November 2009

A LETTER FROM THE EDITOR IN THIS ISSUE p1 Markets as Networks Colleagues, Conference Report

Two months ago, our Research Committee held an interim conference entitled p1 Economy, Society and Giovanni Arrighi Markets as Networks at Sofia University (St. Kliment Ohridski). Two of the orga- nizers of this conference, Tanya Chavdarova and Svetla Stoeva, have been entrust- p5 Business Innovation in Asia ed with the difficult task of distilling the two days into a report summarizing some p5 and Inequalities of the conclusions and debates that animated the conference. Here you may find the fruit of their labor, as well as information on where to access the presentation p8 In the Long Run, Keynesianism Is Dead material. p10 The Limits of Mexican Electoral Democracy In this same research tradition, Dennis McNamara has recently published a book p12 Call for Papers: WSF Award on knowledge and information networks in Asia that is likely to be of interest of Excellence Program to our members. He generously accepted my request to summarize some of his book’s principal findings for our newsletter.

This issue also marks the passing on June 18th of one of our most influential members, Giovanni Arrighi. Chris Chase-Dunn contributes a critical survey of some of Arrighi’s intellectual accomplishments. Economy, Society and Drawing on world-systems theory, Farshad Araghi introduces the concept of “long Giovanni Arrighi Keynesianism” to provide new insights into interpreting the financial crisis and Giovanni Arrighi is an historical soci- our near future. And Miguel Ángel Vite Pérez has kindly contributed a short ar- ologist and one of the originators of the ticle exploring the political and economic consequences in Mexico of the National world-systems perspective (along with Action Party gaining the presidency almost a decade ago. , Ter- ence Hopkins and ). I hope this issue provides you with new ideas for your own work. His Geometry of is yet one of the very best dissections of modern eco- Aaron Pitluck nomic and political-military power, and Illinois State University his The Long Twentieth Century, which is [email protected] really about the last 600 years, is the best overall analysis of the modern Europe- CONFERENCE REPORT centered world-system. Arrighi was trained in both and . Markets as Networks He joined Terence Hopkins and Imman- “Markets as Networks” – the RC02 conference in Sofia (25-26 September 2009) uel Wallerstein at the critically reviewed the major conceptual tools that economic sociology has proposed Center at in the in order to understand the forms of interplay between markets and network struc- late 1970s (see Reifer 2009). Arrighi’s tures. It also discussed various empirical findings of this interplay. Two plenary and Long Twentieth Century (LTC) employed five workshop sessions put in touch more than 30 researchers from Europe, North and a Braudelian conceptualization of capi- South America. (The conference presentations are posted on the conference website, talism as a layered system composed of see at http://www.netmark.bsa-bg.org). Due to the generous support provided by the material life at the roots, a middle sector Faculty of Philosophy at Sofia University “St. Kliment Ohridski” and ISA, especially of interfamilial and intervillage exchange continued on page 2 continued on page 7 page 2 cont’d from page 1: Markets as and Zoya Kotelnikova (State University evidence in favor of the hypothesis that Networks for accommodation grants – Higher School of Economics, Moscow) informal self-employment has gained for young participants, about half of the discussed empirical evidence collected social legitimacy and could make use of presenters were young researchers. from 500 managers in five cities of Rus- anonymous exchange in the same way The conference opened with a keynote sia. V. Radaev focused on the idea that that official activities do. It was specified speech by Olivier Godechot (CNRS, increasing market pressures (higher level through her findings that strong ties are Paris) entitled: What Do Heads of Dealing of competition and stronger bargain- more important in the initial phase of Room Do? The Social Capital of Internal ing power of exchange partners) do not setting up the business while weak ties Entrepreneurs. Stemming from the results contaminate social ties as it is prescribed are more important for informal business Godechot developed the idea that the boundaries of the firm are going to be further undermined by the rising power of social capital in the financial industry of his research on compensation in the fi- by the ‘Hostile-Worlds’ approach. On expansion. nancial industry, O. Godechot developed the contrary, they stimulate formation In the session on networking in job the idea that the concept of the boundar- of social ties. On the bases of elaborated searching, recruiting and status attain- ies of the firm, that have already been taxonomy of social ties he showed that ment four papers added to knowledge shaken by human capital’s greater impact, regular monitoring of competitors’ ac- and understanding of the above men- are going to be further undermined by tions is conducted by a vast majority of tioned issues in rather different ways. the rising power of social capital in the market sellers while social ties embedded Martina Rebien (Institute for Employ- financial industry, which lies even further in network structures and institutional ment Research, Nuremberg) discussed outside of shareholders’ control. arrangements are established by less than data from the annual representative This idea is tested on the example of a half of the firms. German Job Vacancy Survey focusing the heads of dealing rooms who ac- In her presentation Zoya Kotelnikova on staffing via social networks as -de cumulate social capital by subdividing, aimed at exploring the patterns of market pendent upon information about: firms recombining and moving work, establish- exchange between retailers and suppli- structure and characteristics, vacancy ing full control over the division of labor. ers in Russia. She studied how competi- characteristics and engaged person. Her Thus they become internal entrepreneurs tion, power relations and institutional results show a tendency that networks who get control over a substantial part of forces influence the continuity of their are used by smaller firms and in difficult the firms’ productive assets. Since they relationships. According to her findings, economic situations, and they really help can move such assets to another firm en the most widespread pattern of interor- to reduce search costs; the positions filled masse, they become their practical owner. ganizational ties is a hybrid model which via networks are more likely to be stable In order to do this, heads of rooms must is closer to relationship-orientation and ones either in a very high labor marked be linked directly or indirectly to most imply medium- and long-term rela- segment or in a very low one, where the members of the group. This supports tions, multiple-sourcing and infrequent working conditions are especially diffi- Coleman’s (1988) cohesion argument. switching. By carrying out three case cult. Those results also certify a negative However, they also must be the only per- studies in the Buenos Aires Wholesale connection between firms’ use of net- sons capable of doing so, which provides Market, María Laura Viteri (National work contacts and the wages and prestige on the other hand support to the struc- Institute of Agricultural Technology of of the position. tural holes arguments of Burt (1992). Argentina, co-authorship with Alberto Stoyan Novakov (Sofia University) Godechot convincingly showed that a Arce) addressed the issue of quality of presented results from a survey on the complex equilibrium between cohesion fresh fruits and vegetables and the differ- labor market positioning of Bulgarian and structural holes forms of social capi- ent meanings and negotiations around sociology graduates as influenced by tal is needed in order to transgress the it. They defined quality as a negotiated their informal networks. He argued, as firm’s boundaries. social interaction which leads to innova- outlined through the survey, networks of The session on the networks’ role in tive forms of food distribution. The social family, lecturers, colleagues and friends (re)shaping market exchange showed interaction of off-the-books self-em- have different functions in the process of the great diversity of intertwining of ployed young Bulgarians was at the core labor market positioning depending on networks into markets. Vadim Radaev of the presentation by Tanya Chavdarova whether graduates began working while (Sofia University). Her research provided studying or they began working only page 3 after their graduation. nich, co-authorship with Sabine Pfeiffer) to 1987 and covering an entire epoch of Pieter-Paul Verhaeghe (University of studied synergies and contradictions economic and political transformation to Ghent, co-authorship with B. van de in five technical innovation processes. 2001. Following the research findings, D. Putte) challenged the notion of social They concluded that markets are shaped Stark argued that in the latter half of the capital by, first, theoretically discussing by networks of collaboration which are 1990s, the Hungarian economy became the pros and contras to the argument that dynamic and changing throughout the more politicized. Outcomes of elections views social support as a form of social innovation process. led to increasing competition among par- capital. Second, he related the issue to By discussing the social construction of ties for politically loyal firms. representative research on attained holi- markets, Luisa Veloso (Centre for Re- D. Stark showed that firms with politi- day jobs of first year university students search and Studies in Sociology, Lisbon) cally balanced boards seized a broker- and added empirical evidence to his adopted a critical point of view of the age opportunity to occupy the political understanding of social support as a form concept of the market and put forward holes in the economy opened up by the of social capital. the concept of economic field, as pro- growing division between left and right. Marc Hoeglinger (Kalaidos University posed by P. Bourdieu. She presented the Stark concluded that the Hungarian of Applied Sciences, Zürich, co-author- historical trajectory and strategy of a Por- economy is not an aberrant case: poli- ship with M. Abraham and J. Arpagaus) explored organizational and economic sociology’s central question about the impact of embeddedness on economic action and outcomes by looking at firms’ procurement of external employee train- ing programs. He analyzed the effect of organizations’ dyadic (direct ties to providers) and structural (indirect ties vie third parties) embeddedness on the performance of its external training pro- viders and argued that these two kinds of embeddedness don’t act in isolation but are interrelated; they both can behave as substitutes and cancel their respective ef- fects out. This hypothesis was empirically verified through results from a survey of a representative random sample of Swiss organizations. The last session on the first day -at tempted to highlight the questions tuguese business group in the electrome- tics and business are entangled in every concerning economic dynamics, innova- chanical industry and its R&D activities capitalist economy. Thus, the findings of tions and social networks. Vojislav Babic in particular, and clarified her arguments the Hungarian study suggest the need (University of Belgrade, co-authorship with the example of the relationship for comparative research, constructing with Sinisa Zaric) discussed the causes of between the economic and the scientific comparable datasets on the structure of the 2007 economic crisis from the point fields. business-party alliances among different of view of economic and social capital During the second day, the first plenary types of political economies. theory and argued that global economic session opened with the keynote speech The morning workshop session started crises appear in periods where there are of David Stark (Columbia University) with a presentation shifting the subject of noticeably low stocks of social capital. On entitled: “Political Holes in the Economy: networking from the politicized busi- the basis of empirical data, he showed the Historical Network Analysis of Firm-Party ness partnerships to the personal ties of long-term decrease of average participa- Ties in Hungary“ (coauthorship with immigrant entrepreneurs. Silvia Gómez- tion rates in informal organizations and Balazs Vedres). D. Stark presented a study Mestres, Sarah Hoeksma and Jose Luis social trust followed by deep economic of the evolution of politicized business Molina (Autonomous University of Bar- crises (Great Depression, economic crisis partnerships in the Hungarian economy. celona) discussed the personal networks in the 70s and 80s of the previous cen- The logic of the relationship between of Bulgarian entrepreneurs in two Cata- tury, etc.). firm-to-firm ties and firm-to-party ties lans locations. Through the analysis of Daniela Wühr and Petra Schütt (Insti- was captured by the implementation of different cases of migrant entrepreneurs tute for Social Science Research, Mu- historical network analysis reaching back in both localities the authors suggested page 4 that setting up a business implies the de- changing professional environment and A different perspective on the problem ployment of a heterogeneous network of in art appraisal. of networking - disembeddedness from contacts and personal relationships with The afternoon workshop session -ad personal networks – has been developed members of the host society. The focus dressed another aspect of networking: Gergo Papp (Corvinus University of on the role of social capital and network the regional dimensions of organizational Budapest). He highlighted the emergence membership in transnational migratory and personal networks, global produc- of credit markets as an important aspect processes switched then from Spain to tion networks, as well as the role of civic of the transition to in an 18th Moldova, Romania and Hungary. society in the transformative processes of -19th century Hungarian county. The The paper of Hanna Kónya (Corvi- working organizations. Sabine Gensior author suggested that in the course of nus University of Budapest) explored (Brandenburg University of Technology, that transition in Hungary transactions the foundation and development of the Cottbus) applied the theoretical concepts became disembedded from personal net- Moldavian Csángó elite. The author of “social embeddedness” and “social works and the selection of partners was developed the idea that migration net- network” while examining how regional based on rational calculation rather than works generate not only social capital but network structures are established and on personal relations. The last contribu- economic and cultural capita, as well. As how closely- linked regional value-added tion to the session was made by Violeta such these networks are fundamental for chains generate endogenous stability. The Vuckovic (Martin Luther University, Wit- becoming an elite member. The morn- findings of the research show that “social tenberg). She presented a research design ing session addressed a broader range of embeddedness” of commercial activ- for case studies of medium sized towns research topics, as well. ity is a crucial factor for promoting the in Eastern Germany and Central Serbia The last two presentations focused on establishment of regional networks. Thus, aiming at studying the interdependencies different aspects of the formation of net- assumed the author, regional networking between the transformation of post-

Stark showed that firms with politically balanced boards seized a brokerage opportunity to occupy the political holes in the economy opened up by the growing division between left and right work structure and market culture. Efim may function as a “springboard” for the socialist economy and civic society. Fidrya (North-Eastern State University, acquisition of supra-regional markets. The conference participants had the Magadan) studied interorganizational A further contribution to the dis- opportunity to get closer together in the competitive strategies of firms within the cussion of embeddedness came from pleasant informal atmosphere of the wel- Magadan retail sector. The strategies of Mexico. Oscar Contreras (University of come reception organized by the Depart- vertical integration, interorganizational Sonora, Sonora) presented a case study of ment of Sociology at Sofia University and coordination, informal connections, and the auto industry in Sonora. He explored during the evening walks in Sofia. development of stable trusting relations the problem of how local assets, embed- to clients were identified as crucial for ded in social networks, interact with the Tanya Chavdarova and the firms’ development. A different focus operational needs of the assemblers and Svetla Stoeva presented Tatiana Stoitchkova (South- global suppliers in order to meet global West University, Blagoevgrad). She put standards and to promote the upgrading Sofia University “St. Kliment Ohridski” the question of how the market influ- of local suppliers. The paper debated a [email protected] ences the economic behavior of cultural situation where in the global automotive [email protected] organizations. On the basis of a survey on industry, structuring opportunities for the Bulgarian literature field, the author new, low-cost producing regions arises argued that in times when most literature from the concentration of production in and artistic markets are characterized an ever smaller group of assembly and by uncertainty, networking appears as a supply transnational companies. tool that can offer a sense of stability in a page 5

Globalization and Inequalities Complexity and Contested Modernities

How has globalization changed social inequality? Why do Americans die younger than Europeans, despite larger incomes? Is there an alternative to neoliberalism? Who are the champions of social democracy? Why are some countries more violent than others? In this book, I examine the many changing forms of social inequality and their intersections at both country and global levels. I show how the contest between differ- ent modernities and conceptions of progress shape the present and future. The book re-thinks the nature of economy, polity, civil society and violence. It places globaliza- tion and inequalities at the centre of a new understanding of modernity and progress and demonstrates the power of these theoretical reformulations in practice, draw- ing on global data and in-depth analyses of the U.S. and E.U. The book analyses the tensions between the different forces that are shaping global futures. It examines the regulation and deregulation of employment and welfare; domestic and public gender regimes; secular and religious polities; path dependent trajectories and global political waves; and global inequalities and human rights.

Table of Contents 1. Introduction: Progress and modernities 2. Theorising multiple social systems 3. Economies 4. Polities Business Innovation in Asia* 5. Violence Japanese affiliates in South Korea, 6. Civil societies & Thailand 7. Regimes of complex inequality Michael Hobday pioneered the cross- 8. Varieties of modernity border comparison of innovation in East 9. Measuring progress Asia in a path-breaking volume in 1995. 10.Comparative paths through modernity: neoliberalism and social democracy An orderly ladder of Japanese technology 11. Contested futures transfer in the region was giving way to 12. Conclusions a new technology competition. Mapping the same landscape among production Globalization and Inequalities: Complexity and Contested Modernities (Sage 2009) networks today, I find in this volume For more information, contact Sylvia Walby, Lancaster University, S.Walby@Lancaster. that Korea has kept pace, China is in hot ac.uk pursuit, and Japan is still up front. We also find national competitiveness of both Japan and the emerging econo- mies overshadowed by two new develop- ments: regionalization, and the rise of the Chinese economy. The study looks at both regional integration within global value chains and complementarity in na- tional innovation systems. I track knowl- edge flows among Japanese affiliates in South Korea, China, and Thailand. I look at manufacturing investment, including sectors such as autos, electronics, and textiles. Knowledge Societies. Regional produc- tion networks have already drawn wide attention among , as well as regional political integration among political scientists. My own effort draws page 6 on both literatures, but with the goal of along similar paths and with similar or- developing a sociology of regionalism. Knowledge societies, ganization in the three nations of North- Knowledge societies, and specifically and specifically east Asia. Thailand has anchored invest- innovation, provide a focus. Technology ment in all three industries, although in East Asia has roots in both local path , without strong local competitors. State dependencies of industrialization, and innovation and state FDI policy remain the major regional cooperation in manufacturing discontinuity among the four nations, components and assembly. provide a focus. with some similarity between strong Hobday tracked the rapid acquisition states’ insulation in Japan and South Diversity of innovation systems high- and implementation of knowledge in Korea, but discontinuity with China’s lighted diversity of social systems of Japan’s postwar growth, then among the socialist state or with the relatively weak production. Japanese networks, including Asian Dragons. More remarkable than state in Thailand’s history of industrial- both state and the private sector, have the earlier acquisition of technology, ization. Knowledge networks come to the worked over time to develop complemen- however, is the recent shift among Asian fore at the intersection of firms, sectors tarities in the political economies of host nations from a production to an “innova- and states within global value chains. nations. tion network.” Western firms off-shoring Borders. I also find changing borders Analysis of specific sectors, whether services and production have contributed among sectors affecting the anchoring electronics, autos, or textiles, brings to greatly to the shift. Techno-nationalism of Japanese manufacturing in East Asia. the fore critical differences in state policy in Japan, however, has slowed their Panasonic provides consumer electronics on inward FDI and technology shar- embrace of “open innovation” and the for the automotive industry in China and ing, in the organization, independence, tapping of local knowledge resources. Thailand, supplying Japanese assemblers. and activities of industry associations, Japan now finds itself with extensive Toray and Itochu supply automotive inte- and in the landscape of local corporate manufacturing networks across East Asia, riors to Japanese assemblers in the same scale, ownership and activity. Historical but without a deep tradition of coop- two nations. Thailand has reinforced precedents of “cooperative learning” in eration in knowledge creation. Western production anchors by the triple nesting inter-firm networks offer a model of the firms new to the region have made ex- of manufacturing in Japanese electronics, interplay of craft and concept. tensive efforts to tap knowledge workers, auto and textile industries. Efforts of the Networks. I look closely to “knowl- but also to incorporate local management Japanese state and peak industry associa- edge networks,” i.e., interactive link- to strengthen their ties with local state, tions to build complementarity in local ages around nodes of tacit and codified labor, and markets. Western firms ap- industry associations, trade policy, and knowledge embedded in Global Value pear far better suited than their Japanese property rights can yield benefits beyond Chains. Firms within sectors help embed competitors to the new frontier of Asian the interests of simply one sector. the social practices critical for effective innovation networks. Cooperation does Multiple major firms at the Japanese economic coordination and create nodes. not result here in homogenization, or a Chamber of Commerce and Industry in Firms such as Panasonic, Toyota, and technological leveling, or simply “conver- Bangkok can mobilize a common indus- Toray rank as Japan’s leaders in consumer gence” to a global standard. Priorities for try voice on major issues of market and electronics, autos, and textiles respective- capacity-building among Japan’s partners manufacture. Korea provides the foil, ly. Itochu leads general trading compa- must be matched with the rule of law with weak nesting of Japanese manufac- nies in fabrics and fashion, and Denso and protection of property rights. This turing in electronics and auto assembly, stands at the head of the line among auto turns my attention to local systems of despite continuities in the interests of component firms. Beyond manufacturing production both in Japan and among its similarly structured industry associa- routines on the plant floor, firms advance investment partners in Asia, to assess the tions. China has succeeded in nesting their technology levels with in-house distinctiveness of technological exchange extensive Japanese production in all three research units, industry associations, in each setting. sectors recently, although Itochu and and sector-specific technology regimes Innovation Systems. A review of Na- Panasonic put down roots much earlier supported by the state. Manufacturing tional Innovation Systems sheds light on than Toyota and Toray. firms lead worldwide in R&D funding. infrastructures in the social systems of Future. What does the future hold for Panasonic and Toyota rank among Japan’s production supporting basic and ap- the region? A shift from offshore plants leaders in number of patents. Denso and plied research relevant for manufacture. to integrated knowledge networks would Toray are research leaders in their own The relative contribution of knowledge help secure Japan’s role, improve human sectors among local and global competi- networks to regional integration will resources and advance technology in host tors. rest largely on the choice of open versus countries, and strengthen regional inte- I discover that the electronics, autos, bounded innovation systems. I examine gration. South Korea faces a similar chal- and textile and apparel sectors advanced boundaries within a society of sectors. lenge but without the breadth or depth of page 7

Japanese networks at present. China may (Arrighi, Hopkins and Wallerstein 1989) have been created by capitalist industrial- well be ready for the challenge as well as and he addressed the ways in which re- isation will require a capable multilateral, industry moves abroad in the coming sistance from below affected to evolution and hopefully democratic, global state. years. of the world-system in many other works This sheds a somewhat different light (e.g. Arrighi and Silver 1999). on discussions of global state formation Arrighi’s (2007) last book, by theorists of a global stage of capital- Dennis McNamara in Beijing, provided a world historical ism such as William I. Robinson (2004). Georgetown University comparison of the trajectories of China, If global capitalists are creating a global [email protected] Europe and the United States. Arrighi state it might be a good idea to democ- revisited the classics of political economy ratise it and use it as a terrain of struggle *Business Innovation in Asia – Knowledge to explain the rise of the West, its eclipse for social justice and an instrument for and Technology Networks from Japan of China in the nineteenth century, the dealing with environmental issues. (Routledge 2009), by Dennis McNamara. rise and decline of U.S. hegemony in the Adam Smith in Beijing helps us to re- twentieth century, and China’s recent rise think the past and the future of East/West

cont’d from page 1: Economy, Society ...his analysis that a in political and Giovanni Arrighi called “market implies future increase society,” and an upper layer in which flexible and evolving forms of finance globalisation based on hegemony would require a capital and state power form the com- c manding heights. Arrighi’s model of the hegemonic national state that is significantlylarger modern Europe-centered world-system is constituted around a sequence of four than the U.S. partially-overlapping “systemic cycles of accumulation” in which the capital- ist and hegemonic commanding heights to greater centrality in the world econo- relations and to consider the most basic expand and assume deeper control over my. issues about modes of production that protection, production and transactions. Though Arrighi did not say this, his are centrally important for both under- Arrighi tells the story of the alliance analysis implies that a future increase in standing the human past and for politi- between the financiers of Genoa and the political globalisation based on hegemo- cal action in the present and the future. expansive Portuguese sea-borne empire ny would require a hegemonic national It carries the world-systems perspective in the fifteenth century. Then he tells the state that is significantly larger than the forward, developing both its value as story of the Dutch, British and U.S. “sys- U.S. The fact that there are no other states an explanation of human sociocultural temic cycles.” This is a more evolutionary larger than the U.S. in terms of economic evolution and its usefulness as a tool for approach than Immanuel Wallerstein’s size (the European Union is about the guiding present efforts to move in the model of cycles and trends, and it focuses same size, and China is much smaller) direction of a democratic and collectively more on the flexibility of finance capital. means that the hegemonic sequence of rational global commonwealth. It should Arrighi’s LTC focuses on the evolu- an evolution toward a more coordinated be read widely and debated, especially tion of the commanding heights and and integrated form of by those who think that another world is appears to neglect the roles played in by a single national state has probably possible. these qualitative changes by resistance come to an end. Of course a new period Giovanni Arrighi was a paragon of from subaltern classes and from the non- of hegemonic rivalry and deglobalisation the engaged intellectual, a global public core. LTC also somewhat inexplicably is likely during the decline of U.S. hege- social scientist, who used his powerful drops any discussion of the relationship mony. Hopefully this will not devolve mind to systematically analyze social between business cycles (e.g. the Kon- into another ‘Age of Extremes’ of the kind change over the long run to try to solve dratieff wave) and the systemic cycles of that happened during the first half of the the huge problems that humanity has accumulation. This might be construed twentieth century. But eventual further created for itself in recent centuries. He to suggest that he felt that the lower integrative evolution of global gover- did not shrink from the complexities of orders could safely be left out of the story, nance will require a condominium of ex- what he called “the fog of globalization” an approach that is taken by many others, isting states, or even a multilateral global nor of his own commitments to a more especially scholars state. As Peter Taylor (1996) has said, the egalitarian world society. A mutual friend who study the “great powers.” To be fair, U.S. is probably the last of the hegemons. asked Giovanni a few months before his Arrighi was one of the originators of the Further political integration in order to death as to which of his many works he important concept of “world revolutions” manage the massive global problems that most wanted to be remembered. He told page 8 our young friend not to worry about such things, but rather to just “fight the good References fight.” Arrighi, Giovanni 1978, The Geometry of Imperialism, London: New Left Books. Arrighi, Giovanni, Terence K. Hopkins, and Immanuel Wallerstein. 1989. Chris Chase-Dunn Antisystemic Movements. London: Verso. Institute for Research on World Systems Arrighi, Giovanni 1994, The Long Twentieth Century, London: Verso. University of California-Riverside Arrighi, Giovanni 2006, ‘Spatial and other ‘fixes’ of historical capitalism’, in [email protected] Global : Historical and Comparative Perspectives, edited by Christopher Chase-Dunn and Salvatore Babones, : Press. In the Long Run, Arrighi, Giovanni 2007, Adam Smith in Beijing: Lineages of the Twenty-first Keynesianism Is Dead* Century, London: Verso Observations on the Financial Crisis Arrighi, Giovanni, Takeshi Hamashita, and 2003, The Resurgence of In exploring the social roots and the East Asia: 500, 150 and 50 Year Perspectives, London: Routledge future of the global financial crisis from a Arrighi, Giovanni and Beverly Silver 1999, Chaos and Governance in the Modern sociological and world-historical per- World-System: Comparing Hegemonic Transitions, Minneapolis: University spective, this research project offers the of Minnesota Press. following twelve observations: Reifer, Tom 2009 “Histories of the Present: Giovanni Arrighi, the Longue Duree (1) World-historically, there is a cru- of Geohistorical Capitalism, and the Current Crisis” cial difference between the current crisis http://www.tni.org/en/article/histories-present-giovanni-arrighi-longue-duree- and the crisis of the 1930s. The existence geohistorical-capitalism-and-current-crisis of socialism as a global alternative in Robinson, William I 2004, A Theory of Global Capitalism, Baltimore: Johns the early twentieth century provided Hopkins University Press. the context in which the 1930s crisis Taylor, Peter 1996, The Way the Modern World Works: World Hegemony to World was resolved at the expense of capital, Impasse, New York: Wiley. as labor, farm, and populist movements, amid expanding global instability and crisis, forced the recognition of a social and regressive tax policies. Put in other became known as “neoliberalism”) was wage contract and collective bargaining words, dealing with the crisis at the the political response of capital to the rights on capital. Thus the alternative of expense of capital resolved the crisis of contradictions of “positive Keynesian- socialism brought a faction of reformist the 1930s, whereas dealing with the crisis ism” (wage-labor contracts and effective capitalism to the metaphoric negotiat- at the expense of labor has deepened and demand management leading to “wage ing table to agree to the compromise expanded it. inflation,” amidst competitive pressures of labor’s right to collective bargaining (4) The current period is a continua- and expansion of democratic rights). and rising wages accompanied by mass tion of the 1970s. Contrary to the epi- “Negative Keynesianism” was negative consumption. In the absence of a macro sodic analyses focusing on the real estate in the sense that it broke up the post- socio-economic alternative to capitalism, crisis, the latter is only a symptom of war wage/social contracts and violated however, capital is handling the current a deeper long term crisis. Real estate the “development compromise” in the crisis at the expense of the global work- was brought into the speculative game postcolonial world; it was Keynesian it ing classes. by Greenspan’s reduction of the capital the sense that it continued with effec- (2) It is a historical irony that social- funds rate to about 1 percent in 2000 to tive demand management via socializing ism (as both a political threat and statist cause a huge migration of fixed income credit as a component of wages and the welfare model, as Keynes himself ac- securities to Wall Street through the global debt regime as a component of re- knowledged) provided a solution to the mortgage industry. To be sure, while this structuring the postcolonial nation-state crisis of capitalism. While the solution measure did extend the ending life of based divisions of labor. This involved, as to the 1930s crisis involved a downward the financial boom for six more years via is now well-known, the rejection of the redistribution of income, capital’s reac- expanding the mass of “fictitious capital” (positive) Keynesian social contract via tion to the crisis since the late 1970s has in the Polanyian sense, it did not cause “globalization” i.e., spatial and temporal been one of upward redistribution of the crisis. mobilization of capital, flexiblization, income via globalization, depeasantiza- (5) The current financial crisis should de-unionization, and casualization on tion and deproletarianization, financed- be seen as a moment within the crisis of the one hand, and the massive expan- based surplus extraction via macro and the long 1970s when “negative Keynes- sion of indebtedness as a solution to mass micro credit and the global debt regime, ianism” in free-market clothing (or what consumption with low wages on the other page 9

hand. Debt became the continuation of in this context, the Bush/Obama (Paul- tion in terms, once we note that postwar policy by other means, as credit and mi- son/Geithner) plan is a reflection of Keynesianism was (1) an externalizing crocredit substituted wages to solve the privatized politics which will ironically regime fundamentally standing on the Keynesian effective demand problem. deepen the current crisis by making the shoulder of “cheap oil regime” of 1953- (6) This characterization of “long U.S. state an appendix of Wall Street. By 1973 and (2) that the mass consumption Keynesianism” (as a contradictory unity doing so, the crisis of confidence will be component of high wage Keynesianism of liberalism and neoliberalism) would extended to the U.S. government, result- in the North was always standing on the shoulder of “forced underconsumption” in the South. Even if we assume that the high employment/high wages/high con- sumption policies were to be adopted at a global level, high global consumption is g not ecologically possible, and “disposable environments” are no longer obtainable. High global consumption and ecological crises will contradict the Keynesian solu- tion more severely and more quickly than wage inflation did in the 1970s. Thus the Keynesian solution to the crisis of global capitalism has been exhausted. At best, long Keynesianism is in a coma, but it cannot be resuscitated. (10) Hypothetically, a reformist solu- tion that could have ameliorated the cri- sis in the short run would have involved abandoning the debt regime in favor of high wages and full employment policies and massive (and rapid) state investment in infrastructural projects. Even this short run alternative would have required long term planning. As would allow a better exploration of the rela- ing in heavy downward pressure on the ask, where are the long term planners? tively under-theorized phenomenon: The value of the dollar. Not in the private, “flight-by-night state” global institutions of positive Keynesian- (9) With the rising production costs of and other institutions of negative Keynes- ism (the World Bank and the IMF) were food and energy (or what I have called ianism. transformed under negative Keynesian- the “end of cheap ecology”), supply- side (11) Contrary to Marx’s expecta- ism from development institutions to inflation will combine with monetary tions, capitalism seems to be reaching its enforcers of a global debt regime aimed inflation to produce the economists’ economic end before its political end. Ar- at the construction of mutually depen- worse nightmare, stagflation. While there guably, global social justice movements dent export-based and consumption-based will be downward pressure on prices have been gaining strength since the economies. due to massive deflationary pressures 1990s. Then again, these movements are (7) It is precisely the crisis of negative (demand-side deflation), there will also in the main reformist, and have yet to of- Keynesianism that is at the heart of the be upward pressures on prices (supply- fer a coherent view of a global alternative current crisis, and which is leaving the side inflation) due to rising production to capitalism as a social property system. global institutions of negative Keynesian- costs of human and physical energy (note (12) Politically, an extremely danger- ism (the WTO, the IMF and the World the convertibility of food and oil) and ous era is ahead of us. Capital has for Bank) with no solution other than trans- the colossal increase in the supply of the now taken political refuge in hybridity, ferring the costs of the crisis to the South dollar. These counteracting effects will but its purifying tendencies are alive and (and to the South within the North). combine to create a low-level, but persis- well. “Going beyond Obama” should have (8) While positive Keynesianism de- tent stagflation. already been posed by the left, but it is pended on the state as a relatively public (10) From an ecological perspec- the extreme right that is taking the lead. institution, the spectacular achievement tive, there is no long-term Keynesian The future defeat of Obama’s economic of negative Keynesianism has been the solution to the global crisis. “Green and and military strategies will suddenly open relative “privatization of the state.” Seen global Keynesianism” is a contradic- a space for the rapid growth of regressive page 10

and progressive political movements. It is time to pose “global green socialism” as an alternative to both positive and nega- tive Keynesianism.

Farshad Araghi Florida Atlantic University, [email protected]

*See also Farshad Araghi, “The Politi- cal Economy of the Financial Crisis: A World-Historical Perspective,” Economic and Political Weekly, Vol. 43, No. 45 (2008); “The Invisible Hand and the Vis- ible Foot: Peasants, Dispossession, Glo- balization” in Peasants and Globalization: Political Economy, Rural Transformation and the Agrarian Question, edited by A. g H. and Cristobal Kay Akram-Lodhi, New York: Routledge (2009), and my forth- The Limits of Mexican since the economic crisis of 1982. coming article, “Accumulation by Dis- Electoral Democracy The specialists in economics—also placement: Food, Ecology, and the Crisis The Mexican democratic transition known as “money doctors” – established of Reproduction,” Review: A Journal of has not been a homogeneous process a new type of governability in tune with the , volume 32, even though it has been characterized the neoliberal economic idea of commer- no 1. Your comments and questions are as a partisan alternation in the different cializing public policy; that is, they used most welcome. offices subject to popular election.1 This the methods of corporate management is mainly because the presence of the to achieve efficiency goals as in a private Institutional Revolutionary Party (Par- enterprise. The economic reforms which tido Revolucionario Institucional or PRI) were implemented sought to support the From 1982 on, is still hegemonic in some of the munici- interests of capital with the objective of palities and states of the country. inserting the Mexican economy into the the arrival of different Nevertheless, in the year 2000, a candi- international market (López-Portillo, date of the National Action Party (Par- 1994). It is thus that the transition was made from economic nationalism to representatives of the tido Acción Nacional (PAN), Vicente Fox Quezada, won the Mexican presidency in neoliberalism, stressing the importance a highly competitive election. This was of the free market (Zapata, 2005). neoliberal economic particularly remarkable because it meant From 1982 on, the arrival of different that after more than 70 years, the PRI representatives of the neoliberal econom- technocracy to the had lost the presidential election for the ic technocracy to the Mexican presidency very first time. This partisan alternation, was further evidence of the demise of Mexican presidency however, was also a consequence of the the political myth called the Mexican changes that the traditional political elite revolution. This meant the end of social commitment through state intervention, was had undergone, especially when econom- further evidence ic matters were considered the subject of thus eroding the hegemonic party’s (PRI) so-called specialists which was evident social foundations for support. This of the demise of the caused fractures within the party that

1 The Mexican transition to democracy has tended to be interpreted more by what occurs in the electoral plane. The political myth called the voting laws that the different political parties have promoted, in the aftermath of the 1968 student movement, have a greater presence in the Federal Congress as well as in local congresses. These laws include respect for the vote and, at the same time, the need to establish neutral electoral institutions where the federal government has no right to Mexican revolution. intervene. In this sense, any political party would be guaranteed the ability to win, competition among political parties would be a reality, and there would be uncertainty as to the final results of the voting process. This vision neglects the important role that social mobilization can play in electoral institutional changes (Salazar, 1999: 13-41). page 11 led a number of its members to orga- the population. 2 The government of the then-president Vicente nize themselves independently and, in On the one hand, therefore, there are Fox Quezada (2000-2006) was a government for the businessmen given that the business sector financed his some cases, to seek the support of social problems with the government’s account- presidential campaign (see Korrodi, 2003). Fox used his organizations that were unhappy with the ability. Moreover, the government does position to manage influences that favored his relatives and friends (Quintero and Hernández, 2005), as well as general decline of the level and quality of not even appear to be in close touch with large private monopolies (Hernández, 2006). life (Reséndiz, 2005: 169). the needs of the people it governs despite As a result, the deterioration of the having been elected by them. While it ity or impartiality. It was acknowledged, PRI’s hegemony alongside the consoli- is a technically legitimate government, it therefore, that the presidential election dation of a party system at the national can resort to illegal actions without suf- had not been “clean.” According to the level with greater competition guaranteed fering any immediate consequences while Federal Electoral Tribunal, however, that by the respect for the vote because of it is in power (Elizondo, 2006: 88). did not cast doubts on the final result, the existence of independent electoral As a result, social rights cannot be which favored the PAN candidate. institutions, made it possible to have materialized in an institutional manner party alternation at the local level as well because Mexican citizenship has become Miguel Ángel Vite Pérez as a more plural presence in the Fed- increasingly defined through suffrage Doctor of Social Welfare and Inequalities eral Congress. These are the conditions (political rights), which has had the effect University of Alicante, Spain surrounding the PRI’s loss of political of diluting the State’s responsibility in [email protected] monopoly over the Mexican presidency regards to those who have suffered the at the beginning of the 21st century. most within the neoliberal economic The relationship between the govern- model; thus, the State offers assistance to References ment and society changed, however, not some poor families without considering Camacho, Óscar, Almazán, Alejandro (2006) La only because of the disappearance of the social welfare as a social right (Dieterlen, victoria que no fue. López Obrador: entre la guerra social pact established between the hege- 2003: 91-93). sucia y la soberbia, México: Grijalbo. monic party and the social organizations On the other hand, the importance Dieterlen, Paulette (2003) La pobreza: Un estudio that were part of it. The change was also of the presidential election of July 2006 filosófico, México: Universidad nacional Autónoma due to the need for different social move- rests on the fact that it demonstrated de México-Fondo de Cultura Económica. ments to defend the right to vote in order that the partisan option, headed by the Elizondo, Carlos (2006) “Democracia y gobern- to be able to govern through projects that candidate of the Party of the Democratic abilidad en México”, Aguilar Rivera, José Anto- emerged as alternatives to the neoliberal Revolution (Partido de la Revolución nio (coor.) Pensar en México, México: Fondo de ones –this is what happened during the Democrática, PRD), Andrés Manuel Cultura Económica. 1980s (Tamayo Flores, 1997: 166). López Obrador2, who sought to introduce Hernández, Anabel (2006) Fin de Fiesta en Los Later on, during the 1990s, the subject some changes in the neoliberal economic Pinos, México: Grijalbo. of electoral transparency became the model, was neutralized through the main concern of the political parties, intervention of corporate businessmen Hernández, Anabel, Quintero, Arelí (2005) La familia presidencial. El gobierno del cambio bajo sospecha de corrupción, México: Grijalbo. Moreover, the government does not even appear López Portillo, José Ramón (1994) Economic Thought and Economic Policiy-making in Con- to be in close touch with the needs of the temporary México: International and Domestic Components, Great Britain: PhD, Antony´s College people it governs despite having been elected by them. Oxford University. Reséndiz, Ramón (2005) “Del nacimiento y muerte del mito político llamado Revolución which benefitted the experts in techni- and also the actions of the then-president Mexicana”, Estudios Sociológicos 67: 139-183. cal electoral procedures. The election of of México, Vicente Fox Quesada. Both representatives in public office did not, of these interventions translated into the Salazar, Luis (1999) “Incertidumbres y transición”, however, lead necessarily to the democra- successful support of the PAN’s presi- Salazar, Luis (coor.) 1997: Elecciones y transición a la democracia en México, México: Cal y Arena. tization of the mechanisms of governance dential candidate and, thus, the party at the local and national levels. In some won the presidency for the second time Tamayo Flores, Sergio (1997) “La participación cases, authoritarianism and discretionali- (Camacho y Almazán, 2006: 17-74). ciudadana: un proceso” , Revista Mexicana de ty continued to orient public action when Meanwhile, the electoral institutions Sociología 4: 155-185. it came to the management of public in charge of overseeing the presidential Zapata, Francisco (2005) Tiempos neoliberales en funds, which has prevented democratiza- election showed their preference for México, México: El Colegio de México, A. C. tion from having a positive impact in the the PAN’s presidential candidate, which improvement of material conditions of clearly called into question their neutral- page 12

Stiftung Weltgesellschaft World Society Foundation WSF Award of Excellence Program on the topic of f THE GLOBAL ECONOMIC CRISIS: PERCEPTIONS AND IMPACTS

What began as a financial meltdown in the United States has in (international) political institutions; now become a crisis of the entire . Crisis impacts, • Effects of the crisis, and policy responses to the crisis, on however, vary across countries and regions, thereby affecting perceptions of global and regional governance institutions; global and international social inequality, altering core-periphery The above list is not exhaustive. The Foundation will give relations, and re-defining the international power balance. While highest priority, however, to papers that combine a general theo- several semiperipheral countries are profiting from their consid- retical discussion with new empirical findings. These findings may erable foreign currency reserves to gain more political weight in be based on comparative research as well as single-case studies, international financial institutions, peripheral countries are expe- and on qualitative as well as quantitative research methods. In any riencing sharp rises in poverty and accumulating new foreign debt. case, paper proposals should give a very clear indication of the Given their lack of fiscal space to implement stimulus programs, research methods, data sources and analytical tools to be used. peripheral countries are likely to suffer substantially longer from Please note that the Foundation is seeking original contribu- the crisis fallout than the rest of the world. There is a great risk that tions. Papers that have already been published or submitted for faster recovery in core and semiperipheral countries may again publication will not be accepted. drive up oil and food prices, leading to a renewal of the food crisis Interested scholars are kindly invited to submit their paper and heightening existing political tensions at the periphery of the proposals before December 15, 2009. The Foundation’s Board of world-system. Members will evaluate these proposals and ask successful appli- Simultaneously, the crisis has left politicians, policy advisors cants to elaborate their proposals into full papers (25-30 pages, and top managements of enterprises and international institutions but no more than 8000 words) in good English language. We in an ideological vacuum. Well-established theories of the market, strongly encourage authors to discuss the implications of their as well as hegemonic assumptions about the alleged benefits of findings for both, future global social integration and existing unfettered global economic integration, are falling into pieces. The world society theories. The deadline for delivering the papers is current recession nevertheless calls for immediate policy responses. May 31, 2010. There is strong need for ad-hoc theories of the crisis’ causes to Each paper meeting the typical quality standards of the lead- guide short-term cures and long-term structural reforms, both at ing scholarly journals will be honored with US$ 1.000. The most the national and the international level. International organiza- outstanding papers will be published in a forthcoming volume tions, business representatives, and civil society organizations (2011/12) of World Society Studies, the Foundation’s edited book have entered a fierce interpretative contest over crisis mechanisms series. and possible political remedies. The current crisis thus presents The authors of the most outstanding papers become candi- a extraordinary opportunity to study the strategies employed by dates for the Foundation’s Award of Excellence in World Society various interested actors to gain public resonance and influence for Research (2010). The prize money for the Award will be US$ old and new political ideas. 10.000 (First Prize) and US$ 5.000 (Second Prize). The candidates With this call for papers, the World Society Foundation encour- will be invited to a conference to be held at the University of Zur- ages researchers to investigate into the social construction of crisis ich, Switzerland, on September 10-11, 2010, where the award will interpretations and/or the effects of the current crisis on percep- be presented. The Foundation’s Board of Members will act as the tions of global social relations (, North- jury for this evaluation. South relations, multilateralism, etc). Issues that may be addressed Applicants are invited to present proposals for their papers giv- include: ing the following information: • Crisis representations and interpretations in the mass media • Title of the paper (qualitative and quantitative content analysis) or the general • Abstract of no more than 500 words (longer abstracts will be population (quantitative surveys); disqualified) • Crisis framing by social movement organizations, business • Name of the author(s), present address (including e-mail actors, or international organizations (content analysis, address), and name of the institution to which the author is participant observation, etc); affiliated (if applicable) • Impacts on political mobilization and transnational organizing among civil society organizations (protest event Proposals must be sent by e-mail to [email protected]; sub- analysis, participant observation, interviews, etc); missions by postal mail will be disqualified. • Impacts on national and international regulating agencies and For more information on the WSF and its activities, please mechanisms check out our website: www.uzh.ch/wsf/. • Effects of the crisis, and policy responses to the crisis, on trust page 13

Officers

President: Board: Sylvia Walby Salvatore Babones Lancaster University, UK University of Sydney, Australia [email protected] [email protected]

William Carroll Vice Presidents: University of Victoria, Canada Sabine Gensior [email protected] Bradenburg Technical University- Cotbus, Germany Michelle Hsieh [email protected] Academia Sinica, Taiwan [email protected] Alexius Pereira National University of Singapore Andrew Jorgenson [email protected] Washington State University, USA [email protected]

Treasurer: Eun Mee Kim Andrew Sayer Ehwa Womens University, Korea Lancaster University, UK [email protected] [email protected] Darlene Miller Rhodes University, South Africa Secretary and [email protected] Newsletter Editor: Aaron Pitluck Georgina Murray Illinois State University, USA Griffith University, Australia [email protected] [email protected]

Cristina Puga UNAM, Mexico [email protected]