Globalization and Its HistoryReview by: Michael LangThe Journal of Modern History, Vol. 78, No. 4 (December 2006), pp. 899-931Published by: The University of Chicago PressStable URL: http://www.jstor.org/stable/10.1086/511251 .Accessed: 16/06/2012 08:33

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The Journal of Modern History 78 (December 2006): 899–931� 2006 by The University of Chicago. 0022-2801/2006/7804-0004$10.00All rights reserved.

Review Article

Globalization and Its History*

Michael LangUniversity of Maine

A boundary is not that at which something stops but, as the Greeks recognized,the boundary is that from which something begins its presencing. . . . Accord-ingly, spaces receive their being from locations and not from “space.” (MartinHeidegger, 1954)1

The number of scholarly works on “globalization” continues to explode. The numberof scholarly works that open by citing this explosion continues to explode. Over fifteenyears of vigorous discussion inside and outside the academy have revealed variousintellectual tendencies but no clear sense—nor even an approximate sense—of whatthis word means. “Globalization” may be “the leitmotif of our age,” but its exclam-atory recurrence appears to express confusion rather than staying power.2 One authorwrites that globalization is “a network of dependencies which covers the entirety ofthe planet”; another, that over 80 percent of the world’s population lives outside anysuch network.3 Some commentators interpret the events of September 11 as the endof globalization; others see them as its confirmation. Similarly, the U.S.-Iraq War isregarded as a great threat to globalization or, alternately, as its latest manifestation.4

* Books reviewed in this essay include C. A. Bayly, The Birth of the Modern World, 1780–1914:Global Connections and Comparisons (Malden, MA: Blackwell Publishing, 2003), pp. xxiv�540,$69.95 (cloth), $34.95 (paper); Michael D. Bordo, Alan M. Taylor, Jeffrey G. Williamson, eds.,Globalization in Historical Perspective: A National Bureau of Economic Research Conference Report(Chicago: University of Chicago Press, 2003), pp. ix�588, $95.00 (cloth); Andre Gunder Frank,ReOrient: Global Economy in the Asian Age (Berkeley: University of California Press, 1998), pp.xxix�416, $21.95 (paper); David Held, Anthony G. McGrew, David Goldblatt, and Jonathan Per-raton, Global Transformations: Politics, Economics, and Culture (Stanford, CA: Stanford UniversityPress, 1999), pp. xxiii�515, $29.95 (paper); Paul Hirst and Grahame Thompson, Globalization inQuestion: The International Economy and the Possibilities of Governance, 2nd ed. (Malden, MA:Polity Press, 1999), pp. xviii�318, $33.95 (paper); A. G. Hopkins, ed., Globalization in World History(New York: Norton, 2002), pp. x�337, $19.38 (paper); Kevin H. O’Rourke and Jeffrey G. William-son, Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy (Cam-bridge, MA: MIT Press, 1999), pp. xii�343, $87.50 (cloth), $35.00 (paper).

1 Martin Heidegger, “Building Dwelling Thinking,” in his Poetry, Language, Thought (New York,1971), 154.

2 Quote from David Held and Anthony G. McGrew, eds., The Global Transformations Reader: AnIntroduction to the Globalization Debate (Malden, MA, 2000), 1.

3 Zygmunt Bauman, “Wars of the Globalization Era,” European Journal of Social Theory 4, no. 1(2001): 11–28; Richard J. Barnet and John Cavanagh, Global Dreams: Imperial Corporations andthe New World Order (New York, 1994), 383.

4 For the former, John Gray, “Where There Is No Common Power,” Harper’s (December 2001):15–19; for the latter, Eli Zaretsky, “Trauma and Dereification: September 11 and the Problem ofOntological Security,” Constellations 9, no. 1 (2002): 98–105; and David Kirkpatrick, “After Sep-tember 11, One Thing Has Become Painfully Clear: We All Live in One World for Better or for

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In the summer of 2001, the U.S. representative to the UN Conference against Racismrejected an anti-Zionist platform with the demand that the conference agenda address“global, rather than regional problems.”5 Where might we find “global” racism? Mer-its or demerits of the platform aside, appeal to the “global” framework bloated theconference topic into an indistinguishable and useless abstraction. “Globalization” ispromoted as an essential object in the study of the contemporary world, as “the centralthematic for social theory,”6 but as it emerges from the discourse, the concept seemsrather to be limping into the future. Perhaps this results from the construal of its past.

Globalization and related global concepts rely on some kind of geographic for-mulation. In 1990 Anthony Giddens offered the now-classic description of globali-zation as the stretching of social connections between the local and the distant so asto create a highly intensified worldwide scale.7 The territorial borders of the nation-state, Giddens and others argue, are now being relativized by this global scale ofeconomic and political interactions, a condition one author labels “supraterritoriality.”8

This image of globalization is so popular—and so pliable—that it spans otherwisefirmly opposed political affiliations. Conservatives rail against its cosmopolitanism,neoliberals praise its free markets, social democrats bemoan its undermining of thewelfare state, Marxists critique its capitalist dominance, and postmodernists affirm itsdiversity and its destabilization of national identities.

On the heels of Giddens, these “borderless world” and “retreat of the state” argu-ments became very popular in the early and mid-1990s.9 An industry of volumes thenbegan to take as their basis the presumed contemporary condition of globalization.The globalization phenomenon was considered to be new and to require new descrip-tions: the term itself spoke to the alleged incapacity of previous concepts and analysis.It was common to hear “epochal transformation,” “epochal shift,” “paradigm shift,”“the end of the world as we know it,” and simply a constant hammering of the “new.”10

Worse,” Fortune, November 26, 2001, 74–110 (see esp. lead commentary by author, commentary byeconomist Joseph E. Stiglitz, and interview with German media executive Andreas Schmidt). Seealso Rob Lever, “Iraq Rift Threatens US-EU Engine of Global Economy: Experts,” EUbusiness.com,March 19, 2003, http://www.eubusiness.com/cgi-bin/item.cgi?id�105886; David North, “Into theMaelstrom: The Crisis of American Imperialism and the War against Iraq,” World Socialist Web Site,April 1, 2003, http://www.wsws.org/articles/2003/apr2003/dn-a01.shtml.

5 From the preparatory talks at Geneva for the UN World Conference against Racism, RacialDiscrimination, Xenophobia, and Related Intolerance, reported on All Things Considered, NationalPublic Radio, July 30, 2001 (archived at http://www.npr.org/ramfiles/atc/20010730.atc.15.ram).

6 Mike Featherstone and Scott Lash, “Globalization, Modernity, and the Spatialization of SocialTheory: An Introduction,” in Global Modernities, ed. Mike Featherstone, Scott Lash, and RolandRobertson (London, 1995), 1–24, 1.

7 Anthony Giddens, The Consequences of Modernity (Stanford, CA, 1990), 64.8 Jan Aart Scholte, Globalization: A Critical Introduction (New York, 2000).9 Kenichi Ohmae, The Borderless World: Power and Strategy in the Interlinked Economy (New

York, 1990); Walter B. Wriston, The Twilight of Sovereignty: How the Information Revolution IsTransforming Our World (New York, 1992); Jean-Marie Guehenno, The End of the Nation-State,trans. Victoria Elliot (Minneapolis, 1995); Susan Strange, The Retreat of the State: The Diffusion ofPower in the World Economy (Cambridge, 1996).

10 James N. Rosenau, Along the Domestic-Foreign Frontier: Exploring Governance in a TurbulentWorld (Cambridge, 1997), 7; Roger Burbach and William I. Robinson, “The Fin de Siecle Debate:Globalization as Epochal Shift,” Science and Society 63, no. 1 (1999): 10–39; Jan Aart Scholte,“Globalisation: Prospects for a Paradigm Shift,” in Politics and Globalisation: Knowledge, Ethics,and Agency, ed. Martin Shaw (London, 1999), 9–22; Malcolm Waters, Globalization (London, 1995),158; Zygmunt Bauman, Globalization: The Human Consequences (New York, 1998), where we find“the new freedom of capital,” “new speed, new polarization,” “new extraterritoriality,” “the newexpropriation,” “the new global elite,” and so on (10, 18, 23, 65, 125).

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The approaching turn of the century also added a millennial gravitas to the otherwisegiddy excitement.11 Amid this tidal wave, some historically minded criticism didemerge,12 and by the second half of the 1990s, promoters of the concept took care tonote that globalization is “historic.” At times this was glibly announced so as to betossed aside,13 but elsewhere historical evaluation became the focus of analysis. Inlarge part, the globalization discussion had shifted into a contest over history.

This essay reviews some of the leading recent arguments concerning the history ofglobalization. It is guided by a basic question: at what historic date can we begin todescribe the globalization process? It will quickly become clear that this questionhinges on the conceptualization of the key idea. The first section of this article outlinesa brief history of the concept. It then assesses David Held et al.’s Global Transfor-mations for its claim that state-constricting globalization is new. The argument I willpose in response is that contemporary global integration is both exaggerated andprecedented, that constraint upon the state is overestimated in the present and under-estimated for the past. The cause of the distortion in perspective is the ahistoricalabstract separation of political and economic affairs. Section 2 addresses variousworks that date the start of globalization before the contemporary era. For the nine-teenth century, Kevin O’Rourke and Jeffrey Williamson’s canonical work Globali-zation and History repeats the same abstract conceptualization used by Held et al.: ittreats economics and politics as opposing and conflicting activities. For the eighteenthcentury and before, problems lie elsewhere. I will argue against several works thatfor this period the globalization concept is overburdened and that the numerous linksacross the early modern world did not constitute a global aggregation. I will alsodiscuss the additional difficulties that arise from Andre Gunder Frank’s all-too-European anti-Eurocentrism. Section 3 draws from the uncollected essays of MichaelGeyer and Charles Bright to identify a global turning point in the second half of thenineteenth century. It defines globality as the reproduction of local power that becameinterregional and globally networked at that time. For key European states, this in-cipient engagement with a global system simultaneously enhanced power and wealthand increasingly constrained them within what worrisomely came to be called geo-politics. The article concludes by explaining the recent popularity of the “globaliza-tion” concept as a result of the ideological instability of the post–cold war era.

GLOBALIZATION AS PRESENT

If in one’s own history it was possible to register new experiences, those whichsupposedly no one had ever before had, it was also possible to conceive thepast as something that was fundamentally “other.” (Reinhart Koselleck)14

11 Of many such examples to “the new millennium,” see Waters, Globalization, 1; Daniele Archi-bugi, David Held, and Martin Kohler, eds., Re-Imagining Political Community (Stanford, CA,1998), 1.

12 Robert Zevin, “Are World Financial Markets More Open? If So, Why and with What Effects?”in Financial Openness and National Autonomy, ed. Tariq Banuri and Juliet B. Schor (Oxford, 1992),43–83; Jeffrey D. Sachs and Andrew Warner, “Economic Reform and the Process of Global Integra-tion,” Brookings Papers on Economic Activity, no. 1 (1995): 1–118; Robert Wade, “Globalizationand Its Limits: Reports of the Death of the National Economy Are Greatly Exaggerated,” in NationalDiversity and Global Capitalism, ed. Suzanne Berger and Ronald Philip Dore (Ithaca, NY, 1996),60–88.

13 See, e.g., Archibugi et al., Re-Imagining Political Community, 1.14 Reinhart Koselleck, “‘Neuzeit’: Remarks on the Semantics of the Modern Concept of Move-

ment,” in his Futures Past: On the Semantics of Historical Time, trans. Keith Tribe (Cambridge,1985), 250.

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“Globalization”—as a term describing an epochal change in world integration—emerged in the years following the breakdown of the Bretton Woods System. Dis-cussion centered around business studies, where methodological isolation of the econ-omy helped to formulate the concept. “Globalization” then returned the favor byappearing to confirm the autonomy of economics. To date, most debate over global-ization has remained dependent on some economic register. This section will describethe concept’s historic formulation, evaluate claims concerning the contemporaryglobal economy, and compare these descriptions to the world economy of a centuryago.

The Bretton Woods System, initiated in 1944 to guide the postwar order, was en-gineered to promote growth by managing exchange rates and trade flows betweenindividual nation-states, each responsible for designing and administering its owndomestic policies.15 As early as 1950, though, several studies argued that poor coun-tries were not benefiting and were instead becoming increasingly dependent on thepower of the capitalist core.16 And by the 1960s this core had itself become uneasy;U.S. trade imbalances were pressuring the system’s central mechanism of peggedcurrency rates as foreign-held dollars surpassed U.S. gold reserves. Financiers movedout of dollars wherever possible, threatening inflation for more desirable currenciesand thus highlighting for the otherwise rich and powerful states their constraininginterdependence. By 1973, Japan and the European states were forced, under U.S.pressure, to float their currencies. International financial markets exploded with ac-tivity as investors could now take advantage of widening currency value and interestrate differentials. The era of Bretton Woods had come to an end.17

With the ascendancy of the neoliberal agenda, research of the 1970s increasinglyadvanced market-oriented arguments about the new transnational character of theeconomy. To many, state power appeared diminished under the rising influence ofinternational business. Such analysis usually emphasized capital markets. As Law-rence Krause wrote, “The world is experiencing a growing degree of economic in-tegration between all countries. . . . Integration of financial markets is of particularconcern because private international financial activities have seriously infringed ongovernmental sovereignty.”18 This examination of “international political economy”flourished amid ongoing U.S. trade imbalances, high inflation, the price spike by theOrganization of the Petroleum Exporting Countries (OPEC), a general slowdown in

15 For Bretton Woods foundations, Barry J. Eichengreen, Globalizing Capital: A History of theInternational Monetary System (Princeton, NJ, 1996), 96–106; Eric Helleiner, States and the Re-emergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, NY, 1994), 25–50. ForBretton Woods’ early development theories, Gerald M. Meier and Dudley Seers, eds., Pioneers inDevelopment (Oxford, 1984).

16 Raul Prebisch, Economic Survey of Latin America (New York, 1950); and Paul A. Baran, ThePolitical Economy of Growth (New York, 1957); more recently, Arturo Escobar, Encountering De-velopment: The Making and Unmaking of the Third World (Princeton, NJ, 1995). For a review ofdependency theory, Dudley Seers, Dependency Theory: A Critical Reassessment (London, 1981).

17 For the system’s problems and its breakdown, Richard N. Cooper, The Economics of Interde-pendence: Economic Policy in the Atlantic Community (New York, 1968); Eichengreen, GlobalizingCapital, 113–39; Helleiner, States and the Reemergence, 81–124. On the effects of the decision tofloat exchange rates, Jeffrey A. Frankel, On Exchange Rates (Cambridge, 1993), 10–21.

18 A key inaugurating text reflecting divergent orientations and perspectives is Robert O. Keohaneand Joseph S. Nye Jr., eds., Transnational Relations and World Politics (Cambridge, 1972). Seeparticularly in ibid. Lawrence Krause, “Private International Finance,” 173–90, 189. For a review ofthe field, Peter J. Katzenstein, Robert O. Keohane, and Stephen D. Krasner, “International Organi-zation and the Study of World Politics,” International Organization 52, no. 4 (1998): 645–85.

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growth, and the apparent inability of states to respond effectively to these problems.By the end of the decade, the study of business could propose the complete disen-gagement of the economy from the nation-state and its control. The “globalization”canon was born with the claim that territoriality was now irrelevant. One of the mostinfluential works of the period was The New International Division of Labour, writtenin German in 1977 by Folker Frobel, Jurgen Heinrichs, and Otto Kreye and quicklytranslated into several other languages. The authors emphasized the worldwide redis-tribution of production sites that enables manufacturers to pay extremely low wagesin poor countries and eliminate more costly workers in their home countries. Whileworkers are squeezed by competition and wage pressure, the industrial states arerendered helpless, compelled to provide business incentives and tax concessions in abid to keep some production domestic. Dependency and interdependency are nowfused and transcended by “a single world-wide capitalist system.” The global wholeeclipses most local distinctions in a system “largely independent of geographicaldistance.”19 Equally influential was Theodore Levitt’s 1983 advice on corporate strat-egy, “The Globalization of Markets.” Levitt claimed that successful companies, es-pecially Japanese companies, now sell “the same things in the same way everywhere.”The world had become a marketplace of homogenized tastes. “Different cultural pref-erences, national tastes and standards, and business institutions are vestiges of thepast. . . . Global competition spells the end of domestic territoriality.”20 From the per-spective of marketing or Marxism, whether analyzing finance, production, or trade,these texts announced the emergence of globalization and defined it as an economiclimit on state power.

Writings such as these helped to initiate some buzz around market “globalization”in the 1980s, but by late in the decade, discussion within business studies actuallybegan to decline.21 At the same time, however, the concept entered the general streamof social science discourse. As noted, the 1990s then witnessed an explosion of glob-alization talk, most of it reliant, if not focused, on some formulation about the newbusiness economy. One of the most extensive retorts to these presentist perspectivescame from Paul Hirst and Grahame Thompson’s Globalization in Question.22 Theauthors challenged the global description of contemporary affairs by arguing thatnationally centered processes have not been overturned by cross-border activities: thegreat majority of multinational corporations operate from specific national bases,while the state remains essential to the management of economic affairs. The authorsemphasized their thesis by comparing the contemporary world economy to that of thebelle epoque. According to their various macroeconomic measures, current levels ofintegration were fully matched by those of a century ago, indicating that a high degree

19 Folker Frobel, Jurgen Heinrichs, and Otto Kreye, The New International Division of Labour:Structural Unemployment in Industrialised Countries and Industrialisation in Developing Countries(Cambridge, 1980), 8, 13.

20 Theodore Levitt, “The Globalization of Markets,” Harvard Business Review 83, no. 3 (1983):92–102, 93, 96, 94.

21 Mauro F. Guillen, “Is Globalization Civilizing, Destructive, or Feeble? A Critique of Five KeyDebates in the Social Science Literature,” Annual Review of Sociology 27 (2001): 235–60, charts ahistory of the literature based on the number of citations in several leading bibliographic indexes.Though a useful survey of some of the leading positions, the piece does not consider periodizationto be a key debate.

22 The first edition of this book was published in 1996; references are to the 1999 edition, citedabove. Sections discussed here are the same in both editions, save for page number.

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of such internationalization does not create a supraterritorial “global” order. They didnot deny the historicity and variation within the twentieth-century world economy butrather sought to “register a certain scepticism over whether we have entered a radicallynew phase in the internationalization of economic activity” (49).

The Hirst and Thompson book created a turning point in globalization discourse;it extended the frame beyond current affairs and put the concept on the defensive.Epochal globalization now required more than mere assertion. In 1999 four Britishsocial scientists, David Held, Anthony G. McGrew, David Goldblatt, and JonathanPerraton, responded with Global Transformations: Politics, Economics, and Culture,a hefty volume that aims at exhaustive coverage. The authors position themselves as“transformationalists,” sober moderates between presentist “hyperglobalists” andnothing-new skeptics, though the great bulk of Global Transformations is directedagainst the skeptics, and specifically against Hirst and Thompson. Globalization, thebook agrees, certainly has a history, but its contemporary configuration displays “un-paralleled qualitative differences. . . . The contemporary epoch is historically unique”(425). The greatest difference, and the central concern of the text, is the currenttransformation of the nation-state, the “erosion of [its] internal/external distinction”(438). In contrast to the state-directed world economy of the belle epoque, contem-porary globalization is distinguished by “a new geography of power and privilegewhich transcends political borders and regions” (429). To make this point, GlobalTransformations brings to bear an impressive apparatus of social scientific evaluation;it also brings a political agenda. The entire volume can be taken as substantiation forthe lead author’s theoretical work of 1995, Democracy and the Global Order, wherea bid for “cosmopolitan governance” relies on a supposition concerning today’s state-surpassing globalization: “The operation of states in an ever more complex interna-tional system both limits their autonomy (in some spheres radically) and impingesincreasingly upon their sovereignty.”23 This assertion seeks its empirical evidence inGlobal Transformations.

Global Transformations is probably the most cited work on its topic,24 and someof the big bats in history and the social sciences have stepped up to praise it. AkiraIriye calls it “the best synthesis on globalization”; Anthony Giddens, “the most com-prehensive introduction to the subject”; Manuel Castells, “the best, and most com-prehensive, analysis of globalization.”25 Such strong approval of the book and itssynthesis of dozens of arguments make it a good basis for evaluating in detail theclaims of contemporary globalization. In defining their key term, the authors explicitlyecho Giddens: “Globalization can be taken to refer to those spatio-temporal processesof change which underpin a transformation in the organization of human affairs bylinking together and expanding human activity across regions and continents” (15).On this basis, the authors conduct a comparative historical analysis of what they callglobalization’s “discrete historical epochs” (17). These are divided through familiarterminology: as premodern, early modern, modern, and contemporary. The meaningof the key term “modern” is never clarified, however. When we ask what drives

23 David Held, Democracy and the Global Order: From the Modern State to Cosmopolitan Gov-ernance (Stanford, CA, 1995), 135 (entire passage italicized in original).

24 Based on Institute for Scientific Information (ISI) Web of Science citation search, April 3, 2005.25 Akira Iriye, “Internationalizing International History,” in Rethinking American History in a

Global Age, ed. Thomas Bender (Berkeley, CA, 2002), 47–62, 61 n. 17; Anthony Giddens, RunawayWorld: How Globalization Is Reshaping Our Lives (New York, 2000), 84; Manuel Castells, The Riseof the Network Society, 2nd ed., vol. 1, Information Age (Oxford, 2000), 101.

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globalizing “processes of change,” the authors cite the “combined forces of moder-nity” (10). Yet this must refer to globalization in its more recent forms; surely theforces of modernity did not create premodern globalization. Periodization of the“modern” therefore relies on nothing but the tautological assertion of itself. Yet thetemporal markers remain necessary because the book’s definition of globalization initself is so general as to include almost any spatial linkage that has an effect. Likewise,some periodization is of course needed if present-era links are to be considered epo-chally unique. Against Hirst and Thompson then, the bulk of the book’s historicalargument contrasts the “contemporary” to the “modern.”

Held et al. have a twofold thesis—shared by most in the field—that we haveentered a new era of history, one in which the distinctions of territorial power areeroding. Despite a chapter each on culture and the environment, they emphasize thestate-economy axis and, within that, a case study set of six advanced capitalist states(the United States, the United Kingdom, France, Germany, Sweden, and Japan). Thiswould be an odd and narrow selection for the defense of any thesis about globalization,though the authors insist that here we find the most compelling evidence of today’sglobal enmeshment (441, 428). The evidence they present, however, does not sur-mount the objections raised by Hirst and Thompson. I will evaluate in turn the vol-ume’s discussion of economics and politics, though, as we will see, its analytic ab-straction of each from the other creates a fundamental problem for both.

The economic arguments follow the commonplace breakdown of production, trade,and finance. Since Bretton Woods, each is said to exemplify globalization, deterrito-rialization, a decline in national autonomy, and therefore the emergence of a categor-ically new phase of world economic history (178–79, 222–23, 272–73, 426). Howglobal are these registers? How unique are they compared to those that existed acentury ago?

Concerning production, often called “the global assembly line,” Held et al. measureand map foreign direct investment (FDI). According to their argument, export ofproduction and distribution systems is now at unprecedented levels, creating the trans-national power of the new global corporation (282). On the contrary, though, worldFDI is highly concentrated and unevenly distributed. “Globalization” in this regardactually involves but a handful of countries, each in varying degrees of intensity. Anextensive study of European business reports, for example, that for the last twentyyears FDI has remained more or less stagnant for British and Dutch firms. Whileincreases did occur in Germany and France, the destinations for investments comingfrom all four sources were hardly global; rather, they were European, and they didnot show the expected increase to low-wage locations. Overall, multinational pro-duction accounts for less than 10 percent of output within even the most integratedeconomies.26 Within that, policies concerning ownership structures, corporate gov-ernance, worker relations, competitor relations, long-term financing, research and de-velopment, in-house trade, and international investment strategy follow establishednational trajectories and vary widely between U.S., German, and Japanese firms.27

26 Alfred Kleinknecht and Jan ter Wengel, “The Myth of Economic Globalization,” CambridgeJournal of Economics 22 (1998): 637–47; Theodore H. Moran, Beyond Sweatshops: Foreign DirectInvestment and Globalization in Developing Countries (Washington, DC, 2002), 5–6; Geoffrey Gar-rett, “Global Markets and National Politics: Collision Course or Virtuous Circle?” International Or-ganization 52, no. 4 (1998): 787–824.

27 Neil Fligstein, The Architecture of Markets: An Economic Sociology of Twenty-First-Century

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Concerning trade, Held et al. cite both its recent geographical extension and itsincreasing intensification (measured by trade to gross domestic product [GDP] ratios)to assert a new era of “trade globalization” (150). Yet nearly 80 percent of today’s$36 trillion world economy remains national, and further, like FDI, these trade flowsare highly uneven; Africa below the Sahara accounted for just 1 percent of worldtrade in the 1990s.28 The authors do demonstrate a slight upswing in world exportsrelative to world GDP during the post–World War II era (169), but the distributionof this trade indicates regionalization rather than globalization. In Europe, for ex-ample, trade among European Union (EU) partners has grown significantly in thepostwar period, but extracontinental trade has stagnated or diminished for most ofthe individual states and for the EU as a whole. Some economists go so far as to callthe European Union “a closed economy.”29 Overstated assertions about global tradeusually follow classical trade theory in ignoring the significance of geography. Yetcosts associated with shipping, time lag (such as interest charges, perishability, andchanges of style), cultural and linguistic unfamiliarity, human travel, and time-zonedifferentials all contribute to local agglomerations that in turn develop their owngravitational tendencies. These business costs are easily overlooked in the age of theInternet, but they serve as the basis for today’s regionalized trade blocs.30

Finally, the argument for contemporary economic globalization most often drawsfrom the recent history of international finance. Reduction of controls and taxes oncapital movement, liberalization of domestic regulatory restrictions, offshore account-ing, and huge numbers, like the $2 trillion in daily (mostly speculative) currency

Capitalist Societies (Princeton, NJ, 2001), 101–22, 170–90; Paul N. Doremus, The Myth of the GlobalCorporation (Princeton, NJ, 1998); Louis W. Pauly and Simon Reich, “National Structures and Multi-national Behavior: Enduring Differences in the Age of Globalization,” International Organization51, no. 1 (1997): 1–30; John Zysman, “The Myth of a ‘Global’ Economy: Enduring National Foun-dations and Emerging Regional Realities,” New Political Economy 1, no. 2 (1996): 157–84. RonaldPhilip Dore, British Factory, Japanese Factory: The Origins of National Diversity in Industrial Re-lations (Berkeley, CA, and Los Angeles, 1973), the groundbreaking work on the national origins ofmodern business development, insisted on the importance of a nation’s preindustrial social structures,the relative power of the state, the ideology of elites, the nation’s history in war, strategic needs,resource allotments, population density, and racial divisions. For Dore, twentieth-century industrial-ization has been determined neither by a single model of development nor by “unique” national-cultural characteristics but by overlapping and divergent national histories. For international invest-ment strategies, see W. Ruigrok and Rob van Tulder, The Logic of International Restructuring(London, 1995), a large-scale study of the world’s one hundred largest multinationals (“[None] hasmanaged to overcome its base. Globalization remains a myth,” 169 and see also 129–30); and AlanM. Rugman, The End of Globalization: Why Global Strategy Is a Myth and How to Profit from theRealities of Regional Markets (New York, 2001), 218.

28 World Bank, “Total GDP 2003” (2005), http://www.worldbank.org/data/databytopic/GDP.pdf;World Trade Organization, International Trade Statistics 2004 (Geneva, 2005), Tables 1.5 and 1.7,http://www.wto.org/english/res_e/statis_e/its2004_e/its04_bysubject_e.htm. For Africa, Robert Gilpinand Jean M. Gilpin, The Challenge of Global Capitalism: The World Economy in the Twenty-firstCentury (Princeton, NJ, 2000), 21.

29 Kleinknecht and ter Wenzel, “The Myth,” tabulations at 640, quote from 638. Current numbersfor North America reveal regionalization in sharp relief. The United States absorbs about 90 percentof all Mexican exports and nearly 80 percent of those from Canada. About two-thirds of Mexicanand Canadian imports come from the United States (U.S. Embassy in Mexico, “The U.S. and Mexicoat a Glance” [2004], http://www.usembassy-mexico.gov/eataglance1.htm#trade). For Canada, De-partment of Foreign Affairs and International Trade, “Trade Update 2004” (2004), table 1C, http://www.dfait-maeci.gc.ca/eet/trade/state-of-trade-en.asp.

30 Jeffrey A. Frankel, Ernesto Stein, and Shang-Jin Wei, Regional Trading Blocs in the WorldEconomic System (Washington, DC, 1997).

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trading, are usually cited. According to Held et al., “contemporary financial globali-zation represents a distinctive new stage in the organization of credit and money inthe world economy” (235). There is no question that international capital mobility isless impeded today than during the Bretton Woods era, but, as with FDI and trade,patterns of international finance are quite lumpy, and even within such internationalflows, significant national distinctions endure. One study of recent world financialcurrents shows that upper-income countries account for 93 percent of total activityand that the polarization between rich and poor in this regard is growing. Twelvecountries in Asia and Latin America secured 75 percent of the total capital flow todeveloping countries, while 140 of the other 166 developing economies received lessthan 5 percent.31 Among the rich states, the proportion of foreign-held securities alsovaries enormously, demonstrating that domestic institutional decisions remain essen-tial to any understanding of financial internationalization. Different national histories,policies, and cultures create basic structural asymmetries between capital markets.Variations in the degree of domestic capital centralization, the function and regulationof banks, tax systems, bankruptcy rules, accounting practices, cost perception, riskperception, and the distribution of corporate equity all indicate that finance remainsfirmly embedded in national capital markets.32 Finally and perhaps most important,capital mobility in itself reveals quite little about actual market integration. Currencyrisks, even among the richest states, sustain large differentials between national in-terest rates.33 Financial markets do not converge among Held et al.’s examples andcertainly not across the globe.

In general, corporate practices and financial markets both remain securely rootedin national political and cultural structures, and while levels of international tradecontinue to rise, such activity sharply gravitates toward regional, not global, circuits.It thus remains to be asked whether this integration is unique. Have we entered, asHeld and others claim, a new era of contemporary history? Hirst and Thompson’sbelle epoque shows remarkable precedents for what is today described as epochalglobalization.

Starting again with international production: of the six wealthy states on whichHeld et al. focus, only Sweden shows a substantial increase in outward FDI from1914 to 1994. Japan, the United States, and Germany all measure about the same.France and the United Kingdom show heavy contraction (275). The better measureof a global scale—world FDI (relative to world GDP)—shows that 1913 levels re-mained unsurpassed into the late 1990s.34 Multinational corporations flourished during

31 Hak-Min Kim, Globalization of International Financial Markets: Causes and Consequences(Aldershot, 1999), 101; Alejandro Lopez-Mejıa, “Large Capital Flows: Causes, Consequences, andPolicy Responses,” Finance and Development 36, no. 3 (1999), http://www.imf.org/external/pubs/ft/fandd/1999/09/lopez.htm.

32 Eswar Prasad, Kenneth Rogoff, Shang-Jin Wei, and M. Ayhan Kose, “Effects of Financial Glob-alization on Developing Countries: Some Empirical Evidence,” International Monetary Fund (Wash-ington, DC, 2003); Louis W. Pauly, “National Financial Structures, Capital Mobility, and InternationalEconomic Rules: The Normative Consequences of East Asian, European, and American Distinctive-ness,” Policy Sciences 27 (1994): 343–63. See also Andrew Carl Sobel, Domestic Choices, Inter-national Markets: Dismantling National Barriers and Liberalizing Securities Markets (Ann Arbor,MI, 1994); Wade, “Globalization and Its Limits.”

33 Frankel, On Exchange Rates, 68–69.34 Francesca Sanna-Randaccio, “Globalization and Foreign Direct Investments: Towards a New

Protectionism?” in Globalization, Institutions, and Social Cohesion, ed. Maurizio Franzini and FeliceR. Pizzuti (Berlin, 2001), 59–72.

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the earlier period and were essential agents in the internationalization of production.By 1914, U.S., British, German, French, Dutch, Swedish, Swiss, and Japanese firmshad innovated production, packaging, products, and management techniques to createa global diffusion of goods. Production of automobiles, telephones, cameras, pho-nographs, typewriters, elevators, paints, dyes, tractors, arms, electrical equipment,food products, and cigarettes became multinational and usually multiregional in theera before World War I.35

Likewise, international trade today is not noticeably greater than during the prewarera. Comparing 1913 to 2000 (and again using Held et al.’s six advanced industrialstates), only Germany shows a significant increase in total merchandise trade relativeto GDP. France, Sweden, and the United States show slight expansion, Japan slightreduction, and the United Kingdom a major deinternationalization.36 For more com-prehensive numbers, Christopher Chase-Dunn tabulates the level of world trade (as apercentage of world GDP) and reports only a moderate increase from 1913 to 1995.He writes: “There is simply no support for the idea that a completely new stage ofglobal integration has emerged in recent years.”37

Finally, what about securities markets? By many measures, world capital integrationin the belle epoque actually exceeded the levels reached today. Starting in the mid-nineteenth century, European savings banks moved past their insufficient, short-termassets through amalgamation and national centralization, bringing more domestic cap-ital to financial centers and into international markets.38 The worldwide geography ofBritish banking is well known, but the financial centers of France, Germany, Holland,Belgium, Switzerland, and the United States were likewise linked to highly mobileinternational capital markets. Barry Eichengreen estimates that 89 percent of theworld’s 1908 population lived in economies using convertible currency under the goldand silver standards.39 When net capital flows (current account relative to GDP) of

35 Mira Wilkins, “Multinational Corporations: An Historical Account,” in Transnational Corpo-rations and the Global Economy, ed. Richard Kozul-Wright and Robert Rowthorn (New York, 1998),97–111. See as well the discussion of nineteenth-century “free-standing companies,” multinationalenterprises with no home market designed solely as foreign direct investments, in Mira Wilkins andHarm G. Schroter, eds., The Free-Standing Company in the World Economy, 1830–1996 (Oxford,1998).

36 For a 1913–90 comparison, Robert Feenstra, “Integration of Trade and Disintegration of Pro-duction in the Global Economy,” Journal of Economic Perspectives 12 (1998): 38. Hirst and Thomp-son compare the same period but with a different method of measurement and using the Netherlandsinstead of Sweden. Their numbers show, even more pointedly, Dutch and Japanese levels decliningdrastically and the rest in rough equivalence (27). For the 1990s, World Trade Organization, Inter-national Trade Statistics 2001 (Geneva, 2001), 44, 60, 63–64.

37 Christopher Chase-Dunn, Yukio Kawana, and Benjamin D. Brewer, “Trade Globalization since1795: Waves of Integration in the World-System,” American Sociological Review 65, no. 1 (2000):77–95, 88. Using different methodologies and arriving at the same conclusion (though only to 1990),Angus Maddison, Monitoring the World Economy, 1820–1992 (Paris, 1995), 227, 239. See alsoAntoni Estevadeordal, Brian Frantz, and Alan M. Taylor, “The Rise and Fall of World Trade, 1870–1939,” Quarterly Journal of Economics 118, no. 2 (2003): 359–407; as well as Paul Krugman,“Growing World Trade: Causes and Consequences,” Brookings Papers on Economic Activity, no. 1(1995): 327–62.

38 Daniel Verdier, “Domestic Responses to Capital Market Internationalization under the Gold Stan-dard, 1870–1914,” International Organization 52, no. 1 (1998): 1–34.

39 Geoffrey Jones, British Multinational Banking, 1830–1990 (Oxford, 1993); P. L. Cottrell, “GreatBritain,” in International Banking, 1870–1914, ed. Rondo Cameron and V. I. Bovykin (Oxford, 1991),25–47, 30–31; Herbert Feis, Europe, the World’s Banker, 1870–1914: An Account of European

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the pre–World War I period are compared to those of today for Held et al.’s sixwealthy states, only Germany shows an increase; the United States stays the same,and France, Japan, Sweden, and the United Kingdom all indicate decline. The aggre-gate number for these and the six other top economies has today also declined toabout two-thirds of the 1913 level. Before the war, Britain moved up to half of itsdomestic savings into foreign loans. France peaked at nearly 30 percent, and Germanyat nearly 20 percent, both still enormous by today’s standards.40 On the receiving end,the numbers were equally staggering. For the period 1870–1910, net inward foreignflow as a percent of total capital formation was 37 percent for Canada, about 70percent for Argentina, and up to 75 percent for Mexico. These figures are especiallyrevealing when compared to the “debt-crisis” years of the late 1970s and 1980s whenthe third world imported 10–20 percent of its capital, with Argentina at 22 percent(O’Rourke and Williamson, 210). Moreover, today’s foreign asset distribution is gen-erally a risk-sharing enterprise where assets are swapped to hedge investments.41 Inthis sense, contemporary globalization is less global and more state-dependent, as richinvestors seek the protection of safe and comparable settings while development forpoor states now requires a greater share of national financing. Finally, measurementsof the speed of spreading panic reveal that gold-era capital markets were more volatileand interdependent than those today.42 In 1890, for example, the meltdown of theoverspeculated and unstable Argentine economy spread crisis throughout SouthAmerica and rebounded money market troubles into all of Europe. Barings Banknearly collapsed; stunned European creditors came to realize that dependency nowflowed both ways. A recent survey comparing financial market openness concludes,“We have never come close to recapturing the heady times of the pre-1914 era.”43

Unquestionably the world has moved toward greater economic integration sinceWorld War II and the state-centric postwar settlement of Bretton Woods. The worldeconomy remains distant, however, from anything approaching a deterritorializedspace. Sources, destinations, and behavior of contemporary economic flows revealthe ongoing and forceful significance of political, cultural, geographical, and historicalspecificities. Further, the shift toward increased integration is not new. By most mea-sures, today’s world economy still does not match the integration of a century ago.

Global Transformations makes its economic arguments to support its general po-litical thesis concerning diminishing state sovereignty. Transnational production net-works weaken states’ ability to manage growth. New patterns of trade make welfaresystems difficult to sustain and severely limit the protectionist option, while rule-basedregimes like the World Trade Organization directly constrain state sovereignty. Like-wise, global finance undermines the effectiveness of domestic monetary policy. In

Foreign Investment and the Connection of World Finance with Diplomacy before World War I (NewYork, 1965); Eichengreen cited in Sachs and Warner, “Economic Reform,” 7.

40 Maurice Obstfeld, “The Global Capital Market: Benefactor or Menace?” Journal of EconomicPerspectives 12, no. 4 (1998): 9–30.

41 Maurice Obstfeld and Alan M. Taylor, “Globalization and Capital Markets,” National Bureau ofEconomic Research (Cambridge, MA, 2002), 58–59.

42 Niall Ferguson, The Cash Nexus: Money and Power in the Modern World, 1700–2000 (NewYork, 2001), 283–88.

43 Carlos Marichal, A Century of Debt Crises in Latin America: From Independence to the GreatDepression, 1820–1930 (Princeton, NJ, 1989); Obstfeld and Taylor, “Globalization and Capital Mar-kets,” 58.

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sum, “the power and the role of the territorial nation-state is [sic] in decline.”44 Onthis point, as noted earlier, general agreement issues from an unusually wide rangeof commentators, from conservatives to Marxists.45

Like the narrower economic arguments detailed above, this assessment of statepower appears exaggerated and misconstrued in several ways. First, the guarantee ofprivate property demands a political form—a deployment of enforcing power—tocodify and protect exchange and possession. Nothing, of course, has changed in thisregard. Moreover, government policy instruments, like business strategies, remaindistinct in their relation to the international economy. Geographical, historical, andpolitical differences account for a variety of unique, state-specific instruments. China,Russia, and the post-Soviet states have each laid nationally unique foundations fortheir marketization.46 Among advanced capitalist countries, levels of public invest-ment differ by state as well as by election cycle within states.47 Even deregulation, sooften touted as evidence of both global pressure on the state and the convergence ofglobal policy norms, actually varies significantly between states, sustains economicdifferences between them, and most often rearticulates, rather than delimits, statepower.48 Finally, expansion of international regulatory regimes is not in opposition tostate sovereignty but in fact relies on it. International business requirements for cal-culable trade rules and consistent property rights, to take the most obvious examples,

44 From the self-description of the authors’ position in “The Great Globalization Debate: An Intro-duction,” in Held and McGrew, The Global Transformations Reader, 13.

45 John Gray, False Dawn: The Delusions of Global Capitalism (New York, 1998), 55–77; JohnGerard Ruggie, “At Home Abroad, Abroad at Home: International Liberalisation and Domestic Sta-bility in the New World Economy,” Millennium: Journal of International Studies 24, no. 3 (1995):507–26; Rosenau, Along the Domestic-Foreign Frontier, 82, 71; Philip G. Cerny, “Globalization andthe Changing Logic of Collective Action,” International Organization 49, no. 4 (1995): 592–625;Martin Carnoy, “The Demise of the Nation-State?” Theoria 97 (2001): 69–81; Jurgen Habermas, ThePostnational Constellation, ed. and trans. Max Pensky (Cambridge, 2001); William I. Robinson,“Social Theory and Globalization: The Rise of a Transnational State,” Theory and Society 30, no. 2(2001): 157–200; Michael Hardt and Antonio Negri, Empire (Cambridge, 2000).

46 For a general survey of different national industrial and development strategies, Peter Dicken,Global Shift: Transforming the World Economy, 3rd ed. (New York, 1998), 115–44. For a focus onpoor states, Mark A. Carlson and Leonardo Hernandez, “Determinants and Repercussions of theComposition of Capital Inflows,” IMF Working Paper 02/86 (Washington, DC, 2002). On China andRussia, Yingyi Qian, “The Process of China’s Market Transition (1978–98): The Evolutionary, His-torical, and Comparative Perspectives” (1999), Stanford University Economics Department, http://www.econ.stanford.edu/faculty/workp/swp99012.html. On post-Soviet Europe, Mitchell A. Orensteinand Martine R. Haas, “Globalization and Development of Welfare States in Postcommunist Europe,”BCSIA Discussion Paper 2002-02, John F. Kennedy School of Government, Harvard University(Cambridge, MA, 2002), http://bcsia.ksg.harvard.edu/publication.cfm?program�CORE&ctype�paper&ite m_id�339; and Robert Boyer, “The Convergence Hypothesis Revisited: Globalization butStill the Century of Nations?” in Berger and Dore, National Diversity and Global Capitalism, 29–59.

47 Fligstein, Architecture of Markets, 213–20; Geoffrey Garrett, Partisan Politics in the GlobalEconomy (Cambridge, 1998); Peter Evans, “The Eclipse of the State?” World Politics 50, no. 1 (1997):62–87. During the recent steel dispute between the EU and the United States, both sides agreed thatEuropean companies were better able to consolidate because of their states’ responsibility to fundpension and health benefits (Edmund L. Andrews, “Europe versus United States in Steel War,” NewYork Times, March 26, 2002, C1). Within the United States, proposed stimulus packages followingSeptember 11 were substantively polarized between the Democratic plan to support middle, poor,and unemployed sectors and the Republican plan to refund corporate taxes.

48 Pauly, “National Financial Structures”; Steven Kent Vogel, Freer Markets, More Rules: Regu-latory Reform in Advanced Industrial Countries (Ithaca, NY, 1996); see also Gray, False Dawn, onthe highly activist state in Thatcherite “deregulation” (24–34).

Globalization and Its History 911

could not be established by companies themselves. The move toward common stan-dards and “free trade” demands that states negotiate and create such a regime. Inaddition, too great a focus on international regulatory regimes obscures from viewthe ongoing impact of state-imposed trade barriers—the duties, domestic subsidies,technical standards, limits to foreign investment, and preferential trading arrange-ments that vary significantly around the world.49

By ignoring the locally specific, contested, domestic-political production of policyand power, much of the globalization literature can thus project a singular, abstractlogic that covers the globe. Ironically, this conceptual bloat came to prominence inthe globalization discussion right after a decade of methodological reflection in eco-nomics had focused, conversely, on shedding the discipline’s own naturalist assump-tions for an articulation of multiple equilibria, imperfect competition, and the contin-gencies of history, geography, psychology, and accident.50 Yet in the bulk ofglobalization studies significant attention to any locally driven variability is perforceblocked by an appropriately abstract notion of political power, drawn from one of themost enduring of historical presumptions, the Westphalian system.

The foundation stone of twentieth-century realism, the Westphalian model definessovereignty as the self-determining authority of any bordered, territorial space. Withthe closing of the Thirty Years’ War, centralized political units could brush asideemperor, pope, and baron, eliminating all overlapping claims to rule. The geographicaldemarcation of territorial states, according to this formulation, became the basis ofan international political system that eventually encompassed the world.51 Understoodas freedom from external authority, “sovereignty” thus renders domestic politics intoan abstract equivalence for all states. Analysis can then proceed to dispense with thedetails of local differentiae. Inattentive to domestic decisions and tendencies, the West-phalian model consequently treats economy as either contained within a state, andtherefore secondary to the system itself, or outside state power, supraterritorial, andtherefore a threat to the state’s sovereignty. In the globalization literature, this notionof state functions on the one hand to minimize the local production and interrelationof political and economic power and on the other hand to isolate cross-border com-merce into a global abstraction. The former allows the latter; the latter then confirmsthe former.

Further, the Westphalian figure of the territorial state is offered as confirmation oftoday’s epochal global change: delineated boundaries of political rule, historicallyclear and unambiguous, are now being blurred by globalization. Held et al. declare:“The Westphalian regime of state sovereignty and autonomy is undergoing a signifi-cant alteration. . . . A new ‘sovereignty regime’ is displacing traditional conceptionsof statehood as an absolute, indivisible, territorially exclusive zero-sum form of public

49 Nicholas Stern, “Open the Rich Markets to Poor Countries’ Exports” (2001) World Bank, http://www.worldbank.org/knowledge/chiefecon/speeches/nsoped-iht2.htm; Keith E. Maskus, John S. Wil-son, and Tsunehiro Otsuki, “Quantifying the Impact of Technical Barriers to Trade: A Frameworkfor Analysis” (2000), World Bank, http://econ.worldbank.org/view.php?type�5&id�1324.

50 Nicholas Kaldor, Economics without Equilibrium (Armonk, NY, 1985); Paul A. David, “Clio andthe Economics of QWERTY,” American Economic Review 72, no. 2 (1985): 332–37; Paul Krugman,Geography and Trade (Cambridge, MA, 1991).

51 Hans J. Morgenthau, Politics among Nations: The Struggle for Power and Peace (New York,1948), 243–63; Kenneth N. Waltz, Theory of International Politics (Reading, MA, 1979), 95–96,131. A nonrealist argument for Westphalian territoriality, Daniel Philpott, Revolutions in Sovereignty:How Ideas Shaped Modern International Relations (Princeton, NJ, 2001).

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power” (444, 9).52 Myriad other approaches to globalization likewise historicize agolden age of Westphalian sovereignty now coming to its end.53 In all cases, pre-sumption of the model serves to underestimate state power in the present while over-estimating such power in the past. But international pressures on state “sovereignty”are not new, and, like today, responses were locally dependent and highly variable.As Michael Mann writes, modern states “have always possessed a complex combi-nation of relative autonomy and complex interdependence.”54 To submerge the variant“Westphalian” operations of boundary, domestic rule, and international law under thesingle rubric of “sovereignty” seems to obscure considerably more than it reveals. Inany case, this rubric confronts the manifest evidence that domestic rule has commonlybeen subject to external authority and intervention. According to Stephen Krasner,every major peace treaty from Westphalia to Helsinki has compromised the so-calledWestphalian model.55

Historical analysis raises additional skepticism regarding the Westphalian periodi-zation of territoriality, the linchpin of the entire model. According to Charles Maier,actual centralization of enforceable state authority emerged only in the last third ofthe nineteenth century when the control of land, transformed by industrial capitalism,escaped from the hands of traditional rulers to be reconfigured by alliances of newand old elites. Administrating industrial wealth, arms, and infrastructure, regimes werenow able to fuse the “space of decision” with the “space of identity” into a singleterritorial unit.56 And it is here, also for the first time, that lawyers and historians,

52 The text shifts freely between sovereignty as a theoretical “conception” and as a description ofpolitical reality. According to Jens Bartelson, this oscillation is symptomatic of all historical attemptsto define “sovereignty” insofar as the mutual production of knowledge and power goes unrecognized(Jens Bartelson, A Genealogy of Sovereignty [Cambridge, 1995]).

53 Competing against realism, though reliant on its state-centric historicization of Westphalia, arecosmopolitanism, in addition to Held et al., Andrew Linklater, The Transformation of Political Com-munity (Cambridge, 1998); neoliberal institutionalism, Robert O. Keohane, “Hobbes’ Dilemma andInstitutional Change in World Politics,” in Whose World Order? ed. Hans Henrik Holm and GeorgSørensen (Boulder, CO, 1995), 165–86; constructivism, John Gerard Ruggie, “Territoriality and Be-yond: Problematizing Modernity in International Relations,” International Organization 47, no. 1(1993): 139–74; systems theory, Rosenau, Along the Domestic-Foreign Frontier; sociology of space,Scholte, Globalization; sociology of war, Martin Shaw, Theory of the Global State: Globality asUnfinished Revolution (Cambridge, 2000); critical theory, Habermas, The Postnational Constellation;Marxism, Robinson, “Social Theory and Globalization,” and Hardt and Negri, Empire.

54 Michael Mann, “Has Globalization Ended the Rise of the Nation-State?” Review of InternationalPolitical Economy 4, no. 3 (1997): 472–96, 477.

55 Stephen D. Krasner, “Globalization and Sovereignty,” in States and Sovereignty in the GlobalEconomy, ed. David A. Smith, Dorothy J. Solinger, and Steven C. Topik (London, 1999), 39–52;Stephen D. Krasner, “Compromising Westphalia,” International Security 20, no. 3 (1995–96): 115–51. See also Justin Rosenberg, The Empire of Civil Society: A Critique of the Realist Theory ofInternational Relations (London, 1994); and Justin Rosenberg, The Follies of Globalisation Theory:Polemical Essays (London, 2000).

56 Charles S. Maier, “Consigning the Twentieth Century to History: Alternative Narratives for theModern Era,” American Historical Review 105, no. 3 (2000): 807–31; similar periodization inP. H. H. Vries, “Governing Growth: A Comparative Analysis of the Role of the State in the Rise ofthe West,” Journal of World History 13, no. 1 (2002): 67–138. See additionally, for the nationalcentralization of banks, Verdier, “Domestic Responses”; for the territorialization of currency, EricHelleiner, “One Nation, One Money: Territorial Currencies and the Nation-State” (1997), AdvancedResearch on the Europeanisation of the Nation-State, University of Oslo, www.arena.uio.no/publications/wp_97.htm; for the shift from federative to national political organization, Robert CedricBinkley, Realism and Nationalism, 1852–1871 (New York, 1935). Most famously, this periodizationis asserted in Eugen Weber, Peasants into Frenchmen: The Modernization of Rural France, 1870–1914 (Stanford, CA, 1976).

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theorizing the Janus-faced state, projected back the origins of its sovereignty into amythically construed Westphalian Treaty.57 From there this nineteenth-century con-ceptual artifact became the basis for twentieth-century international relations theoryand its paradigmatic realism as well as the basis for today’s globalization studies andits own peculiar realism.

Yet already in the late nineteenth century international economic flows were un-dermining the rhetoric of Westphalia. To secure development loans, weak states ofthe period, like many in recent history, surrendered fiscal autonomy to foreign gov-ernments, creditors, special supervisory companies, and international commissions.58

Furthermore, the era’s gold standard, as previously noted, increasingly approached anear-total integration of world currencies. This system subordinated the national mon-etary policies of rich states as well as poor ones to the demands of gold parity andsufficient gold reserves. Even Britain, often regarded as the hegemonic conductor ofthe system,59 could find its options nullified. On several occasions, Britain’s respon-sibility to gold was split between domestic and international obligations. To deflectruns on its reserves and a possible collapse of sterling convertibility, the Bank ofEngland was forced to become the borrower of last resort, drawing gold reserves fromFrench, German, Belgian, and Russian central banks. The world’s financial power-house was itself dependent on and restricted by this multipolar system, later assailedby Keynes as a constraint on national sovereignty.60

Both weak and strong states were compromised by the world economic order ofthe prewar era. This did not mean, however, that conditions or consequences wereuniform. Domestic distinctions and national decisions remained significant. Amonggold’s major players, different devices were used to uphold currency strength: Britainfrequently adjusted its discount rates, France hoarded gold and limited franc con-vertibility, and Germany combined these to suit current exigencies, while the UnitedStates had no central bank and minimal national management. Each of these in turngenerated diverse local and systemic effects.61 In smaller economies, negotiation withthe international system was of course more imposing, yet also informed by localfactors. Fearing U.S. economic penetration, Mexican elites carefully regulated allforeign economic presence. The Brazilian government, in contrast, pursued policies

57 Andreas Oriander, “Sovereignty, International Relations, and the Westphalian Myth,” Interna-tional Organization 55, no. 2 (2001): 251–87.

58 Krasner, “Compromising Westphalia,” 128–33; Marichal, A Century of Debt, 122–23, 149–70.59 The tack taken by Held et al. to distinguish that era from the absence today of an economic

hegemon (196).60 Barry J. Eichengreen, Golden Fetters: The Gold Standard and the Great Depression, 1919–1939

(New York, 1992), 29–66; The Collected Writing of [John Maynard] Keynes, vol. 6, bk. 2, A Treatiseon Money (London, 1971), 151, 270–303. Held et al. attempt to deflect any contemporary comparisonby critiquing Keynes’s assessment: “Domestic monetary policy was never solely determined by globalfinancial markets,” a hyperbolic claim that Keynes did not make (196). They also overlook Keynes’ssuspicion and Eichengreen’s confirmation that in short money, prewar London was as much a debtoras a creditor.

61 Eichengreen, Golden Fetters, 42–54; see also the appropriate chapters in Cameron and Bovykin,International Banking, 1870–1914. Despite their somewhat misleading titles, J. Lawrence Broz, TheInternational Origins of the Federal Reserve System (Ithaca, NY, 1997), and “Origins of the FederalReserve System: International Incentives and the Domestic Free-Rider Problem,” International Or-ganization 53, no. 1 (1999): 39–70, insist on the local, partisan, and distributional contestations overthe creation of the U.S. Federal Reserve; similarly, Daniel Verdier, “Capital Mobility and the Originsof Stock Markets,” International Organization 55, no. 2 (2001): 327–56, reports that levels of inter-national capital mobility among the United States and European states heavily depended on thesectoral distribution of political power and the intensity of state centralization.

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favoring landowners and their export interests, deliberately exposing the national cur-rency to the depreciating pressure of foreign denominations. Contrary approaches toimporting capital were also found within the commonality of the British Dominion.The policies of colonial “states” likewise depended on the specific configuration oflocal and imperial conditions.62 Among both the powerful and the weak, differinghistories, geopolitical contexts, domestic distributional conflicts, elite preferences, in-stitutional settings, and developmental strategies created unique relations to the in-ternational economic order and its pressures.

In general, then, the contemporary era represents neither a new economic regimenor a new system of states. Like most of the presentist globalization literature, theHeld et al. volume distills the complex of world power into the abstracted categoriesof politics and economics. Its authors defend the epochal language of globalizationby using these categories to make inherently distorted comparisons with the past. Ontheir own terms, these comparisons are not particularly convincing. And when po-litical and economic forces are understood not as being in conflict but as reciprocallyconstructed, the constraints on contemporary governments appear exaggerated and byno means new. The modern territorialized state has always needed to manage themobile flows of international wealth. This should not be taken as “supraterritoriality,”though. Such a condition is inflected but also created at the site of decision. Domestic-distributional, national, and regional variations, both in the past and in the present,defy the claim that power “transcends political borders.”

GLOBALIZATION AS PAST

The accountants have computed their great counting-house the globe, by gir-dling it with guineas, one to every three parts of an inch. (Herman Melville,1851)63

Despite its extensive social scientific apparatus, Global Transformations fails to proveits central contention that “the contemporary epoch is historically unique” (425). Mea-sured by the degree of world economic integration and by the strengths and limits ofthe state form, the contemporary era appears remarkably similar to the period pre-ceding World War I and in this regard can hardly justify the millennial discourse ofan entirely new era. Indeed, the problem of historical precedent was developed in amajor work of economic history published in 1999, the same year as Global Trans-formations. Kevin O’Rourke and Jeffrey Williamson’s Globalization and History nowserves as the urtext for a large body of research on nineteenth-century globalization.64

Internal debates aside, this corpus represents a consensus that globalization is besthistoricized by a U-shaped descriptor: a very high degree of economic integration inthe nineteenth century, dipping drastically after World War I and returning to historicpeaks in the late twentieth century. In the 2003 essay collection Globalization in

62 Richard Weiner, Race, Nation, and Market: Economic Culture in Porfirian Mexico (Tucson, AZ,2004), 48–69; Eichengreen, Golden Fetters, 54–65; William G. Clarence-Smith, “The Modern Co-lonial State and Global Economic Integration,” in Smith et al., States and Sovereignty in the GlobalEconomy, 99–135.

63 Herman Melville, Moby Dick or, the Whale (New York, 1992), 178.64 In addition to the work discussed here, see esp. the papers available at the National Bureau of

Economic Research, www.nber.org.

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Historical Perspective, this periodization is generally assumed rather than argued.Whereas Hirst and Thompson sought to overturn the globalization concept entirely,these economists do not shy away from defining the integration process in this way.They portray globalization as the convergence of prices—as the reduction in costspreads for goods, labor, land, and money—against which states can only interfere.In this neoclassical approach, economy and state are separate and for the most partopposing forces. The political abstraction of the Westphalian state is here ironicallymirrored by an equally abstract market economy.

O’Rourke and Williamson argue that nineteenth-century international price con-vergence followed two initiating forces. First, they look to the explosion of “transportrevolutions”: the steamships, railroads, canals, and refrigeration that combined tolower drastically the costs of international transport (29). As these costs collapsed,trade and migration increased: general commodity prices, land rents, and wage gapsthus converged across the North Atlantic. By late century, commodity price and landrent convergence extended beyond this core and around the world.65 Second, theauthors point to the liberal trade regime initiated by Great Britain in the 1820s, con-summated with the repeal of the Corn Laws in 1846 and soon duplicated by mostcontinental states and many others in Asia. Tariffs were minimized, while variousbilateral treaties further lowered duties and subsequently were often generalized toother trading partners. “Free trade,” coupled with the capacities of cheap transport,generated a trade boom that linked remote locales and integrated factor and com-modity markets across the globe. One article in Globalization in Historical Perspectiveestimates that between 1820 and 1914 intercontinental price gaps dropped by 81percent. Over two-thirds of this was due to declining transport costs; the rest, to tariffcuts (Williamson and Lindert in Bordo et al., 231, table 5.1). But starting in 1875,free trade policies were reversed in a “globalization backlash” instituted by powerfuldomestic interest groups negatively affected by integration. Ongoing reductions intransportation costs maintained a considerable degree of convergence, but state inter-ference continued to grow past World War I and into a new era of world marketsegmentation. After World War II and especially after 1973, free trade and new trans-portation technologies once again generated global convergence.

In O’Rourke and Williamson’s historical explanation of integration, policy hardlygarners any role. Globalization occurs with liberalization of the state; deglobalizationoccurs when the state reasserts itself. As for transportation technology, the process ofits local introduction is simply presumed. O’Rourke starkly summarizes this outlookelsewhere by defining “politics” as the obstructing gap between an era’s technology andits globalization potential.66 But the development of technology has never been an au-tonomous process. Similarly, the notion that “free trade” involves a mere withdrawalby the state is an oversimplification. In the mid-nineteenth century, as North Atlanticstates pursued industrial and territorial organization, governments participated exten-sively in their national infrastructural development, from surveying and road buildingto research funding and training. Government intervention in this era of “free trade”also included critical import substitution strategies, such as technical exhibitions, patent

65 For factor-price convergence across the non-Atlantic world, see Jeffrey G. Williamson, “Land,Labor, and Globalization in the Third World, 1870–1940,” Journal of Economic History 62, no. 1(2002): 55–85.

66 Kevin H. O’Rourke, “Europe and the Causes of Globalization, 1790 to 2000,” in Europe andGlobalization, ed. Henryk Kierzkowski (Basingstoke, 2002), 64–86, 81–82.

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protections, risk limitations, investment planning, start-up support, loans, credits, sub-sidies, monopoly grants, and, in the United States, massive tariffs to protect iron andsteel.67 The railroads themselves are most famous in this regard. In mid-century, mostindustrializing states built and ran their rail lines with public funds or else issuedgrants, concessions, and guarantees to private investors. Belgium financed its ownnational system and then allowed it to sustain noncompetitive deficits. In France,government engineers designed the Paris-centered network with capital provisionscoming from public and private sources. The latter were usually backed by aids, loans,and guarantees, while state authorities were responsible for nearly all of the land,tracks, bridges, tunnels, stations, and equipment. The Prussian state railway was fi-nanced either by government investments or by government guarantees after the fail-ure of early private ventures. In southern Germany, most of the network was national.In Russia and Sweden, trunk lines were built and run by the state. In the United States,where the system was private, nearly 200 million acres of land were granted to therail companies, which also received astounding subsidies, such as the $65 millionloan guarantee to connect the coasts. British rail was the one system financed entirelyby risk-bearing investors, but to say this ignores British India, where, in this age of“free trade,” railway investors enjoyed guaranteed, above-market returns.68

This neoclassical history also ignores the role of state coercion. Military needs oftenspurred technological innovation and improvements, while rail lines themselves werecommonly built with troop transport in mind. It is at least arguable that repeal of theCorn Laws represented a strategy to retard competitive industrialization by creatingan export market for the continent’s agricultural products and primary goods, in order,in the words of one free trade proponent, to “render all the world tributary to us.”Neoclassical accounts have little room for the imperial aspects of the “free trade” era.As the World Bank’s Branko Milanovic notes, liberal economists are conceptuallylimited by their core methodological construct: the “self-interested individual . . . [forwhom] there is no external coercion.”69 This bias is compounded by the untenablechestnut that “the nineteenth century stands out as an unusually peaceful one in thecontext of Europe’s bloody history” (O’Rourke and Williamson, 77). But “bloody”here refers exclusively to interstate combat. The interrelation of internal violence andpolicy during the liberalizing era—national revolutions, peasant uprisings, and ofcourse, ongoing worker and union suppression—can hardly be consigned to domestichistory when assessing degrees of convergence. It is also unclear why, in an analysisof globalization, the alleged insignificance of violence for Europe should be restrictedto European actors. African-American plantation slaves were laboring on some of themost capitalized firms in the world, the “factories of the field.” U.S. slave society,

67 For a state-by-state survey, Ha-Joon Chang, Kicking Away the Ladder: Development in HistoricalPerspective (London, 2002), 13–68.

68 Ibid., as well as Barry Supple, “The State and the Industrial Revolution,” in The Fontana Eco-nomic History of Europe, vol. 3, The Industrial Revolution, ed. Carlo M. Cipolla (London, 1973),327–49, 344; on the United States, Carter Goodrich, Government Promotion of American Canals andRailroads, 1800–1890 (New York, 1960), and Richard Kozul-Wright, “The Myth of Anglo-SaxonCapitalism: Reconstructing the History of the American State,” in The Role of the State in EconomicChange, ed. Ha-Joon Chang and Robert Rowthorn (Oxford, 1995), 81–113.

69 Benard Semmel, The Rise of Free Trade Imperialism: Classical Political Economy, the Empireof Free Trade, and Imperialism, 1750–1850 (Cambridge, 1970), 148; Branko Milanovic, “The TwoFaces of Globalization: Against Globalization as We Know It,” World Bank (Washington, DC,2003), 8.

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enforced at all levels of government, accounted for fully half the nation’s exportswhile generating nearly 80 percent of the British cotton supply in the years after theCorn Laws repeal. Cheap U.S. cotton reduced costs to British textile manufacture farmore than either technological innovations or improvements in labor productivity.70

In addition, a long list of North, Central, and South American interstate and civilwars helped to determine for each country the trajectory of its national developmentand the character of its relation to Europe. The War of the Triple Alliance, for example,crushed Indian development schemes in the South American interior and secured theexport-dependent policies of Argentina and Brazil. Likewise, in the north, the U.S.Army pushed back the Mexican frontier and cleared the lands of their Indian inhab-itants. The Civil War ended slavery but not the well-policed wage suppression of thesharecropping system. At the same time, the Union victory guaranteed the westwardexpansion of free farming and industrialization. The United States emerged as a verylarge and unified economy, drawing substantial investments from Europe as well asa massive inflow of European immigrants.71

Economic integration also flowed from direct and unambiguous international co-ercion deployed by the European states themselves. Gunboat diplomacy is often de-scribed as European “pressure,” though bombardment often supplanted the merethreat of force. As free traders celebrated reductions in tariffs, several European statesand the United States were strong-arming foreign lands into guarantees of extrater-ritoriality, unsupervised trade, and, most often, very low customs duties. Navies alsocommonly went ashore in the interest of bondholders and investors.72 Williamsondoes not exactly ignore these facts; he and O’Rourke concede, for Asia at least, thatthe “dramatic switch to free trade” was imposed by “gunboat diplomacy.” But theircharacterization denotes a brief instance of muscle flexing; it minimizes the enduringmeasure of coercion during the subsequent march down the “liberal path” (54). Asym-metrical treaties remained in force for decades. Japan was deprived of customs au-tonomy until 1911 (even as it imposed the same on Korea starting in 1876). Ottomanobligations outlasted the empire. China waited until 1929 to be able to determine itsown tariffs.

Finally, of course, economic intervention by the state took the form of direct co-lonial control. The violence of colonial seizures was not uncommon in mid-century,as Robinson and Gallagher indelicately pointed out some time ago.73 Moreover, sup-pression of war-scale uprisings, such as Sepoy, as well as the daily microlevel en-forcement of occupation and extraction attest to the importance of state violenceduring this period of world trade. O’Rourke and Williamson again concede the pres-

70 Stanley L. Engerman, “Slavery and Its Consequences for the South in the Nineteenth Century,in The Cambridge Economic History of the United States, vol. 2, The Long Nineteenth Century, ed.Stanley L. Engerman and Robert E. Gallman (Cambridge, 2000), 329–66; D. A. Farnie, The EnglishCotton Industry and the World Market, 1815–1896 (Oxford, 1979), 137–38, 82.

71 On the War of the Triple Alliance, Bradford Burns, The Poverty of Progress: Latin America inthe Nineteenth Century (Berkeley, CA, 1980); on the importance of both Paraguay and the U.S. CivilWar, Michael Geyer and Charles Bright, “Global Violence and Nationalizing Wars in Eurasia andAmerica: The Geopolitics of War in the Mid-Nineteenth Century,” Comparative Studies in Societyand History 38, no. 4 (1996): 619–57, 638–48.

72 John Gallagher and Ronald Robinson, “The Imperialism of Free Trade,” Economic History Re-view, second series, 6, no. 1 (1953): 1–15.

73 Ibid., 2–3.

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ence of coercion, but only as the initial prying open of trade, with no regard for theongoing role of force. Yet, while the United States and most European governmentsprotected their textile manufacturers with either import prohibitions or duties from 30to 80 percent, British control eliminated Indian tariffs entirely, bringing in an ava-lanche of Lancashire merchandise. In the 1850s, Britain dramatically expanded state-backed railroad construction in pursuit of cotton supplies. Industrial imports to Indiawere exploding precisely as Britain pressed much of the subcontinent into primary-products exports.74 In nearly all cases, colonial powers forcibly controlled the trans-portation of goods, limited local tariffs, and legislated, restricted, or banned variousmanufactures, imports, and exports to favor the metropolis.75

The neoclassical economists entirely ignore colonialism’s economic relevance tothe participants; they also say nothing of colonialism’s specific interconnections tothe broader world economy. As is well known, most Indian surplus revenues in the1830s were transferred immediately to the state opium monopoly. The narcotic wasthen sold to China, largely in exchange for tea, whose tariff-supported retail in turnbankrolled much of Britain’s further colonization of India. Following the Opium Wars,of course, British surpluses swelled and developed further as British-Indian teas—produced by largely coerced labor—began to crowd out the Chinese export market.The siphoning of wealth from both China and India enabled Britain to venture intothe world market with substantial amounts of capital, which were largely used in turnto finance the “transport revolution.” These coerced surpluses with Asia, furthermore,allowed Britain to run large deficits with its Euro-American trading partners—thetrade boom core that O’Rourke and Williamson call globalization.76

The neoclassical model can ignore the enduring significance of colonialism bytreating it as a singular big bang that initiates free trade. This follows from its narrowemphasis on prices. In general, the neoclassicists’ price approach is a useful tool forrefining perspectives on global integration; it is insufficient, however, for an overallassessment or periodization of this process. Though they have different disciplinaryperspectives and agendas, Williamson duplicates Held et al. in treating the economyas an autonomous sphere against which politics is measured by its degree of controlor interference. In this case, undue attention to prices biases analysis toward seeingthe state solely in terms of tariff “distortions.” But from massive financial interven-tions, through the daily enforcement of labor, to the sheer deployment of militaryforce, political power helped to create and expand markets in the nineteenth century.The lifting of import restrictions constituted only one aspect of national economicpolicy, and for non-Europeans it was often an imposed, asymmetrical arrangement.The description of the mid-century world economy as liberal or free trading is unten-able, and this abstraction of state and economy again falls short of an adequate historyof global integration.

In this regard, scholars of the early modern period hold an analytic advantage.Unburdened by the nineteenth century’s competing universalizations of state andeconomy, these observers are in many instances able to recognize the mutable andreciprocal force of each. What remains questionable for this period, though, is the

74 E. J. Hobsbawm, Industry and Empire (Harmondsworth, 1968), 149; Bairoch, Economics andWorld History, 89; Farnie, English Cotton Industry, 137.

75 Gallagher and Robinson, “The Imperialism of Free Trade.”76 Frederic Wakeman, “The Canton Trade and the Opium War,” in The Cambridge History of China,

ed. Denis Twitchett and John K. Fairbank, vol. 10, Late Ch’ing, 1800–1911, pt. 1, ed. John K.Fairbank (Cambridge, 1978), 173; Kenneth Pomeranz, The Great Divergence: Europe, China, andthe Making of the Modern World Economy (Princeton, NJ, 2000), 285.

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applicability of a worldwide scale of analysis. Some early modern and eighteenth-century studies regard as global what can perhaps be better described in a more limitedmanner as long-distance network linkages. In the next volume under discussion, thisproblem is compounded by the treatment of Europe, which to be fit into a worldwideframe is underwritten as a mere dependency of larger global forces.

In his 1998 ReOrient: Global Economy in the Asian Age, Andre Gunder Frank setsout to demonstrate that “contrary to widespread doubts and denials, there was a singleglobal world economy with a worldwide division of labor and multilateral trade from1500 onward” (52). In his thoroughly structuralist account, class, state, and cultureare all dependent upon the world economic system (43). Frank calls his approach“globological” (xv), and he is explicitly guided by political commitments to globalunity and anti-Eurocentrism. Through empirical synthesis and the conjecture commonto economic history, Frank describes a world system in which Europe enjoyed onlya brief hegemony, now declining, but whose nineteenth-century analytic legacy ofparticularism stubbornly persists.

Frank regards Afro-Eurasia as a single economic system dating back some fivethousand years. Starting no later than 1000 CE, Song China began to dominate thissystem. Europe was an entirely marginal player, though after 1500 its American ex-tractions were able to buy it a small place at the Asian table. Frank relies heavily onthe evidence of early modern silver flows, most of which began in America, enrichedEurope, and were largely traded out to a monetizing China for spices and textiles.Silver, and to a lesser degree other precious metals and coin, were arbitraged andexchanged for commodities across the globe, making the “world market operationallypractical for practically all goods” (133).77 Frank also relies on long-term economiccycles: he sees a China-centered expansive phase beginning at about 1400 and lastinginto the eighteenth century. Crucially, the subsequent contractive phase had differ-ential effects on the two sides of Eurasia: Europe’s relatively high wage levels (dueto its smaller population) and its reliance on a finite silver supply combined to giveit a unique incentive to lower production costs. Europe industrialized while low-wagelabor abundance in China trapped it in the down cycle. Europe subsequently parlayedits industrial revolution into temporary global dominance, but by the late twentiethcentury East Asian economies were once again emerging ascendant.

Frank’s holism offers an attractive vision of world unity and a challenging critiqueof Eurocentric presumptions. As in Held et al.’s Global Transformations, these politics(and here, this method) are explicitly justified through a periodization of global in-tegration. But, as in Held et al., the periodization is not convincing, as I will dem-onstrate by examining those components outlined above—currency, trade, and eco-nomic cycles—as well as Frank’s critique of Eurocentrism. Starting, then, with silverimports, it appears that these had little influence on early modern Chinese prices. Inthis period, European and Chinese money circulated in independent currency systems,as indicated by divergent inflation rates and land rents. By the eighteenth century,China’s booming hinterland development had largely dropped out of silver in favorof less cumbersome bronze. A new surge of inflation resulted from this domesticexpansion; it was unconnected to the international stream of bullion.78

77 See also the work of Dennis O. Flynn and Arturo Giraldez, most recently, “Cycles of Silver:Global Economic Unity through the Mid-Eighteenth Century,” Journal of World History 13, no. 2(2002): 391–427, where a “highly integrated global economy” begins in the sixteenth century (392).

78 Richard von Glahn, “Money Use in China and Changing Patterns of Global Trade in MonetaryMetals, 1500–1800,” in Global Connections and Monetary History, 1470–1800, ed. Dennis O. Flynn,Arturo Giraldez, and Richard von Glahn (Aldershot, 2003), 187–205.

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Without doubt, new commercial opportunities created significant long-distance in-terconnections throughout the early modern era.79 Yet the handful of European tradingposts hardly affected the highly developed inland and maritime commerce of EastAsia.80 Other than silver, there was little from the western hemisphere to interest Chinaat this time. Moreover, the high costs of shipping would have limited the growth ofany such trade. Only very expensive, noncompeting goods could offset their long,costly, and hazardous journeys.81 Prices for such goods thus varied widely by locale.Price convergence was lacking even within Europe, where in the late eighteenth cen-tury wide gaps remained for grain, the region’s most traded commodity (Lindert andWilliamson in Bordo et al., 232 n. 3). Though precise numbers are difficult to deter-mine, several authors estimate that as late as 1820 world trade accounted for onlyabout 2 percent of all commodities.82 Like currency, markets for most goods remainedlocally or regionally structured in the early modern era.

Given the perceptible separation of world economies, Frank depends all the moreon growth cycles as the deep structure from which local variation can emerge. Amongeconomists, there is no consensus over the existence of such very long waves. Evenwithin world-systems studies, descriptions of early modern cycles have differedsharply.83 But questions about these waves also arise from within Frank’s text itself.In his scenario, European industrial growth sparked just as the Asian world entereda contractive phase. Frank covers the differential using Gerschenkron’s “advantagesof backwardness” (283, 356). But as Peer Vries points out, a preexisting global econ-omy would have pushed China to cut overall production costs, lower wages notwith-standing. Yet producers there continued for about a century to sell their goods suc-cessfully without industrializing. It does not appear that China had entered into acycle of decline, and European and Chinese manufacturers were clearly not in com-petition. Industrialization therefore cannot be explained via the long cycle of a singleglobal market.84 This is not to say that the industrialization was “internal” to Europe:in this regard Kenneth Pomeranz points to the crucial distinctions between China’sfree-labor periphery and Britain’s American slave economy.85 Such disconnections

79 Kenneth Pomeranz and Steven Topik, The World That Trade Created: Society, Culture, and theWorld Economy, 1400 to the Present (Armonk, NY, 1999).

80 Rhoades Murphey, The Outsiders: Western Experience in India and China (Ann Arbor, MI,1977).

81 See the now-classic piece by Russell R. Menard, “Transport Costs and Long-Range Trade, 1300–1800: Was There a European ‘Transport Revolution’ in the Early Modern Era?” in The PoliticalEconomy of Merchant Empires, ed. James D. Tracy (Cambridge, 1991), 228–75; as well as C. KnickHarley, “Ocean Freights and Productivity, 1740–1913: The Primacy of Mechanical Invention Reaf-firmed,” Journal of Economic History 48, no. 4 (1998): 851–76.

82 Maddison, Monitoring the World Economy, 38, reports that merchandise exports accounted for1 percent of world GDP in 1820; Alan M. Taylor, “Globalization, Trade, and Development: SomeLessons from History,” National Bureau of Economic Research Working Paper No. 9326 (Cambridge,2002), 29, claims total trade measured about 2 percent of world GDP in 1800; Simon Kuznets,averaging the ratio of imports plus exports to national incomes, estimates world trade at about 2–3percent for the early nineteenth century, cited in Patrick Karl O’Brien, “Intercontinental Trade andthe Development of the Third World since the Industrial Revolution,” Journal of World History 8,no. 1 (1997): 75–133, 82.

83 Jack A. Goldstone, Revolution and Rebellion in the Early Modern World (Berkeley, CA, 1991);Immanuel Wallerstein, The Modern World-System, vol. 2, Mercantilism and the Consolidation of theEuropean World-Economy, 1600–1750 (New York, 1980), 7–9.

84 Peer Vries, “Should We Really ReOrient?” Itinerario 22, no. 3 (1998): 19–38.85 Pomeranz shows that the Americas allowed Britain to trade out the land-intensive production of

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and differentiations between Europe and China cast doubt on the geographic andtemporal scale of Frank’s deep-structure sequence.

Finally, for Frank, evidence of a single global system yields the theoretical andpolitical imperative of holism. He considers nonholistic approaches to be Eurocentricsocial science, an “ideology of domination” rooted in the nineteenth century (359, 8).But difference is not the same as rank, and open-ended differentiation need not implya single center. Frank’s inflexible criticism blindsides him into a set of logical andhistorical contradictions. One of the volume’s “theoretical implications” states that“commonalities” are “more important” than differences (341). This is a self-cancelingstatement insofar as the plural “commonalities” necessitates differentiation. The claimmight obtain meaning for a delimited set of variables, but it cannot then be univer-salized into a theory of history. Yet this is precisely Frank’s goal, to raise social scienceto “the equation History � Theory” (350). Such universalizing of historical knowl-edge is itself a product of Europe, developed in large part from Europe’s particularengagement with the wider world and described by Nietzsche as its “occidental prej-udice.”86 In attacking the Eurocentric prejudice, Frank often criticizes Weber, butWeber understood that there are no detached observers, that every holism derivesfrom a standpoint. It is not so easy to shake off the European perspective, but thatshould not be taken as a defense of Eurocentrism. It is rather to say that the criticalposition against it might be better served by a contingency of categories than by apredetermined hierarchy of dichotomous concepts.87 The latter indeed remains wed-ded to the social science of the nineteenth century and its hubristic claim to know“the world historical process itself” (359).

Explicitly hesitant about any such global teleology are two absorbing volumes withroots in British imperial studies, Globalization in World History, edited by A. G.Hopkins, and The Birth of the Modern World, 1780–1914, by C. A. Bayly. UnlikeFrank’s volume, both works present Europe within a polycentric history. These au-thors regard the world’s various early modern empires as motors of globalization, asmanagers of large and expansive social systems. This empire form of globalization,again according to both authors, was then reconfigured in the nineteenth century intoa new global system of states. Hopkins’s book collects seventeen fascinating essaysthat together cover a wide range of geographic regions and historiographic themes.But for a definition of globalization, Hopkins unfortunately draws from Held et al.’sdescription of tightening large-scale networks (19).88 In this degree of generality,

foods and raw materials for a specialization in manufacture. Unlike China’s free labor peripheries,American slavery guaranteed both the flow of these resources and a market for finished goods. Thisunique plantation periphery and the good fortune of coal were foundational to subsequent Britishindustrialization (Pomeranz, The Great Divergence).

86 On the emergence of modern history in the context of European relations to the wider world,Koselleck, “‘Neuzeit,’” 247–53, as well as Reinhart Koselleck, “The Eighteenth Century as theBeginning of Modernity,” in The Practice of Conceptual History: Timing History, Spacing Concepts(Stanford, CA, 2002), 154–69; Friedrich Wilhelm Nietzsche, Samtliche Werke: Kritische Studienaus-gabe in 15 Banden, ed. Giorgio Colli and Mazzino Montinari (Munchen, 1967–77), vol. 1, “VomNutzen und Nachtheil der Historie fur das Leben,” 243–334, 256.

87 For such a contingency of categories, see, e.g., Walter Johnson, “Time and Revolution in AfricanAmerica: Temporality and the History of Atlantic Slavery,” in Bender, Rethinking American Historyin a Global Age, 148–67.

88 Hopkins continues to echo Held et al. by suggesting the possibility that contemporary globali-zation is “without strong national roots” (39).

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globalization can be readily reflected back to almost any instance of empire, tradecircuit, or migration. It is therefore unclear what the concept adds to the discussion.

Hopkins writes, “Globalization is by definition a process that affects the wholeplanet” (23). He makes this statement in the context of discussing the contemporaryera, and given the spatial bounds of earlier network configurations it is presumablymeant to be limited in that way. What, then, conceptually connects the various his-torical networks to each other and to globalization in the present? Like the Europeanmerchant empires of its time, the Qing Empire “expanded,” but it did so in an entirelydifferent way. Europe obtained specialized imports from its overseas semitropicalcolonies through the mercantile union of profit and power. The Qing, by contrast,converted its adjoining lands into sedentary agricultural communities that reproducedthe interior’s production and market patterns. Foreign trade and goods remained onlyminimal concerns.89 What do we gain by describing the Qing Empire as a kind of“globalization”? What the authors present, rather than a history of globalization, isactually a transactional method. They reject self-contained designators for both po-litical units and disciplinary categories. They show the dynamic relations betweeninterior and exterior forces that create, sustain, and destroy different social formations.Globalization and World History mislabels this compelling network approach, itsalleged object of analysis, as “globalization.”

Bayly’s stunning work, whose precis constitutes one chapter of Hopkins’s volume,also expertly unpacks the complex, interactive networks of world history. Its multi-causal and multidirectional dynamic treats a sweeping range of topics whose inter-relations are set into a historiographical context and delivered with sharp, dense writ-ing throughout. Moreover, the volume’s arguments are not limited to network analysis;Bayly makes specific claims about the global system itself. Underneath the linkages,he looks for global conjuncture. He finds the first of these in the eighteenth century.Of this large and complex work, I will turn only to this single periodization, theemergence of a global system in the eighteenth century.

Bayly’s frame is the long nineteenth century. He details the intensification of worldlinks during this span and argues that it made societies more uniform in many of theirpolitical, economic, and cultural patterns while at the same time often amplifying thesense of difference between them. In addition, Bayly endeavors to lessen the impor-tance given to industrial capitalism as a historiographic turning point. He claims that“conflict had, in fact, achieved a global scale, before economic uniformities wereestablished across much of the world” (7). Was there global conjuncture before 1800?

For Bayly, the “truly global crisis” of the eighteenth century (91) occurred as acrisis of governance. From the Safavids in the 1720s to the Bourbons in the 1780s,various regimes collapsed or began their drastic slide at this time. He explains: “Re-gimes across the world were particularly vulnerable to the financial pressures of war-fare during this period. The ‘military revolution’ in Europe . . . had its global dimen-sion” (91). Once again, however, China offers an essential counterexample to claimsof eighteenth-century globalization; it did not suffer the fiscal crisis at the heart ofBayly’s conjuncture. As Bayly does acknowledge, the Qing were able to generate

89 R. Bin Wong, “The Search for European Differences and Domination in the Early Modern World:A View from Asia,” American Historical Review 107, no. 2 (2002): 447–69. Arguably, Qing practiceswere similar to European settler colonies, but the latter had greater economic independence from themetropole. In any case, unlike the Chinese hinterlands, they would rely on foreign trade for sometime.

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funding streams well beyond the capacities of any other eighteenth-century govern-ment.90 In his attempt to discern some crisis at this time, Bayly leans heavily on PhilipKuhn’s Soulstealers, an account of a Chinese sorcery scare in the 1760s that generateda degree of dissidence against the Qing dynasty.91 According to Bayly, the incidentplanted seeds for some early nineteenth-century difficulties, themselves only a “pre-monition of turbulence rather than the beginning of the collapse of the Qing” (103).Given the caution of this claim and the 150 years separating the sorcery scare fromthe 1911 fall of the Qing, comparisons to France seem hard-pressed.

Furthermore, there was no military revolution in eighteenth-century China. TheQing did not need it. As Bayly notes (90), China was entirely successful in scores ofarmed engagements in the 1700s. With almost none of the military modernization andreorganization witnessed in Europe, China became—in the words of Jeremy Black—“one of the most expansionist powers of the century.” China increasingly asserteddirect rule over outer locations and successfully suppressed local resistance when itsurfaced. For defense, the Qing likewise had no reason to draw from European ex-amples. Well into the 1800s, the best Chinese walls could withstand sustained barragefrom the largest British naval guns. In the eighteenth century, the European militaryrevolution had no effect on China, and without such changes, state revenue poolsremained quite large.92

Elsewhere in Asia, the influence and predicament of European armed forces werenot widespread. In Africa, expensive European weapons became variably significantalong some coastal areas, but in the interior cavalry usually dominated. In Russia,where Peter the Great did indeed successfully transform the army and the adminis-tration into a European power, he did so without subsidy or borrowing. Peasant sac-rifice prevented fiscal crisis.93 In general, the time scale for technological diffusionwas still too slow to create a worldwide arms dilemma; the world would wait anothercentury for the global market in arms.94 Where European weaponry did have an im-pact, the responses were highly conditioned by local circumstance. Revenue was notinherently pushed into shortfall, and in some places it remained quite robust. Russiaand China, while on very different paths, were each able to stay in the black and atthe same time deploy major military force. It is difficult to discern behind the crisesof the eighteenth century Bayly’s global pattern of fiscal-military pressure.

Overall, these three works covering the early modern period persuasively show inrich detail the importance of interregional links. Taken together, they give weight toBayly’s contention that “it is no longer really possible to write ‘European’ or ‘Amer-ican’ history in the narrow sense” (2). But there remains a distinction of analysisbetween intersocial links and a global condition. As Troeltsch indicated, a “causal

90 See R. Bin Wong, China Transformed: Historical Change and the Limits of European Experience(Ithaca, NY, 1997), 129–35, 237.

91 Philip A. Kuhn, Soulstealers: The Chinese Sorcery Scare of 1768 (Cambridge, MA, 1990).92 On Chinese expansion, Jeremy Black, War and the World: Military Power and the Fate of Con-

tinents, 1450–2000 (New Haven, CT, 1998), 84, 114–16, 96; on defense, Geoffrey Parker, “Europeand the Wider World, 1500–1700: The Military Balance,” in Tracy, The Political Economy of Mer-chant Empires, 161–95, 191–92.

93 Black, War and the World, 107–19; David B. Ralston, Importing the European Army: The In-troduction of European Military Techniques and Institutions into the Extra-European World, 1600–1914 (Chicago, 1990), 43–78, 13–42.

94 William H. McNeill, The Pursuit of Power: Technology, Armed Force, and Society since A.D.1000 (Chicago, 1982), 260–61.

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connection” between groups does not make them subordinate elements of a “unified”history.95 Economists vigorously argue against any meaningful integration of worldregions before 1800. Many regional specialists who emphasize long-distance linksare also skeptical of a worldwide framework for the early modern era.96 As MichaelGeyer and Charles Bright have argued, the eighteenth century was indeed an era ofboth expansion and tightening connections across and between several world regions,but space nonetheless remained crucial. Empires were largely decentered and orga-nized by various local subcenters. Imperial war was managed at the local level andusually fought by locally recruited and supplied armies. Relations between regionalcenters of power emphasized distance and were mediated by a string of agents andemissaries. In general, the reproduction of political and economic power was region-ally autonomous. Empires could overlap, interact, and exchange, but they had not yetbecome subject to a global scale of power.97

GLOBALIZATION AS GEOPOLITICS

It approaches irrefusably, hesitantly, terrible as fate, the great task and question:how shall the earth as a whole be managed? (Friedrich Nietzsche, 1885)98

Early modern historians have not persuasively shown the existence of any kind ofglobal system in their period. Such a global scale of power did not emerge until thesecond half of the nineteenth century. As we have seen, the neoclassical economistsdescribe an unparalleled degree of world economic integration at this time. But thecreation and maintenance of those economic links were inescapably local, territorial,and political. For the economists, as well as for Held et al. and most globalizationdiscourse in general, a distorted picture of this global past remains inevitable whenanalysis relies on the abstraction of economy and state. The relative interference orincapacity of states is not a measure of global integration. States are themselves con-stituted by internal and external worlds that they in turn help to re-create. Analyzingsuch transactional effects, as opposed to idealized markets or formal borders, opensthe possibility of actually historicizing globalization.

In a series of articles that redefine modern historical time/place designators, Geyerand Bright show that nineteenth-century global integration and local self-determina-tion were often mutually reinforcing. As variously noted above, during mid-centuryand throughout the world, competing though generally autonomous centers of regionalrule increasingly encountered interregional connections in their reproduction ofpower. European interventions and technologies played a significant part in makingthis possible, but the problematics of reproduction in Japan, Russia, the OttomanEmpire, Germany, southern Africa, Paraguay, and the United States, among others,were propelled by indigenous and regional trajectories. Even in mid-century China,European incursions were generally still held to the coast, while peasant and ethnic

95 Ernst Troeltsch, Gesammelte Schriften, vol. 3, Der Historismus und seine Probleme (Tubingen,1922), 689.

96 Roger Owen, The Middle East in the World Economy, 1800–1914 (London, 1993), see esp. xxii,92–95; Frederick Cooper, “What Is the Concept of Globalization Good For? An African Historian’sPerspective,” African Affairs 100 (2001): 189–213.

97 Geyer and Bright, “Global Violence and Nationalizing Wars,” 649.98 Nietzsche, Samtliche Werke, vol. 11, Nachgelassene Fragmente, 1884–1885, 580.

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civil wars were convulsing the empire. Likewise, the start of the Japanese transfor-mation was largely determined by regional competition with China rather than byEuropean or global pressures. Yet the resolution of such large-scale regional crisesraised world areas to an aggregated, global level that in turn interlinked reproductivepotentials, ended the possibility of self-sufficiency, and made the maintenance ofautonomy a permanent struggle of adaptation and self-renewal. Attempts to managethe global scale of competition often enhanced, but could also diminish, the devel-opment of centralized state structures, and such efforts were perforce engaged fromemplaced conditions and perspectives. British state power broadened with the “im-perialism of free trade”; Russia and the United States sealed their national marketswhile expanding their territories; Germany and Japan intensively engineered theirsocial orders through strident, eventually militarist, nationalism. In Argentina, Chile,Thailand, Burma, West Africa, and Eastern and Southern Europe, the new regionalreconfigurations helped push reorientation toward large-scale agricultural export, ren-dering state power increasingly dependent on both producers and the imperatives ofthe world market. In all cases, domestic class relations and social cohesion wereseverely strained, though to various degrees, with highly differentiated state responsesand with equally distinct results—democratic concessions, revolutionary incitements,ardent nationalism, peasant uprisings—that themselves then transmitted new globalrepercussions.99 The work of Geyer and Bright supports and further explains the his-toriography that dates territorialization not to Westphalia but to the second half of thenineteenth century. Their formulation also shows political and economic histories tobe irreducible to each other, while revealing multivariable systems of local rule in-terconnecting in the nineteenth century to create a globalized network, at once pen-etrating and empowering, encompassing as well as delimiting.

Within this context, the “new” European imperialism was unique in externalizingits adaptation through an overseas expansion, not as old-style conquest but throughglobal circuits of control. European powers shifted colonial strategy from surplusextraction to social organization, seeking to systemize production through a state-anchored worldwide division of labor. The British military likewise now dispatcheda fluid “capacity to be present globally,” which it obtained through logistical networksof force and supply as opposed to a staged chain of command. These imperial circuitsof social and military control endeavored to manage the global field. Imperialism hadbecome “conscious of itself as a world ordering concept.”100 With the gold standard,furthermore, European powers organized and directed among themselves the man-agement of the world economy. Unprecedented levels of trade allowed capital exportsfrom the system’s core to be balanced by the export of finished goods, while regionsoutside of Europe were designed to service their debts with the export of primarygoods. Instability was controlled by Europe’s central banks serving as national lendersof last resort, each in turn assisted by the others when necessary, as well as by private

99 Charles Bright and Michael Geyer, “For a Unified History of the World in the Twentieth Century,”Radical History Review 39 (1987): 69–91; Michael Geyer and Charles Bright, “World History in aGlobal Age,” American Historical Review 100, no. 4 (1995): 1034–60, and “Global Violence andNationalizing Wars.” On Japanese competition with China, see Heita Kawakatsu’s thesis, discussedby Wong in “The Search for European Differences” (461) (Kawakatsu Heita, “Nihon no kogyoka omeguru giatsu to Ajia ken kyoso,” in Hamashita Takeshi and Kawakatsu Heita, Ajia Koeki Ken toNihon Kogyoka, 1500–1900 [Tokyo, 1991]).

100 Geyer and Bright, “Global Violence and Nationalizing Wars,” 651; Bright and Geyer, “For aUnified History,” 76.

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capital flows that could benefit from the management of a crisis (by entering into anexchange rate that would improve once stabilized).101

Yet the European effort to order world affairs was unraveling in the very processof its production. First, as distant zones integrated and imperial ties tightened, localresistance and self-renewal strengthened. Foundation of the Indian National Congress,the reign of the anti-Western Abbas II in Egypt, persistent Vietnamese demonstrations,the indigenous modernization drive in Indonesia, the Boer war, large-scale Filipinoresistance to U.S. occupation, the Japanese defeat of Russia, the uprising over thedivision of Bengal, the Maji Maji rebellion, the Parliamentary assertion in Persia, theOttoman struggle to keep Macedonia and the resulting Young Turk revolt, ibn Saud’sreconquest of the Nejd and the resurgence of Wahhabism, the Mexican Revolution,the reforms, uprisings, and eventual collapse of the Qing dynasty: these are the bestknown examples of many such sites where imperial organization met forceful oppo-sition aiming at local autonomy. Several of these efforts were unsuccessful in theirstated objectives, but to European incursion they proved difficult and costly, variouslylimiting the degree of European control and grounding national and radical counter-struggles for decades to come.102

Second, imperial management enlarged competitive difficulties between the Eu-ropean states themselves. Despite the many agreements over colonial settlement, theprospects of global power could not help but aggravate European tensions. Expandingand tightening integration increased and reconfigured the interactions of relevantforce. For example, the Russo-Japanese War—what Hajo Holborn called the first“global crisis”—sent out percussive effects that recoiled either directly onto Europeor through the relay of other regions: the hurried, successful conclusion of the Anglo-French entente cordiale as France feared losing its Russian support; this entente’s useof loans and the war settlement to keep Russia out of the German camp; Germany’ssubsequent isolation over Morocco; the Anglo-Russian rapprochement settling Cen-tral Asian spheres and creating the fateful Triple Entente; the revival of Russia’sBalkan agenda; Austria’s aggressive Bosnian stance against a presumably weakenedRussia; Schlieffen’s underestimation of Russian strength; the heightening of the Yel-low Peril discourse; the undermining of Romonov authority; the subsequent revolu-tion, concessions, and revolutionary legacy in Russia; and several of the anticolonialinsurrections listed above, which victoriously turned European technology and tech-niques against European powers—all were influenced by this single event.103 Neithergestures toward organized territorial dispensation nor wishful presumptions of ananalogue between European and world dynamics could contain the complex and in-terdependent networks of global power. In 1904, H. J. Mackinder announced to theRoyal Geographical Society: “From the present time forth, in the post-Columbian age,we shall again have to deal with a closed political system, and none the less it willbe one of worldwide scope. Every explosion of social forces, instead of being dissi-pated in a surrounding circuit of unknown space and barbaric chaos, will be sharply

101 Eichengreen, Globalizing Capital, 35–38, 42–43.102 On the European significance of these events: Jan Romein, The Watershed of Two Eras: Europe

in 1900 (Middletown, CT, 1978); Geoffrey Barraclough, An Introduction to Contemporary History(Harmondsworth, 1967), 153–98; Bright and Geyer, “For a Unified History,” 76.

103 Hajo Holborn, The Political Collapse of Europe (New York, 1951), 69; Ludwig Dehio, ThePrecarious Balance; Four Centuries of the European Power Struggle (New York, 1962), 234; seealso William L. Langer, The Diplomacy of Imperialism, 1890–1902, 2nd ed. (New York, 1965); andNorman Rich, Great Power Diplomacy, 1814–1914 (New York, 1992), on imperial blowback.

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reechoed from the far side of the globe, and weak elements in the political and eco-nomic organism of the world will be shattered in consequence.”104 Similar analysisemerged from each of the imperial states. Certainly, such geopolitical doctrine denotedan “intensification of territoriality,” a redoubled demand for the further consolidationof state power.105 Yet this itself derived from the theory’s foundational recognition ofa new, insuperable, and volatile globality that, according to Mackinder, was about toimplode upon the descendents of Columbus.

Third, survival of the gold standard—mutually enhancing to elites at its core—relied on political circumstances that could not be long sustained. According toEichengreen, the gold system depended on both the credibility and the cooperationof participant states. The former required that monetary authorities single-mindedlypursue the goal of currency convertibility. By the end of the century, however, thisagenda had become a domestic political problem. In Western Europe, expansion ofthe franchise and the rise of working-class parties created the demand that policiesbe redirected from convertibility and the balance of trade toward the national elimi-nation of unemployment. In the United States, export-oriented farmers fought thedeflationary system with the Populist call for soft money, while the U.S. system ofpolitical representation amplified such agricultural interests through the Senate. Inseveral Southern European and South American countries, political influence in favorof inflation and depreciation entirely upended credibility by suspending gold conver-sion. Meanwhile, the geopolitical condition vexing relations between imperial stateswas likewise eroding their willingness to cooperate on gold. Even before WorldWar I, the political basis for the international monetary system was in steep decline.106

Fourth, deepening internationalization of the economy intensified political tensionsbetween European states. While many Europeans prospered from the integration ofworld markets, abundant imports could also imperil the rewarding prices obtained forrelatively scarce, domestically produced goods. As import pressures increased, coun-tries spiked tariffs to blunt the negative effects on politically powerful sectors of thenational economy. Countermeasures and emulations ensued. From the end of thenineteenth century until the First World War, Germany, France, Italy, Sweden, Nor-way, Spain, and Portugal all substantially raised grain and manufacturing tariffs—the“backlash” discussed by O’Rourke and Williamson. Additional protections targetedagainst European exports sheltered manufacturing in the United States, Canada, Aus-tralia, Argentina, Uruguay, Brazil, and Venezuela. The competitive squeeze betweenEuropean states was further compressed as domestic constituencies were threatenedand as export room in Europe and elsewhere declined. At the same time, unrestrictedmigrant inflows appeared to threaten political authority and cultural order. Great Brit-ain, Germany, France, the United States, Canada, Australia, and Argentina all soughtto insulate themselves from the global labor market; each resurrected or newly insti-tuted various border and employment controls to create a sharp division betweencitizens and aliens. These immigration policies, on top of the tariff walls, served ingeneral to homogenize, nationalize, and militarize the identity of domestic popula-tions—what Aristide Zolberg calls “the naturalization of nativism.”107

104 Halford John Mackinder, The Geographical Pivot of History (1904; London, reprint 1951), 30.105 Maier, “Consigning the Twentieth Century,” 816; similarly, Ruggie, “Territoriality and Beyond,”

168.106 Eichengreen, Golden Fetters, and Globalizing Capital.107 Bairoch, Economics and World History, 5, shows that tariffs had no long-term negative effect

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Internationalization of the economy also snared European powers with the risingcost of security-related resources. In the early twentieth century, rival states enteredinto a deepening arms race. Here again, blowback from the Russo-Japanese Warproved decisive. Russia started a rearmament drive, while Germany, sensing advan-tage, began to militarize its diplomacy and increase arms expenditures. Britain andFrance of course responded with military expansions of their own and joint war plan-ning with Russia. Budgets in Austria-Hungary, Italy, Serbia, and Romania rose aswell. The series of crises in Morocco and Bosnia contributed to a self-perpetuatingcycle of redressing military imbalances. In opposition to local producers who sufferedprice declines, states—as consumers—competed for resources that were fetchinghigher earnings elsewhere. Britain, France, and Germany encountered increased costsin accessing easily exportable capital. All three as well as Russia and Austro-Hungaryalso faced difficulty mobilizing laborers, for whom industrial wages were everywhererising; in the east, returns to peasants were increasing as well. States responded var-iously, but in general they pooled labor by increasing the reserve army, innovatedmilitary doctrine for a short, less costly war, and sponsored strident nationalism topersuade resource holders to overlook reduced compensation. This situation madestrategic assessments highly complex and uncertain. States charted their market-compromised circumstances yet could only make conjectures about their rivals, whoseown responses were interpreted as preparation for war. Such perceptions reinforcedan arms race that with every measure and countermeasure further amplified the stakesof resource mobilization. After its setback in the second Moroccan crisis, Germany,now fearing a widening inferiority, initiated a massive acceleration of land strengthand a new phase of the race. As military budgets grew, the possibility of worseningconstraints in the future threatened to nullify for each state any advantage perceivedin the present. Two years after Morocco, the European blocs entered into war, eachstate panicked by the potential of an unfavorable future.108

“Although the war of 1914 started in Europe, it was thus from the beginning a

on export growth and probably contributed to the era’s increasing internationalization. Important hereis the short-term decline in export opportunity, and from that the appearance of a zero-sum competitionthat hardened national economic identities. In addition to the states cited, similar nativizing policieswere instituted in Italy, though these were in its management of outflows (John C. Torpey, TheInvention of the Passport: Surveillance, Citizenship, and the State [Cambridge, 2000], 93–121; An-dreas Fahrmeir, “Passports and the Status of Aliens,” in The Mechanics of Internationalism: Culture,Society, and Politics from the 1840s to the First World War, ed. Martin H. Geyer and JohannesPaulmann [Oxford, 2001], 93–119; Aristide R. Zolberg, “Global Movements, Global Walls: Re-sponses to Migration, 1885–1925,” in Global History and Migrations, ed. Wang Gungwu [Boulder,CO, 1997], 279–307; Colin Holmes, “Hostile Images of Immigrants and Refugees in Nineteenth-and Twentieth-Century Britain,” in Migration, Migration History, History, ed. Jan Lucassen and LeoLucassen [Bern, 1999], 317–34; Aristide R. Zolberg, “The Great Wall against China: Responses tothe First Immigration Crisis, 1885–1925,” in Lucassen and Lucassen, Migration, 291–315, 315).

108 On the arms race and the start of war, David G. Herrmann, The Arming of Europe and theMaking of the First World War (Princeton, NJ, 1996); and D. Stevenson, Armaments and the Comingof War: Europe, 1904–1914 (Oxford, 1996). On resource costs, David M. Rowe, “World EconomicExpansion and National Security in Pre–World War I Europe,” International Organization 53, no. 2(1999): 195–231, and “Globalization, Conscription, and Anti-militarism in Pre–World War I Europe,”Comparative Social Research 20 (2002): 145–70. For an argument that the German and Austrianmilitary-financial complex was uniquely constricted, see Niall Ferguson, “Germany and the Originsof the First World War: New Perspectives,” Historical Journal 35, no. 3 (1992): 725–52, “PublicFinance and National Security: The Domestic Origins of the First World War Revisited,” Past andPresent 142 (1994): 141–68, and The Pity of War (New York, 1999), 105–42.

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world war”: Geoffrey Barraclough, whose late career was devoted to historicizingmodern Europe within a world historical dynamic, maintained that the understandingof World War I needed to be grounded in the late nineteenth-century emergence ofglobal power.109 For Europe, the deployment of this power simultaneously structuredtwo countervailing tendencies. On the one hand, it enhanced the process of stateaggrandizement, while also contributing to a conjoint chauvinization of national iden-tity. On the other hand, states faced new pressures from both their interior and theirexterior, and adjustment mechanisms directed at one sent complicating feedback toboth. Leading European states were becoming richer, more effectively organized, andmore powerful just as their affairs grew increasingly unstable and ever more difficultto assess and manage. Multilateral agreements did not help: ostensibly political andostensibly economic arrangements, while benefiting participating interests, could notcontain the political-economic turbulence that they and the entire endeavor were cre-ating. The war emerged out of this milieu of global power. And it set into motion asubsequent series of global struggles—the Depression, World War II, decolonization,and the cold war—in which competing social formations and localities battled overthe conditions of an integrated world.110

CONCLUSION

Globality describes the interregional reproduction of power that became networkedworldwide in the late nineteenth century. It denotes the interrelation of social systemson a global scale. It is not a single social organization, and locality is not the hybridof a general condition. Globality has no goal, and it entails no normative implicationsfor governance. There is also no “global economy.” As always, capitalism constrainsits participants, but how this obtains necessarily depends on the distribution ofdecision-making capacity at all levels as well as across levels. Markets are socialconstructions, built by consumers, workers, firms, and states, and they are furtherinfluenced and varied by history, culture, geography, and chance. This does not mean,however, that economy is simply a function of politics. States are themselves thenegotiation of forces from within and without. Like market operations, state power isa constant arbitration and appropriation of conditions, actors, and resources. The over-riding problem in most discussions of globalization is the categorical reduction ofboth economics and politics, abstracting and essentializing one from the other andrendering them competitive rather than mutually constructive. For over a century,globality has been produced by diverse conditions and various agents in the strugglefor control and self-determination. Local, regional, and interregional dynamics havecombined to destabilize the regionally self-sufficient reproduction of power, creatingwith every interposition new cycles of local, regional, and interregional inputs. Oncewe remove the placeless notions of an autonomous economy and a sovereign state,

109 Barraclough, Contemporary History, 116; Geoffrey Barraclough, History in a Changing World(Oxford, 1957), European Unity in Thought and Action (Oxford, 1963), Turning Points in WorldHistory (New York, 1977), and From Agadir to Armageddon: Anatomy of a Crisis (New York, 1982).

110 Twentieth-century histories from the perspective of global power: Bright and Geyer, “For aUnified History,” 78–88; William R. Keylor, The Twentieth-Century World: An International History,4th ed. (Oxford, 2001); Ian Clark, Globalization and Fragmentation (Oxford, 1997). See as wellMichael Geyer, “Concerning the Question: Is Imperialism a Useful Category of Historical Analysis,”Radical History Review 75 (1993): 65–72.

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the site of decision and the flow of capital are no longer set into opposition. We alsoshed the narcissism of the now with which the “modern” has always defined itself asa present epochally unique.111

To understand globalization as the production and reproduction of necessarily localand emplaced circumstances is to insist on historical explanation, as opposed to ateleological narrative of a master process. And explanations are themselves historical.If contemporary history has deep roots in the critical years of the late nineteenthcentury, why did globalization discourse only explode in recent times? After WorldWar II, the Bretton Woods System created an international financial architecture fo-cused on promoting national growth. The classical gold standard of fifty years beforehad depended on economic decisions being isolated from the demands of nationalpopulations. Democratic pressures before 1914 had already made the system difficultto sustain. After World War II, the needs and expectations of populations made itsrevival impossible. The closing of Bretton Woods decreased the depth of systemicsupport for managing growth, but most core states maintained the postwar socialcontract of directing economic policy toward national growth and social welfare. Evenin Britain and the United States, where Margaret Thatcher and Ronald Reagan arguedfor the disengagement of politics from economics, state interventions and protectionsactually increased. What occurred was not the impossible separation of public decisionfrom private wealth but a move to free economic policy from popular pressures. Thefirst small boom in globalization literature emerged in this period, predominantly injournals of business and economics. International capital movements, offshore pro-duction, and worldwide trade had increased since Bretton Woods, but not to epochallevels requiring a new vocabulary. Necessary for “globalization” in this phase wasthe neoliberal rhetoric that abstracted economic and political spheres, granting theformer a deterritorialized quality. This literature actually declined for a short while,but with the end of the cold war the number of works on globalization skyrocketed.Economics was joined by massive outputs from sociology and political science tomake globalization “the leitmotif of our age.”

This second and considerably larger phase of the discourse was symptomatic of anideological crisis that emerged from the collapse of the Soviet system. After 1914,the great struggles between competing social formations helped states to articulatetheir economic priorities in international political terms. For corporate capitalism,communism, and the various authoritarian and fascist nationalisms, economics wasmobilization. The economy was presented not only as a distribution of resources butalso as a weapon. Even the neoliberal agenda, which so stridently demanded an au-tonomous economy, nonetheless defined itself as at war with an opposing ideologyembodied by specific states, above all the Soviet Union. After the cold war, however,the major powers could no longer justify state organization of the economy withinthe frame of large-scale conflict. For the ideology of these advanced capitalist states,political and economic tracks lost the signposts of their parallel logic. Fukuyama’sfamous volume of 1992 marked not the end of ideology but the crisis facing theideological grounding of capitalism within a political identity—what he called “his-tory.”112 The left did better than neoliberals like Fukuyama: Bill Clinton, Tony Blair,

111 Koselleck, Futures Past. On globalization discourse specifically, see also Andreas Wimmer’sdiscussion of “temporalo-centrism,” in “Globalizations avant la Lettre: A Comparative View of Iso-morphization and Heteromorphization in an Inter-connecting World,” Comparative Studies in Societyand History 43, no. 3 (2001): 435–66.

112 Francis Fukuyama, The End of History and the Last Man (New York, 1992).

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and the entire “third way” came to power proclaiming for the state the role of efficientregulator in the reproduction of capital. It is certainly correct to define “globalization”as a neoliberal agenda,113 but this describes only the first phase of its discourse. Thesecond phase has served up as well the agendas of conservatives, third-way liberals,social democrats, Marxists, and cosmopolitans who have each sought to reclaim apolitical object during this crisis and this opportunity of ideological formation.

For the poor and the weak, wealth and borders divide. Billions live in closed,inescapable worlds. For the rich and the powerful, the judicious reproduction of capitalis itself offered as the meaning of political community. The recent turn in NorthAtlantic elections against third-way governments suggests that this may not beenough. At the same time, the events of September 11, the subsequent “War on Ter-rorism,” and the U.S.-Iraq War tender the possibility of a new political object. InOctober 2001, President Bush spoke from Travis Air Force Base, a logistics depot inCalifornia that describes its “primary mission” as “providing rapid global mobility.”He said: “The terrorists attacked the World Trade Center, and we will defeat them byexpanding and encouraging world trade.”114

113 Philip McMichael, “Globalization: Myths and Realities,” Rural Sociology 61, no. 1 (1996): 25–55, is the strongest among the many proponents.

114 Quoted from Travis Air Force Base homepage, https://www.travis.af.mil; “Bush Links TerrorAttacks to Trade Bill,” New York Times, October 18, 2001, C6.