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False Dawn: The Delusions of Global Capitalism

by John Gray [Professor of European Thought, London School of Economics]

The New Press, 1998

The world is undergoing a Second Great Transformation. As free markets spread around the globe, economic activity loses its social bearings. Using its unique power, America promotes the project of laissez-faire in an effort to turn the global economy into a universal civilization. This produces everywhere the unsettling effects Americans experience at home. The unfettered pursuit of profit endangers societies by undermining social cohesion. But few countries follow America's example, its power to support its vision is waning, and global capitalism will prove inherently unstable in any case. Hence this transformation, costly though it is, will be brief, itself transformed by forces of resistance. So goes Gray's Polanyish tale.

America is his global psycho, suffering most intensely the delusions of global capitalism. Unaware that "[w]e have entered an era of Occidental twilight" (p. 193), America still pursues the impossible Enlightenment dream of creating one world civilization. It has felt the full fury of free markets, which have destroyed its families, increased inequality, filled its prisons, made its middle class anxious, and indeed ruptured liberal capitalism itself. Yet it keeps wanting more of the same and tries to impose its delusions on others. Caught in a mood of national hubris (p. 222), obsessed by "messianic fancies," it cannot face the reality of being surpassed by others who possess superior virtues. Its central project is bound to fail.

Gray's book is a litany of woe. Wherever he looks, he sees markets threatening societies. In Britain, the New Right exacerbated inequality without improving the economy. In Europe, globalization spells the demise of social democracy. In Russia, shock therapy led to the anarchy of bandit capitalism. In Asia, a "gathering depression" shows the instability of capitalism. And so on. Are there any points of light? China's leaders, who have a sense of history, try to build a distinctive form of capitalism. Japan may be able to get out of the capitalist rat race by pursuing a no-growth strategy. America's inability to impose free markets worldwide creates an opportunity to build a "regime of global governance . . . . in which world markets are managed so as to promote the cohesion of societies and the integrity of states. Only a framework of global regulation . . . . can enable the creativity of the world economy to be harnessed in the service of human needs" (p. 199). Like any prophet, Gray is sparing with details.

Will Dr. Gray's diagnosis cure the world of its delusions? Not likely. For one thing, most of his arguments are a muddle. Gray denounces global capitalism as a deliberate political project engineered by the nefarious U.S., yet he also describes it as the outcome of uncontrolled technological change. He thinks Britain's New Right failed miserably in the 1980s and 90s (the state got bigger, reforms were only partial, and so on), yet blames it for all manner of social ills. He laments New Zealand's neoliberal turn, but gives no clue about the better course it should have chosen. Most social problems, if we take his word for it, have only one cause: the spread of unfettered markets. Correlation is causation, post hoc ergo propter hoc. At one point, Gray recommends that Japan adopt a no-growth strategy; later, he realizes that no growth in Japan may spell trouble for Asia. Precisely what is wrong with conventional economic arguments we never learn, since Gray never engages them. His authorities on matters economic are the likes of George Soros and William Greider. Most puzzling is the way he presents his main concern. Free markets are dangerous; they threaten to shape the world in America's image. But he also reiterates that market are never really free, that they can never operate by themselves anyway, that globalization threatens the project of creating a single market, that diversity persists, that U.S.-style capitalism digs its own grave, and so on. If the dragon is a paper tiger, what's the worry?

Gray does no better with facts. He declares social democracy dead at a time when the left is in power across Europe. He believes labor force participation is uniquely low in the United States, which would come as a surprise to, say, America's working women. He describes the American middle class as assetless when its wealth is steadily increasing; he thinks anxiety pervades the majority of Americans, at a time when, say, consumer confidence is at record levels. He does not bother to support even relatively simple empirical claims (CNN purveys the "American world view" that "American values are universal and American institutions the solution for the world's . . . . problems"--p. 60). If a statement implies that there's something wrong with America, so it seems, it must be true.

These are tough times to be a European intellectual of anti-American inclinations. To see the bastion of market ideology hubristically basking in unprecedented wealth and power must drive any critical intellectual to distraction. Yet Gray bravely trots out nearly every cliché from the repertoire of knee-jerk anti-Americanism. In some ways, he remains enthralled by the evil he opposes. While chiding America for its Enlightenment-style ambition, Gray is no less confident in his ability to say what's good for the world. His jeremiad reads like an old-fashioned, monocausal grand narrative. Equally old-fashioned is his faith in his own predictions. He thinks it is a "safe bet" that some years hence not a single person will want to be associated with once having defended free-market globalization (how much does he want to wager?). He is sure "we can know in advance" the outcome of the global experiment in social engineering; he looks forward to the time when global free market consumes itself. Such tenuous hope expressed as solid certainty marks the conventional delusion of anticapitalists: surely, undoubtedly, due to inherent contradictions, this system will fail.

Gray's work sounds many themes currently popular in critiques of globalization. He adds a peculiarly conservative twist. Not surprisingly, Patrick Buchanan, the American conservative, has praised the book. Yet for progressive critics it is a long way down from Marx to Gray. They will be put off by the musty odor of old-Tory nostalgia. They may be less enamored than Gray of the good old days when "social markets" met "human" needs, people stayed close to where they were born, good things were not creatively destroyed, and cohesion was preserved even as most people had nasty, brutish and short lives. Though Gray advocates a strong role for states in preserving "social cohesion," his priority is not redistribution in the interest of equality. What he really wants is for things not to change so much. Gray is no friend of democracy either: "With luck," China may come to enjoy a Singapore-style government that rejects the "universal authority of liberal democracy" (p. 4).

Gray's arguments are so poorly developed, some of his claims so patently false, his ideology so reactionary, his rhetoric so overheated, that one begins to suspect this book is a sly attempt to make neoliberalism look good. English don peddles false doom to herald new dawn--the handmaidens of the ruling class are subtle indeed. Taken at face value, Gray's purple prophecies only serve as a muddle-headed expression of widely shared discontent. They are a useful indicator of the state of global discourse--nothing more.

FL/00

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Copyright 2000 - Frank Lechner