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Globalization: A Fetish of (Post) Modernity

Throughout the enormous literature on ‘globalization’ there is a common theme that worldwide social, political, and economic transformations have contributed to reconfigurations and re-articulations of the world-system. The contention is that due to to recent technological revolutions in communication, media, and transportation, a ‘new international division of labor' has ensued a unique 'global' sociological imagination; the national 'state' as a principle of structuration is unsatisfactory for the social scientist - the 'space of flows' has replaced the 'space of places' (Ruggie, 1993). Dynamic connective configurations beget 'transnational' corporations omnipresent vertically disintegrated and horizontally integrated in an irresistible Gramscian transnational historic bloc of 'neoliberalism'.

This approach downplays the primary force driving globalization, which is financialization - the international transformation of future streams of (profit, dividend, or interest) income into tradeable financial assets.  The systemic power and importance of financial markets, financial motives, financial institutions, and financial élites manifestly delink the national state from perceived social, political, and economic processes. Given US hegemony in the world-system (cf. Fields & Vernengo, 2012),  however, the US Federal Reserve (along with the US Treasury and Wall Street) sets the conditions for financialization, since it acts as a safety valve for mass amounts of international liquidity necessary the transnationalisation of corporate power (Arrighi, 1999: 223).

US monetary policy is the international transmission mechanism for global economic activity. As such, to suggest that methodological nationalism is not befitting, because it blinds social science to the multi-dimensional process of change that has irreversibly transformed the very nature of the social world and the place of states within it, is a ‘just so’ story of prejudgement that overlooks how the world-system operates within a particular institutional setting.

As Bertell Ollman (see here) notes:

"There is also a related tendency to overestimate the speed of change, along with a corresponding tendency to underestimate all that is holding it back. Thus, relatively minor cracks on the surface of capitalist reality are too easily mistaken for gaping chasms on the verge of becoming earthquakes. [...] non-dialectical thinking leads people to be surprised whenever a major change occurs, because they aren't looking for it and don't expect it, because it isn't an internal part of how they conceive of the world at this moment [...]" 


  1. Nice you mention Giovanni Arrighi one the real great .He is worth reading,to seldom mention today sadly.His last book Adam Smith in Beijing was a real good one.Here is video with Giovanni Arrighi, David Harvey, and Joel Andreas,in discussion about Arrighi's ''Adam Smith in Beijin in 2008

    1. While I do like Arrighi's Long Twentieth Century, I cannot say the same about his last work. He presumes that China is going to be the next hegemon and the US is on decline. Very much the opposite of what we have suggested in the paper David quotes.

  2. Can you link it to your article?

  3. The article that David referred to is here

    Also the topic was dealt here in other posts like or

  4. Hi Matias, big fan of the blog. Arrighi was often misread as stating that China would become the next hegemon; and he spent his last years trying to point out that this is what he was not saying. Rather, he was arguing that the relative decline of US power in the world economy may lead to a situation where no state or group of states can reorder capitalism on a global scale as it currently functions, and this would have profound effects on the world economy and the hierarchy of power and wealth. See the interview I did with him in 2008 on this subject:


  5. Hi Kevan, thanks for referencing the JWSR piece...surely clears some issues that I had with Arrighi's last work. However, as Matias and I argue, see, US power in the world-system has not, and will not (for a considerable amount of time) decline(d), leading to a situation global multipolarity, which is why I expressed in my post that methodological nationalism, especially with respect to hegemony, is still pertinent.

    1. David, thanks - I read that piece when it came out. Certainly it makes the best case on the role of currency in hegemonic power politics I'm aware of recently. And of course I have no difference here on the globalization fairies and their arguments about the end of the North/South divide or the decline of the state.

      I can only tell you what Arrighi would say (and had been saying) when the dollar issue was brought up, as it was continually to him since he had been writing the Long Twentieth Century.

      He sometimes pointed out how the UK pound stayed as an international reserve currency in the british commonwealth into the late 1960s, but this could not be claimed as a sign that UK power was what it used to be.

      The main finding in LTC, as well as Chaos and Governance (w/ Silver), is that financialization gives a short/medium term boost to the hegemonic power, but in the long term it undermines the sources of that power. The financial fix of the late 1970s could only have worked with the post-bretton woods US fiat currency system in place, but one wonders after 2008 if this system is now burdened with priming global liquidity in such as way that other parts of the world benefit more than the US is in the not so distant future. In that case, the currency is hegemonic but the actual underlying power is not. And that is what Giovanni would say today if he was around and kicking, I'd wager. Your piece gives the social/political context for how currencies function as hegemonic ordering mechanisms, but it begs the question what is the (shifting?) historical relationship between money and power. Giovanni provided his answer to that question in LTC, which did not stress the role of currency as the ultimate foundation of hegemonic power. Instead he would say that we are in an era of chaos, of multipolarity if you will, and that is the historical norm. Actual periods of hegemonic rule are not only rare, but through the past several centuries they have been shorter and shorter in duration. The institutions of the previous hegemonic era do not disappear, hardly; rather it is within the interstices and innovations that emerge from this previous era that we can at least make an educated guess about what could be coming next (or what set of options are more likely/less likely). That's what he was interested in China, not so much because he was a Sinophile (he remained an Africanist) but because he was interested in what it told us about what was happening to capitalism.

  6. Thanks for the insight. As much as I agree with Arrighi's analysis, I have to disagree with the notion that phase be of hegemony is strictly a manifesting of decline. I would argue that specifically with respect to the US financialization is a sign of heightened dominance in the world system, especially when viewed from Geoffrey Ingham's sociological understanding if money as an expression of social and poltical power (an author who Arrighi quotes frequently, but mostly his early writings on industrial organization).

  7. In regards to articulation a changing historical relationship between money and power, I would follow Eichengreem, see here: with a caveat that the analysis is better understood with the theory of Cartalism (for more explication on this see:,5,7;journal,36,42;linkingpublicationresults,1:110909,1 (subscription required)

  8. Sorry for the misspellings and grammatical issues, typing on the IPad is a b$&

  9. Also not sure if the rest of the world is benefitting. Europe surely isn't : see


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