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GLOBAL CAPITALISM AND THE HEGEMONY OF THE TRANSNATIONAL ELITE:
THEORETICAL NOTES AND EMPIRICAL EVIDENCE
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William I. Robinson
Department of Sociology
University of California
Santa Barbara, CA 93106
805-893-5607
[email protected]
Prepared for Presentation at the 2002 Conference
of the Political Economy of the World System (PEWS)
University of California-Riverside
May 3-4, 2002
Introduction
Hegemony is firmly situated in our social science lexicon. But it means different things to different speakers.
Hence a good place to begin is to specify what we mean when we speak of hegemony. There are at least four
interwoven conceptions in the literature on the international order and the world capitalist system:
1)
Hegemony as International Domination. Hegemony in the realist tradition in International Relations (IR),
world politics, and some International Political Economy (IPE), understood as dominance backed up by
active domination, or “hegemonism.” Thus the former Soviet Union exercised hegemony over Eastern
Europe and the United States exercised hegemony over the capitalist world during the Cold War.
1)
Hegemony as state hegemony. Hegemony in the loose sense as evoked in much world-systems and IR
literature, in reference to a dominant nation-state within the core that serves to anchor the world capitalist
system or to impose the rules and enforcement that allows the inter-state system to function over time. Thus,
there has been a succession of hegemonic powers in the history of world capitalism, e.g., from Dutch, to
British, and then to U.S. hegemony, and a particular power is a “hegemon.”
1)
Hegemony as consensual domination or ideological hegemony. Hegemony in the more generic and more
specific sense meant by Antonio Gramsci as the way in which a ruling group establishes and maintains its
rule. Hegemony is rule by consent, or the cultural and intellectual leadership achieved by a particular class,
class fraction, strata, or social group, as part of a larger project of class rule or domination. Thus, in modern
capitalist societies the bourgeoisie has managed to achieve its hegemony during periods of stable rule,
although that hegemony has broken down during periods of crisis, such as in the 20 th century period of world
wars and authoritarian rule in a number of countries.
1)
Hegemony as the exercise of leadership within historic blocs in a social formation. A view of hegemony that
combines the loose sense of some preeminent state power in the world system with the more specific sense of
the construction of consent or ideological leadership around a particular historic project. Thus the United
States was able to achieve hegemony in the post-WWII period as a result, not so much of its economic
dominance in global political economy and military might to back it up, than to the development of a
Fordist-Keynesian social structure of accumulation that became internationalized under the leadership of the
U.S. capitalist class.
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Of course the above is a simplification. These four approaches are not mutually exclusive and most social
scientists would probably view their use of the concept of hegemony as a synthesis of several or all of them. But for
argument’s sake the first approach is epitomized by such realist paradigms as the theory of hegemonic stability in the
field of International Relations, as developed by Kenneth Waltz (1979) and Robert Keohane (1984), among others.
We could characterize Immanuel Wallerstein’s essay, “The Three Instances of Hegemony in the History of the
Capitalist World-Economy” (1984), as archetypical of the second approach, while Arrighi’s 1994 study, The Long
Twentieth Century, may be its most elegant expression in the world-systems tradition. Gramsci’s own writings (1971)
epitomize the third approach. The Frankfurt school writings of the early and mid 20 th century, and perhaps more
recently, some of the theoretical work of Habermas and of Bordeau, and late 20 th century political sociology research
on power, may draw on or develop out of this approach. The fourth is closely associated with the work of Robert Cox
(see, inter-alia, 1987) and the Italian, or neo-Gramscian, school in IR, and may be best illustrated by Mark Rupert’s
study, Producing Hegemony (1995), although Justin Rosenberg’s The Empire of Civil Society (1994) stands out as
well.
All four conceptions of hegemony may be of value insofar as they have contributed to our understanding of
the evolving historical structures of the world capitalist system. But here I want to suggest that an understanding of the
current dynamics of the global system requires a more expansive approach, one that allows for innovations in order to
understand novel transnational processes unfolding in global society in the early 21 st century. My objective in this
essay is to identify the elements of, and offer some empirical evidence in support of, such innovation. In a nutshell, I
suggest that we need to expunge nation-state centrism from the discussion of hegemony. This allows us to conceive of
a transnational social hegemony, not necessarily tied to any one nation-state. In fact, we need to move away
altogether from a statist conception of hegemony, or from what could be termed statism, and revert to a view of
hegemony as a form of social domination exercised not by reified states but by social groups and classes. This allows
us to identify social groups in the global system that may now be attempting to construct their hegemony beyond
formal state institutions, and it provides for much greater latitude in our discussion of 21 st century hegemonic projects.
This essay is divided into three parts. In the first part, I summarize the critique I have developed elsewhere of
nation-state centrism in extant frameworks and discuss the concept of hegemony in transnational social terms. I
reiterate my theses on global capitalism and the rise of a transnational capitalist class. In the second part, I look at
empirical markers of the process of transnational capitalist class formation. My theses on globalization and
transnational processes have generated sharp debate in recent years. I wish in this second part to respond to critics who
have argued that my past work offers limited empirical substantiation. In the third, I return, by way of conclusion, to
the notion that hegemony in the 21st century world capitalist system is exercised by the transnational capitalist class at
the helm of a new global capitalist historical bloc, and identify potential counter-hegemonic forces. The discussion
here represents a continuation of ongoing exploratory work I have been developing on these themes (Robinson,
2002a; 2002b; 2001a; 2001b; 1998; 1996a; 1996b; Robinson and Harris, 2000; Burbach and Robinson,1999) and is, as
a matter of course, open-ended.
I: From Nation-State to Global Capitalism
Beyond Nation-State-Centrism
The nation-state framework of analysis accords centrality to the nation-state in macro-social inquiry
(Robinson 1998; 2002). Nations are seen as discrete units within a larger system (the world-system or the
international system) characterized by external relations among these units. Economic globalization is analyzed from
the political framework of the nation-state system and the agency therein of national classes and groups. But studying
social phenomena in the new epoch requires that we adopt a transnational or global approach in place of this outdated
national/international approach. The national/international approach focuses on the pre-existing system of
nation-states as an immutable structural feature of the larger world or inter-state system, whereas by contrast
transnational or globalization approaches focus on how the system of nation-states and national economies, etc., are
becoming transcended by transnational social forces and institutions grounded in the global system rather than the
interstate system.
To get beyond nation-state centrist ways of thinking about 21st century global dynamics we need to keep in
mind that a study of globalization is fundamentally historical analysis. When we forget that the nation-state is an
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historically-bound phenomenon we reify the nation-state, and by extension the inter-state system or the world system
founded on nation-states. To reify means to understand something that social agency has produced as though it exists
and operates quite independently of this agency, according to its own laws. It is to perceive a social practice that we
engage in as some external “thing” that exists on its own. To reify something is to attribute a thing-like status to what
should be more properly seen as a complex and changing set of social relations that our practice has created. The
problem is that the social world is so complex and multidimensional that we must create numerous concepts to try to
describe, codify and understand its varied dimensions. Thus, “society,” “race,” “culture,” “identity,” “state,” and
“nation-state” are concepts we have created to help us understand reality. They have no ontological status
independent of human agency. But when we forget that the reality to which these concepts refer is our own sets of
social relations that are themselves in an ongoing process of transformation and instead attribute some independent
existence to them then we are reifying. For instance, a “nation-state” is not a tangible “thing” in so far as borders are
artificial lines we draw through real space. A “state “ is not, of course, the physical buildings which house government
officials or a capital city but a set of social relations and practices we have created and institutionalized. To see the
state as some thing-in-itself is to reify the state.
Accounts of the nation-state system such as that contained in much world-system, world society, IR and
related frameworks reify the nation-state system insofar as they posit this system as an ontological feature of world
capitalism. The imputation of a trans-historic character to the nation-state is erroneous in that it assigns a universal
character to relatively fixed set of historic structures whose foundations were laid in the 16 th and 17th centuries. From
the 1648 treaties of Westphalia into the 1960s capitalism developed worldwide through the framework of the
nation-state and the inter-state system that generated concomitant national structures, institutions, and agents. A key
feature of the current epoch is the supersession of the nation-state as the organizing principle of capitalism, and with it,
of the inter-state system as the institutional framework of capitalist development and as the basis for hegemony(ies) in
the world capitalist system. Indeed, I am taking issue with the implicit assumption that by fiat we are speaking of the
hegemony of a particular nation-state or coalition of states when we discuss hegemony in the world system.
Beyond “Statolatry”
It should be clear that there is a reification closely related to that of the nation-state and which must be
dispelled if we are to tackle the matter of hegemony, namely that of the state (which is not synonymous with the
nation-state). There is a rich theoretical literature across the social sciences on the state that cannot be referenced here
(but see, inter-alia, Clark, 1991; Held, 1984). What concerns me here are twin problematics. The first problematic is
the Weberian versus the Marxist conceptions of the state. The former reifies the state as a “thing,” an entity with an
independent existence as expressed by a set the institutions and the managers or cadre that administer these
institutions. The latter views the state as a set of institutionalized class and social power relations (for discussion, see
Robinson, 2001a). The second problematic is the separation of the economic and the political under capitalism. This
separation is taken as natural or organic in liberal ideology and has been given historical and theoretical treatment,
among others, in the works of Marx, Polanyi, Poulantzas, and Gramsci. The formal or apparent, separation of the
political and the economic spheres of a larger social totality under capitalism is not real; it is illusory. It takes the
expression of the separation of the “public” from the “private,” the former seen as the state proper, or what Gramsci
referred to as “political society,” and the latter as what Gramsci referred to as “civil society” (1971:12-13).
In his essay, “State and Civil Society,” Gramsci (1971:210-276) critiques the conception of the state
developed by the liberal ideologues of capitalist society as derived from the separation of politics and economics and
“conceived as a thing in itself, as a rational absolute” (1971:117). This results in a reified or fetishistic view, in which
individuals “are led to think that in actual fact there exists above them a phantom entity, the abstraction of the
collective organism, a species of autonomous divinity that thinks, nots with the head of a specific being, yet
nevertheless thinks, that moves, not with the real legs of a person, yet still moves” (Gramsci, 1995:15). This view of
the state as a “thing-in-itself,” as an entity unto itself in political society, was lambasted by Gramsci as “statolatry”
(1971:268-69). Instead, the state is “the entire complex of practical and theoretical activities with which the ruling
class not only justifies and maintains its dominance, but manages to win the active consent of those over whom it
rules” (Ibid:244). Here the state becomes the “integral” or “extended” state, in Gramsci’s formula, encompassing
political plus civil society, a conception aimed at overcoming the illusory dualism of the political and the economic.
Hence, the key question with regard to hegemony in 21st century global society is, who is the ruling class? Is
the ruling group a class or class fraction from a particular nation-state? Are there still distinct national ruling classes?
In order to answer these questions we need to specify how my critique of nation-state centrism and “statolatry” in
extant frameworks is related to hegemony. Simply put, we cannot speak of the hegemony of a state. Hegemony is
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exercised by social groups, by classes or class fractions, by a particular social configuration by these fractions. When
we speak of “British” hegemony or “U.S.” hegemony we do not really mean “British” or “U.S.” as in the country.
This is merely shorthand for saying the hegemony of British capitalist groups and allied strata, such as British state
managers and middle class sectors, in the context of world capitalism. But problems arise when we forget that this is
just shorthand. The term “hegemon” is generally evoked in a particularly misleading way because a country or a state
cannot be a “hegemon.” A social group exercising hegemony through a state may be hegemonic and hence the term
“hegemon” to describe that state is a shorthand that is highly susceptible to reification.
If classes and groups are nationally-organized then this shorthand is justified. In an earlier moment in the
history of world capitalism classes were organized around national markets and national circuits of accumulation,
even as these national markets and capital circuits were in turn linked to a more encompassing world market and
processes of accumulation on a world scale. But the process of economic globalization has created the conditions for
a shift in the locus of class and social group formation from the nation-state to the global system. If classes and groups
are no longer in the main national then we need to put aside the shorthand and reformulate the conceptions that
justified such shorthand. I suggest that here we are faced as much, or even more so, with an empirical question than
with logical argumentation, and that the empirical evidence warrants my propositions.
Historically the process of class formation in the capitalist system may have taken place through the
institutional framework of the nation-state but under globalization this is no longer necessarily so. Until recently, the
reality of capital as a totality of competing individual capitals and their concrete existence as a class relation within
specific spatial confines determined geographically as nation-states worked against a trans-, or supranational, unifying
trend in the development of world capitalism. To state this differently, in a world of national economies, classes
developed around national circuits of accumulation As the entire circuit becomes transnationalized, so too do classes,
political processes, states, and cultural-ideological processes. The locus of class and group relations in the new epoch
is not the nation-state but the global system.
The Global Capitalism Thesis
My approach to globalization can be broadly identified with the "global capitalism" thesis or school, and has
come to concentrate on the idea of a transition from a world economy to a global economy, constituting an epochal
shift (not a rupture or discontinuity per se) in the history of world capitalism (Robinson, forthcoming). In synthesis,
the world capitalist system has been characterized since its inception by the development of national economies, or
national circuits of accumulation that were linked to each other through commodity trade and capital flows in an
integrated international market. This was a world economy. Different modes of production and social forms were
"articulated" within a broader social formation, or world system, while nation-states mediated the boundaries between
a world of different articulated modes of production. But in recent decades the production process itself has become
increasingly transnationalized. National production systems are reorganized as national circuits of accumulation
become broken down and functionally integrated into global circuits. This signals the rise of a global economy. The
global fragmentation and decentralization of what were once national productive processes involves the dismantling
of national economies and the construction of a single global production system. Globalization is characterized by the
rise of truly transnational capital, divorced from specific countries.
To make reference in this way to a new globalist stage of world capitalism is not to suggest that previously
capitalism was not a world system. The capitalist system has always been world-wide; it has always been a world
system, as world-system theory has established. But in this new transnational stage of world capitalism the ongoing
development of the system takes place increasingly beyond the framework of a nation-state system that organized its
previous development. Moreover, to pose the matter in terms of the global capitalism thesis is to say that
globalization, rather than being a state or a condition, is an open-ended and fundamentally historical process. The
conception here is one of historic structure in motion, and as such numerous forms may be involved in the dynamics of
globalization, such as ascendant transnational and descendant nation-state forms of class, of productive structure, and
so on. What is important for materialist analysis is to capture the direction of historic movement and the tendencies
underway, even when such historic processes are open-ended and subject to being pushed in new and unforseen
directions.
On Classes and Class Analysis
It is generally agreed that social class is a fundamental category in society and class analysis is integrated into
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a great deal of research in the social sciences. Class formation is an ongoing historical process and refers to changes
over time in the class structure of society, including the rise of new class groups and the decline of old ones. By class,
I mean a group of people who share a common relationship to the process of social production and reproduction and
which are constituted relationally on the basis of social power struggles. This concept of class applies to antagonistic
polar opposites, that is, to classes that stand opposed to each other and are constituted on the basis of their polar
relationship. But the concept of class can also be used for analysis of particular groupings within a single class, or
class fractions (see, inter-alia, Poulantzas, 1975; Szymanksi, 1983). For instance, the study of the capitalist class
involves identifying three fractional interests: industrial capital, commercial capital, and financial capital, and more
recently, some argue that information capitalists comprise a new fraction in the age of the inter-net and the dot-com
company. Central to my thesis on transnational class formation is the idea that under globalization a new class
fractionation, or axis, is occurring between national and transnational fractions of classes.
An analysis of transnational class formation must start with the primacy of social relations of production in
the constitution of antagonistic classes, and with the derivation of specific classes or class fractions, such as a
transnational capitalist class from class struggle grounded in these relations. In other words, if we want to gain an
understanding of the class structure of a particular society at a particular moment in history we would do well to start
with an analysis of the economy and the social production relations that prevail. I am suggesting that the globalization
of production and the extensive and intensive enlargement of capitalism in recent decades constitutes the material
basis for the process of transnational class formation. Of course a study of the economy is only a starting point of class
analysis. Classes do not develop in an institutional, political, or cultural vacuum. The existence of a class is
conditional upon its capacity to forge a collective political and/or cultural protagonism, that is, a self-representation,
and class formation involves the mutual constitution of antagonistic classes. This dialectic conception is best captured
in Marx's notion of a class-in-itself and a class-for-itself. The study of class formation therefore involves structural
and agency (or objective and subjective) levels of analysis. The first is concerned with the material bases and the
production relations which give rise to and define classes; the second, with intentionality and with the forms of
consciousness involved in intervention that shape social processes and as well the direction of development in material
relations. A study of hegemony must involve both these dimensions.
From National Capitalists and their International Alliances
to Transnational Capitalists
Transnational class formation is central to globalization and the process involves the rise of a transnational
capitalist class, or TCC. The relationship between nation-states, economic institutions and social structures has
become modified as each national economy has been reorganized and integrated into the new global production
system. Class formation is no longer tied to territory and to the political jurisdiction of nation-states in the way that it
has been for much of the history of world capitalism. It is the globalization of production that provides the basis for
the transnationalization of classes and the rise of a TCC. More specifically, as the entire circuit of capital
(M-C-P-C'-M') becomes transnationalized, so too do classes, political processes, states, and cultural-ideological
processes.
My theory on global class formation involves propositions that have generated sharp polemics (see symposia,
Science and Society, 2002; Theory and Society, 2001). But I am certainly not the first to observe that the capitalist
class has been in a process of transformation bound up with the international expansion of capital in the 20 th and early
21st centuries. Since the 1960s a growing number of observers have discussed the rise of an "international capitalist
class." Summarizing much of the research on this theme in the 1960s and 1970s, Goldfrank pointed in 1977 to
"growing evidence that the owners and managers of multinational enterprises are coming to constitute themselves as a
powerful social class" (35), and that "the study of class structure or stratification on a world level is in its infancy” (32).
More recently, as the global economy came into focus in the closing decades of the 20 th century scholars began to
discuss transnational class formation. Among the pioneering scholars in this area are the Dutch political economist
Kees van der Pijl (1984; 1989; 1998). He has analyzed the fractionation of capital along functional lines in the
post-WWII period in advanced capitalist countries. Van der Pijl points to the internationalization of these fractions
and their political projects as a consequence of the transnational expansion of capital. He develops the idea of an
internationally class consciousness bourgeoisie and of a "comprehensive concept of [bourgeoisie class] control" at the
international level. The "Italian School" in international relations - so-called because it has applied Gramscian
concepts to the study of international relations - has set out to theorize a global social formation outside the logic of the
nation-state (see, esp. Cox, 1987; Gill, 1990). There has come into existence, according to Robert Cox (1987, 271),
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one of the lead figures in this school, “an emergent global class structure." Pursuing this proposition, Stephen Gill,
another lead figure, has identified a "developing transnational capitalist class fraction" (1990, 94).
But perhaps the scholar who has gone the furthest in arguing for the existence of a TCC is sociologist Leslie
Sklair. In recent years Sklair has written broadly on his "theory of the global system" (1995). His theories involve the
idea of the TCC as a new class that brings together several social groups: the executives of transnational corporations;
"globalizing bureaucrats, politicians, and professionals", and "consumerist elites" in the media and the commercial
sector (1995; 2001). Although my analysis diverges from his in a number of ways, Sklair's work is closest to my own
and, I believe, goes the furthest in conceiving of the capitalist class as no longer tied to territoriality or driven by
national competition.
This is essential to the global capitalism thesis. What the varied accounts of international class formation
share, with the exception of Sklair, is a nation-state centered concept of class. They postulate national capitalist
classes that converge externally with other national classes at the level of the international system through the
internationalization of capital and concomitantly, of civil society. World ruling class formation is seen as the
international collusion of these national bourgeoisies and their resultant international coalitions. The old view of
internationalization as national blocs of capital in competition is merely modified to accommodate collusion in the
new globalized age. But globalization compels us to modify some of the essential premises of class analysis,
particularly the notion that classes are by definition attached to nation-states. Marx and Engels spoke last century in
the prescient passages of The Communist Manifesto of the essential global nature of the capitalist system and of the
drive of the bourgeoisie to expand its transformative reach around the world. “The need of a constantly expanding
market for its products chases the bourgeoisie over the whole surface of the globe,” they argued, in perhaps one of the
most oft-quoted passage in world literature. “It must nestle everywhere, settle everywhere, establish connexions
everywhere” (Marx and Engels, in Tucker:476).
But for Marx, and for many Marxists after him, the bourgeoisie, while it is a global agent, is organically
national in the sense that its development takes place within the bounds of specific nation-states and is by fiat a
nation-state based class. Early 20th century theories of imperialism established the Marxist analytical framework of
rival national capitals, a framework carried by subsequent political economists into the latter 20th century via theories
of dependency and the world system, radical IR theory, studies of U.S. intervention, and so on. According to this
perspective, the capitalist class is organized through the distinct political boundaries of nation-states. The competition
among capitals that is inherent to the system therefore takes the form of competition (as well as cooperation,
depending on the circumstances of the moment) among capitalist groups of different nation-states, and is expressed as
inter-state competition, rivalry, and even war.
This then became the context in which hegemony in the world capitalist system has been studied. In fact,
many aspects of international relations and world development over the past five centuries can be explained by the
dynamics of inter-state rivalries and national capitalist competition. The problem begins when we fail to acknowledge
the historic specificity of these phenomena and instead extrapolate a transhistoric conclusion regarding the dynamics
of world class formation from a certain historic period in the development of capitalism.
Production Relations, Social Forces, and Hegemony
Let us now link the issue of transnational class formation to that of hegemony. There may be a plethora of
competing interpretations of hegemony but all exhibit an underlying assumption that hegemony is exercised by
countries or states within the nation-state/inter-state system. To get beyond this we need to extend the analysis
developed by the neo-Gramscian school that by discerning different modes of social relations of production it is
possible to consider how changing production relations give rise to particular social forces that become bases of power
within and across states and then within a specific world order (Cox, 1987:4). To examine the reciprocal relationship
between production and power there is, then, a focus on how social relations of production may give rise to certain
social forces, how these forces may become the bases of power in forms of state and how this might shape world order.
We need not concern ourselves here with the ingrained state-centrism and nation-state centrism of the neo-Gramscian
focus. Of import is the following: social relations of production – social forces – world order (hegemonic projects).
I am arguing that globalizing production relations have thrown up new social forces, or class forces, namely a TCC
and allied transnationally-oriented strata, and this TCC is at the helm of a project of transnational hegemony.
How have new social forces been thrown up by the globalization process?
The particular local social
structures of accumulation that developed during the nation-state phase of world capitalism often took the form of
corporatist, welfare, and developmentalist projects, all predicated on a redistributive logic and on incorporation of
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labor and other popular classes into national historical blocs. A social structure of accumulation refers to a set of
mutually-reinforcing social, economic, and political institutions and cultural and ideological norms which fuse with
and facilitate a successful pattern of capital accumulation over specific historic periods (Kotz, McDonough, and
Reich, 1994). As modes of accumulation corresponding to national capitalism eroded under the thrust of globalization,
these social structures of accumulation and the class alliances and arrangements between dominant and subordinate
groups they embodied, began to break down. "Although there is no guarantee that a successful new social structure
will emerge, if one does it will reflect the alignment of class forces and other social influences that produce it," note
Gordon and his colleagues. "Thus the rise of a new social structure of accumulation depends upon the previous
downswing and more specifically on the concrete historical conditions that the period of the downswing bequeaths to
the major classes" (Gordon, Edwards, and Reich, 1994:20).
The liberation of transnational capital from the constraints and commitments placed on it by the social forces
in the nation-state phase of capitalism has dramatically altered the balance of forces among classes and social groups
in each nation of the world and at a global level towards a TCC and its agents. As capital assumed new power relative
to labor with the onset of globalization, states shifted from reproducing Keynesian social structures of accumulation to
servicing the general needs of the new patterns of global accumulation and the TCC, which meant an end to
redistributive projects. Economic integration processes and neo-liberal structural adjustment programs are driven by
transnational capital's campaign to open up every country to its activities, to tear down all barriers to the movement of
goods and capital, and to create a single unified field in which global capital can operate unhindered across all national
borders (see, inter-alia, Robinson, 2001a; 2001b). This declining ability of the nation-state to intervene in the process
of capital accumulation and to determine economic policies reflects the newfound power that transnational capital has
acquired over popular classes. This newfound power of transnational capital helped it in its efforts to mold a highly
favorable global social structures of accumulation. As social structure becomes transformed and transnationalized in
each region of the world, a new global social structure of accumulation is becoming superimposed on, and
transforming, existing national social structures.
Table 1 shows the movements towards opening up each country to transnational capital, one indicator of the
creation of a single unified field for global capitalism. This is the field upon which classes now develop and the battle
over hegemony is waged.
Table 1: Changes in National Regulatory Changes, 1991-2000
------------------------------------------------------------------------------------------------------------------------------------------Item
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
----------------------------------------------------------------------------------------------------------------------------- -------------Number of countries that
introduced changes in
investment regimes
35
43
57
49
64
65
76
60
63
69
Number of regulatory
changes
82
79
102
110
112
114
151
145
140
150
Of which
More favorable to FDI 80
79
101
108
106
98
135
136
131
147
Less favorable to FDI 2
1
2
6
16
16
9
9
3
-------------------------------------------------------------------------------------------------------------------------------------------Sources:UNCTAD, 2001:12.
There are political and class implications of the transnationalization of the capital circuit. In previous epochs
of capitalism the nation-state was the predominant locus of struggles among classes and social groups over the
distribution of wealth, over social arrangements, and political projects. Dominant and subordinate classes struggled
against each other over the social surplus through nation-state institutions and fought to utilize national states to
capture shares of this surplus. The nation-state thus acted fundamentally to mediate class relations and was a key
political determinant in class formation. Subordinate classes mediated their relation to capital through the
nation-state. Capitalist classes developed within the protective cocoon of nation-states and developed interests in
opposition to rival national capitals. These states expressed the coalitions of classes and groups that were incorporated
into the historic blocs of nation-states. There was nothing transhistoric, or predetermined, about this process of class
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formation worldwide. It is now being superseded by globalization. What is occurring now is a process of
transnational class formation, in which (or because) the mediating element of national states has been modified. A
global class structure is becoming superimposed on national class structures. As national productive structures
become transnationally integrated, world classes whose organic development took place through the nation-state are
experiencing supra-national integration with "national" classes of other countries.
To the extent that local production systems are integrated into globalized circuits of production through the
process of transnationalization, the logic of local and global accumulation tend to converge and the earlier rivalries
between capitalists no longer take the form of national rivalries. Competition between capitalists remains fierce. But
given the increasing deterritorialization of accumulation processes and the transnational integration of capitalists,
competition is now between oligopolist clusters in a transnational environment. The rise of transnational capital out of
former national capitals is having a transformative effect on what were national capitalist classes. These are drawn by
globalization into transnational chains that reorient the determinants of class formation. The leading capitalist strata
worldwide are crystallizing into a TCC.
This new transnational bourgeoisie is comprised of the owners of transnational capital, that is, the group that
owns the leading worldwide means of production as embodied principally in the transnational corporations, or TNCs,
and private financial institutions. This class is transnational because it is tied to globalized circuits of production,
marketing, and finances unbound from particular national territories and identities, and because its interests lie in
global over local or national accumulation. The TCC therefore can be located in the global class structure by its
ownership and/or control of transnational capital. What distinguishes the TCC from national or local capitalists is that
it is involved in globalized production and manages globalized circuits of accumulation that give it an objective class
existence and identity spatially and politically in the global system above any local territories and polities.
As the agent of the global economy, transnational capital has become the hegemonic fraction of capital on a
world scale. Here fraction denotes segments within classes determined by their relation to social production and the
class as a whole. The hegemonic fraction of capital is that fraction which imposes the general direction and character
on production worldwide and conditions the social, political, and cultural character of capitalist society worldwide.
The TCC is a new ruling class worldwide. It is represented by a class-conscious transnational elite that has been
pursuing a class project of capitalist globalization, as reflected in its global decision-making and the rise of a
transnational state (TNS) apparatus under the auspices of this fraction (Robinson, 2001a).
A New Hegemonic State or Region, or a Deterritorialized Transnational Hegemony?
How, then, do we conceive of hegemony in the emerging global order? For realists, world-system analysts,
and Marxists, hegemony is inextricably tied up with state power, and state power is conceived in terms of the
nation-state. The logic of a competing nation-state system as the basis for analyzing world dynamics leads analysts to
search for hegemony in some type of nation-state configuration in the new global order. The world-system approach
to hegemony focuses on successive state hegemons. Looking backward, the baton was passed from the Italian city
states to Holland, Great Britain, and then the United States. The predominant view now seems to be the rise of an East
Asian hegemony. For its part, the Italian school focuses on a succession of hegemonic projects, from the liberal
international economy (1789-1873) under British leadership, to an era of rival imperialisms (1873-1945), and then to
the post-WWII of pax Americana, under U.S. leadership (Cox, 1987:109). The neo-Gramscians acknowledge that
profound changes to world order but retain the framework of the nation-state and the inter-state system in their
concrete analyses (see, e.g. Gill, 1990). I maintain, in contrast, that the baton is being passed to an emergent
transnational hegemonic configuration.
Hegemony is a relationship of power and domination and hence it is incumbent to ask, who holds power in
global society? The worldwide decentralization of production takes place together with the centralization of
command and control of the global economy. A reified vision of the state that suggests states rather than social groups
and classes as central historical actors leads to the search for a state-based configuration in analysis of command,
control, and power in the global system. But command and control of the global economy is centralized not within a
state or a nation-state but in transnational capital. Power in the global system is concentrated in the TCC together
with allied transnationalized groups and strata, such as transnationally-oriented state managers and the cadre of such
public and private supranational institutions as the World Bank, the World Trade Organization, the Trilateral
Commission and the World Economic Forum. We are witness to an emerging transnational hegemony as expressed in
the emergence of a new historic bloc, global in scope and based on the hegemony of transnational capital
The historical pattern of successive "hegemons" has come to an end, and that the hegemonic baton will not be
8
passed from the United States to a new hegemonic nation-state, or even to a regional bloc. Pax Americana was the
"final frontier of the old nation-state system and hegemons therein. Instead, the baton is being passed in the 21st
century to a transnational configuration, to the global capitalist historical bloc. But my argument has meant stiff
resistance by many who advance a scenario of competing regions and the rise of an East Asia hegemon, among them,
Arrighi (1994; Arrighi and Silver, 1999), and Goldfrank (2001). A more nuanced interpretation of global politics
along similar lines sees the underlying dynamic as struggle among competing core power blocs for hegemonic
succession in the wake of U.S. decline. In the "three competing blocs" (or "regionalization") scenario, the EU, the
U.S.-centered NAFTA, and East-Asia ASEAN blocs are non-global regional forms; each core grouping is integrating
its periphery into a regional formation in competition with rival regional blocs. Ultimately this is a matter of empirical
investigation. The notion of three competing blocs is a popular and by now well-worn thesis but it is backed by very
little concrete evidence and not really supported by global political and economic dynamics in recent years.
The problem of state-centric and nation-state centric analysis is that it does not allow us to conceive of an
emergent global hegemony in terms of transnational classes and groups no longer bound to any state or to specific
geographies. We know, for instance, that East Asian dynamism is inseparable from the massive entrance of
transnational capital, and more recently (especially in the wake of the late 1990s crisis), has been organized by elites
seeking not a regional circuit of accumulation in rivalry with circuits elsewhere but a more complete integration into
globalized circuits.
What we see instead of a recentering of the global economy in the East, as Arrighi and Silver claim
(1999:219), is precisely a decentering of the global economy; its fragmentation and the rise of several zones of intense
global accumulation. One such zone in Europe runs from the northwest to the south east, cutting across borders and
reaching out into areas of Eastern Europe. Another in North America is the U.S.-Mexico border zones. Several such
axes criss-cross East Asia. These may not be territorially-bounded rivals for hegemony as much as sites of intensive
accumulation within a global economy that bring together transnational capitalists and elites in diverse locations
around the world, precisely what we would expect from a supranational and decentered transnational configuration.
But what about the quite visible and preponderant role of the United States, the “only remaining
superpower”? Transnational structures are emerging from the womb of a nation-state system which itself is unevenly
developed. We are witnessing the decline of U.S. supremacy and the early stages of the creation of a transnational
hegemony through supra-national structures that are not yet capable of providing the economic regulation and political
conditions for the reproduction of global capitalism. To affirm this is not to propose that geo-political relations are no
longer important or even crucial to diverse conjunctures in the current epoch. Rather, we need to reinterpret
geo-political relations in light of globalization. There are tensions and contradictory impulses which checker all
historical processes. Certainly the extent to which capitalist groups have transnationalized and the relative power and
weight of these fractions vis-a-vis fractions still grounded in national accumulation processes is open to debate and
requires empirical research. How these fractions engage in struggle and accommodation within nation-states is a
matter of creative political and conjunctural analysis. Moreover, state managers may respond to the agenda of a
transnational elite, but they must simultaneously sustain legitimacy among nation-based electorates (or at least attempt
to). These multifarious processes can produce confusing and contradictory behavior on the part of policymakers
within states.
I have argued that the "U.S" is playing a leadership role on behalf of a transnational elite. This role is
explained historically. Precisely because it was the last "hegemon" among core powers - that is, because globalization
emerged in the period of worldwide U.S. hegemony and the concentration of resources and coercive powers within the
U.S. national state - the United States has taken the lead in developing policies and strategies on behalf of the global
capitalist agenda of the transnational elite. Due to the particular manner in which the world economy and global
capitalist relations unfolded in the post-World War II period, the "U.S. contingent" of the transnational elite was the
first to become thoroughly transnationalized. This is in fact geo-politics in the sense that world political dynamics are
still shaped by certain residual relations between territorial units and power.
But how are we to interpret these dynamics? Extant paradigms maintain that U.S. state behavior in the global
arena indicates defense of "U.S. interests" whereas I suggest what is being defended are the interests of an emergent
global capitalist historic bloc at whose core is a TCC. This class has relied to advance its interests on existing national
state apparatuses and also increasingly on the emergent apparatus of a TNS, and in doing so it has found the U.S.
national state to be the most powerful of these apparatuses (this is the particular form through which the old
geo-politics of the nation-state are winding down). Here the focus is at all times on social groups and classes. I may be
wrong in my assertion that transnational capital has become the hegemonic fraction of capital worldwide and that it is
represented by a transnationalized bourgeoisie - i.e., maybe capitalist fractions that remain nationally-based are still
dominant - but this does not allow us to revert the focus from social groups and classes to reified states-as-actors, or to
put forward a reified interpretation of world political dynamics as struggles among nation-states/core powers to
9
preserve their (nation-state) dominance in the international system. But am I wrong? Let us turn to some empirical
evidence.
II: Some Empirical Indicators of
Transnational Capitalist Class Formation
The argument developed in part one hinges on the matter of economic globalization and the transnational
integration of national capitalist groups. I now turn to an empirical examination of this matter.
The rise of transnational capital draws into the vortex of the global economy national capitalist classes.
Globalization creates new forms of transnational class alliances across borders and new forms of class cleavages
globally and within countries, regions, cities, and local communities, in ways quite distinct from the old national class
structures and international class conflicts and alliances. Internationalization occurs when national capitals expand
their reach beyond their own national borders. Transnationalization is when national capitals fuse with other
internationalizing national capitals in a process of cross-border interpenetration that disembedds them from their
nations and locates them in new supranational space opening up under the global economy. At what point national
classes become transformed into transnational classes is open to debate - despite the fact that we can conceptually
distinguish such a class - and depends upon the devices we construct to define the material bases of transnational
classes. The diverse mechanisms that promote the transnationalization of capitalist groups include the spread of
TNCs, the expansion of foreign direct investment (FDI), cross-national mergers and acquisitions, strategic alliances,
and interlocking directorates that are transnational. As well are the phenomena of worldwide subcontracting and
outsourcing, the extension of free enterprise zones, and a number of other new economic forms associated with the
global economy. Such new forms of organizing globalized production are important because, as noted previously,
they contribute to the development of worldwide networks that link local capitalists to one another, generate an
identity of objective interests and of subjective outlook among these capitalists around a process of global (as opposed
to local) accumulation. They therefore function as integrative mechanisms in the formation of the TCC and act to shift
the locus of class formation from national to emergent transnational space.
Foreign Direct Investment
Perhaps the single most comprehensive indicator of the growth of transnational production is the global stock
of FDI (see graph 1), which was valued at nearly $1.3 trillion in 2000. FDI “continues to expand rapidly, enlarging
the role of international production in the world economy,” according to UNCTAD’s World Investment Report for
2001. FDI grew by 18 percent in 2000, “faster than other economic aggregates like world production, capital
formation and trade, reaching a record $1.3 billion” (UNCTAD, 2001:1).
10
With the exception of 1998-99, exports of goods and services have grown faster than the growth of world GDP
between 1986-2000, as table 2 shows, which by itself is a significant indicator of transnationalization. However, what
is most notable about the data presented in table 1 is just how much greater the growth of FDI inflows and outflows has
been than that of world production. This growth was nearly double that of fixed capital formation between 1986-1990,
then about triple that figure in the first half of the 1990s, and then in the ball park of 100 times greater in the second
half of that decade.
Table 2: Annual Growth Rates for World FDI, Foreign Trade, and GDP (percentage)
----------------------------------------------------------------------------------------------------------------------------- --------------1986-1990
1991-1995
1996-1999
1998
1999
2000
----------------------------------------------------------------------------------------------------------------------------- --------------FDI Inflows
23.0
20.8
40.8
44.9
55.2
18.2
FDI Outflows
26.2
16.3
37.0
52.8
41.3
14.3
World Exports
15.4
8.6
1.9
-1.5
3.9
N/A
World Production
11.7
6.3
0.7
-0.9
3.4
6.1
Fixed Capital Formation
12.2
6.6
0.6
-0.6
4.3
N/A
-------------------------------------------------------------------------------------------------------- -----------------------------------Source: UNCTAD, 2001:2.
Moreover, the flow of FDI in recent years has played a critical role in integrating different regions into the
global economy. FDI is still concentrated among the developed-country triad of North America, Europe, and Japan,
which absorbed approximately $1 trillion in FDI in 2000 (UNCTAD, 2001:3), compared to a little over $270 billion in
FDI flows going to developing countries that year. But even at that, reported the UNCTAD, a “comparison of the
world maps of inward and outward FDI in 2000 and 1985 reveals that FDI reaches many more countries in substantial
manner than in the past.” The UNCTAD continues:
More than 50 countries (24 of which are developing countries) have an inward stock of more than $10 billion,
compared with only 17 countries 15 years ago (7 of them developing countries). The picture for outward FDI
is similar: the number of countries with stocks exceeding $10 billion rose from 10 to 33 (now including 12
developing countries, compared to 8 in 1985) over the same period. In terms of flows, the number of
countries receiving an annual average of more than $1 billion rose from 17 (6 of which were developing
countries) in the mid-1980s to 51 (23 of which were developing countries) at the end of the 1990s. In the case
of outflows, 33 countries (11 developing countries) invested more than $1 billion at the end of the 1990s,
compared to 13 countries (only one developing country) in the mid-1980s (UNCTAD, 2001:4).
11
The Spread of TNCs
A key indicator of the rise of the TCC and its agents is the spread of TNCs. TNCs embody the
transnationalized circuits of capital and organize those circuits, and here are defined as firms with headquarters in
more than three countries, which makes them distinct from multinational corporations. The number of TNCs
increased from 7,000 in 1970, to 37,000 in 1993, to 53,000 in 1998, and then to more than 60,000 by 2000, according
to the UNCTAD (1999:3; 2001:1) [see also, Castells, 2000:251-252]. These TNCs accounted for some two-thirds of
world trade. Similarly, the share of world GDP controlled by TNCs grew from 17 percent in the mid-1960s to 24
percent in 1984 and almost 33 percent in 1995 (UNCTAD, 1996:3). As of 2000, some 800,000 affiliates of TNCs
produced goods and services estimated at $7 trillion (UNCTAD, 2001:1). The global value of TNC sales went from
$2.5 trillion in 1982 to $5.4 trillion in 1990 and $15.7 trillion in 2000 (UNCTAD, 2001:2). It was estimated that in
2000 the corporate foreign affiliates held assets valued a $21.1 trillion (ibid.).
Since the mid-1990s the UNCTAD has been constructing an index of “transnationality" which ranked the
world's leading TNCs according to three ratios: the percentage of their foreign assets to total assets, foreign sales to
total sales, and foreign employment to total employment. A company moves up the index from zero to 100 as it
becomes more transnational, that is, more spread around the globe (e.g., a transnationality score of 50 would mean that
one-half of the company’s assets, sales and employment roster are foreign). According to the index, the largest 25
TNCs scored a median transnationality of 59.9. The Swiss electronic corporation ABB scored a 94.1, General Electric
a 36.7, Ford Motor Company a 36.1, IBM a 53.7, Nestle a 95.2, Seimens a 56.8, Mannesmann a 48.9, BMW a 60.9,
and so on (UNCTAD, 2001:6). “The degree of transnationalization increased for both the top 50 TNCs and the top 25:
from 37 percent in 1998 to 39 percent in 1999 in the case of the former; and from 26 percent to 32 percent in the case
of the latter,” reported the UNCTAD. “The transnationality of the top 100 TNCs remained fairly stable at a high level
(53 percent)” [UNCTAD, 2001:5).
While TNCs employed directly 70 million workers worldwide, these workers produced one-third of the
world’s total private output (Castells, 2000:251). Local firms become incorporated into the transnational corporate
structure through an array of mechanisms involved in FDI and TNC activity, ranging from mergers, contracting and
outsourcing arrangements, local marketing deals, take-overs, and so on. Although the point cannot be pursued here, it
is worth noting that the spread of TNC networks transnational working class formation just as it foments TCC
formation. “The labor force located in different countries depends on the division of labor between distinct functions
and strategies of these multinational networks,” observes Castells. “Thus, most of the labor force does not circulate in
the network, but becomes dependent on the function, evolution, and behavior of other segments in the network. This
results in a process of hierarchical, segmented interdependence of the labor force, under the impulse of relentless
movements by firms in the circuits of their global networks” (2000:251-252).
Importantly, there has been a high degree of cross-investment between TNCs in the major capitalist countries
(Kan and Johansson, 2000:17) Dicken, 1998:45-46), which indicates a high degree of interpenetration of "national"
capitals in the process of TNC expansion. The developing world absorbed four-fifths of pre-WWII FDI through the
old colonial "spheres of influence" structure of world order. But most FDI flows from the 1960s into the 1980s took
place between core regions. Dicken notes that "The world's population of TNCs is not only growing very rapidly but
also there has been a marked increase in the geographical diversity of its origins in ways which cut across the old
international division of labor...virtually all developed economies have substantial outward and inward direct
investment...What these patterns imply, in fact, is a high degree of cross-investment between the major developed
market economies" (1998:45-46). This is important because the first pattern of international corporate expansion
reflects a situation in which core national bourgeoisies were in rivalry, whereas the latter indicates a key mechanism in
the transnationalization of these of these "national" bourgeoisies.
Cross-Border Mergers and Acquisitions
Until the 1980s, most merger and acquisition activity occurred within national boundaries, but since then
cross-border acquisitions and mergers have become one of the most important ways for firms to expand their activities
transnationally (Kang and Johansson, 2000; Dicken, 1998:222) and are an essential mechanism in the
12
transnationalization process. Mergers and Acquisitions, hereafter referred to as M&As, is one mechanism for the
concentration of capital, and occurs when an enterprise acquires control over the whole or a part of the business of
another enterprise. Cross-border, in the case of mergers, means the integration of capitals from at least two distinct
countries. If an acquisition, it means that a given firm incorporates a foreign company with its employees, managers,
and "national" interests. The concentration of capital is not new. It is part of the very process of capitalist
development and was an integral aspect in an earlier period of national class formation and the rise of national
bourgeoisies. The transnational concentration of capital through global M&As has a similar importance for
transnational class formation and the rise of a transnational bourgeoisie. Some of cross-border acquisitions involves
the merger of TNCs, but much of it entails the acquisition of national companies by TNCs, which draws local social
forces into the transnationalization process.
The value of cross-border M&As grew an astounding six-fold between 1991 and 1998, from $85 billion to
$558 billion, according to a report by the Organization for Economic Cooperation and Development (OECD). It then
surpassed $1 trillion in 1999 (Thompson Financial Securities Data, 2000:1; Renner, 2000:1), as shown in graph 2.
Such M&As “must now be included among the fundamental mechanisms of industrial globalization,” stated the
OECD report, and includes “an explosion in, and geographic widening of, the number and value of mega-mergers”
among well-known TNCs (Kang and Johansson, 2000:6). Cross-border mergers and acquisitions have involved not
just the most globalized sectors of the world economy, such as telecommunications, finances, and autos, but also
mega-retailers, companies trading in primary commodities, chemicals, steel, pharmaceuticals, and numerous services,
from legal firms to insurance and management and utilities. And, although concentrated in Europe and North
America, the merger wave also included a growing participation of capitals originating in Asia, Latin America, and
elsewhere. Developing countries accounted for 27 percent of all M&A activity between 1991-98, and firms from
developing countries themselves accounted for nearly 11 percent of outward cross-border M&As during the same
period (Kang and Johansson, 2000:11-12). Moreover, global M&As were also growing in size, with the average size
increasing almost five-fold during the 1991-98 period, from $21 million to $104 million (Kang and Johansson,
2000:7).
graph 2 here.
Transnational M&As are playing a dominant role in increasing flows of FDI. The value of cross-border
M&As in relation to world FDI rose from 53.7 percent in 1991 to 85.3 percent in 1997 (Kang and Johansson,
2000:14). This means that just over four-fifths of FDI was in M&As in 1997, with the remainder going to new or start
up investments. Of a total of $520 billion that flowed into the United States between 1991-98 as FDI, a full 85.7
percent was as M&A investments (Kang and Johansson, 2000:17). Far from “foreign” capital establishing itself in
U.S. territory alongside “U.S.” capital, the inflow of FDI was thoroughly globalizing economic activity inside the
United States and in the process transnationalizing the class structure. Some of the largest cross-national mergers and
acquisition in the late 1990s were: British Telecom and MCI (telecommunications); Daimler Benz and Chrysler
(autos); Dupont and Herberts (chemicals and paints); Alcatel and Motorola (phone and telecommunications
equipment), and Alcatel's subsequent acquisition of DSC Communications; the acquisition of MCA by Seagram
(entertainment); the purchase of Marion Merrel Dow by Hoeschst (pharmaceuticals); the acquisition by the
U.K.-based Zeneca Group Plc of the Swedish-based Asta (pharmaceuticals) [UNCTAD, 2000:12; Kang and
Johansson, 2000:8].
As this process deepens transnational capital gains increasing control over every sector of the global
economy and transnational class formation accelerates. “Through international mergers, the nationality of firms is
becoming ever more vague,” concludes the OECD report on transnational M&As. “Multinational firms are more than
every footloose, with terms such as home and host countries becoming meaningless. The firms themselves have
facilities and employees in diverse countries, serve many national markets and purchase supplies and components
worldwide. They are showing less loyalty to particular countries and increasing resentment towards country-level
regulations and restrictions which may hinder their activities” (Kang and Johansson, 2000:37-38).
Transnationally-Interlocked TNC Directorates
Increasingly, the leading strata among the TCC has come to occupy a variety of interlocking positions within
13
the global corporate structure. This process parallels a similar one in an earlier period, when the rise of national
bourgeoisies involved national-level interlocking directorates that congealed the objective links and the subjective
identity of national bourgeoisies, as documented in a wealth of literature from political sociology on the subject of
national "power elites", and ruling blocs, the "inner circle", and so on (see, inter alia, Domhoff, 1967; Useem, 1984;
Dye, 1986; Mills, 1959).
The Conference Board, a leading peak association of firms from around the world that brings together senior
executives from the major TNCs, conduced a study in 1999 to determine the extent to which member firms were
developing transnationally interlocking boards of directors. The study included affiliated TNCs from 16 countries,
among them Argentina, Australia, Brazil, Canada, Chile, France, Germany, Japan, Korea, Mexico, Singapore, South
Africa, Spain, Sweden, the United Kingdom, and the United States. According to the findings, between 1995 and
1998 alone, the percentage of companies with non-national directors increased from 39 to 60 percent, and companies
with three or more non-national directors (given a median board size of 10 directors) increased from 11 to 23 percent
(Alexander and Esser, 1999:5). While 58 percent of firms from OECD countries had non-national directors, a full 67
percent of firms from non-OECD countries did, including 60 percent of North American firms, 44 percent of
Asia/Pacific firms, 43 percent of Latin American firms, 71 percent of European firms, and 100 percent of African
firms (South Africa was the only African country included in the study).
“The survey found that the majority of non-national directors have been recruited in the last three years,”
stated the report. “Given that the number of board members in general has been decreasing, this suggests that
non-national directors are gaining an influential role in boardrooms around the world” (6). It went on to observe that
a “global board of directors is necessary to deal with the risks and rewards of globalization” (9) and - echoing a similar
conclusion as the OECD study on cross-border M&As discussed above - that the new globalized economic and
regulatory infrastructures “have provided additional legal security for international commerce, transforming
companies into transnational entities without distinct national identification. Increasingly, staff and management are
becoming as global as their business base - the are global citizens with local roots around the world” (10).
It should be recalled - and this is the case for transnational M&A activity as well - that the typical TNC which
transnationalizes its board of directors is as well interlocked with other TNCs from home or second countries, and as
well may engage in diverse strategic alliances and informal collaborative and subcontracting arrangements with third
firms (see below). In addition, each board member of a TNC typically sits on other corporate boards as well. Thus the
growing participation of non-national board members is only one small portion of the story of transnational
interlocking of corporate boards. The German-based Deutsche Telekom telecommunications firm is an example.
Formerly a public company, it was privatized in 1996 and the German state still owns 50 percent of its assets. Listed
in North American, European, and Asian stock markets, and with investors from around the world, the board includes
a U.S., Austrian, Belgian, and French member, the company formed an alliance in 1998 with France Telecom, through
which both companies acquired a 10 percent share in Spring, a U.S.-headquartered network (Alexander and Esser,
1999:17). What appears therefore on the surface as a “German” company has a structure of ownership and
management that inextricably entangles it in global corporate networks.
While The Conference Board report found that, of companies with non-national directors, manufacturing is
the most globalized sector, with 82 percent of companies reporting non-national directors, followed by non-financial
services, with 61 percent (Alexander and Esser, 1999:5), a growing number of studies on transnationally-interlocking
directorates found the phenomenon to be spreading across all sectors (see, e.g., Mahoney, 1999). Fennema, for
instance, identified for the early 1980s an international network of interlocking directorates among the leading
transnational banking and industrial firms (1982). More recently, Berger and his colleagues found a steep rise in
financial service firm M&As in the late 1990s, in step with the globalization of production facilities, commerce and
other services, and in response, in part, to the demand for global financial services that this globalization generates
(Berger, et. al., 2000).
Strategic Alliances
Yet another mechanism resulting in the interpenetration of capitals across countries is the extraordinary
growth of transnational strategic alliances among TNCs. Strategic alliances encompass a wide range of links between
firms short of outright mergers or acquisitions, including joint ventures, minority equity investments, equity swaps,
joint research and development, production and marketing, technology sharing, long-term sourcing agreements, and
shared distribution/services. According to another OECD report, such transnational strategic alliances among firms
from two or more countries increased more than five-fold between 1989-99, and “these tend to be far larger than
14
earlier partnerships in terms of scale and value” (Kang and Sakai, 2000:5). While the majority of these strategic
alliances were among firms from OECD countries, there was in the 1990s a surge of alliance activities with
non-OECD countries from Asia, including China, and from Latin America. Alliances were formed across a broad
range of sectors, from chemicals and pharmaceuticals, computers and electronic equipment, and financial and
business services. About one-half of these alliances were joint ventures, which means that two or more firms invest
their capital in some shared operation, thereby developing a measure of organic integration beyond arms-length
cooperation.
As with M&As, strategic alliances are driven by heightened global competition, which increases the need for
firms to achieve global economies of scale, strategic flexibility, marketing advantage, and so on. And also as with
M&As, the pattern of strategic alliances worldwide in recent decades has not been one in which “national” blocs of
capitals ally amongst themselves against other national blocs of capitals but in which oligopolist conglomerates
bringing together capitalist groups from numerous countries and regions compete with each other in the global
economy. “Strategic alliances are now considered one of the most powerful mechanisms for combining competition
and cooperation and for industrial restructuring on a global basis,” observes the OECD report. “Cross-border alliance
formation has followed increasing competitive pressures from more integrated global markets” (Kang and Sakai,
2000:6). Most telling is the fact that, while strategic alliances, both domestic and transnational, increased more than
six-fold during the 1989-1999 period, over two-thirds of all new alliances were across countries rather than within
countries. “In each year of the 1990s, international partnerships linking firms from different national economies are
always the majority of these alliances,” noted the report. “International strategic alliances accounted for 66 percent of
all alliances (numbering 62,000) between 1990-1999. On average, there are about two international strategic alliances
for every domestic partnership, illustrating that globalization is a primary motivation for alliances” (Ibid:7).
Typical examples of transnational strategic alliances among major TNCs include the Du Pont/Sony
partnership to develop optical memory storage products; the Motorola/Toshiba union to develop manufacturing
processes for microprocessors; the General/Motors/Hitachi partnership to develop electronic components for
automobiles; and the Fujitsu/Siemens joint venture for the manufacture and sale of computer products. The
automobile industry provides a text case of the trend towards transnational alliances across industries. In recent years
there has been about 100 new alliances in the industry per year. About 80 percent of these in place in 1999 were
cross-border, and the majority of those were for joint manufacturing, indicating the high degree of globalization of
this sector (Kang and Sakai, 2000:24). Ford has held minority equity (25 percent) in Mazda since 1979 and increased
this shareholding to 33.4 percent in 1996. General Motors and Isuzu formed an alliance in 1971 and the General
Motors Suzuki alliance began in 1981. Renault and Nissan have an alliance which included plans for Renault to utilize
a Nissan factory in Mexico to produce its own model. Mazda started in 2000 assembly of a Ford model in its factories.
Daimler-Chrysler and Mitsubishi are similarly allied. And so on. In 1999, Russian firms formed eight alliances with
Western partners, including with General Motors, Ford, Renault and Volvo. Chinese firms by 1999 had formed at
least 13 international alliances. Daimler-Chrysler, Ford, Honda and Volkswagen formed an alliance in 1999 to jointly
develop fuel cells (Ibid:24-27).
New Global Economic Arrangements
The phenomenal spread since the late 1970s of diverse new economic arrangements, such as outsourcing,
subcontracting, transnational intercorporate alliances, licensing agreements, local representation, and so on, parallels
the proliferation of FDI, M&As, transnationally interlocking-directorates, and strategic alliances, and underscores
another major aspect of the transnational linkage of capitals. These arrangements result in vast transnational
production chains and complex webs of vertical and horizontal integration across the globe. According to Dicken:
TNCs are also locked into external networks of relationships with a myriad of other firms: transnational and
domestic, large and small, public and private. It is through such interconnections, for example, that a very
small firm in one country may be directly linked into a global production network, whereas most small firms
serve only a very restricted geographic area. Such inter-relationships between firms of different sizes and
types increasingly span national boundaries to create a set of geographically nested relationships from local
to global scales....There is, in fact, a bewildering variety of interorganizational collaborative relationships.
These are frequently multilateral rather than bilateral, polygamous rather than monogamous (Dicken,
1998:223)
15
What this underscores is the increasing interpenetration on multiple levels of capitals in all parts of the
world, organized around transnational capital and the giant TNCs. It is increasingly difficult to separate local circuits
of production and distribution from the globalized circuits that dictate the terms and patterns of accumulation
worldwide, even when surface appearance gives the (misleading) impression that local capitals retain their autonomy.
Local and national capitals must "de-localize" and link to hegemonic transnational capital if they are to survive. As
the global circuit of capital subsumes through numerous mechanisms and arrangements these local circuits, local
capitalists who manage these circuits become swept up into the process of transnational class formation.
The diverse new economic arrangements in the global economy have been associated with the transition,
discussed in chapter one, from the Fordist regime of accumulation to new post-Fordist flexible regimes. As many have
noted, the structural properties of the emerging flexible regime are global in character, in that accumulation is
embedded in global markets, involves global enterprise organization and sets of global capital-labor relations
(especially deregulated and casualized labor pools worldwide) [see, inter-alia, Hoogvelt, 1997:109-113]. Competition
dictates that firms must establish global as opposed to national or regional markets. As Hoogvelt shows, competition
in the global economy increasingly compels them to operate full production systems in all three regions of the global
triad (North America, Europe, and East Asia). The leading TNCs are becoming "multi-regional" companies,
operating multiple and integrated production as well as financial and commercial operations throughout the triad
(ibid). These multi-regional companies are emerging through the strategy of alliances, mergers, and other forms of
integrative coordination among TNCs, as a general transitionary form in the process of the transnational integration of
capital.
TCC Formation in the Third World
It is in the Third World where transnational class formation is weakest and where "national" bourgeoisies
may still control states and organize influential political projects. However, even here transnational class formation is
well underway. "The world's population of TNCs is not only growing very rapidly but also there has been a marked
increase in the geographical diversity of its origins in ways which cut across the old international division of labor,"
notes Dicken. "The geographic structure of FDI has become far more complex in recent years, a further indication of
increased interconnectedness within the global economy" (1998:45). Foreign direct investment has increased sharply
to developing countries. The average annual flows increased more than three-fold between the early 1980s and the
earlier 1990s for the world as a whole, while for developing countries it increased fivefold (ILO, 1996-97:2). National
capitals in the South have themselves increasingly transnationalized by their own FDI and by integrating into global
circuits of accumulation. In 1960, only one percent of FDI came from developing countries. By 1985, this figure had
increased to around 3 percent, and by 1995 it stood at about 8 percent (Dicken, 1998:44). Southern-based TNCs had
$51 billion invested abroad by that year (Burbach and Robinson, 1999). By 1997 the figure stood at $61 billion (Kang
and Johansson, 2000:19).
The top 50 TNCs of the Third World augmented their foreign assets by 280 percent between 1993 and 1995,
while those of the top 100 corporations based in the core countries increased by only 30 percent (ILO, 1996:xvii).
“For the first time, three companies from developing countries (Hutchison Whampoa, Petroleos de Venezuela and
Cemex) are among the world’s 100 largest TNCs,” observed the UNCTAD in its 2001 report. “The
transnationalization of companies is a phenomenon increasingly observed not only in developed countries but also in
the developing world. The top 50 TNCs from developing countries - the largest of which are comparable in size to the
smallest of the top 100 worldwide - originate in some 13 newly industrializing economies of Asia and Latin America
as well as in South Africa” (UNCTAD, 2001:5). The largest 10 TNCs from developing countries scored a 30.7 on the
UNCTAD transnationality index (UNCTAD, 2001:7).
The bourgeoisie of countries such as Singapore, South Korea, Taiwan, Brazil, Chile, and Mexico are
becoming important "national" contingents of the transnational capitalist class. South Korean and Taiwanese-based
companies not only moved into cheaper wage zones in Southeast Asia and Central America but also began "South to
North" relocations. In the first six years of the 1990s, 14 Korean companies invested a total of $2.6 billion in the
United Kingdom alone (Hildyard, et. al, 1996:35). In the mid-1990s Mexico had 24 billionaires who became
world-class investors and major shareholders in leading TNCs, among them Del Monte Corporation, Apple,
Microsoft, and investing abroad in media, cement and glass production, and so on (Burbach and Robinson, 1999).
These transnationalized fractions of local dominant groups in the South are New Right "technocratic" elites in Latin
America, Africa and Asia (sometimes termed a "modernizing bourgeoisie") who have overseen sweeping processes of
16
social and economic restructuring and integration into the global economy and society.
Meanwhile, each shock in the series of crises that wracked the global economy in the late 20th and early 21st
centuries, from Mexico to Asia, from Russia to Brazil, tended to result in an accelerated transnational integration of
affected countries of local capitalists into the ranks of the TCC. These crises brought into sharper relief the process of
fractionation among local elites. For instance, the Asian crisis of 1997/98 led to a restructuring of many of the region's
major corporations and economies that facilitated and advanced the consolidation of transnational capital. The
"chaebol," the powerful financial-industrial groups of South Korea, for instance, were compelled to sell off national
assets to TNCs and at the same time they forged partnerships with corporations from other areas of the world (Business
Week, 1998a). As Lawrence Summers stated in 1998 when he was undersecretary of the U.S. Treasury Department,
"In some ways the IMF has done more in these past months to liberalize these [Asian] economies and open up their
markets to U.S. goods and services than has been achieved in rounds of negotiations in the region" (cited in Bello,
1998/99:138).
III: Transnational Hegemony
A New Global-Capitalist Historic Bloc?
The revival of the ideas of Antonio Gramsci in recent years has brought some of the central notions of
Gramscian thought into the mainstream of social theory and practice. Such Gramscian concepts of hegemony and
historical blocs have opened up new directions in research in such areas as political sociology, international relations,
cultural studies, history and development, and are of tremendous utility, in my view, in comprehending emergent
transnational phenomena, as attested to by the rich and varied research that has come of the Italian school. Crucial
here is Gramsci's concept of hegemony as consensual domination, his focus on civil society as the locus of hegemony,
and on the "extended state" comprised of political society plus civil society, as the axis of social structure.
In modern conditions, Gramsci argues that a class maintains its dominance not simply through a special
organization of force, but because it is able to go beyond its narrow, corporative interests, exert a moral and
intellectual leadership, and make compromises, within certain limits, with a variety of allies who are unified in a social
bloc of forces which Gramsci calls the historic bloc. The bloc represents the basis of consent for a certain social order,
in which the hegemony of a dominant class is created and re-created in a web of institutions, social relations, and ideas.
I draw on Gramsci’s concept of historic blocs, which are hegemonic projects, in arguing that hegemony in 21 st century
global society will not be exercised by a nation-state - which in any event is shorthand for saying it will not be
exercised by dominant groups from any particular nation-state or region - but by an emergent global capitalist historic
bloc.
This emergent hegemonic bloc consists of various economic and political forces led by the TCC whose
politics and policies are conditioned by the new global structure of accumulation and production. It is the logic of
global, rather than national, accumulation that guides the political and economic behavior of this bloc, henceforth
referred to as the globalist bloc. At the center of the globalist bloc is the TCC, comprised of the owners and managers
of the transnational corporations and other capitalists around the world who manage transnational capital. The bloc
also includes the cadre, bureaucratic managers and technicians who administer the agencies of the TNS, such as the
IMF, the World Bank, and the WTO, the states of the North and the South, and other transnational forums. And
membership in the hegemonic bloc also includes the politicians and charismatic figures, along with select organic
intellectuals, who provide ideological legitimacy and technical solutions. Below this transnational elite are a small
and shrinking layer of middle classes who exercise very little real power but who - pacified with mass consumption form a fragile buffer between the transnational elite and the world's poor majority. It is in this way that we can speak
of a historic bloc in the Gramscian sense as a ruling coalition and a social base in which one group exercises leadership
(the TCC) and imposes its project through the consent of those drawn into the bloc. Those from this poor majority
who are not drawn into the hegemonic project, either through material mechanisms or ideologically, are contained or
repressed. The world politics of this new global ruling class is not driven, as they were for national ruling classes, by
the flux of shifting rivalries and alliances played out through the interstate system.
The Battle for Hegemony and the Ongoing Crisis of Capitalism
17
The globalist bloc has run up against one crisis after another in its effort to secure its leadership and
reproducing hegemony. There are twin dimensions to the globalist bloc’s ongoing crises of authority.
The first dimension is contradictions internal to global capitalism. This includes the objective inability, at
least so far, of the global capitalist system to attenuate polarization tendencies inherent in capitalism and which have
been aggravated by the modes of accumulation that adhere to the global economy as it is currently structured.
Hegemony requires a material base and it is not clear if this base is broad enough to sustain a transnational hegemonic
project. Another contradiction internal to the globalist bloc is the inability to date of the TCC to put aside its
immediate corporatist interests (maximizing profits) in the interests of the stability of the system as a whole.
The second dimension is subjective and has to do with the challenge to global capitalist hegemony posed by
diverse oppositional and subaltern forces, not all of them progressive.
Regarding the first of these dimensions, a necessary condition for the attainment of hegemony by a class or
class fraction is the supersession of narrow economic interests by a more universal social vision or ideology, and the
concrete coordination of the interests of other groups with those of the leading class or fraction in the process of
securing their participation in this social vision. Here, the narrow interests of transnational finance capital (currency
speculators, bankers, portfolio investors, etc.) seemed to hold out the prospects of frustrating a hegemonic project. As
well, a unified social vision has been difficult to secure because distinct elites seek different and even conflicting
solutions to the problems of global capitalism based in the historic experiences of their regional systems. There has
been considerable strategic debate and tactical differences within the ranks of the TCC, and in particular, rising splits
and factional disputes.
But even if the TCC did rise above its narrow corporate interests and factional disputes it is not clear how it
could resolve, or even attenuate, the problem of global social polarization. The fin de siecle world economic downturn
is, in my view, symptomatic of crisis within the system that is more than merely cyclical. No doubt world capitalism
has tremendous reserves upon which to draw. But we may well be witness to the opening salvos of a deeper
restructuring crisis. It would be foolish to predict with any conviction the outcome of this crisis, which may be a
reassertion of productive over financial capital in the global economy and a global redistributive project just as it may
be a global fascism founded on military spending and wars to contain the downtrodden and the irrepented. The post
WWII expansion - the so-called “golden age” of capitalism - entered into a crisis in the 1970s, precipitating a period of
restructuring and transformation. Capital responded by “going global.” Free trade policies, integration processes, and
neo-liberal reform opened up the world in new ways to transnational capital. Income shifted from working and poor
people to capital and to new high-consumption middle, professional and bureaucratic strata that provided a global
market segment fueling growth in new areas. All this reverted - temporarily - the crisis of stagnation and declining
profits of the 1970s. But the underlying laws of capital remain in place and assert themselves eve as novel patterns of
accumulation unfold and generate a kaleidoscope of social and political forms. The breakdown of nation-state based
redistributional projects may have restored growth and profitability but it also aggravated the tendencies inherent in
capitalism towards overaccumulation by further polarizing income and heightening inequalities worldwide. It was
overcapacity that lay beneath the Asian crisis of 1997-98 and it is overaccumulation that underlay the world recession
of 2001-02.
Under globalization, national states have progressively lost the ability to capture and redirect surpluses
through interventionist mechanisms that were viable in the nation-state phase of capitalism. In redefining the phase of
distribution in the accumulation of capital in relation to nation-states, globalization undermines the distinct
redistributive and other mechanisms that acted in earlier epochs to offset the inherent tendency within capitalism
towards polarization. The result has been a rapid process of global social polarization and a crisis of social
reproduction. In most countries, the average number of people who have been integrated into the global marketplace
and are becoming "global consumers" has increased rapidly in recent decades. However, it is also true that the
absolute number of the impoverished - of the destitute and near destitute - have been increasing rapidly and the gap
between the rich and the poor in global society has been widening since the 1970s (table 3). Broad swaths of humanity
have experienced absolute downward mobility. While global per capita income tripled over the period 1960-1994,
there were over a hundred countries in the 1990s with per capita incomes lower than in the 1980s, or in some cases,
lower than in the 1970s and 1960s (UNDP, as cited in Stalker, 2000:139).
Table 3: Shares of World Income 1965-1990
-------------------------------------------------------------------------------------------------------------------------Population
Percent of Total World Income
18
1965
1970
1980
1990
Poorest 20%
2.3
2.2
1.7
1.4
Second 20%
2.9
2.8
2.2
1.8
Third 20%
4.2
3.9
3.5
2.1
Fourth 20%
21.2
21.3
18.3
11.3
Richest 20%
69.5
70.0
75.4
83.4
--------------------------------------------------------------------------------------------------------------------------Source: Korzeniewicz and Moran, 1997.
Global society is increasing characterized by a three-tiered social structure. The first tier is made up of some
30-40 percent of the population in what have traditionally been the core countries and less in peripheral countries,
those who hold "tenured" employment in the global economy and are able to maintain, and even expand, their
consumption. The second tier, some 30 percent in the core and 20-30 percent in the periphery, form a growing army of
"casualized" workers who face chronic insecurity in the conditions of their employment and the absence of any
collective insurance against risk previously secured by the welfare state. The third tier, some 30 percent of the
population in the traditional core capitalist countries, and some 50 percent or more in peripheral countries, represents
those structurally excluded from productive activity and completely unprotected with the dismantling of welfare and
developmentalist states, the "superfluous" population of global capitalism (see, inter-alia, Hutton, 1995; Hoogvelt,
1997). But no emergent ruling class can construct an historic bloc without developing diverse mechanisms of
legitimation and securing a social base. Such a bloc involves a combination of the consensual integration through
material reward for some, and the coercive exclusion of others that the system is unwilling or unable to coopt. Within
this three-tiered social structure, the transnational elite is seeking to secure a firm social base in the first tier, to draw in
the second tier, and to contain the third tier.
Such global inequalities lead to a new "politics of exclusion" in which the problem of social control becomes
paramount. There is a shift from the social welfare state to the social control (police) state, replete with the dramatic
expansion of public and private security forces, the mass incarceration of the excluded population (disproportionately
minorities), new forms of social apartheid maintained through complex social control technologies, repressive
anti-immigration legislation, and so on. Global polarization brings with it increasing residential segregation of the
rich, protected by armies of private security guards and electronic surveillance, from the cities of Latin America to
those of the United States, Europe, Asia and elsewhere. These "gated communities," variously referred to as
"enclaves," "citadels" and "fortresses," are "part of the trend toward exercising physical and social means of territorial
control," the natural products of global inequalities, have been spreading to all parts of the world (on gated
communities worldwide, see inter alia, Blakely and Snyder, 1997; Bartu, 1999; King, 1999; Davis, 1999).
But those who dwell within the gated community must venture into the “dark” side of the world they have
created and must invite in the outcast to cook, clean, and so on. A global gated community is no security for global
elites and privileged strata. The September 2001 attack on the World Trade Center in New York suggests the rise of
new modalities of conflict between the weak and the powerful in global society. In the past, the most exploited,
oppressed, and dispossessed sectors of humanity, the colonized, were forced by material and spatial reality to limit
their resistance to the direct sites of colonial control; they were limited to facing colonizers and imperialists on their
own lands. Globalization places resistance in a whole new “ball park,” metaphorically speaking. For the first time,
acts of rebellion can be waged around the world irregardless of space. The spatial separation of the oppressors from
the oppressed as epitomized in the old colonial system is vanishing. Global capitalism is too porous for spatial
containment. Just as progressive resistance to the depredations of global capitalism - Seattle, Porto Alegre, etc. - is
less space-bound and more transnational than in the past, so too is reactionary resistance. The Mau Mau of Kenya and
the National Liberation Front of Algeria could not wage rebellion directly in Great Britain and France against the
economic and military symbols of British and French colonialism. I use these two examples - legitimate national
liberation movements - because both made recourse to the weapons of terror in their resistance strategies.
A Global Counter-Hegemonic Movement?
Let us then turn, by way of conclusion, to the prospects of counter-hegemonic resistance to the globalist bloc.
Global capitalism has generated crises of social reproduction (survival) for countless millions of people. Expanding
poverty, inequality, marginality and deprivation are the dark underside of the global capitalist cornucopia so
19
celebrated by the transnational elite. Mass social dislocation, evaporating social protection measures, declining real
opportunities, and spiraling poverty and inequality, sparked widespread yet often spontaneous and unorganized
resistance around the world in the 1980s and 1990s, as epitomized in “IMF food riots.” But everywhere there were
also organized resistance movements, ranging from the Zapatistas in Mexico to the Assembly of the Poor in Thailand.
Challenges to the hegemony of the globalist bloc come from several quarters:
1)
The anti-globalist far right. This far-right has been able to capitalize in numerous countries on the
insecurities of working and middle classes in the face of rapidly changing circumstances to mobilize a
reactionary bloc. The far-right draws in particular on the insecurities of those sectors formerly privileged
within national social structures of accumulation, such as white workers, family farm sectors, middle and
professional strata facing deskilling and downward mobility, and national fractions of capital threatened by
globalization. Pat Buchanan in the United States, Haider in Austria, the One Nation party in Australia, Le
Pen’s National Front in France, racist skinheads in Germany, and so on, epitomize the rise of this reactionary
bloc. It is certainly possible that some reactionary forces become drawn into the globalist bloc and may even
act in some instances as shock troops for the transnational elite agenda.
1)
Progressive elites and nationalist groups in Third World countries, such as Hugo Chavez in Venezuela.
These elites was well draw on insecurities of vulnerable sectors but articulate a progressive vision as distinct
from the far right. In this category also are elites from certain countries and regions that have not been fully
drawn into the global economy, or are being integrated into it in a way which is structurally distinct from that
of national contingents of the TCC in most countries and regions. Here China and Russia, and perhaps India,
stand out. Political projects that emerge could well be one of cooptation or accommodation with the globalist
bloc or heightened conflict with it.
1)
Popular sectors worldwide, as expressed in the rise of a global justice movement (what is usually referred to,
not entirely accurately, as the anti-globalization movement). In the closing years of the 20 th century popular
resistance movements and forces began to coalesce around an anti-neo-liberal agenda for social justice,
epitomized in the Seattle protest of late 1999 and the first Porto Alegre encounter of early 2001.
A counter hegemonic impulse could come from any of these sectors, or from a combination of these forces, in ways
which cannot be anticipated. Clearly the counter hegemonic discourse of the global justice movement was in
ascendance in the late 20th century.
By the turn of the century the transnational elite had been placed on the defensive. For the first time perhaps
since 1968 a crisis of the system’s legitimacy had begun to develop and the prospects for a real counter-hegemony
could be imagined. Fundamental change in a social order becomes possible when an organic crisis occurs. An organic
crisis is one in which the system faces a structural (objective) crisis and also a crisis of legitimacy or hegemony
(subjective). Seen from the vantage point of the popular classes, the tragedy of the attack on the World Trade Center
was that it allowed the U.S. state and the transnational elite to reverse - at least momentarily - this process of
delegitimation that is the necessary condition for a counter-hegemonic project. Led by the U.S. state, the transnational
elite regained the offensive. The “war on terrorism” provided a cover for the transnational elite to extend its drive to
consolidate and defend the project of capitalist globalization with a new and terrifying coercive dimension which may
well end up with the institution of a global police state.
Given the prospects of a global police state, why are the abstract theoretical debates addressed in the present
essay important? At times of great social transformation established social theories are called into question and new
ones proliferate to give explanation. And at times of great social crisis such as the one that we apparently face in early
21st century global society sound theoretical understandings are crucial if we hope to intervene effectively in the
resolution of such crises. If we want to intervene effectively in global society neither practice nor theory is sufficient
on its own. Praxis is practice informed by theory. An accurate reading of the nature of global capitalism is essential
for the struggle to resist its depredations.
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