Page 10 - Culture Society and Economy

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INTRODUCTION

the centrality of the fact that the small and medium-scale economy of the
classical liberal paradigm is gone for good, never to return. Large-scale
centralized organization has triumphed in the economy and social, political
and even cultural life.
This reality affects capitalism as much as it affects any conceivable
alternatives to it. All discussions of any feasible form of a modern econ-
omy, global justice, national or international democracy must base them-
selves firmly on the irreversibility of this large-scale reality and on none
other. Failure to understand this fundamental reality and the yearning for
a local world lost forever are at the root of the weakness of many of the
alternatives to globalization put forward by the global justice movement,
especially for those influenced by environmentalism and anthropology.
Failure to understand the potential in this new reality leads to the sensi-
bility that this large-scale organization is a Weberian iron cage in which
one is trapped and to which, at best, one must tragically resign oneself.
This is an understandable but most profound mistake. In fact, this new
international division of labor, in completely different economic and
political conditions, presents an unprecedented opportunity for democ-
racy, individuality and prosperity for all peoples on a global scale.
The second concern is this: the transformation of the liberal economy
has been accompanied by a process of the export of capital and the
growth of a strongly integrated global economy. This means that what
one is dealing with is not just monopoly capital but the rise of transna-
tional corporations (TNCs) which includes massive financial institutions
engaging daily in trillions of dollars in international currency transac-
tions. Thus, not only national economies are dominated by large transna-
tional corporations but also the international economy. A substantial
amount of international trade today is inter-firm transfers within the
same transnational corporation. This reality means that the national
macroeconomic management of even highly developed economies can-
not be pursued independent of the wishes of global finance capital. The
third consequence therefore follows from these processes: one has to
analyze modern social science problems from an international viewpoint,
even when national issues are the focus of interest. These factors have
radically different consequences for developed and underdeveloped
capitalist economies and are the basic source of the North–South divide.
They are also at the root of the most serious international economic and
political inequalities and tensions which confront the world today. None
of this means that nation–states are powerless in the world of today. It
does mean that nation–states have to adapt to this new economic and
political environment if they are to be effective.

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