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Thursday, October 17, 2002 - 10:14 AM Permanent link for Against the Dead Hand
Against the Dead Hand

As airplane reading on a biz trip to/from Europe, I read Against the Dead Hand:  The Uncertain Struggle for Global Capitalism by Brink Lindsey

Overall, I found the book very insightful and felt that Lindsey did a good job of pushing forward an alternative theory towards understanding the fits and convulsions that so many are having in the midst of "globalization."

Lindsey first argues that the world is actually current mired in a second bout of globalization.   The initial round of Globalization was actually introduced in the late 1800s / early 1900s via the Industrial Revolution.   While not quoting from his book, this article written by Lindsey provides a very good summary of the ideas he expands on:

The Industrial Revolution was the economic expression of a much more general transformation, a radical new form of social order whose defining feature was the embrace of open-ended discovery: open-endedness in the pursuit of knowledge (provisional and refutable hypotheses supplanting revelation and authority), open-endedness in economic life (innovation and free-floating market transactions in place of tradition and the "just price"), open-endedness in politics (power emerging from the people rather than the divine right of kings and hereditary aristocracies), and open-endedness in life paths (following your dreams instead of knowing your place). In short, industrialization both advanced and reflected a larger dynamic of liberalization — a dramatic and qualitative shift in the dimensions of social freedom.

During this period of history, "Globalization" reached truly impressive levels [Lindsey 63]:

In 1913, merchandise trade as a percentage of gross output totaled an estimated 11.9 percent for industrialized countries.   That level of export performance was not matched again in those nations until sometime in the 1970s...  For example, capital flows out of Great Britain rose as high as 9 percent of the gross domestic product in that earlier time;  by contrast, the seemingly staggering current account surpluses of Japan and Germany during the 1980s never surpassed 5 percent of GDP.

Thus, the Industrial Revolution was generally founded in a classically liberal environment and led to significant world trade.   However, this first bout of globalization seeded several memes which led to what Lindsey terms the "Industrial Counterrevolution"

  • The emergence of large, integrated industrial firms led to a belief in the superiority of a top-down planned system.   The evidence was seemingly unequivocal, for example, that a 100,000 man steel operation led by technocrats had greater output efficiency vs. distributed arts and crafts industries.   Nations which had very direct experience with large militaries saw obvious parallels with the steel factory
  • The social displacement as the countryside peasant left a socially integrated life and became the comparatively anonymous city / factory worker.  There was a desire to create replacement systems in the political sphere to re-enfranchise the worker

Between these memes, Lindsey argues, a centralizing movement began to grow with the promise of "Back to the Future."   Backwards towards a time of recognizable social enfranchisement and to the future towards the greater material well being promised by top down economic management.   In full bloom, this movement was, of course, outright Marxism.

It's important to point out that while many contemporaries think of Socialism/Marxism as primarily a tool for political enfranchisement, the Marxists were actually arguing that their control of the economy would lead to greater material well-being for all -- above and beyond the effects of simple wealth redistribution;  that there would actually be faster GNP expansion as a result of technocratic rule. 

Here, Lindsey points out, we start to see several examples of the mutual flirtation between industrial techno barons and Marxist political technocrats [p 100]: was assumed that economic advancement turns on the faithful application of an existing body of technical knowledge.   All that is needed to usher in a golden age of growth and prosperity is to grant the elite that possesses the necessary knowledge the plenary power to apply it--or, in other words to force the rest of us to do as we're told.

Even in partial fruition, however, Lindsey argues that we still see many of the vestiges of these ideas in place today even within the most liberal governments such as the US (for example Keynesian infatuation in the 60s/70s;  various regulatory bodies today). 

World wide, the Counterrevolution meme was far deeper and more damaging.   Lindsey's example of particular manifestations of the Industrial Counterrevolution meme include:

  • [SE Asia, Latin America] -- Strict currency management and Pegging
  • [Japan, SE Asia] -- Industrial policy
  • [Latin America, India] -- Import Substitution
  • [Europe, India] -- Industry / Labor Governance
  • [Almost everywhere in varying degrees] -- Capital market intervention

Lindsey goes into excellent empirical an anecdotal detail into many of these examples.  The net result of these policies was pronounced retrenchment from global trade over most of the 20th century.

I particularly enjoyed his discussion of how government centralizing policies, in the face of a "naturally" entrepreneurial populace results in sub-efficient scale manufacturing in India.

Now, Lindsey has laid the stage for his central argument -- that the throes as we enter our second bout with globalization stem from weaning ourselves off Counterrevolution memes [p 191]:

The current situation then is at best a transitional phase -- a twilight era juxtaposed between the statist past and a liberal future.  In this in-between time, elements of pas and future jostle uneasily alongside each other.   And, thus far, coexistence has proved anything but peaceful

...At present and for the forseeable future, the influence of market forces on world economic affairs is deeply compromised by overweening interventionism on the one hand and underdeveloped institutions on the other difference with the critics of globalization, though, is that they blame the liberalization while I blame its partial nature

He goes through several of the oft-cited examples of Globalization gone awry and explains how they stem from the interplay of the liquid global market with illiquid statist policies:

  • Asian Financial Crisis
  • Global Unemployment
  • IMF and World Bank failures
  • "Race to the Bottom" unemployment caused by MNC shifts

Lindsey points out that he isn't advocating a neo-Anarchic embrace of non-government.  To the contrary, he points out that many often unseen government actions are necessary to provide the groundwork for a successful, globally integrated, classically liberal society.  Lindsey cites many of these functions as outlined in Hernando De Soto's Mystery of Capital.

Perhaps the most interesting element for me, Lindsey begins to articulate a theory towards the motivations of the now infamous anti-globalization protestors of Seattle, New York, etc.   He advances an idea which does credibly explain their proclivity towards a very wide, disparate series of causes du jour.   Lindsey finds explanatory revelation by looking at the infatuation European intellectuals had with War on the eve of WWII [Lindsey, 246]:

The historian A.J.P. Taylor pointed the way towards an answer when he wrote "Men's minds seem to have been on edge in the last two or three years before the war ... as though they had become unconscionably weary of peace and security..."  According to Taylor, "Men wanted violence for its own sake;  they welcomed war as relief from materialism"

...And today, we see that very same craving, that "quest for community" in the rantings of anti-globalization protestors... Though they hold themselves out as defenders of the world's poor against economic injustice, it is striking how much of their ire is directed, not towards poverty, but against affluence

...Yes, they rail against markets for failing to deliver the goods, but their bitterest complaint is that markets deliver nothing but the goods.   They reject contemporary affluence as shallow and banal, and year for authenticity in a world of artifice.   In the future, they hope, lies some greater political redemption, but in the present they find solace in the simple joys of marching and chanting and renouncing.

And so, while many anti-globalization protestors see themselves as the inheritors of the Rousseau vs. Smith/Locke intellectual debate; Lindsey actually finds them -- convincingly -- as the latest incarnations of the Marx voice.   This is NOT in the end-game manner of a socialist paradise but rather in the motivation Lindsey quotes earlier in the book [22]

"The greatest appeal of the Totalitarian party, Marxist or other," wrote Nisbet, "lies in its capacity to provide a sense of moral coherence and communal membership to those who have become, to one degree or another, victims of the sense of exclusion from the ordinary channels of belonging in society."

And in this sense, we also see what Lindsey believes is the fundamentally self-limiting nature of the anti-globalization protestor.  While Marx was making his argument that centralized management would lead to greater material prosperity, our current protestors are actually protesting the tools of material prosperity itself. 

While the argument has some resonance in a literary/philosophic sense, it is far from being a "mass market" meme (pun very deliberately intended).

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