from the confusion of offshore for globalization. That sort of narrative is now brought home, as the status of exclusion is accorded to those who fail to keep up with the demands of ‘globalization’. It is, in other words, presented as though their marginalization from a globalizing world economy is their own fault! The more global you are, this implies, the less excluded you are. This, in turn, has very important consequences for the ways in which social exclusion are to be resolved, consequences that are even more pronounced when we consider the ‘local’ spatial scale to which they are also routinely consigned.

Social exclusion and the local scale Although the labour market and other circuits from which the poor are understood to be excluded are national and, by extension, global, the point of (re-)entry is almost without exception understood to be ‘local’. This is in large part a result of the standard imagery of social exclusion which ascribes to it a specific spatial scale: that of the local community or neighbourhood. At an empirical level, where the concept of exclusion is used in its descriptive and analytic mode in relation to incidences of poverty and marginalization, this is quite understandable. The acute and compounded forms of social and material deprivation that the term is used to describe tend to be concentrated in particular geographical areas. Statistics produced from

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analysis of the 1991 census for England and Wales, for example, support the idea that the various processes considered as evidence of social exclusion are indeed concentrated in specific areas (Dorling 1995). The figures reveal specific concentrations of poor housing, unemployment and illhealth. They also reveal that certain causes of premature death tend to be concentrated in the same geographical areas, revealing both a very clear ‘north–south’ divide in terms of life expectancy and a clear association between poverty and illness (Dorling 1995: 160; Hudson and Williams 1995; Hills et al., 2002). As Madanipour et al. argue, various forms of exclusion ‘when combined, they create acute forms of exclusion that find spatial manifestation in particular neighbourhoods’ (1988, 22). As a consequence of this all too real geography of poverty and marginalization, the word ‘community’ has almost become a synonym for social exclusion. As Hoggett notes, For policy-makers and street-level bureaucrats within the state, the idea of community has nearly always been used as a form of shorthand for the socially excluded. (1997, 11)

As a result, and despite the widespread acknowledgement of the many different aspects of social exclusion and the spatial complexity of its manifestation, the mainstream discourse of social exclusion tends to concentrate solely upon the local scale as the most salient for its identification. Whilst this is in part a consequence of the empirical evidence outlined above, the ‘localization’ of exclusion is also, and perhaps more powerfully, a product of the particular way in which the term is couched. It is not possible, for example, to consider an entire country or transnational region to be ‘socially’ excluded, since the term carries with it a particular spatial reference point – ‘society’. Social exclusion, although presented as a problem that is manifest globally and as a product of globalization, none the less ends at the border of the nation-state. As the Czech gypsies who landed at Dover in 1997, or the Moroccan emigrants who brave the crossing to Spain have discovered (Khalaf 1999), one state’s socially excluded person is another state’s ‘economic migrant’ (Money 1997, 1999). This has the effect of consigning the meaning of social exclusion to specific, sub-national areas which in practice and discourse have come to be devolved down to the lowest spatial unit. Hence, the entire debate about the causes and locations of social exclusion, as well as proposed solutions to it, refers to local, ostensibly geographically-defined, communities and/or ‘neighbourhoods’ (CEC 1998a; Gittell and Vidal 1998; Levitas 1998; Madanipour et al. 1998; Social Exclusion Unit 1998; Byrne 1999). Perhaps the clearest expression of this comes with the way in which the solutions to social exclusion have come to be presented both by grassroots development agencies and non-governmental organizations (NGOs) and,

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increasingly, by the institutions of national and international governance. The identification of the local scale as an, if not the, appropriate starting point for development and regeneration activities is far from new. As Friedman (1992) notes with reference to the ‘Third System’ proposals made by the International Foundation for Development Alternatives (IFDA) in the late 1970s, Development is lived by people where they are, where they live, learn, work, love, play – and die. The primary community, whether geographical or organizational, is the immediate space open to most people. It is the village, the neighbourhood, the town, the factory, the office, the school, the union’s local, the party’s branch, the parish, the sports club, the association – whatever its purpose – that personal and societal development first and best interact. (Friedman 1992, 3–4, emphasis in original)

Despite the stress laid by the IFDA documents on the multiplicity of scales of intervention in development activity, of which the local was a very important one, as time has gone on the development orthodoxy has come to privilege the local scale above all others (Levitas 1998). As David Byrne notes, ‘Community’ matters not just because it is the key collective identity constituted through space, but also because ‘community’ development has been just about the only strategy of empowerment attempted, however halfheartedly and sometime [sic] with a view to disempowerment rather than empowerment in the whole repertoire of anti-exclusion policy. (1999, 111)

The effect of this can be clearly seen in various established databases containing details of ‘anti-exclusion’ projects around the world. UNESCO, for example, launched a database in 1994 as part of its Management of Social Transformation (MOST) programme. The database consists of details of more than 650 projects addressing the problem of social exclusion in such disparate parts of the world as Germany, the UK, Brazil, the US, Finland, South Africa, Belgium, Norway, Philippines, Venezuela, Colombia, Argentina, Morocco, Australia and Turkey (UNESCO 1999). In 1999, the European Commission established a similar database, Local Initiatives to Combat Social Exclusion in Europe,6 containing ‘best practice’ information on over 600 individual projects drawn from all the member states of the EU and covering a similar range of issues. Despite the enormous range of different places, peoples and problems included in these databases, their one constant feature is that social exclusion is assumed to be manifest at a local level. Furthermore, by suggesting that the local scale is also the most salient and, in practice, the only scale at which social exclusion ought to be tackled, the possibilities for intervention

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in poverty are similarly restricted. In the UK, for example, which established a ‘Social Exclusion Unit’ in 1997 to find ways to tackle this ‘new’ problem, the main policy statements are a ‘National Strategy for Neighbourhood Renewal’ (SEU 1998; emphasis added) and a ‘New Deal for Communities’ (DETR 1998; emphasis added). The result is that the policy discourse of social exclusion has developed alongside a ‘new localism’ (Goetz and Clarke 1993) in which ‘community rules’ (Levitas 1998). As in the case of ‘globalization’, therefore, a primary outcome of the rise of the discourse of social exclusion, itself constructed as a consequence of globalization and manifest on a global scale, is a specific narrative of localness. As Giovanna Procacci has put it: Social exclusion describes a dual society (ins–outs), and in doing so confirms the break of social relations … The kind of policies that social exclusion has implemented are mainly characterized by turning social problems into urban problems, where they take on a specific feature of urban structure, that is the replacement of inequality by segregation. Therefore, the unique meaning of citizenship at work in such policies is local integration. From this vantage point citizenship, or the lack of it, becomes a question of sociability, at most a question of ‘active animation’, a culture, an identity, a set of behaviours whose frame is the urban location where the exclusion takes place. (1999, p 24–5; emphasis in original)

The localness of social exclusion has tended to be accepted as a logical consequence of the breakdown of conventional, national spatial forms. And yet, in spite of all this interest in and promotion of the local, its meaning and content tend to be left unexplored and undefined.7 Despite its routine invocation with respect to social exclusion, the local is ‘an elusive concept that escapes precise definition’ (Sengenberger 1993, 314). Although the local scale continues to be articulated in the language of conventional geographical categories – as though its meaning were self-evident and transhistorical – in practice, localness has come to be identified in terms of relative proximity of poor people in poor places to an ideal-typical construction of the ‘mainstream’ economy and the ‘mainstream’ labour market. In this manner, a particular narrative of local social exclusion has been configured into the fa-s of globalization. There is therefore an important disjuncture between the way in which locality is represented, which remains essentially based on topographical, cultural and political features, and the content of ‘locality-as-exclusion’, which is increasingly based on relative levels of access to and participation in the global economy. The presentation of the ‘local’ and, above all, the ‘community’ (used as synonyms) as standardized units by, amongst many others, the European Commission, World Bank, UNESCO and so on, is in fact only made possible by the institutionalization of this disjuncture. If locality is identified

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according to its specific content as a place, with all its particularities, histories and traditions, then it cannot be a standardized subject and object of policy. If, on the other hand, locality and community are defined less in relation to each other but against a universal and universalizing norm – in this case the global economy – then they can be presented as disembodied socio-spatial units which conform more or less to the norms of economic ‘development’, ‘regeneration’, ‘reinsertion’, and so on (Amin et al. 2002). Anthony Giddens’ version of the Third Way, for example, reproduces precisely this kind of evacuated and standardized ‘community’, linked directly to the process of globalization, and which he advocates as the prime site for the creation of the new politics of his ‘post-traditional society’: The theme of community is fundamental to the new politics, but not just an abstract slogan. The advance of globalization makes a community focus both necessary and possible, because of the downward pressure it exerts. ‘Community’ doesn’t imply trying to recapture lost forms of local solidarity; it refers to practical means of furthering the social and material refurbishment of neighbourhoods, towns and larger local areas. (Giddens 1998, 79)

Again, we find globalization marshalled as an externalized fact, in response to which a reorientation of political activity to the ‘community’ is a necessary adaptation on the part of the state. Although Giddens presents this as a ‘practical’ matter, regenerating ‘real’ communities rather than using community as an abstract slogan, he none the less imports a normative abstraction all the same. Rather than seeking to ‘recapture lost forms of social solidarity’ (in other words, the specific character of places however much they have been disrupted and/or destroyed), Giddens is seeking to reinvent community precisely in relation to the exigencies of the normative hierarchy of the global economy. ‘Community’ in this context is not an abstract slogan, it is an abstraction – a normative prescription for what local places ought to be like, indeed must be like, in the aftermath of the creation of a global economy. An intriguing aspect of the quite explicitly stated spatiality of the discourse of social exclusion is that while, as we have seen, the phenomenon of exclusion is routinely ascribed to a particular spatial scale, social inclusion is not. The ‘normal’ state of belonging, conformity, citizenship, economic participation and so on, is not described in territorial terms – the spatial articulation of social inclusion is assumed but never articulated explicitly. Spaces of social inclusion, we must presume, consist of all those other localities and spaces that are not characterized by exclusion. As our tripartite scheme suggests, the spatial content of the antieconomy, of social exclusion, is contrasted not with other territorial spatial scales, but with the normative economic space of the global system – the placeless but none the less pervasive ‘mainstream’ economies of offshore

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and the Schumpeterian state. The locality of exclusion is thus of a very particular kind. Excluded communities are rooted to redundant places that have been abandoned by the economic mainstream, which operates not just at a different territorial scale within the same national space (as the conventional imagery of the nation-state would suggest), but as a different form of socio-economic spatiality altogether.

Normative social exclusion Through the increasing use of the concept of social exclusion by international organizations, politicians and academics alike refer to extremely different articulations of civil society and the result can be the erosion of the concept as a description of particularity. As the concept of social exclusion has been applied to an evermore diverse range of situations, it has lost its precision. As Michael Katz (1989) noted some time ago in relation to the discourse of poverty in the US, the relationship between the ‘language of difference’ used to describe the poor by academics and policy-makers, does not necessarily stem from any close analysis of its real conditions. In the case of social exclusion, its meaning within mainstream political discourse has tended to become increasingly convergent, generalized and reified as it has become more commonly applied. Although social exclusion retains its potential as a descriptor of particular processes of poverty and marginalization, this is not the way the term is now most commonly used. As it has become increasingly dislocated from specific contexts by being incorporated into national and international policy programmes, so it has become a normative category of social existence – social exclusion is not presented as an evolving and complex ‘process’ as it is in the academic debate, but as a common ‘problem’ requiring a common solution. Social exclusion, therefore, is a debate wherein various empirical phenomena are brought together as though they constituted a coherent problem. In his analysis of the ‘new poor’, Zygmunt Bauman traces a process of exclusion that emerges from explicit connections made between poverty and ‘criminality’ in the literature of the political Right and in the context of the rise of consumerist lifestyles in the West. Criminality in this context refers both to those literally criminalized by poverty – in other words, those with little choice but to turn to crime either to make ends meet, or to participate at whatever low level in the consumerist dream – but also the ways in which poverty itself has come to be equated with criminality – ‘to be poor is criminal’ (Bauman 1998b, 72), irrespective of the morality of the individual. By being discursively cast out of the normal life of the global economy, the socially excluded have, in Bauman’s terminology, been subject to ‘expulsion from the universe of moral obligation’ (1998, 77). The poor and

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the uneconomic have not, however, simply been expelled into an amorphous void, and nor have the majority been imprisoned, at least not in the formal sense.8 Rather, they have been consigned to a particular social category – social exclusion – and processes of rehabilitation (retraining, etc.) which are themselves confined to particular spatial scales – the local, the neighbourhood, the community. These spatial categories are, in turn, constructed as the spatial and historical opposites of globality. Since the all-pervasiveness claimed for the global system allows for no territorial exception in conventional terms, some other way must be found to express difference from an emerging set of norms. The result is the deployment of the language of conventional territorial spatiality, to differentiate between social groups according to a set of normative, economic criteria of exclusion and inclusion.

Social exclusion as configural narrative The idea of ‘exclusion’, whilst not always explicit, is a necessary aspect of any definition of ‘society’ (Johnson 1991; Madanipour 1998). Every society involves an exercise in delimitation, the creation of an ‘in’ and an ‘out’ based on complex combinations of institutions, traditions, languages, iconographies, identities, religions, ethnicities, territories, laws, and so on. For that reason, the pairing of ‘social’ and ‘exclusion’ might seem a little paradoxical, even tautological, at first glance. In fact, the rather curious nature of this pairing suits its function very well since social exclusion seeks to identify a phenomenon that is itself paradoxical. It denotes a space of exclusion within a society, a normative separation that places certain individuals and communities into a discrete space that is simultaneously in the state but beyond the society – as Lash (1994, 133) puts it, ‘ not in but of civil society’. What is at issue in terms of the meaning of social exclusion, therefore, is not the existence or not of forms of exclusion, but the particular ways they are articulated, the nature of their definition in relation to those deemed to be ‘included’ and, if necessary, the nature of any solutions. All of these are necessarily formulated within the parameters of a particular image of civil society – the fa-s. Social exclusion is, therefore, first and foremost the signifier of a new cartography: of the inner separation of something we used to think was necessarily one. It therefore contributes to the vertical reconfiguration of the spatial imagery of state we describe in this book, in a similar way to that of offshore. In a parallel spatial shift, therefore, the competition state has created two distinctly different spaces of exclusion. On the one hand, it pretends that ‘offshore’ is outside of it, as an external force of change over which it has no control and to which it must adapt itself. On the other, the peculiar localist discourse of social exclusion tells us that the state itself is no longer a unity but contains spaces of radical difference – all citizens may be equal, but some are more equal than others!

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That is not all. The popularized and globalized version of social exclusion has managed to neatly conflate issues of social citizenship and economic class. It incorporates the normative conception of the solidarist social whole (even if not presented as a ‘society’ as such), with an understanding that it is defined in terms of differential access to material wealth. Civil society, in other words, is redefined as a normative economic space. Despite the explicit appeal to a goal of ‘social’ integration, the debate has come, as we have seen above, to be centred on levels of economic participation (Levitas 1996, 1998). The corollary of social exclusion, of course, is social inclusion, but inclusion in what? In the competitive ‘national’ economy.

Poverty as pathology – the deserving and the undeserving poor Just as the discourse of social exclusion can be interpreted as delineating the boundary between the normative spatialities of exclusion and inclusion, it also, as part of the same process, differentiates between the socially excluded themselves. The shift from systems of welfare based on universal provision to those based on localized, contingent and, ideally, temporary provision makes this kind of differentiation inevitable. Some means must be established to decide who remains eligible for welfare and those for whom the only option will be some form of reintegration into the labour market. Adopting the slogan, ‘Work for those who can, security for those who cannot’ (DSS 1998a, iii), as the New Labour government has done in the UK, necessitates some means of distinguishing between the two. The way that this differentiation is being achieved in practice is controversial and complex. Although the details vary from country to country, it inevitably involves some form of sorting mechanism whereby abilities and resources are assessed, training is provided and advice is given. In the case of the UK, for example, participation in the New Deal workfare programme involves a preliminary ‘gateway’ stage during which the particular needs of the individual are assessed and a path through the various programme choices is mapped (Peck 1998). The two elements of the programme that are not negotiable are participation, which is compulsory on pain of loss of all benefits, and destination, hence, in the case of the UK, the programme is designated ‘Welfare-to-work’. Whilst such programmes are intended to draw people out of the welfare system who have no need to be within it, they also serve to redefine the nature of poverty. As a number of commentators have noted, the primary effect of such schemes is to recast poverty and unemployment as a ‘pathology’ of the poor themselves. As Byrne notes, Social exclusion programmes predominantly centre on the rectification of personal deficits through training. They are founded on a supply side notion:

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if only these people could acquire the skills which the higher levels of the labour market want of them, then everything would be fine. (1999, 128)

The idea that poverty and marginality are ‘personal deficits’ implies that those unable or unwilling to live up to the emergent norms of the global labour market are in some way pathologically deviant. It also implies that responsibility for becoming more employable lies in the first instance with the unemployed themselves and not with the institutions of the mainstream labour market from which they are excluded. The wide range of organizations that seek to provide training and other intermediary services between welfare and the labour market, thus act as conduits through which the unemployed pass in the process of acquiring the social and professional skills deemed appropriate for participation in the new moral economy. Workfare schemes, therefore, contribute to the valorization and reification of the boundary between the anti-economy and the mainstream and to the normative differentiation between the flexible and potentially employable poor and the rest. The effect of the introduction of workfare strategies in Canada, Brodie suggests, has been to reintroduce ‘into political discourse concepts such as the “deserving and undeserving” poor and “genuine” versus “non-genuine” poverty’ (1996, 391). Strategies of recasting welfare in this way, she continues, signal a shift in the philosophy of welfare provision away from the protection of people who are either temporarily or permanently displaced by the wage economy, to a new regime where retraining or participation in the job market are conditions for social assistance. (1996, 391)

This is indeed the case but needs to be drawn out further. Retraining and participation in the labour market are preconditions for temporary social assistance. To qualify for long-term or permanent social assistance, one must increasingly be able to demonstrate an absolute inability to work either because of some form of severe disability or illness. Simply being unemployed, whether or not there are jobs available in the area where you live, no longer carries eligibility for social security benefits. Part of the package of ‘incentives’ for the unemployed to adapt themselves to the emerging moral order is thus the stigmatization of poverty as either criminality (Bauman 1998b) or as disability.9 In the imagined economies of globalization, therefore, the unemployed shoulder the blame for the failures of the labour market. Indeed, for some economists there is no such thing as labour-market failure. Rather, it is the failure of the unemployed, the inflexible and the static, to keep up with the demands of the global labour market that causes unemployment. The task of the localized, fragmented and intermediary welfare system is thus stood on its head – the purpose of the Welfare State moves from being one

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of general social protection to being a highly selective combination of social adaptation of the capable, minimal maintenance of the incapable and the elimination of the criminal (Bauman 1998a and b).

Social exclusion as a new ‘mode of poverty’ The way in which discourses of social exclusion and globalization rearticulate the cognitive map of the contemporary state is to create a normative distinction between a ‘normal’ mode of economic participation and an ‘abnormal’, ‘deviant’ and/or ‘criminal’ mode of economic barbarity. ‘Normality’ is associated with modern mobile capitalism which is supposedly perfectly capable of providing for the good life. Abnormality is associated with pockets of poverty and any resistance to this image of the happy consumer. As such, the bounds of ‘existing society’ have been extended and rearticulated. Through the increasing equivalence between social citizenship and economic participation, we are forced to differentiate less between different socio-economic classes, or even people and nations of different societies; the distinctions are increasingly blurred and obscured by the new international division of labour. We are encouraged, however, to make a distinction between those able to join the mainstream economy at any level, and those who cannot. By the same token, we can also see in this re-articulation of the discourse of globalization a cynical reformist programme, aimed at lessening the fiscal and administrative burden on the state without altering the basic relations of production. Just as we have witnessed the progressive marginalization of traditional political radicalism, most recently in the rise of New Labour in the UK but also throughout the past century in the US (Lasch 1970), so we have seen social change reconstituted as change in material conditions and the progressive withdrawal of the state for reasons of fiscal prudence and efficiency (Atkinson 1999). In the age of globalization, the poor who were always with us, have become the poor we can no longer tolerate except in extremis. The poor are presented as inhabiting a series of local places across the globe that, marked by the label ‘social exclusion’, lie outside of normal civil society. Their route back into the amorphous space of inclusion that the rest of us inhabit is through the willing and active transformation of themselves to conform to the disciplines of the market, since it is that which they are ultimately rejoining. The competition state has been able to harness a mass of self-disciplining individuals, who have managed to reorient their own sense of success and self-worth towards competition: this is the world of the ‘winners’ in business, in the office, in politics, who definitely do not want to be associated with ‘losers’ (Lasch 1979). The poor, the excluded, the ‘losers’, can ultimately extricate themselves only by themselves. In the new policy language

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of ‘empowerment’, responsibility for that process of ‘inner’ transformation lies with the poor themselves who need to adapt, flexibilize, retrain and reskill; they need to open up to the new reality, to raise their heads and understand the values of the new society. This is not merely an economic programme, it is, as Tony Blair has claimed, an ‘ethic of responsibility’ (Blair 1997). Of course, reality comes knocking. In the absence of the unsustainable and uncompetitive Welfare State, the route through which ‘the excluded’ are to better themselves is increasingly confined to local and community-based projects organized outside of and instead of state-funded and supported welfare systems. Such projects, which in most instances are semi-privatized adjuncts to the public sector (Amin et al. 2002) serve a number of different functions. They serve as the conduit for those adaptable enough to escape this imaginary realm of the anti-economy. But they also, crucially, serve to contain those who cannot, those who fail to meet the standards of the new ethic of responsibility. Their role as an ‘alternative’ to the mainstream public and private sector economies is all too often a means of providing a limited degree of local poverty relief in a manner that reduces the political and fiscal risk to the state and the mainstream economy, whilst at the same time relieving the private sector of any responsibility at all, other than through the entirely voluntary exercise of ‘enlightened self-interest’ (Byrne 1999; Amin et al. 2002, 2003). The ways in which localism and social exclusion are constructed, the way they are written into the fãs of the competition state and by whom, affects their meaning, content and function. Far from being emancipatory – which was the original purpose behind the concept of social exclusion as a more holistic descriptor of chronic poverty – the way in which these concepts have come to be configured, in theory and practice, can aid the creation of localized socio-economic ghettos. The ‘locally excluded’ are, therefore, discursively confined to limited circuits of local social and finance capital that maintain the appearance of growth, change and ‘integration’, whilst at the same time reinforcing the boundaries of exclusion. More importantly, perhaps, the spatiality of exclusion contained within contemporary policy narratives is contrasted to globality, presenting an image of globalization not simply as an economic ‘fact’, but as a moral imperative. It is a contingent after-effect of such discourses that the active globalizers of offshore and the competition state need not bother themselves with the socially excluded; it is simply not their responsibility. The consequence of these complex processes is, as suggested above, the production in the language and imageries of policy-oriented analysis of a new ‘mode of poverty’. Just as the poor have always been with us, so the means by which ‘we’, the non-poor and the non-excluded, define and contain ‘them’, have changed. The discourse of social exclusion produces a particular normative geography of exclusion and poverty that, in casting the poor out of the new moral order, the civil society of the global economy, normalizes and reifies them.

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This is perhaps best illustrated by a consideration of the explicit objectives of the majority of anti- exclusion policies of the new social democratic parties of the New Labour ilk. Although there are occasional references to ‘inclusion’ as the desired outcome (Wolfensohn 1997, for example), by far the most common objective is not social inclusion, but social cohesion (Leonardi 1995; CEC 1994; Hooghe 1996, 1998; Gibb and Wise 1998). The pursuit of social cohesion falls far short of the goals of equity that characterized the objectives of the post-war Welfare State. Rather than being an attempt to resolve poverty in any absolute sense, the policy goal of social cohesion is an attempt to achieve what amounts to an ‘acceptable level’ of poverty – a level of poverty that does not pose a serious threat to the privatized-national economy. As suggested above, the way that social exclusion has come to be articulated creates a division more invidious still than that between the ‘deserving’ and ‘undeserving’ poor. Rather, it divides the employable from the unemployable, the undeserving from the pathological, the curable from the terminal. The consequence of this is to transform poverty from being a function of the failure of national, let alone international, economies or polities, to a function of the poor themselves. As such, a level and type of poverty is achieved that cannot threaten the cohesion of the state. Not only are the residual welfare recipients in the care of local community-based voluntary organizations or social enterprises, and therefore unlikely to appear as an excluded ‘class’ with any form of common interest, but they are also incapable, because of their ‘personal deficits’, of rejoining the labour market. Poverty constructed in this way cannot threaten the legitimacy of the competition state, since it is not a product of either the state or the economy. The localization of poverty, therefore, is a process by which the poor are disciplined, defined and contained. They are disciplined and diminished by the new moral order of the global, which demands their incorporation into the placeless spatiality of the mainstream economy. They are defined by the articulation of the normative boundary between the anti-economy and the mainstream. They are contained, since the localities they inhabit are excluded from mainstream national and global circuits.

7 Conclusion

The names of such things as affect us, that is, which please, and displease us, because all men be not alike affected with the same thing, nor the same man at all times, are in the common discourses of men, of inconstant signification. For seeing all names are imposed to signifie our conceptions; and all our affections are but conceptions; when we conceive the same thing differently, we can hardly avoid different naming of them. (Thomas Hobbes, Leviathan [1651] 1951, 109; emphasis in original) Drenched in data, fantasy becomes reality, because at one level, it is real. (William H. Gass 1998, xiii)

Politics is, on some readings at least, the art of the possible. The problem is, of course, that what is possible at any given time and place is limited. There are, first and foremost, the familiar practical constraints on political possibility – the availability of resources, appropriate institutional structures, democratic mandates, issues of moral legitimacy, and so on – and these are real enough. However, these are the practical limits particular to the internal functioning of existing political systems. Beyond these there are other, more subtle if equally powerful limits, and they have to do with what is taken to be ‘common sense’, ‘normal’, even ‘thinkable’, at a given time and place. This is what we have described in this book, after de Certeau, as the fa-s: a constitutive bounded discursive space defining the political field. There is, therefore, an important difference between two forms of power, constituting and constituted: if one really means to give the distinction between constituting power and constituted power its true meaning, it is necessary to place constituting and constituted power on two different levels. Constituted powers exist only in the State: inseparable from a pre-established constitutional order, they need the State frame, whose reality they manifest. Constituting power, on the other hand, is situated outside the State; it owes nothing to the State, it exists without it, it is the spring that no current use can ever exhaust. (Georges Burdeau, quoted in Agamben 1998, 39)

Constituting power appears as if it springs from nowhere and is produced and controlled by no one in particular – this is what Burdeau means by

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‘outside the State’. But, as we have tried to demonstrate in this book, constituting power is not some mysterious or mythical force that exists wholly outside of our influence. On the contrary, it is a power palpably felt and familiar to anyone seeking a change in the status quo. The first hurdle faced by a radical political programme of any sort is to try to reframe the debate, to change the very nature and boundaries of what is taken to be ‘common sense’ – and it is always the biggest hurdle because it involves the rewriting of foundational narratives. Yet it can be done. This was, for example, the hurdle faced by the bourgeoisie in the seventeenth century, by feminists in the late nineteenth century, by environmentalists, anti-racists and gay liberation movements in the twentieth century, and so on. To effect changes in the constituted power of the state, all of these various movements were aware, however liminally, of the need to alter the dimensions of the prevailing constituting power expressed as ‘common sense’. At one time ‘common sense’ decreed, for instance, on the basis of what appeared as ample historical and empirical evidence, that the place of women was in the home and in the kitchen. The feminist movement had to challenge the existing fa-s of their days; that dimension of social space that, ‘opens a space and provides a foundation for the operations of the military men, diplomats or merchants who dare to cross the frontiers’ (1974, 124). Indeed, even after more than a century of feminist activism and its many successes, women continue to be confronted by the invisible yet tangible barriers of ‘common sense’ gender constructions. Our collective narratives, for all their partiality and empirical fragility, their ‘inconstancy’ as Hobbes puts it, nevertheless constrain us and we all willingly accept that constraint to a greater or lesser degree. But how has a ‘common sense’ understanding of globalization been framed, configured? And how does this shape policy and institutional change? As we noted at the outset, these questions tend to be overlooked by the vast majority of studies of globalization, most of which are essentially prescriptive. They seek to answer undoubtedly important, practical questions concerning what is feasible and desirable under conditions of globalization, but globalization itself as a particular narrative of constituting power does not come under close critical scrutiny. Globalization is still understood as something that is taking place ‘out there’ (or ‘by them’ which amounts to the same thing) and the task of the theorist is to report its history and form as faithfully as possible. The fact that this reporting on globalization induces action and institutional change, and that it is, therefore, narratives about globalization and not the abstraction of ‘globalization’ itself which provide the empirical foundations of the debate, seems to have been lost. The result is inevitably limited to the conceptual and empirical boundaries of globalization itself – globalization is treated, in other words, as though it were a domain of constituted power. This book is different, in that it develops a theory of the particular manner by which the cognitive space of ‘common sense’ – which contains

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what is considered possible and desirable in the age of globalization – is articulated. We have demonstrated how, within a series of evolving configural narratives, all of which have histories of their own, globalization and social exclusion combine to form a meta-narrative about the contemporary state, producing a new distribution of socio-economic spaces and velocities. We have also demonstrated how these imagined economies have to a certain extent become self-fulfilling prophecies – they have been written in ways acceptable to their own prescribed conclusions. It is therefore, we argue, impossible to account fully for the development of the socio-spatial concepts of globalization and social exclusion and their associated practices and institutions, without paying attention to the relationship between processes and narratives. Few would argue that the perspective that presents globalization as a homogenous planetary force, a force external to state and politics, a force of market integration driven by technology, is factually wrong. However, what is of far greater importance, from our perspective, is the extent to which any attempt to understand globalization (or any other complex social concept) in purely phenomenological terms fails to account for the powerful narratives at work. Indeed, such approaches generally fail to realize that phenomenology itself is a narrative – a claim that we can somehow ‘know’ the world without any form of ‘reflexive glance’. Such approaches cannot, therefore, account for the power of the narratives of globalization and social exclusion in shaping perspectives on what is possible, desirable or thinkable. Precisely because of their constraining power, however, the crude images of ‘business globalization’ cannot be ignored in spite of their many inaccuracies. They cannot be ignored because they contain an extraordinarily subtle and powerful narrative about what is to be desired, striven and fought for in the contemporary world, and what is to be forgotten, condemned and contained. This, in turn, has a more or less direct impact on what is actually done in a world governed by ‘inconstant’ names. As we have seen in the context of Michael Bonsignore’s observation that ‘all bets are off’ (p. 2), the difference between fantasy and reality is a matter of degree – of drenching the former in ‘data’ to produce the latter. The narrative of globalization as an homogenous, planetary force, is supported by ‘data’ from the offshore economy which, notwithstanding that it is largely misappropriated and misinterpreted (in other words, is a narrative in its own right), provides ample plausibility for the political programme of ‘no alternative’ constructions of global inevitability. The elision of offshore and globalization has thus helped to reconfigure (or ‘emplot’, to use the language of configural narratives) the reorientation of state policies away from goals of full employment and national unity to goals of global competitiveness. The empirical data of globalization (offshore) has, therefore, only served superficially as an argument about the decline of the state. Examined

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as a configural narrative, as we have argued, it can be seen to have reinscribed the state as the ‘competition state’. Under the terms of the emerging fa-s, the competition state must discipline itself and, more specifically, its human populations, to accommodate the new principles of competitiveness. Far from ‘withering away’, therefore, the meaning and function of the state runs throughout globalization as a narrative of socio-spatial difference because it is primarily upon the terrain of the state that this narrative is understood to impinge. Moreover, however much it has been ‘eroded’, the state still provides security, legal infrastructures – for example, the law of contract, the granting of title – education, health and all other ‘precompetitive’ support required for the smooth functioning of today’s economy. But as it does so, it reduces its un- or, worse, anti-competitive ‘interventions’ in the functioning of the market. Despite appearances and common assumptions, this ‘covert’ narrative accepts that the state is not inimical even to the more extreme ends of the business globalization debate, but is in fact written into them. The very fact that offshore is elided with globalization to lend it plausibility and legitimacy means that the very strong theory of the state already implicit in the idea of the ‘shore’ is an integral part of the foundational narratives of globalization. This is why debates on national industrial policies and the competition state are, in our view, concomitant with and not, as many assume, subsequent to the globalization debate and the rise of the offshore economy. This central focus on the unequal relationship between state and globalization, however, left a gaping hole in its wake – a gap noticed and soon filled by the new ‘common sense’. It is no accident of history that, just as the concept of globalization began to be articulated in the 1970s, primarily among business and cultural theorists, ideas about the nature of poverty and poverty eradication as ‘social exclusion’ also started to emerge. The crisis of the state very rapidly became a crisis of the Welfare State, which, in due course, became a crisis of welfare itself. The crisis of welfare has, in turn, become a crisis of and for the poor. Since the logic of the competition state demands that (a) inclusion in the imagined economy of the (national) private economy is a prerequisite for success and (b) that this simultaneously precludes the resolution of poverty by the public purse, the only course left open – the common sense political possibility – is the radical redefinition of poverty itself to neutralize its demands and dilute the threat it poses to competitiveness. The ‘new Durkheimian hegemony’ (Levitas 1996) ushered in by the narrative of social exclusion has achieved this, drenched as it is by the ‘local’ data about poor people in poor places. Narratives of social exclusion have been bolstered by empirical evidence used to lend credibility to the assertion that the poor are no longer merely poor, but are ‘different’ (Byrne 1999). The conception of ‘cultures of poverty’, which was common in the 1980s, has been deepened by a narrative of poverty as individual pathology or criminality. This further marginalizes

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people and places already on the edge of survival and creates invidious distinctions between the ‘deserving’ and ‘undeserving’ poor. Not, of course, that any of this was laid overtly at the door of globalization. With one or two notable exceptions, the narratives of globalization and social exclusion have existed in splendid isolation. There may be an argument that certain aspects of social exclusion are after-effects of globalization (for example, in exacerbating the gap between rich and poor in and across national boundaries), but strongly localist theories of social exclusion, for all that they posit exclusion as a global phenomenon, do not really implicate globalization itself. By the same token, the formal globalization debate has never ‘factored in’ a concept of poverty. Although coeval, the two narratives have, it seems, developed quite independently of each other – they tell different stories about different worlds.1 But far from being a contingent afterthought, the question of poverty as a form of exclusion is integral to the new grid of meaning; the contemporary fa-s. At the same time that the state has been re-inscribed in the image of globalization, so the poor have been re-inscribed within the new imagery of the ‘competition state’. From being the poorest participants in the great national journey, and therefore the responsibility of the state, the poor have increasingly become a retarded element in the great journey of globalization. Globalization is a dynamic, modern, forward-looking and cheerful dimension of contemporary society, while social exclusion is static, archaically local, pathological and generally miserable. In these circumstances, it is difficult to expect the likes of Tony Blair or Gerhard Shröder to contemplate any other ‘solutions’ to the problem of ‘social exclusion’, other than programmes of ‘inclusion’ into the private national economy – itself understood as the rational and inevitable response to globalization or offshore. A radical departure from that sort of paradigm is, at the moment, practically inconceivable. And yet, and this is the paradox of political fa-s, very few, particularly among the experts on poverty and ‘social exclusion’, truly believe in the efficacy or long-term benefits of their programs.2 No one truly believes that poverty and marginalization, north or south, will be eradicated by some process of local ‘social inclusion’. Far from it. So we are pushing for programmes we do not believe in, not because we do not care about the poor, nor simply because of a lack of sufficient will to provide the enormous sustained resources required to make even a dent in the lives of the poor on earth. Rather, we are pushing for them because the true cost of not attempting these programmes would be to admit to serious doubts about the entire image of the global economy. Policies towards poverty and social exclusion, therefore, cannot be understood in isolation; they are part and parcel of the fa-s of the day. It is not the case, as some have argued passionately, that the poor are the victims of globalization, but it is the case that social programmes for dealing with poverty and, indeed, the

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very idea of a society that supports such programmes, are the victims of globalization. They are now increasingly articulated and pursued to the extent, and only to the extent, that they offer support for neo-liberal globalization. That is the power of narrative. Paradoxically, then, the modern fa-s inverts one of the dominant metaphors of globalization, that of the archipelago economy of offshore. This image of offshore – which parades its peculiar geography as one of its great innovations – has been joined by another parallel archipelago economy; that of the socially excluded. The rise of the concepts of both offshore and social exclusion has relied crucially on narratives of spatial difference. However, both have ended up employing the language of conventional topography to describe social spaces at opposite ends of the normative spectrum of economic globalization. Offshore describes different ‘places’ – both in territorial terms (EPZs) and in juridical terms (Euromarkets) – which are diametrically opposed to the ‘local’ places of poverty – inner-city estates, shanty towns, rural villages, etc. The crucial difference between these two discourses of place, of course, is that one is understood to represent the future and is to be embraced, while the other, in representing an obsolete past, is to be eradicated. And that eradication is not only to be pursued in the interests of globalization – so as not to compromise the competitiveness of its active and dynamic participants – but through the extension of globalization. The growing gap between rich and poor world-wide is, it seems, no reason to pause to reflect on the uneven effects of ‘globalization’ world-wide. Rather, since exclusion is a state of ‘insufficient globality’, the answer to poverty is the further expansion of the offshore and private economies, in the certain hope of eradicating the anti-economy. If this seems far-fetched, listen to a tale of ‘inclusion’ told by one of the chief histors of globalization, World Bank President James D. Wolfensohn. In 1997, Wolfensohn gave a major policy speech in which he highlighted a new theme for the Bank: ‘The Challenge of Inclusion’. Wolfensohn began his address by describing a visit he had made to a Brazilian favela to see ‘first hand’ how the poverty and squalor of the area was being tackled through the provision of running water and sanitation. Not surprisingly, the speech describes the important positive effects of the provision of clean water for some of the world’s poorest and most marginalized people. This was not, however, the main point of Wolfensohn’s story. More important than the direct benefit of sanitation, was the vigour with which the women living in the favela were waving their water bills at Wolfensohn as he toured the area. The reason that they were displaying these bills with such enthusiasm, at least according to the vice-governor of Rio de Janiero who accompanied Wolfensohn on his tour, was ‘because this is the first time they have been included in society. With that receipt they can get credit to purchase goods, with that receipt they have recognition and hope’ (Wolfensohn 1997). Wolfensohn concludes from this encounter,

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As I walked back down the hill from that favela, I realized that this is what the challenge of development is all about – inclusion. Bringing people into society who have never been part of it before.

The way the word ‘inclusion’ is used here is important. First, it is used without definition as a self-sufficient descriptive noun. As such, the ultimate goal of ‘inclusion’ is apparently so well known and understood that it requires no name or specification: the excluded will simply be included into ‘it’. The second striking thing about Wolfensohn’s story is that what counts as inclusion in ‘society’ is less the alleviation of the immediate problem of a poor water supply, that is, improved relative access to social goods, or any significant change in the structure of the relationships between people living in the favela themselves, or between them and their local or national authorities. What counts is access to the global credit economy secured on the back of payment for basic amenities. As a place, the favela remains the favela – a marginal and impoverished locality, albeit now with the undoubted benefit of running water. But the major spatial shift here is that the occupants of the favela have been brought to the threshold of the formal private sector economy and therefore, according to Wolfensohn, within reach of the ‘space’ of social inclusion. What will give the favela spatial meaning and social inclusion, therefore, will be its (necessary) ultimate absorption into the private sector economy of Brazil and, simultaneously, the global (offshore) economy of credit and banking. The favela as presented by Wolfensohn in many ways represents the fundamental change that is taking place as the fa-s of globalization becomes ever more fully integrated and normalized in the contemporary state. Favelas, shanty-towns, refugee camps and all the many other impromptu and ‘temporary’ settlements housing the poor and the marginal throughout the world are, at root, conventional horizontal spatial responses to hardship. They are formed when the established spatial relations and structures of people’s lives are disrupted or destroyed. To that extent, they are entirely rational and, in many cases, life-saving spatial shifts. But moving in territorial space in pursuit of a better life is no longer enough if, indeed, it ever was. Simply moving closer to a site of wealth and the promise of prosperity and peace does not make it happen. As the women of the favela seem to have discovered, courtesy of the World Bank, a simultaneous vertical shift is required that has nothing to do with the ground on which they stand. They have not been brought nearer wealth just because they can get physically closer to it. They must accept, it seems, the ‘reality’ of economic globality and with that reality the disciplines of competitiveness that it demands. There is simply no other choice. But is there? As we have argued at various points throughout this book globalization, and by extension social exclusion, are empirically dubious propositions. Their significance seems to lie less in their ‘proveability’ than

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in their plausibility, their normalization. This is because their concrete existence cannot be established in any conventional empirical way – that is, as demonstrable, observable, replicable ‘facts’. Their only existence, therefore, comes in the form of common configural narratives, stories produced and consumed about the world which allow us to live our lives. These narratives are not complete, or ‘true’, or real, in any absolute sense, but are fragmentary and fluid accounts of daily life which nevertheless conform closely enough to a ‘reality check’ to be taken as though they were. What Wolfensohn unwittingly narrates in his account of the favela is precisely the moment at which the configural narratives of the lives of one group of socially excluded people are altered. They were probably unaware that they were ‘excluded’ until this point (they probably thought they were just poor and exploited), but their tickets to the global credit economy, their water bills, change all that. Written into their bills is the narrative of inclusion and with it the narrative of offshore, the competition state and exclusion. What, then, does this say about contemporary political possibilities? Does it mean that now that we are aware of and can be reflexive about the nature of narrative configuration, we can simply ‘re-imagine’ a different way of life – ‘construct’ at will a different geography of power to that represented by the imagined economies of globalization? Unlikely. As argued throughout this book, the fa-s is not merely a product of narratives and performances to the extent that they can be easily rewritten. Rather, it consists of those narratives people are willing and able to invest time and resources in, which of course presumes that they have those resources in the first place. All bets may be off for the CEO of a transnational corporation who can reflexively indulge his (and his shareholders) fantasies, but this is not the case for the women of the favela above, or indeed, for the vast majority of the world’s population. As Scott Lash asked with some exasperation, in response to arguments by Beck and Giddens about the ‘self-construction of life narratives’, outside of the sphere of immediate production, just how ‘reflexive’ is it possible for a single mother in an urban ghetto to be? … [J]ust how much freedom from the ‘necessity’ of ‘structure’ and structural poverty does this ghetto mother have to self-construct her own ‘life narratives’? (1994, 120)

The answer, of course, is very little indeed. Despite this, the many proponents of ‘local’ solutions to ‘local’ exclusion continue to argue, more in hope than expectation, that local ‘empowerment’ and/or the creation of local ‘social capital’ will somehow resolve problems of global poverty (Amin et al. 2002). Does this mean, then, that these imagined economies are so firmly embedded in our collective consciousness as well as in our institutions and daily performances, that we are trapped? Has the discourse of ‘no alternative’ finally come true?

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Within the dominant discourse it is certainly very difficult to see any other possible solution being contemplated. Not because, ironically, poverty is a contingent after-effect of globalization and therefore not its (our) responsibility but because narratives of globalization already contain the theory of social exclusion. Globalization, as we have seen, relies for its meaning on an acceptance of an image of the world economy operating at different speeds. Since social exclusion is written into this imagery – since it is immanent to the narrative – it becomes difficult to articulate a plausible theory of poverty and poverty reduction without challenging the entire offshore and private economy matrix upon which the discourse of globalization is built. Given the pervasive nature of the contemporary fa-s we would seem to have very little room for manoeuvre. The realm of the political seems to be tightly confined within the parameters of that which is acceptable to the narrative of globalization. It is perhaps naïve, therefore, to expect our politicians (even those nominally on the political Left), industrialists, financiers, economists, academics, and all the other power-brokers of contemporary globalization to be able to argue their way out of the dense thicket of configural narratives they have done so much to help create. Much the same is also true, however, of those who, in Bourdieu’s words, perform the bulk of the ‘labour of representation’ of globalization. As argued in Chapter 3, perhaps the greatest strength of the contemporary fa-s is derived from the fact that its normalcy – its plausibility – is reproduced by countless small, incidental performances on a daily basis by the ‘man in the street’. It is those of us who are already one step ahead of the women of the favela – those of us, in other words, who are already locked into national and global credit and banking networks in almost every aspect of our daily lives – who do most to reproduce the fa-s. But does this also open up new political possibilities? At the time of writing, the members of one of the United States’ most powerful pension funds, the California Public Employees’ Retirement System (CalPERS), are attempting to use their power as an institutional investor to force the Tyco Corporation and other ‘expatriated’ firms to ‘relocate’ their finances to the US. Tyco, a Cayman Islands-registered TNC with manufacturing and communications operations throughout the world, is effectively being called to account by its shareholders. At stake is the very meaning of corporate governance, since the CalPERS fund is insisting that Tyco management do their bidding in the interests of current and future pension-holders. Specifically, they are demanding that Tyco abandon its offshore fiscal location and repatriate itself, its profits, and its regulatory and social responsibilities to the US. Whatever the outcome of this particular battle, it illustrates that there are at least cracks in the edifice of globalism – even if for the present only open to the wealthier of the West’s pension funds. Small comfort, perhaps, for the socially excluded. However, it does at least indicate the possibility

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of collective action and with it an effective collectivist narrative that runs against the grain of the imagined economies of globalization. As we, along with many others, have argued in this book, we cannot return to older forms of social organization – older stories and older narratives. But we can perhaps see the possibility of alternative narratives even within what seems to be an all-embracing and all-consuming meta-narrative of globality. Perhaps the most important lesson to be learned from the immense power of the narrative of globalization, therefore, is not that it is entirely theoretically and empirically secure, but that it is partial, fragmentary and fluid and that those who currently benefit most from it have little or no idea of how it actually functions.

Notes

Introduction 1. In fact, one of the important functions of academic analysis has long been to tell us how to establish this ‘reality check’ by distinguishing which methodologies are useful in describing social ‘reality’. 2. It is not, of course, without its problems and dangers. The scandals concerning Enron, Worldcom, Quest, Andersen and other corporate failures reveal both how prevalent and how fragile a system based on discounting the future can be. In these cases, ‘creative’ accounting practices were fraudulently used to convince investors and shareholders that future earnings would cover current capital deficits. 3. There are, of course, nations without states and multi-national states: both types are defined, however, as exceptions to the rule, discovered in the very practice of ‘normal’ nation-states. 4. As Hegel puts it: ‘The nations are the concepts which the spirit has formed itself’ (1975, 51). On the concept of the nation as an ‘epic journey’ see Fichte (1981) and Schnapper (1998). 5. ‘The worth of individuals is measured by the extent to which they reflect and represent the national spirit, and have adopted a particular station within the affairs of the state as a whole … the individual’s morality will then consist in fulfilling the duties imposed upon him by his social station’ (Hegel 1975, 80). This sentiment is most famously enunciated in John F. Kennedy’s oft-quoted exhortation to the US ‘nation’, ‘And so, my fellow Americans: ask not what your country can do for you – ask what you can do for your country’ (Inaugural Address, Washington DC, 20 January 1961). 6. Though it should be stressed that the largely exogenous processes by which, for example, post-colonial ‘fiscal states’ were created was very different from the slower endogenous processes at work in Europe. That the fiscal state form informed the creation of these national economies does not mean that it was fully replicated. 7. Such debates have not, of course, entirely disappeared but still echo loudly through, for example, deliberations on the wisdom of membership of the European Union and the single currency. 8. However defined, globalization is not entirely global, by which we mean that the processes associated with globalization do not present themselves in equal measure throughout the world. A good proportion of humanity is touched by globalization only in a mediated and indirect way. See Palan and Abbott (1996, ch. 7).

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Chapter 1 1. For a sophisticated account of the epistemological pitfalls see MacLean (1999). 2. As Marx and Engels put it in the Communist Manifesto, ‘The ruling ideas of each age have ever been the ideas of the ruling class’ (1998, 59). 3. Mainstream approaches draw heavily on the hypothetico-deductive methods of the natural sciences. These are characterized by Pierre Bourdieu as ‘objectivism’: ‘set out to establish objective regularities (structures, laws, systems of relationships, etc.) independent of individual consciousness and will’ (Bourdieu 1990). 4. At the time of writing (March 2003), for example, HSBC is advertising itself as ‘The World’s Local Bank’ – deliberately exploiting the idea of a ‘global’ presence backed up by ‘local’ knowledge. Without the common acceptance of the existence of the global economy, and by extension of a process of globalization to which even individual bank customers must adapt, this kind of representation would be meaningless. 5. See also the highly critical discussion of the ‘localist’ and ‘communitarian’ agendas of the anti-globalization movement developed by Hardt and Negri (2000, 42–6) and again in Bauman (2002, 19). See also Peck and Tickell (2002). 6. See also the chapter ‘Mixed Constitution’ in Hardt and Negri (2000 ch. 3.5 pp. 304–24). 7. Negri, for example, wrote his contribution from a Roman jail, where he is serving a sentence for alleged Leftist political terrorism in Italy during the 1970s.

Chapter 2 1. For an excellent summary of this tradition see Colebrook (1997). 2. Bourdieu develops a similar argument in his account of ‘Language and Symbolic Power’, in particular in the capacity of the possessor of ‘authorized language’ to effect what he calls the ‘social magic’ of being able to create social realities through particular modes of institutionalized enunciation (1991). 3. In making this argument, Ricoeur makes much of the etymology of history in both French and German as the narration of a story. 4. This is, of course, the charge levelled at the Cambridge school contextualists like Skinner and Pocock (1975). 5. For a similar view see Hayden White’s (1999) defence against the charge of naïve relativism and, especially, Clifford Geertz’s account of ‘anti-anti-relativism’ (2000). 6. Here we can see a clear and unambiguous link between evolutionary institutionalism’s concept of path-dependency and post-structuralism. For discussion see Palan (2000). 7. Whether these are ‘Marxist’ or not is another matter. To our mind, they are in fact all too often no more than a parody of Marx’s thought. 8. For an extended analysis of what makes certain political ideas powerful and others not see Debray (1981).

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9. A given policy response may be claimed to be a reaction to an external and objective stimulus, but the path then followed by the policy-maker in question is one determined internally, based on his or her subjective determination of the reaction to that stimulus which best suits their expectations, interpretations and aspirations of and for their own future. But even in this highly simplified and artificial model of a single external stimulus leading to a direct policy outcome, the apparently ‘rational’ calculation made by the policy-maker falls far short, as the more sophisticated observers of ‘rational choice’ have understood, of the expected separation of theory from reality. Even in the case of a stimulus wholly external to the policy-maker, his or her consumption, interpretation and reactions to it are mediated through pre-existing structures of knowledge. In the case of much more complex and subjective stimuli, and the pronouncements around globalization and social exclusion fall firmly into this category, we must take into account at least two sets of bodies of knowledge. On the one hand, those producing the stimulus – in our case those describing the ‘facts’ associated with the concepts – do so through the filters of their own perceptions, experiences and interpretations and within the social and symbolic constraints of language. On the other hand, our policy-maker must then receive and interpret material that has already been interpreted prior to its consumption. In other words, instead of assuming a simple linear process: Data → Theory → Interpretation We are in fact in a recursive loop: Interpretation → Data → Theory → Interpretation Even this is a simplified model since it presumes a significant, if not complete, separation between the producer and consumer of social knowledge. In practice, and certainly in the case of the bear-pits of debate on globalization and exclusion, academic and policy dialogues take place at many levels and on many scales simultaneously, with no clear separation between the producers and consumers of social knowledge. 10. Paul Feyerabend develops similar arguments with respect to earlier debates between Aristotelians, Galileo and Copernicus concerning the rotation of the earth, its relationship to the other planets of the solar system and particular constructions of ‘reason’ in Against Method (1974). See also Motooka (1998) for the construction of the rationalist narrative, and Dodd (1994) for the relationship between money, reason and the state. 11. A critical analysis of the discourse within which the would-be critic is wholly implicated is problematic to say the least. As Bourdieu notes with regard to the power of what he called ‘authorized language’, breaking through the boundaries framing debates, particularly if they become accepted as common sense, is a momentous task: Heretical discourse must not only help to sever the adherence to the world of common sense by publicly proclaiming a break with the ordinary order, it must also produce a new common sense and integrate within it the previously tacit or repressed practices and experience of an entire group, investing them with the

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165 legitimacy conferred by public expression and collective recognition. (1991, 129)

12. For an extended and extraordinary discussion of the issues surrounding representation, resemblance and mimesis, see Goodman (1976) and White (1999). 13. For a useful collection of essays on the analysis of space by a number of social theorists see Crang and Thrift (2000). 14. It is, moreover, a spatial category which, as Foucault demonstrated, is a relatively recent arrival in history, despite the prevalent assumption that modern conceptions of individuality are and always have been fundamental and immutable. 15. See above p. 42–3. 16. From the outset, therefore, we can make a firm prediction: any clear and universally acceptable definition of the global and globalization will prove to be every bit as clear and universally acceptable as those of the nation and nationalism!

Chapter 3 1. In fact this diagram could be rendered more generally to describe the process of the production of any form or objectified social reality. 2. This is not to deny an empirical base to the spatial forms of both the national state and the putative global system. We have no problem with the argument that prior to the development and consolidation of the processes that are now understood to constitute globalization, social, cultural and economic life, particularly for industrialized states, had been organized on the basis of a national territory. Within such a territory the state, in the form of the legislature, executive and judiciary, held sovereign power over the entire population extending to clearly delineated boundaries. The nature of historical narrative construction, as we saw in the previous chapter, requires empirical and archival evidence. We are saying, however, that the conception of the ‘national-economy’ is in many subtle ways more modern than suspected. The concept of the nation-state that we discover in the globalization debate is a ‘new’ modern conception overlaid by the emerging conception of globalization and vice versa. 3. This time period, tellingly, is never specified too clearly in the literature. Does the process of globalization last ten years? Twenty? Or a hundred? The failure of the mainstream debate to find an agreed start date for globalization, despite strenuous efforts to trace various processes back in time, is in part a consequence of the pervasive misunderstanding of the constructed nature of the narrative. 4. This is not to suggest that globalization is merely a matter of disembodied discourse – a figment of the collective imagination with no real substance. Whatever their causes, there are clearly changes taking place in the contemporary world which, whilst not necessarily creating a global system in any absolute sense, are clearly making the world take on, at the very least, a more ‘global’ character. However, we cannot make sense of this global character by reducing it to the empirics of globalization (24 hour markets, dispersed production systems, etc.) any more than we can by reducing it to ‘text’. We therefore need

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5. 6.

7. 8.

some system by which we can embrace both the empirical claims made about globalization and at the same time set them in the context of developing processes of discursive epistemological framing. Wood does not herself necessarily buy into this seductive imagery. But she summarizes well, in our view, a particular set of contentions. At the time he wrote this, Petrella was both a Professor of Political Economy and Director-General of the Forecasting and Assessment in Science and Technology (FAST) Programme for the European Commission. In short, his views on globalization mattered! ‘The sign,’ as Ernst Cassirer argued, ‘is no mere accidental cloak to the idea’ (1955, 86). For example, writing about Italy’s economic and political weakness compared to England in the early nineteenth century, Friedrich List ([1844] 1885) noted that: She supplied all nations with manufactures, with articles of luxury, and with tropical products, and was supplied by them with raw materials. One thing alone was wanting to Italy to enable her to become what England has become in our days, and because that one thing was wanting to her, every other element of prosperity passed away from her; she lacked national union and the power which springs from it. (p. 5; emphasis added)

9. The famous TINA of Margaret Thatcher: ‘there is no alternative’. 10. Claus Offe (1996) developed a very similar argument with respect to the mobilization of ‘modernity’ to create, in his terms, ‘The Utopia of the Zero Option’. 11. A more developed critique of the naïve localism of the Third Way and other communitarian theory can be found in Amin et al. (2002). See also Frazer (1999); Hardt and Negri (2000); Levitas (1999) and, especially, Rose (1998). 12. As Hardt and Negri put it, ‘This [localist] view can easily devolve into a kind of primordialism that fixes and romanticizes social relations and identities. What needs to be addressed, instead, is precisely the production of locality, that is, the social machines that create and recreate the identities and differences that are understood as the local’ (2000, 45; emphasis in original). 13. They are also from suspiciously restricted gender, class, national, ethnic and cultural groups (us two again!) 14. We recognize, of course, that the ‘protesters’ in question are by no means an homogeneous group and that many of them would utterly reject each other’s readings of globalization. This, if anything, however, strengthens the point that a ‘common sense’ of opposition has developed to such a degree that such disparate groups can appear to be talking with one voice. 15. See also Dicken et al.’s (1997) very useful discussion of the roles played by the ‘boosters’ and ‘hypercritics’ of globalization.

Chapter 4 1. As expressed, for instance, so well by a Susan Strange article ‘Wake Up Krasner! The World Has Changed’ (1994).

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2. By ‘narratives’ here, we are of course referring as much to narratives embodied in institutions and practices as to those articulated in formal debates. 3. For a much fuller and more detailed account of the various dimensions of the offshore economy see Palan (2003). 4. The Bank of England used English common law to argue that it could not extend regulation over the new market. Unlike Continental law, in English law any prohibition must be clearly specified. Except where such prohibitions are spelled out, the government takes no view on whether a particular activity is against the law or not. Since financial operators are particularly innovative, they are able to push back the boundaries of the ‘legal’ by developing new practices not specifically prohibited under existing UK law. Law is made through ‘test cases’ in which the government takes particular operators to court essentially to establish the nature of the law. For discussion see Burn (2000). 5. The Interest Equalization Tax Act was formally signed by President Johnson on 2 September 1964, and was made retroactive to 18 July 1963. The IET did not apply to bank loans generally but was extended in 1965 to cover such transactions. In 1966 Congress enacted the Foreign Investors Tax Act which allowed certain important tax benefits to foreigners making portfolio investments in the US. 6. This rather controversial interpretation is found in Helleiner (1994) and Kapstein (1994). 7. The other best known example is Hong Kong. 8. Although the term ‘the British State’ must be approached with care. The British government as represented through the Treasury knew little about the Euromarket. The Bank of England apparently knew more, but kept that away from the British State. For discussion see Burn (1999, 2000). 9. Other forms of offshore include Flags of Convenience states who offer ‘easy’ registration, low or non-existent taxes, and no restrictions on the nationality of crews. By transferring a ship from a ‘genuine’ national register to a Flag of Convenience, ship-owners can escape taxation, health and safety regulations and interference from trade union organizations. There are also e-commerce forms of offshore (Palan 2003). 10. Financial systems provide other contributions, including, allegedly, ‘resolving the risk preferences of individuals and companies’ (Carmichael and Pomerleano 2002, 1). But this aspect does not occupy us here. 11. We are referring to the apparent sudden emergence of the debate of globalization in different disciplines in the late 1980s and 1990s, giving the impression that globalization is some new, fashionable concept. 12. There are particular historical reasons for the adoption of this discourse of ‘shores’, not least the practice starting in the 1960s of locating ‘pirate’ radio stations on boats in international waters to evade national broadcasting restrictions. For a fuller account of the origins of this imagery see Palan (2003). 13. Baudrillard gets closer than most, however, with his conception of the ‘mediascape’.

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Chapter 5 1. The concept of the ‘idea’ of the nation-state is developed in the work of Dominique Schnapper: ‘it is the internal logic, or the idea – in the Kantian sense of the term – of the nation that I will attempt to analyse here’ (Schnapper 1998, 1). She quotes Raymond Aron, who says: : ‘The nation holds as its principle and final end the participation of all the governed in the State. It is in order to participate in the state that all minorities demand the recognition of their language … to deny the modern nation is to reject the political advent of the eternal claims of equality’ (Schnapper 1998, 3). 2. This is by no means a new or novel theory. Schnapper, like many others, has noted that ‘we are witnessing today a weakening of public spirit and political bonds’ (1998, 1). We seek, however, to place this debate on the changing nature of politics within the context of global political economy and the putative imagery of globalization. 3. Cf. also Lovering 1998. 4. These ideas originated prior to Adam Smith, with John Locke and ‘mercantilist’ economists who distinguished between the sort of industries that contributed to the commonwealth and monopolies that added nothing. ‘The commonwealth was the sum of individual product, hence contribution to the wealth of the commonwealth was the measure of required societal support. The distinction turned on the means by which a person becomes rich. If he gets riches by virtue of special or exclusive privileges of manufacture or merchandising granted by the sovereign, then his riches are a deduction from the commonwealth without a corresponding contribution on his part. But if he became rich by the activity of manufacturing, merchandising, retailing, importing commodities from abroad, or producing crops on his land, then his private wealth was equal to his contribution to the commonwealth’ (Commons 1961, 27). In later writing, the commonwealth was replaced by capitalism, and government intervention in the economy was viewed with suspicion. 5. London International Bank Offer Rate – the generally agreed international standard lending rate. 6. One of the clearest expressions of this was the desire on the part of the more powerful states in Europe to create overseas colonies and empires. The stimulus behind European imperialism was as much one of economic, as political or ideological competition. 7. Dicken’s Global Shift (2003) contains probably the best overall account of the changing structure of trade in the context of globalization. See also Castells (1996). 8. For discussion see Fagerberg (1994). 9. Other influential texts include Prestowitz (1988), Reich (1991), Thurow (1992) and Tyson (1992). 10. For example, the Internet started life as DARPANET, a communications tool designed for the US Department of Defense to survive nuclear attack. The role of Stanford University at the heart of Silicon Valley is well documented.

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11. The EU operates both as a competitive environment for its member states and as a competitive actor in its own right. The attractiveness of gaining access to the entire EU market by locating in a member state has been a considerable draw for investment from both the US and East Asia. As many have pointed out, however, the EU has failed to open up all of its markets, most notably agriculture, to the rigours of the world market. To that extent, therefore, and this can also be seen with recent efforts on the part of the US to protect its steel industry, there are still considerable political limits to the competition state. 12. Third and voluntary sector organizations in the UK, which are increasingly being looked to as sources of competitive, growth-oriented activity for purposes of regeneration, are specifically prevented by their funders from engaging in any activity that might be deemed ‘proper’ to the private sector (Amin et al. 2002).

Chapter 6 1. Economists in fact introduced a theory to support the image of friction: the NAIRU, the non-accelerating rate of unemployment. The NAIRU is a derivation of the Phillips curve, itself a central component of modern macro-economics. The Phillips Curve (Phillips 1958) represents the relationship between the rate of inflation and the unemployment rate. A.W. Phillips argued that there was an inverse relationship between the rate of wage inflation and the rate of unemployment in the United Kingdom from 1861 to 1957. When unemployment was high, wages increased slowly; when unemployment was low, they rose rapidly. His ideas were then used in policy-making to demonstrate a trade-off between unemployment and government stimulation of the economy. The more a government would try to stimulate the economy, the tighter the labour market is likely to be, which in turn would lead to inflation. Governments therefore had to balance out the goal of a low rate of unemployment with the goals of low inflation. That theory was than criticized by Milton Friedman and Ned Phelps, both of whom argued that labour anticipates government policy and hence inflation and government stimuli of the economy are discounted. There was, therefore, no inverse relationship between inflation and unemployment, but in fact, with some time lag (debated by economists) inflation always ends up contributing to higher unemployment. Friedman made a distinction between a short- and-long-term Phillips curve, arguing instead that there was something like a ‘natural rate’ of unemployment in the economy. These ideas were then modified and instead of the notion of natural rate, economists accepted that the exact natural rate would tend to vary over time and under different circumstances. They argued instead for the non-accelerating inflation rate of unemployment, or the NAIRU. Under the guise of a sophisticated theory allegedly constructed from economic history, economists advance, therefore, a theory that maintains that a certain degree of unemployment is absolutely necessary for the smooth functioning of a competitive national economy.

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2. As was the case, for example, when the building up of the war economies in Europe and North America in the late 1930s finally soaked up the persistent unemployment that had been produced by the Depression. 3. That is, the permanent withdrawal of employment from certain areas with little or no prospect of renewed investment. 4. See, for example, several of the essays in Gual (1996), particularly those by Gual, Drèze and Layard, all of which are predicated on the assumption that the only solution to unemployment is ‘job creation’. 5. Although the policy and academic debates over globalization and social exclusion have developed largely independently of each other (not least because they tend to be ascribed to different academic disciplines and/or government departments), they are widely understood to have a one-dimensional, contingent relationship. 6. See http://locin.jrc.it. 7. Of the ten essays that appear in Goetz and Clarke’s analysis of The New Localism (1993), for example, none feels it necessary to venture any analysis of the meaning of locality itself – the nature of the local as a spatial category is simply assumed. 8. Though see Wacquant’s (2002) account of the massive incarceration of young black men in the US, for an example of the degree to which real prisons are integrated into the general spatialization of social exclusion. 9. In the UK, the long-established practice of transferring the long-term unemployed from employment to disability registers is one manifestation of this. Initially used to mask high levels of unemployment in older industrial areas, it quickly became established as a means of delivering long-term, low-level welfare in a manner that would not undermine the ‘competitive’ appearance of particular places. New Labour has, more recently, begun to chip away even at this, however, by insisting on medical evidence to support long-term disability claims.

Conclusion 1. The degree to which this is the case comes close to home. Our original title for this book included the phrase ‘social exclusion’. This, we were told, was unacceptable because it would severely limit the market for the book. Globalization, we were informed, is marketable, social exclusion is not. Apparently it belongs to a different story that no one wants to hear. Our apologies, therefore, if, having thought you were buying a book simply about globalization, you are offended by our insistence on discussing poverty! 2. Witness, for example, the massive gulf between ‘development’ spending targeted at social exclusion throughout the world and ‘defence’ spending targeted at maintaining the security of Western capital. In the case of Iraq, for example,

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the West generously allows it to trade ‘oil for food’ – in other words to use its own resources to deal with hunger – but happily supplies unimaginable quantities of munitions, soldiers and other military material in the name of ‘regime change’.

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Index

accumulation, 17 advertising, 34 Altvater, E., 27 Americanization, 39, 80 Anderson, B., 64, 66 anthropology, 59 anti-capitalism, 3, 30, 81 anti-economy, 16, 17, 19, 130–51 anti-globalization, 17, 21, 30, 35–6, 81, 107 anti-poverty programmes, 156 Archibugi, D., 32, 33 Asian Currency Union (ACU), 94 Bank of England, 94 Banking Act, 94 banking, 34, 158 Bauman, Z., 12, 145 Blair, T., 52, 150, 156 Bobbitt, P., 111 Bonsignore, M., 2, 154 borderless world, 17, 27, 73 Bougnoux, D., 44 boundaries, 80; conceptual, 11 Bourdieu, P., 8, 44, 46 bourgeoisie, 153 Braudel, F., 74 Bretton Woods, 14 Brodie, J., 148 Burdeau, G., 152 Bush, G.W., 52–3 business globalization, 27–30, 41, 154 Byrne, D., 142 California Public Employees’ Retirement System (CalPERS), 160 Canada, 148 capitalization of future earnings, 9, 10 Cassirer, E., 65 Castells, M., 149 Castoriadis, C., 46, 86 Channel Islands, 97 chronology, 61, 71 City of London, 94, 97 cognitive map, 15, 16 Colbert, J., 115 Colebrook, C., 48–9 Commons, J., 9 communitarianism, 37, 79; and the Third Way, 81 community, 37, 81, 107, 140, 143–4 competition state, 17, 109–16, 126, 130, 146, 155; and civil society, 149 constructivism, 30, 34 consumption, 20, 132 corporations, 1; and globalization, 2 cosmopolitan democracy, 32, 33 Cox, R., 48 credit, 34, 158

de Certeau, M., 11, 46, 66, 72, 83–4, 87–8, 111 Debray, R., 4 denationalization, 8 deterritorialization, 8 dirigisme, 115 disemployment, 135 Durkheim, E., 65 Easton, D., 14 economic migrant, 141 economists, 84 Empire, 41–2 emplotment, 61, 71 environmentalism, 153 Euromarket, 91–3, 95, 101, 113; British Government and, 92 European Commission, 135, 142, 143 European Union, 139 everyday life, 22 Exchange Control Act, 94 excluded, the, 20, 135 export processing zones (EPZs), 18, 97–8, 113, 139 fa-s, 65–8, 111, 114, 123, 131, 134, 143, 146, 150, 156–60 passim favela, 157–8, 160 feminism, 153 fiscal state, 13 Fordism, 112–13 Foreign Exchange Market, 94 forgetting, 11, 20, 83–4, 102 Foucault, M., 46 Freud, S., 8 Friedman, J., 44 future, 9 Garten, J., 1 gay liberation movement, 153 geographies, 20; critical, 59; of economies, societies and polities, 21, end of, 27; of exclusion, 141, 150; literary, 64; regional, 120; scales, 55 Germany, 119 Giddens, A., 81, 144 Gill, S., 38 Gills, B., 35 global constitutionalism, 38 global political economy, 7 globality, 17 globalization, 1, 6, 8, 10, 17, 21, 26, 32–45, 46, 51, 54–7, 74, 80, 123–5; conflated with capitalism, 36; conflated with offshore, 98–103, 154; conspiracy theory, 35, 82, 90; culturalist approaches to, 26, 29, 40–2; discourses of, 20; as external, 80, 100; as false consciousness, 34; as fa-s, 65–8;

Index globalization, cont. and global ‘culture’, 76; Gramscian approaches to, 26, 29, 37–40; histories of, 10; mainstream approaches to, 26, 29–34, 89; Marxist approaches to, 26, 29, 34–7; methodological individualist approaches, 31; as myth, 27; narratives of, 19, 29, 34, 72; ‘no alternative’, 36, 81, 102, 159; normality of, 22, 85–7; wave theory, 25–30; as objective fact, 2, 86; politics of, 21; as practice, 41; predicted, 10; and social science, 65; as story, 3; techno-economic, 76–77; and time, 57–9; time-space compression, 34, 100 glocalization, 82 Goodman, N., 47, 58, 65, 86 governance, 18, 142; deficit, 31; global, 21, 76 government, 18 governmentality, 41 Gramsci, A., 37 Greenblatt, S., 46 Hankiss, E., 43–4, 66 Hansenne, M., 137 Hardt, M., 42 Harvey, D., 46 Hay, C., 26 Hegel, G.W.F., 6 hegemony, 37 Held, D., 33, 75–6 hermeneutics, 59; and space, 60 Hines, C., 21 Hirst, P., 27, 90 histor, 47, 85, 157 historiography, 8, 43 Hobbes, T., 5, 6, 153 human capital, 133 identity, 20, 33 imagination, 86 imagined community, 15, 64, 77, 105 imagined economies, 8, 15 Interest Equalization Act, 93 International Banking Facilities, 93–5 International Criminal Court, 21, 32 International Foundation for Development Alternatives (IFDA), 142 International Labour Organization (ILO), 137 International Monetary Fund (IMF), 96, 114, 124 international relations, 5, 48 international trade, 14; theories of, 114–23 internationalization, 80 Islam, 10, 52 isolationists, 15 Japan, 119, 122; steel industry, 120 Jessop, B., 22, 126–7 Johannesburg, 21 journalists, 34 Keynes, J.M., 14, 101 Kirby, K., 62 Krugman, P., 117, 122 Kuhn, T., 68 labour market failure, 148 Laing, R.D., 7

185 Lake, D., 31, 35, 37 language, 39; ‘authorised’, 44, 49, 84 Lash, S., 19, 27, 159 Law of the Sea, 93 Lefebvre, H., 46, 60–1 Lenoir, R., 135 Levitas, R., 19 literary theory, 59 localization, 21, 81 Lovering, J., 138 Mann, M., 27 maps, 63, 83 Marginalists, 14 market state, 109, 111, 123, 130 Marsden, R., 38 Marsh, D., 26 McDonaldization, 39, 139 metaphor, 8, 21, 73, 75, 80, 102; naturalist, 77; physical, 78 Mexico, 113 Michalet, C.-A., 26 Milan, 21 Mink, L., 58 modernization theorists, 14 Morretti, F., 64 myth, 3, 43, 65–7; of identity, 8 narrative, 9, 11, 21, 29, 32, 43, 46–51, 79, 83, 153–4, 157; construction, 4, 6, 8, 10; as empirics, 29; framing, 51–65, 76, 80, 107; and institutional change, 25; ‘narrative function’, 48, 61, overt and covert, 10; plausibility, 50; social exclusion as, 146; spatio-temporal, 69–88 narrativity, 84–8 nation, the, 12, 14; building, 13, 72; population, 130 national economy, 12, 14, 72, 79 nationalism, 13, 37 nation-state, 8, 74, 76–9; borders of, 62; contemporary, 68; crisis of, 10, end of, 27; ‘idea’ of, 12, 15, 56, 108; myth of 15; origins of, 13; reflexive, 12; regulatory spatiality of, 18 Negri, A., 42 neighbourhood, 140 New Growth Theory, 118–19 new social movements, 3 New Trade Theory, 117–18 Newton, I., 53 Nixon, R., 119 non-governmental organizations (NGOs), 141 North American Free Trade Association (NAFTA), 139 Offe, C., 131 offshore, 16–19, 89–108, 110, 126, 146, 157; and narrative, 103–7; and sovereignty, 100–3, 108 Orshansky, M., 132 Parsons, T., 14 Peck, J., 81 performance, 29, 46 performativity, 84–8 Petrella, R., 73–8 passim

186

THE IMAGINED ECONOMIES OF GLOBALIZATION

Plato, 46 plausibility, 4, 8, 29, 50, 72 policy analysts, 34 policy-makers, 9, 34 political economy, 40 politics, 152–3 Porter, M., 121 Post-Fordism, 121 postmodernism, 43 Poulantzas, N., 12, 46 poverty, 20, 80, 130–51; as criminality, 148, 155–6; as pathology, 147–9 power, 31, 35, 48; constituted and constituting, 152 practice, 8, 85–6; and credibility, 87 private economy, 16–19 privatization, 18, 39, 110, 119 Procacci, G., 143 profit, 9 proscription, 23, 70–4, 104 psychoanalysis, 43 racists, 37 rationality, 9 reflexivity, 6, 7, 49, 84; as instrumental resource, 19, 159; and state, 12 relativism, 43, 47 religion, 66 retroscription, 23, 70–4, 103, 104, 106 rhetoric, 25, 69 Ricardo, D., 115 Ricoeur, P., 4, 47–51, 71, 85, 88, 106 Rio de Janeiro, 157 Rose, N., 128 Rosenberg, J., 55, 79 Sahlins, M., 46 Sayer, A., 3 Schnapper, D., 12 Schumpeterian Workfare State, 109, 125–8 Schutz, A., 6 Seattle, 21, 41 semisphere, 43–4 Sennett, R., 129 Shaw, M., 32 Shröder, G., 156 simultaneity, 61 Singapore, 94 Smith, A., 112, 115 social cohesion, 151 Social Exclusion Unit, 143 social exclusion, 8, 19, 21, 46, 51, 54–7, 130–51, 154; and competitiveness, 138; cultural, 139; as economic, 136, 137–40; and globalization, 138–40; literary, 64; local spatiality of, 17–19, 140–5, 157; normality of, 22; normative, 145; political, 138–9; and technology, 140; and time, 57–9; tourism related, 139 social inclusion, 17, 157–9; as mode of poverty, space of 18, 56, 144, 146, 155; social, the 19; death of, 19; framing, 63–5; reality, 51

society, 7, 19; normal, 19 sociology, 59 Soja, E., 60 Soros, G., 102 sovereignty, 14, 15, 74, 79, 105; commercialization of, 110–11; end of, 27 space, 56; cognitive, 20; of exclusion and inclusion, 131; framing of, 59–63; imaginary, 7, 23, 74; literary, 64; metaphor, 62; normative, 18, 54; and offshore, 99, 104–5; planetary, 79; production of, 60; proliferation of, 75; and the self, 33, ‘shores’, 103–4 socio-economic, 15, 146–7; sovereign territorial, 8, 55; spatiality, 7, 20, 55, 60, 106; and trajectory, 71 speech, 5 speed, 105–7, 160 Starchild, A., 95 state, the, 17, 62, 103, 107; crisis of, 109, 113; disciplined, 123–125; Fordist, 35; hollowing out of, 139; institutional adaptation to globalization, 18, 31, 126–9; post-national, 109–14; spaces of, 72; spatial fiction of, 105; trifurcation of, 15–20 story-telling, 9, 10; communal, 25 Strategic Trade Theory, 119–21, 124 surveillance, 17 Sutherland, P., 124 symbolism, 34, 44 tax havens, 95–8 teleology, 57 territoriality, 61, 65, 71 theory, 25 Thompson, G., 27, 90 time, 57; compression of historical, 10; experiential, 71; framing of, 57–9; social, 58 Tul Karem, 51–3 Tyco Corporation, 160 unemployment, 131, 137, 148 UNESCO, 136, 142, 143 United States, 31; federal government, 92; September 11th 2001, 52 universalists, 15 Veblen, T., 9 velocity, 15, 104, 105–7 Virilio, P., 60 Weber, M., 134 Welfare State, 112, 126–9, 130, 133–4, 148 Westernization, 39 White, H.D., 101 Wolfensohn, J., 2, 136, 157–8 Wood, E. M., 27, 73, 75, 78 World Bank, 2, 114, 124, 136, 143 world economy, 12, 14, 20 World Trade Organization (WTO), 21, 81, 124