There is an emergent Bush-Wolfowitz Project. The White House has nominated US Deputy Defence Secretary Paul Wolfowitz as next head of the World Bank to replace James Wolfensohn. This development has implications for the rest of the world. Surely, nothing much substantial will change in the global political economy of development as capitalist market-led development shall continue anyway. But the changing of the Bank's leadership may also mean the changing of the strategy in managing the global capitalist system and its contradictions as well as in promoting continued capital accumulation.
In the essay I submitted a few months ago to Professor J. Gabriel Palma of Cambridge University, entitled 'Governing Global Capitalism: The Politics of Ideology and the Economics of Information', I argue that it would be analytically useful to think of the Bank, in partnership with the International Monetary Fund (IMF), as ‘problem-solving institutions’ geared at the management of the general conditions for capitalist accumulation and at resolving the contradictions capitalism induces. ‘Problem-solving’, in this sense, does not adhere to Robert Cox’s narrow conception of a ‘problem-solving’ orientation as the management of the status quo, which appears to be uncritical and unreflective of current realities. This is because, as Paul Cammack rightly points out, ‘there is no moment at which a “problem-solving” orientation aimed at maintaining the status quo is enough. The managers of domestic and local economies need just a “critical” a perspective as their opponents, if by “critical” we understand an analytical perspective which is mindful of complex processes of change, the clashes of interest they provoke, and the need to find innovative responses as new situation arise’. Beyond their own triumphalistic rhetoric, the global managers of globalising capitalism – the Bank and the Fund – are all too aware of capitalism’s contradictions and crises. It is for this reason that globalisation is presented not only as a blueprint for continuing development through the market but also as a project of crisis management.
The Bank and the Fund are not welfare institutions that prioritise distribution function. In reality, they cannot anymore also be viewed as Keynesian institutions prioritising stabilisation function because they have become bastions of neo-liberalism as they call for, if not forces, the restructuring of the world economy, targetting the policies of welfare and developmentalism along the conditions that satisfy capitalist profit. Neither the view that the Bank and the Fund are regulatory institutions – which prioritise regulation function of correcting market failures such as monopoly, negative externalities, and asymmetric information – would be adequate in analytically capturing the complexity of the governance of global capitalism.
There are at least two models of neo-liberalism that have emerged since the early 1980s: the Washington Consensus (1980s - early 1990s) and the post-Washington Consensus (mid-1990s - present). The two models contrast not along the ‘state versus market’ debate as active state involvement in making markets work has always been present in the history of political economy. The contrast lies in their respective strategies and focus in the management of the global capitalist system and the drive for accumulation. The Washington Consensus focused on an ‘open market economy’ through macro-economic structural adjustments in the policies of privatization, deregulation, and liberalization. The post-Washington Consensus, on the other hand, focuses on ‘competitiveness’ through a comprehensive institutionalization of ‘competition cultures’, especially on labour market reforms and the development of ‘human capital’. This post-Washington Consensus is the so-called Wolfensohn-Stiglitz project. Wolfensohn is the outgoing head of the Bank to be replaced by Wolfowitz. Joseph Stiglitz, former chief economist of the Bank, is a nobel prize winner for his 'economics of information' scholarship. This Wolfensohn-Stiglitz project focuses on the use of institutions (including the state), policy coordination, and the ‘information-theoretic approach’ as the strategy pursued by the Bank and all pro-capitalist political forces in the management of global capitalism, in particular the utilisation of non-market responses (that is, not merely setting prices right and the faith in the magic of the invisible hand) to address market imperfections.
The world now awaits for another neo-liberal offensive to be carried out by a military hardliner defender of American interest. My fear is that ‘new imperialism’ may be transformed to what I would call 'post-new imperialism'. New imperialism, as depicted in the process of globalisation, is a unique way of capital to dominate without exercising direct extra-economic power such as the political institutions and the military. Under new imperialism, uneven development does not anymore mean a system of the rich robbing the poor. All that is done is to subject and subordinate the workers and poor countries to capitalist market, and hence in a geography where majority are proletarianised and impoverished, and where both capital and labour are dependent on the market for their survival and self-reproduction. Post-new imperialism may go back to the old, pre-capitalist system of appropriation where capital accumulation is carried out through direct ‘extra-economic’ coercion.
The emergent Bush-Wolfowitz Project is about imposing the imperial hegemony of the US in particular and global capitalism in general through the subjection of everyone to the imperatives of the capitalist market that is sustained by direct extra-economic power of imperial political coercion and military rule. What Wolfowitz and the pro-capitalist forces are about to face is how to protect the interest of American capital in particular vis-a-vis the fastest-growing and strengthening economies of China, the European Union, and East Asia, and how to manage global capitalism in general vis-a-vis the increasing rage of the billions of people in misery around the world.
In the essay I submitted a few months ago to Professor J. Gabriel Palma of Cambridge University, entitled 'Governing Global Capitalism: The Politics of Ideology and the Economics of Information', I argue that it would be analytically useful to think of the Bank, in partnership with the International Monetary Fund (IMF), as ‘problem-solving institutions’ geared at the management of the general conditions for capitalist accumulation and at resolving the contradictions capitalism induces. ‘Problem-solving’, in this sense, does not adhere to Robert Cox’s narrow conception of a ‘problem-solving’ orientation as the management of the status quo, which appears to be uncritical and unreflective of current realities. This is because, as Paul Cammack rightly points out, ‘there is no moment at which a “problem-solving” orientation aimed at maintaining the status quo is enough. The managers of domestic and local economies need just a “critical” a perspective as their opponents, if by “critical” we understand an analytical perspective which is mindful of complex processes of change, the clashes of interest they provoke, and the need to find innovative responses as new situation arise’. Beyond their own triumphalistic rhetoric, the global managers of globalising capitalism – the Bank and the Fund – are all too aware of capitalism’s contradictions and crises. It is for this reason that globalisation is presented not only as a blueprint for continuing development through the market but also as a project of crisis management.
The Bank and the Fund are not welfare institutions that prioritise distribution function. In reality, they cannot anymore also be viewed as Keynesian institutions prioritising stabilisation function because they have become bastions of neo-liberalism as they call for, if not forces, the restructuring of the world economy, targetting the policies of welfare and developmentalism along the conditions that satisfy capitalist profit. Neither the view that the Bank and the Fund are regulatory institutions – which prioritise regulation function of correcting market failures such as monopoly, negative externalities, and asymmetric information – would be adequate in analytically capturing the complexity of the governance of global capitalism.
There are at least two models of neo-liberalism that have emerged since the early 1980s: the Washington Consensus (1980s - early 1990s) and the post-Washington Consensus (mid-1990s - present). The two models contrast not along the ‘state versus market’ debate as active state involvement in making markets work has always been present in the history of political economy. The contrast lies in their respective strategies and focus in the management of the global capitalist system and the drive for accumulation. The Washington Consensus focused on an ‘open market economy’ through macro-economic structural adjustments in the policies of privatization, deregulation, and liberalization. The post-Washington Consensus, on the other hand, focuses on ‘competitiveness’ through a comprehensive institutionalization of ‘competition cultures’, especially on labour market reforms and the development of ‘human capital’. This post-Washington Consensus is the so-called Wolfensohn-Stiglitz project. Wolfensohn is the outgoing head of the Bank to be replaced by Wolfowitz. Joseph Stiglitz, former chief economist of the Bank, is a nobel prize winner for his 'economics of information' scholarship. This Wolfensohn-Stiglitz project focuses on the use of institutions (including the state), policy coordination, and the ‘information-theoretic approach’ as the strategy pursued by the Bank and all pro-capitalist political forces in the management of global capitalism, in particular the utilisation of non-market responses (that is, not merely setting prices right and the faith in the magic of the invisible hand) to address market imperfections.
The world now awaits for another neo-liberal offensive to be carried out by a military hardliner defender of American interest. My fear is that ‘new imperialism’ may be transformed to what I would call 'post-new imperialism'. New imperialism, as depicted in the process of globalisation, is a unique way of capital to dominate without exercising direct extra-economic power such as the political institutions and the military. Under new imperialism, uneven development does not anymore mean a system of the rich robbing the poor. All that is done is to subject and subordinate the workers and poor countries to capitalist market, and hence in a geography where majority are proletarianised and impoverished, and where both capital and labour are dependent on the market for their survival and self-reproduction. Post-new imperialism may go back to the old, pre-capitalist system of appropriation where capital accumulation is carried out through direct ‘extra-economic’ coercion.
The emergent Bush-Wolfowitz Project is about imposing the imperial hegemony of the US in particular and global capitalism in general through the subjection of everyone to the imperatives of the capitalist market that is sustained by direct extra-economic power of imperial political coercion and military rule. What Wolfowitz and the pro-capitalist forces are about to face is how to protect the interest of American capital in particular vis-a-vis the fastest-growing and strengthening economies of China, the European Union, and East Asia, and how to manage global capitalism in general vis-a-vis the increasing rage of the billions of people in misery around the world.
