Conceptual Foundations of International Politics: Commentary and Critique of the Columbia University lecture series at Lecture Ten: Jose Antonio Ocampo(A Critical View of Globalisation)

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This is the final lecture in this series.

The lecturer is clearly a quantitatively based data driven lecture which is, however, trying to make ideological and ethical criticisms of existing global structures and processes.

Ocampo begins by noting that he is going to adopt a critical perspective of global structures and processes from the point of view of the opportunities and difficulties experienced by the developing world. There are, he claims two views of global economic development. Firstly there is the claim of David Ricardo who views the International Economy as an entity in which all participants are equal partners. Secondly there is the alternative view which Ocampo appears to argue for, in which the International Economy is a system in which unequal participants relate to each other on unequal terms.

Ocampo then produces an overhead highlighting three critical issues:

“* Uneven liberalisation of markets
* Uneven distribution of benefits
* Global institutions lag behind Global Markets”

He then supplements the information on the overhead relating to the uneven liberalisation of the markets by pointing out firstly that industrialised countries have an enormous advantage in the system because they have developed institutions which can mange what he calls “the down sides of markets”. He notes that there are three critical issues relating to the institutions of the International Economic system:

“* An incomplete and biased agenda
* An incomplete set of institutions
* Asymmetry between the agenda and the instruments for actions
* Unsettled relation between globalisation and the nation state
* Developing countries have limited voice and limited participation”

Ocampo having argued for the first two points earlier in relation to the third point mentioned above points out that the UN millennium goals clearly had an agenda but the instruments of action to achieve these goals were lacking. In relation to the fourth point concerning globalisation and the nation state he provides a detailed overhead of what he regards as the three different stages if globalisation: The first stage between 1870 and 1913, the second between 1945 and 1973, and the third between 1974 and the present time(2007). The missing years are the war years in which he argued all global activity ceased. He notes that in the current period for example there are high levels of capital mobility and a growing volume of labour mobility and trade and that there is growing interdependence of national institutions. The major problem he notes is that the development of international institutions is lagging behind what the International economy requires. As a consequence he disagrees with the previous speaker and argues that there is continuing divergence between the economic growth of industrialised and developing countries especially in those developing countries outside of Asia which is part of a trend of longer term increase in International Inequality. He does, however note a statistic that might be a counterargument against his position:

“Between 2004 and 2007 there was for the first time a faster rate of growth in the developing countries than in the developed countries. Is this a trend?We do not yet know, for example if the economies of China and India can function as locomotives and pull the growth of the world economy forward. According to a recent UN University study, 88% of the world lives in countries where inequality is increasing”

Ocampo points out in relation to this research that the amount of social spending on health, education and social protection is highly correlated with the level of income of the country concerned.

Ocampo then shows an overhead relating to three inequalities. In the quote below is both the information contained on the overhead plus the verbal commentary on it:

“Inequalities of Global order: Three asymmetries.
1. financial and macroeconomic: The available finance in the International Economic system flows from the industrialised countries and this is what constitutes the international currencies we trade in, the dollar, pound,yen etc. This in its turn produces market segmentation , i.e. a market of good and bad borrowers in which the developing countries are regarded as risky borrowers who as a consequence have to pay more for the money they borrow. This cost prevents them from being able to manage the cyclical downturns in the market(flow of capital followed by dry weather). This is a characteristic feature of the third wave of globalisation and is a cause of the divergence of economies
2.Technological and Productive inequalities: Only a few countries generate new technologies and they are very protective of their discoveries. This prevents a smooth process of distribution: diffusion is a very slow process
3. Limited labour mobility. There is discrimination in the system against unskilled labour mobility and an asymmetrical flow of labour toward the industrialised countries

Ocampo elaborates upon point one by pointing out that there are no instruments to counter financial swings in the market insofar as the non OECD countries are concerned and while the expectation is that water and funds should trickle downward, it looks very much as if the developing countries are funding the industrialised countries.

This in turn connects to point two above. With these funds the industrialised countries can make their agricultural and manufactured products more competitive which results in faster growth

In relation to point three Ocampo claims that migration, with the exception of Western Europe, is in fact more limited in the third stage of globalisation than it was in the first stage.

Ocampo then shows an overhead entitled “Three Basic Objectives of International Cooperation”:

“* Interdependence, guaranteeing an adequate supply of global public goods
* Equality of Nations which would help overcome the asymmetries in the world
economic system
* Equality of citizens which would be based on a world system of Human Rights,
i.e. global citizenship

In relation to point one and point two on the overhead the lecturer points out that nations are a part of a hierarchical system which by its nature generates unequal opportunities for some participants.

In relation to point three the lecturer asks the question: How do we build an international system of rights and he answers at the institutional level rather than the individual citizen or nation level.He posts an overhead entitled “Improved Governance Structures”:

“* Should be based on a network of world, regional and national institutions forming a dense network of systems
* Whilst retaining a “policy-space” for individual nations where diversity is respected
* Developing countries must participate on equal terms”

The level of the individual is perhaps incorporated in the political and educational institutions that he participates in but what is missing in the above account is the language of individual action in the description of institutions which have been formed by human beings for human beings. There is an underlying complaint in the lecture which refers back to the level of unjust action which would have produced a more nuanced discussion.

There is paradoxically a theoretical bias in this discussion, as there is in economics generally: a bias which works on the assumption that there is a constant or uniform state of the system which all actions of the system attempt to create or maintain. The interesting question to ask is what is the best concept which we should use to describe this system. Is it the concept of the system of the healthy body of Aristotle in which there is an energy regulation system striving to maintain a uniform/constant state of the body giving it a healthy glow and allowing it to lead a healthy life. Or is the system best described in psychological or subject like terms in which the actions will be striving not just to achieve something uniform and constant but rather something better, something desired, something excellent(areté), something which will be good and just for the generations of the future.

The theoretical view of economics quite often uses a hybrid concept of body and mind and mixes these fundamental categories in a theory of the so called enlightened self interested subject whose choices would be enlightened from all points of view.

In the arena of philosophical practical reasoning the key concept is that of action which has two Aristotelian aspects , that of deliberation before the process of acting, and the process of “production of the action” after the deliberation process is over. These two aspects cover two regions of reasoning or “science” for Aristotle , neither of which are what he would term “theoretical reasoning” which is defined as the transmission of knowledge via a series of premises. The two forms of reasoning involved in the two aspects of action which Aristotle discusses involve a transmission of human desire to a final premise which describes an action which ought to be immediately taken, or an object of pleasure. Ocampo is arguing for such a premise relating to an action which presupposes a transmission of desire after a process of deliberation by a network of international institutions(in the name of equality) without the requisite premises, i.e. without the presence of premises of the requisite logical form. In other words Ocampo is attempting to argue for an ought value laden premise conclusion without any major premise containing an ought value-laden statement, thus committing the naturalistic fallacy. Also amongst the is-premises there ought to be recognition of the appropriate categories under which to categorise his theoretical notion of a system. The prevailing category is that of equality: but equality in a physical system where each part or participant in the system should receive equal benefits and opportunities. If , for example, the category assumed is that of a physical system like a living body, Aristotle of course believes that equal treatment of participants should prevail unless there are significant differences between the recipients of benefits. If trying to maintain a uniform or constant state of ones body required distribution of oxygen,nutrition and antibodies to ones organs the function of the organ will determine how much oxygen nutrition and immunising antibodies should be received. It would for example be absurd to claim that every organ in the body should benefit equally: the benefit any particular organ receives will probably be in proportion to the work it performs in the body. The principle of distribution then is related to the contribution to the whole which the particular organ or participant in the system makes, i.e the equality principle does not apply. So this cannot be the type of system that Ocampo has in mind. What he appears to have in mind sometimes is that the larger industrialised countries are the beneficiaries of the work and financing of the non industrialised countries. But is this true? The evidence for this thesis is not presented. There are implied complaints about industrialised countries preventing the free flow of technology but there is no recognition of the work and effort which resulted in the technological innovation. In what Ocampo refers to as “this hierarchical system” this work is, according to Aristotle the significant difference which justifies the fact that a larger proportion of benefits should accrue to the workers behind this work. It might be in fact that in an Aristotelian economic system, work is the value which is being measured. Hannah Arendt argued for a threefold distinction to be observed in this arena of discussion: labour, work and action. Ocampo talks much about labour but not of work or of action,areas of activity which are more complex than labour. If it is these two latter categories, work and action, that are the real generators of value in our society then it is not helpful to construct economic systems based on the value of equality which at best measure the value of labour. The issue of the rights of non industrialised nations presuppose the responsibility of the industrialised nations to assist in the process of the development of non industrialised countries. This issue or rights can only be discussed in relation to the ethical ideas of justice which relate to action. Ocampa wishes for a system of institutions to work and to act in the interests of the non industrialised actors but there is no coherent model for the justification of this work and action coming from the field of economic theory. There is more than an echo here of an old complaint from Socrates who pointed out that doing what is just and understanding what is just requires knowledge.