As long-anticipated as such seminal work turns out to be, Guoguang Wu’s Globalization against Democracy – A Political Economy of Capitalism after Its Global Triumph offers a groundbreaking account of the third-wave globalization and its global implications from a multidisciplinary perspective. By providing “a coherent, macro theory of global capitalism,” this book constituted a powerful counterargument against the prevailing, though demonstrably increasingly flawed neoliberal interpretation about economic globalization and the subsequent spillover into political spheres – a perceived inevitable trajectory that is bound for political convergence of all nation-states toward global democracy. Countering Fukuyama’s “end of history” teleology, Wu argued that the global triumph of capitalism in the wake of the Global 1989 had in actuality unleashed tremendous forces against democracy nationally and internationally with the emergence of “the economic state” around the world that unexceptionally seeks self-legitimation through a mechanism of “state-market nexus,” in the sense that the two powerful institutions of markets and state power were no longer mutually exclusive, but rather reinforced each other within and beyond national boundaries to serve the purpose of promoting economic growth at home and enhancing national competitiveness abroad.
The state-market nexus is a new phenomenon and the most defining feature of global capitalism in the post-Cold War era. The erstwhile capitalism-democracy matrimony characteristic of the First World nation-states only matches a “mild globalization” (Stiglitz, 2003) externally, which stands for a grand compromise between Keynesianism and free trade called “embedded liberalism” (Ruggie 1982) during most of the post-World War II years until the late 1970s. With virtually all nations becoming an “economic state” after the end of the Cold War in 1989, Wu argued that global capitalism quickly reached its limits in geographical/spatial scope, leading naturally to “institutional reconfiguration,” namely, greater resource concentration through “gaining a greater share” within a carved-up world market, and resultant “global collusion” between the global oligarchs, which nonetheless undermined the “spirit of free competition.” Some Left-wing statist-oriented economists might argue otherwise. Peter Nolan’s empirical research, for instance, suggests that the trend for global oligopoly resulting from the Third Industrial (Information) Revolution throughout the 1990s has fostered even fiercer competition rather than “global collusion” between the global oligarchs. Interestingly, the intensification of international competition that involved substantial role of the state, as observed by these market skeptics, paradoxically vindicated the book’s argument about the institutional entrenchment of “the economic state,” hence “state-sponsored market” across the globe.
As the central contention of the book, Wu’s enunciation of the rise of the “economic state” is piercingly plausible as evidenced by the changing global political economy in the past two decades. The significance of this finding lies in the institutional decoupling of market capitalism and liberal democracy in favor of strong-state illiberal regimes in the Golden Age of hyperglobalization after the Cold War. The main driving force behind the decoupling seems to be the political. In the first instance, the demise and discredit of Communism in its entirety in Central-Eastern Europe, the once-deemed feasible alternative to capitalist modernity, gave a strong impetus to the transformation of the “mild globalization” during the Cold War into an unfettered globalization after the Cold War, the direct product of which was the “acceptance of market institutions by virtually all states.” The neoliberalism’s paradigmatic mystification of so-called “maximizing shareholders’ value” even at the expense of social equity became the new bible, which as a consequence contributed to worldwide corporatization of the state after the Cold War. But that is only part of the story. Arguably, in a still-Westphalian world, the lack of a supposedly representative world government in the international “jungle” in reining in the unfettered global capitalism further highlighted the critical role of the state that is indispensable to nation-states’ pursuit of power and wealth in an intuitively realist way. Against such a backdrop, as Wu convincingly argued, the expansion of global capitalism removed the “political shell” both globally and nationally, justifying the “capitalism-democracy disjuncture” for underdeveloped non-democracies on the one hand; and fostering democratic states going “authoritarian” in terms of “de-regulating the market” at home and intervening powerfully to “strengthen national competitiveness on the global market,” on the other. Ostensibly, that particular role of the state was differently anticipated as far as the national interests of the Global North and the Global South were concerned. The hypocrisy and neoliberalism’s instrumentalization of the Global North, the USA in particular, was no more pronounced than in their inducing the Global South’s deep integration into the global economy on more unfavorable commercial terms – or in Ha-Joon Chang’s words, “deeply anti-developmental” terms; and such utterly neoliberal external integration approach was ironically offset by the former’s de facto acceptance of the latter’s hardening authoritarianism as a quid pro quo. As such, for illiberal regimes in the age of liberal globalization, being a “strong state” that is more repressive and predatory seems to have formed a necessary if not a sufficient condition for economic success along neoliberal lines – A great irony in the aftermath of the “global triumph” of capitalism.
Through theorizing the “economic state,” and whereby to deconstruct the globalization myth, the author has grasped the real essence of the post-Cold War global capitalism. And within this ad hoc theoretical framework, the author further enriched the “dependency reversed” thesis by re-examining the development paradigms, either the old structuralist dependency theory or the prevailing neoliberalism. As shrewdly noted by the author, the centrality of capital on which an “economic state” depends so much highlights the relative institutional advantage of illiberal regimes, particularly authoritarian strong states, such as Russia and China, in promoting economic development. Coincidentally, “The Rise of the Rest vs. the Decline of the West” thesis also points to such an inverse economic interdependence in the new globalized international division of labor. But has the globalized “state-market nexus” eventually turned against the Global North economically in addition to eroding the political foundation of liberal democracy given the enlarging income disparity and the decline of the middle class? Development studies literature shows that except the Global North, few countries of the Global South were beneficiaries of globalization. This has evoked a series of further questions: Was the rule-based liberal order dominated by the West really accommodating to global development in the post-Cold War era when “development by invitation” of a handful of “lucky few” chosen allies of the USA had become history under the old Bretton Woods System? What on earth caused the rise of the Rest, embodied most typically nonetheless by the BRICS? As “economic growth” was mistakenly, and even intentionally, confused with “economic development” within the prevailing neoliberal paradigm, did the Rest really have “caught up and got even” in technological and/or other human development index (HDI) terms? Was its rise characterized by an intensive (innovation) driven growth or an extensive (input) driven growth? Was its wealth accumulation accomplished through total factor productivity (TFP)-led profitable growth or at the expense of environment and resources? Last but not least, was the recent totalitarian turn of the Chinese state the evidence of solid economic success, hence vitality of the country’s “developing authoritarianism,” or the natural result of a dependent development that has reached its limits?
The questions raised above, however, do not constitute a refutation of the book’s general theoretical framework. Instead, they serve to enrich debates surrounding the relationship between capitalism, democracy, and development to greater academic sophistication. And answers to these questions would further strengthen the author’s extraordinary insights into the identical challenges facing the entire human race: “distribution and sustainability – not growth and wealth.” In this regard, as the author rightly put it, “neither neoliberalism nor state capitalism is the remedy for the other.” Consequently, for the underdeveloped Global South, the anti-developmental rules of the game as established and overseen by the Global North do not lend justification to repressive regimes, however impressive the latter’s development model of “wealth without freedom” appears to be during a certain period of time, not to mention that their way of pursuing wealth stands little chance of success in achieving genuine modernity in any meaningful way. To make the world a better place to live for the whole of humanity, therefore, rethinking globalization is essential to bringing the “political shell” back to capitalism in industrial democracies and to making development goals more achievable for the developing world. This entails painful paradigmatic and institutional innovations for the entire world in terms of building “democratic peace” and “The Wealth of World” (not narrowly “Nations”) in a creative way. But first and foremost, as the author cogently recommended in the Conclusion, concerted efforts should be made by the Global North and the Global South to seek relegitimation through “stationary growth” and “moderate growth,” respectively.
Comprehensive, illuminating and insightful as this volume has unfolded, Guoguang Wu’s contribution is, from all perspectives, invaluable both academically and practically.