New Statesman
London, England
September 24, 2001

The era of globalisation is over
by John Gray

Communism failed, but market liberalism then tried to impose its
own utopia. The atrocities should mark the end of that crusade

The dozen years between the fall of the Wall and the assault on the Twin Towers will be remembered as an era of delusion. The west greeted the collapse of communism - though it was itself a western utopian ideology - as the triumph of western values. The end of the most catastrophic utopian experiment in history was welcomed as a historic opportunity to launch yet another vast utopian project- a global free market. The world was to be made over in an image of western modernity - an image deformed by a market ideology that was as far removed from any human reality as Marxism had been. Now, after the attacks on New York and Washington, the conventional view of globalisation as an irresistible historical trend has been shattered. We are back on the classical terrain of history, where war is waged not over ideologies, but over religion, ethnicity, territory and the control of natural resources.

We are in for a long period - not months but years, perhaps decades - of acutely dangerous conflict, from which it will be impossible, as well as wholly wrong, for Britain to stand aside. It will be a type of conflict with which many regions of the world are all too familiar, but which overturns many of our preconceptions about war and peace. Its protagonists are not the agents of states, but organisations whose relationships with governments are oblique, ambiguous and sometimes indecipherable. The men who struck the Pentagon and the World Trade Center, using penknives and passenger jets as weapons, were soldiers in a new kind of war.

A monopoly of organised violence is one of the defining powers of the modern state, achieved slowly and with difficulty. Now war, like so much else in the age of globalisation, has slipped out from the control of governments - and it has done so, moreover, with astonishing speed over the past decade. The world is littered with collapsed states. In much of Africa, in Afghanistan, in the Balkans and a good deal of Russia, there is nothing that resembles a modern state. In these zones of anarchy, wars are fought by irregular armies commanded by political and religious organisations, often clan-based, and prone to savage internecine conflicts. No power is strong enough to enforce peace.

The results expose the weaknesses and contradictions of the global free market constructed after the cold war. Rich societies cannot be insulated from the collapsed states and new forms of war. Asylum-seekers and economic refugees press on the borders of every advanced country. But while trade and capital move freely across the globe, the movement of labour is strictly limited - a very different state of affairs from the late 19th century, a period of comparable globalisation in which barriers to immigration hardly existed. This is a contradiction rarely noted by tub-thumpers for the global market, but it will become more acute as travel is monitored and controlled ever more stringently by governments.

With the assaults on New York and Washington, the anarchy that has been one of the by-products of globalisation in much of the world can no longer be ignored. The ragged, irregular armies of the world's most collapsed zones have proved that they can reach to the heart of its richest and most powerful state. Their brutal coup is an example of what military analysts call "asymmetric threat" - in other words, the power of the weak against the strong. What it has shown is that the strong are weaker than anyone imagined.

The powerlessness of the strong is not new. It has long been I revealed in the futile "war" on drugs. The trade in illegal drugs is, along with oil and armaments, one of the three largest components of world trade. Like other branches of organised crime, it has thrived in the free-for-all created by financial deregulation. The world's richest states have squandered billions on a vain crusade against a highly globalised and fabulously well-funded industry. Rooting out terrorism will be even more difficult. After all, most of the worst effects of the drug trade can be eradicated simply by legalising it. There is no parallel remedy for terrorism.

The atrocities in Washington and New York did more than reveal the laxity of America's airport security and the limitations of its intelligence agencies. It inflicted a grievous blow to the beliefs that underpin the global market. In the past, it was taken for granted that the world will always be a dangerous place. Investors knew that war and revolution could wipe out their profits at any time. Over the past decade, under the influence of ludicrous theories about new paradigms and the end of history, they came to believe that the worldwide advance of commercial liberalism was irresistible. Financial markets came to price assets accordingly. The effect of the attack on the World Trade Center may be to do what none of the crises of the past few years - the Asian crisis, the Russian default of 1998 and the collapse of Long Term Capital Management, an over-leveraged hedge fund - was able to do. It may shatter the markets' own faith in globalisation.

Some people say that this was the purpose of the attack, and that we would be craven to give in to it. Instead, we are told, we must reassert the verities of the global free market and seek to rebuild it. And, with luck, it may not be too late to stave off worldwide recession. But the name of the game has changed for ever. The entire view of the world that supported the markets' faith in globalisation has melted down. Whatever anyone tells you, it cannot be reconstituted. The wiser course is to ask what was wrong with it.

It is worth reminding ourselves how grandiose were the dreams of the globalisers. The entire world was to be remade as a universal free market. No matter how different their histories and values, however deep their differences or bitter their conflicts, all cultures everywhere were to be corralled into a universal civilisation.

What is striking is how closely the market liberal philosophy that underpins globalisation resembles Marxism. Both are essentially secular religions, in which the eschatological hopes and fantasies of Christianity are given an Enlightenment twist. In both, history is understood as the progress of the species, powered by growing knowledge and wealth, and culminating in a universal civilisation. Human beings are viewed primarily in economic terms, as producers or consumers, with - at bottom - the same values and needs. Religion of the old-fashioned sort is seen as peripheral, destined soon to disappear, or to shrink into the private sphere, where it can no longer convulse politics or inflame war.

History's crimes and tragedies are not thought to have their roots in human nature: they are errors, mistakes that can be corrected by more education, better political institutions, higher living standards. Marxists and market liberals may differ as to what is the best economic system - but, for both, vested interests and human irrationality alone stand between humankind and a radiant future. In holding to this primitive Enlightenment creed, they are at one.

And both have their dogmatic, missionary side. For market liberals, there is only one way to become modern. All societies must adopt free markets. If their religious beliefs or their patterns of family life make this difficult for them, too bad - that is their problem. If the individualist values that free markets require and propagate go with high levels of inequality and crime, and if some sections of society go to the wall, tough - that is the price of progress. If entire countries are ruined, as happened in Russia during the time of neoliberal shock therapy, well - as an earlier generation of radicals nonchalantly put it - you can't make an omelette without breaking eggs.

During the 1990s, this crudely rationalistic philosophy was hugely influential. It had a stronghold in the International Monetary Fund, as it blundered and bungled its way across the world exercising its power to impose identical policies on countries with vastly different histories, problems and circumstances. There was only one route to modernity - and the seers who ruled the IMF were resolved that it be followed everywhere.

In fact, there are many ways of being modern, and many of failing to be so. It is simply not true that liberal capitalism is the only way of organising a modern economy. Bismarck's Prussia embodied a different model, as did tsarist Russia, and each of them might well have been with us still in some form had the First World War ended differently. The Japanese and German forms of capitalism have never conformed to the free market model and - despite orthodox opinion everywhere telling us the contrary - it is a safe bet that they never will. We cannot know in advance what modernity means for any given society, or what it takes to achieve it. All we know for sure is that different countries have modernised successfully in a variety of ways.

The atrocities of 11 September have planted a question mark over the very idea of modernity. Is it really the case that all societies are bound, sooner or later, to converge on the same values and views of the world? Not only in America but also, to some degree, in most western countries, the belief that modernisation is a historical imperative that no society can ignore for long made it harder to perceive the growing risk of an anti-western backlash. Led by the US, the world's richest states have acted on the assumption that people everywhere want to live as they do. As a result, they failed to recognise the deadly mixture of emotions - cultural resentment, the sense of injustice and a genuine rejection of western modernity - that lies behind the attacks on New York and Washington.

In my view, it is reasonable to regard the struggle against the groups that mounted those attacks as a defence of civilised values. As their destruction of ancient Buddhist relics demonstrated, the Taliban are hostile to the very ideas of toleration and pluralism. But these ideas are not the property of any one civilisation-and they are not even peculiarly modern. In western countries, the practice of toleration owes much to the Reformation and, indeed, to the Enlightenment, which has always contained a sceptical tradition alongside its more dogmatic schools. Beyond Europe, toleration flourished long before the modern era in the Muslim kingdoms of Moorish Spain and Buddhist India, to name only two examples. It would be a fatal error to interpret the conflict that is now under way in terms of poisonous theories about clashing civilisations.

Effective action against terrorism must have the support of a broad coalition of states, of which Britain should certainly be part. Crucially, these must include Muslim countries (which is one reason why American military action must entail new attempts to seek peace in Israel). Not only Russia and China - each of which has serious problems with Islamic fundamentalism - but even Iran could conceivably join in a US-led coalition.

Constructing such a far-reaching alliance will be an exercise in realpolitik in which ideas of global governance of the kind that have lately been fashionable on the left become largely irrelevant. The US will find itself supping with former enemies and courting states that are in no sense committed to liberal values. In waging war against the Taliban, it will do battle against a force it backed only a few years ago to resist the Soviet invasion. Such ironies can no more be conjured away by international courts than by global markets. They are built into an intractably disordered world. Bodies such as the United Nations can play a useful role in the labyrinthine diplomacy that will inevitably surround military action. But anyone who thinks that this crisis is an opportunity to rebuild world order on a liberal universalist model has not understood it. The ideal of a universal civilisation is a recipe for unending conflict, and it is time it was given up. What is urgently needed is an attempt to work out terms of civilised coexistence among cultures and regimes that will always remain different.

Over the coming years, the transnational institutions that have built the global free market will have to accept a more modest role, or else they will find themselves among the casualties of this great upheaval. The notion that trade and wealth creation require global laissez-faire has no basis in history. The cold war - a time of controls on capital and extensive intervention in the economy by national governments - was, in western countries, a time of unprecedented prosperity. Contrary to the cranky orthodoxies of market liberals, capitalism does not need a worldwide free market to thrive. It needs a reasonably secure environment, safe from the threat of major war, and reliable rules about the conduct of business. These things cannot be provided by the brittle structures of the global free market.

On the contrary, the attempt to force life everywhere into a single mould is bound to fuel conflict and insecurity. As far as possible, rules on trade and the movement of capital should be left to multi-- lateral agreements between sovereign states. If countries opt to stay out of global markets, they shouldbe left in peace. They should be free to find their own version of modernity, or not to modernise at all. So long as they pose no threat to others, even intolerable regimes should be tolerated. A looser, more fragmented, partly de-globalised world would be a less tidy world. It would also be a safer world.

It will be objected that de-globalisation defies the dominant trend of the age. But while it is true that technology will continue to shrink time and distance, and in that sense link the world more closely, it is only a bankrupt philosophy of history that leads people to think that it will produce convergence on values, let alone a worldwide civilisation.

New weapons of mass destruction can and quite possibly will be used to prosecute old-style wars of religion. The Enlightenment thinking that found expression in the era of globalisation will not be much use in its dangerous aftermath. Even Hobbes cannot tell us how to deal with fundamentalist warriors who choose certain death in order to humble their enemies. The lesson of 11 September is that the go-go years of globalisation were an interregnum, a time of transition between two epochs of conflict. The task in front of us is to forge terms of peace among peoples separated by unalterably divergent histories, beliefs and values. In the perilous years to come, this more-than-Hobbesian labour will be quite enough to keep us occupied.

©New Statesman Ltd. Sep 24, 2001

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John Gray, professor of European thought at the London School of Economics, is the author of False Dawn: the delusions of global capitalism (Granta).

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