Capitalism after Globalization

Diaspora 6:2 1997 Capitalism after Globalization John Marx Trinity College, Hartford Millennial Dreams: Contemporary Culture and Capital in the North. Paul Smith. New York: Verso, 1997. Rarely do historical events cooperate with the work of cultural studies as readily as they appear to have done with Paul Smith’s Millennial Dreams: Contemporary Culture and Capital in the North. Several months after his book first appeared in stores, a worldwide stock market crisis seemed to provide corroborating evidence for Smith’s most audacious claim, that globalization’s promise of a stateless, borderless world is little more than an elaborate cover story told by capitalism’s apologists in a variety of fields. Smith identifies a tendency in cultural studies in particular to treat globalization as a revolutionary change in the way the world does business. In truth, he argues, it is nothing of the sort. Far from introducing a radically new mode of production, “the budding global economy simply nurtures the social relations of colonial business as usual” (10). The methodological upshot of this argument should be clear. High-profile theorists such as Stuart Hall and Saskia Sassen make a fatal error, Smith contends, if they assume that globalization has so changed capitalism that the old-fashioned tools of Marxist analysis no longer apply. Echoing ongoing debates over post-Fordism and postmodernity, Smith sets out to prove that “the fundamentally different descriptions of the world that Marxism can offer are still crucial” (3). Though certain aspects of Smith’s defense of Marxism are open to question, his assessment of late modern capitalism appears to be borne out by the historical narratives he reconsiders in Millennial Dreams. The market collapse of 27 October 1997, an event that happened well after his book went to press, lends further credence to his claims. Sparked in the markets of Asia, the crisis at first seemed to testify to a genuine shift in global economic power. Within a matter of days, however, the old imperial calculus of Northern management of Southern economies returned to the fore. On Monday 27 October, American traders watched their assets being pulled into the black hole that had opened up overnight in xxxxxxxxxxxx 253 Diaspora 6:2 1997 the markets of Southeast Asia. For such speculators, this was the worst nightmare of globalization. A volatile stock exchange on a tiny island had shaken the most powerful market in the world. Hong Kong’s Hang Seng index had caused the US Dow Jones to plummet. This is, of course, a bit of a simplification. It was not as if Hong Kong’s financiers actually desired Monday’s disaster. They had, in fact, been working hard to prevent it. In the days and weeks leading up to the Hong Kong crash, traders there and elsewhere in Asia had been fighting desperately to maintain price levels threatened by a set of late-summer currency crises in Indonesia and Thailand. On 27October, they simply lost the battle. The same sort of overvaluation that had crippled Indonesia’s stock market took its toll on the Hang Seng and, ultimately, on every other major index in the world. The Hang Seng, it should be remembered, had been sliding downward for weeks. While traders in the US nervously and obsessively charted its fall, they employed their most calming tones to reassure investors and, in the process, nearly convinced themselves that what happened in Asia could not happen in America— until Monday, that is, when the bottom finally dropped out, and US stockholders began to imagine themselves vulnerable to the turmoil on the other side of the globe. After Hong Kong fell, Tokyo’s Nikkei followed suit. As the sun began to shine on Frankfurt, Germany’s Dax index plummeted too, bringing the rest of Europe’s financial markets down with it. Long before dawn broke in New York, trading curbs were already in effect on the electronic markets where the buying and selling of futures contracts sets the tone for the day ahead. Computerized trading of futures in the broad-based S&P 500 index was locked at fifteen points down. At 9:30 a.m., when the opening bell sounded on Wall Street and live trading began, the managers of

Capitalism · Economic history · Economics · Economy · Globalization · Marxist philosophy · Political economy · Political science · Politics · Sociology · World-system · Globalization and Cultural Identity · History · Law · Social and Cultural Dynamics · World Systems and Global Transformations

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