Many economists, business analysts and especially people in the communications industries are in a state of euphoria about globalization. While this is obviously a feature of the times, parts of the business press give the impression that a single world market is a foregone conclusion, indeed virtually exists already. Analysts are urging that competition for capital will steer governments to provide the conditions that international business wants, like some giant, spontaneous traffic-calming device. The certain near-term victory of this process is too readily assumed, reflecting the fact that economists and business commentators tend to fix their attention on the more mobile factors. Political commentators, on the other hand--particularly those of a "realist" disposition--are more likely to emphasize the less mobile ones. While both perceptions pick up aspects of reality, it is not hard to see that the two must be brought together, since the tensions between them are what cause conflict and, so to speak, sell newspapers.

There are three profound systemic movements now working at the global level. The common element among them is the rapid cheapening of information. This, though speeding economic, political, and social changes of disparate kinds in societies throughout the world, is paradoxically exacting a price in many unexpected ways.

The first process is a speeded-up circulation of factors of production. Great uncertainty is being created by competition to attract and retain industries, especially those using advanced technology.

The second process, labeled for convenience "democratization," is the challenge to the non-Western world posed by rapidly spreading notions of political pluralism. As advanced communications link up across the world, waves of disturbance wash against cultures that lack the West's long preparation for them, in terms of individualism and gradual growth. In countries lacking even a free press, this "democratization" is seen not as a universal tendency that Western society happens long since to have absorbed into its bloodstream, but as a Western threat to traditional cultures and political leaderships.

The third process, summed up here, not without irony, as a "declining work ethic" or "tendency to self-actualization," so far affects only the West. Affluence, magnified by the ease of modern communications, has vastly extended personal choice. Constraints on individual aspirations have lifted, much as in earlier centuries the veils of isolation, ignorance, and hierarchy were peeled back to permit the emergence of Western democracy. In his compelling article, "The Real Clash" (The National Interest, Fall 1994), James Kurth urges the centrality of the struggle within the West for its own soul. I shall treat Kurth's "real clash" in the West as an aspect of my third process, self-actualization, and regard it as only the most recent of the three overmastering movements.

The fact that these three processes are occurring concurrently, yet are regionally out of phase, provokes much of the international disorder we see today. It is only by considering all three movements, and their relationship to each other, that we can hope to reassemble the global jigsaw.

Cheaper Information

Information has been getting cheaper for centuries, since at least the multiple copying of medieval manuscripts. Modern technologies mean that it is doing so faster than ever, producing a great asymmetry as its price plunges away from the prices of other factors of production. Cheaper information propels economic growth, speeds the movement of other factors of production, and reduces economies of scale in the running of industries and political units. It also renders the creation of brand images much dearer, spreads individualistic and pluralistic political ideas, and helps both protagonists and opponents of any given change to combine for or against it.

Reduced information costs have an effect, or take a toll, by eroding economies of scale in running the state. Recent studies suggest that micro-states have become more viable than they were. Electronic access to world markets has permitted them to find niches for their goods and services. A big internal market is no longer vital. Accordingly, and unexpectedly, it has become easier to establish breakaway states within an expanded world market. Insofar as this involves a retreat to units based on ethnicity or religion, it is more dangerous than political nationalism. Civil wars and wars of religion are the bitterest of all. They are scarcely negotiable. They evade such rational instruments of management as centuries of diplomacy have developed to manage political relationships.

The Grip of Sovereignty

With their intractable affection for local groupings, people (and peoples) will usually fight to the last against cosmopolitanism. Whether or not the world eventually merges into a benign whole, to believe that it will do so quickly, without hideous pain, defies all probability and every precedent. It disregards the disruptive power of the many who fear they may be the losers in global competition.

Statistics on globalization are hard to come by, as the Organization for Economic Cooperation and Development (OECD) admits, but in reality most multinationals are still regional rather than genuinely global in their reach. A recent study confirms that multinationals carry out research and development largely in their home countries. Local ownership and local content laws remain influential. Standardization is more limited than we are led to believe. Tradable goods may look much the same across the world but they cost very different amounts of labor to buy in different countries, and anyone who has worked or set up house in more than one country knows that as far as services are concerned standardization is a joke. Accompanying
the euphoria about the global firm, then, is selective inattention to variations among economies and a blindness to the forces that actively recreate local differences.

Nevertheless, a tectonic shift is taking place as relative economic strength relocates across the globe. Fresh voices are bound to be raised in international politics. This is not simply because of the retreat of the superpowers, as the viewpoint of strategic analysis might suggest; it reflects the market shift. The essential point about modern information systems is that they permit more volatile investment. Funds now gravitate fast to regions offering cheap labor
and other attractions. The costs of adjustment fall onto the relatively less mobile factors, which occasions political friction. Labor may be more mobile than ever before but cannot begin to match the speed of transactions in capital markets. Governments everywhere resent the power of businesses to leave when dissatisfied. They vacillate about offering multinational firms inducements to stay.

External competition need not be serious, or even real, to stir up anxieties. New combinations form; old class antagonists join to preserve the Fordist (or Stalinist) phase of industrialism based on the heavy manufactures, vast plants, huge unionized workforces, and above all economies of scale that decentralized, computer-aided, information-rich technologies are undermining. This is not merely the temporary alliance of those interested in one ailing industry or another. On the assumption that imports from countries with currently cheap labor are more to blame for current woes than are cyclic changes or new technology, one half of modern conservatism rides everywhere on a wave of protectionist sentiment. The other half--owners and investors who have successfully repositioned their assets in rising sectors, workers with the skills appropriate to these sectors--therefore no longer finds all "capitalists" or the entire bourgeoisie to be its allies.

Right-left politics concerned with the shares of income accruing to capital or labor is bifurcated anew, in country after country, on the question of opening or closing the national market. What cannot be guaranteed is that lines drawn up over income distribution or free trade will correspond to conservatism of a social or moral kind, the sort that finds itself embattled because of the flood of alien images transported by information technologies similar to those that circulate investment at the press of a key. Tension is exacerbated between desires for a free market and the comforts of the social order that it may undermine.

Eager globalizers urge that governments today not only should be but already are powerless to resist the threats of capital to leave their jurisdictions. Once firms find labor dearer, taxes higher, the regulatory environment tighter, or the national polity unstable, they may exit. The actual end of the nation-state is prophesied. Perhaps this will come about, but it will not come smoothly. Resistance to losses of sovereignty is expressed by legislators, trades unions, cultures, and (as unemployment continues to increase) a fearful middle class. Whatever the final outcome, this response, muddled in with local and particular considerations, must slow globalization. Ideologues of all kinds have other values than the dollar. This cannot exempt them from economic influences but it can desensitize them. To cite only one example, the fact that one hundred company head offices quit Montreal between 1976-1981 has hardly slowed the Quebec separatists.

The European Precedent

We can get some purchase on the likely course of events by examining historical precedent. A convenient experiment of economic integration has been run before, not on a global scale but on the still sizable canvas of nineteenth-century Europe. An historical analogy can never be exact, but this one reveals how ardently nation-states attempt to retain control when their sovereignty is threatened. It shows that the technological developments behind international integration may work equally to strengthen the nation-state, setting bounds to the coalescence of a unified market. We have already noticed that the reduction of costs, particularly information costs, which promotes globalization may work in the reverse direction, making it cheaper to run small political units.

The proclivities of historians mean that they are given to overrating the unique aspects of Europe's evolution and underrating the blind forces of social change. Consider the background: by 1800, Europe had already benefited from centuries of incremental improvement in transport, industrialization, and urbanization. The arbitrariness of kings had been curbed by the invention of the bill of exchange, meaning that capital could slide away to other realms, just as individuals could escape over the borders of pocket handkerchief-sized states.

In the nineteenth century, industrialization and urbanization took place faster than ever before. Constraints on capital and labor were dissolving, improvements in communications were coming faster, and popular education was expanding. When these changes began to affect Eastern Europe, Czarist Russia, and the Balkans--areas with less preparation than Western Europe--they arrived with percussive force. Not every nineteenth-century change "took." In the Balkans, for
example, the building of stable states and inclusive nations was a flimsy thing. Similar inadequate reactions may well occur in
contemporary, hierarchical cultures faced with "Westernization." The best comfort lies in noting that there are more and better role models nowadays, communications are easier, and the advantages of joining the world community are greater.

Nineteenth-century European opinions and debates parallel those we are hearing again. As early as the beginning of the eighteenth century writers such as Sir Andrew Freeport in the Spectator expressed the conviction of capitalists that "war does not pay." Kant, who died in 1804, thought trade was undermining governments. Cobden saw free trade and peace as "one and the same cause," and Proudhon agreed. In its famous passages that eulogize the achievements of the bourgeoisie, the Communist Manifesto spoke of trade creating the "universal interdependence of nations." In 1889 Pareto told the Peace Congress at Rome that economic integration would lead to political integration. In 1910 Norman Angell noted that postal services, the telegraph, and the rapid dissemination of financial and commercial information had put the chief cities of
Christendom in closer contact than the chief cities of Britain had been a century earlier. He wrote The Great Illusion to show that economic interdependence had made war inconceivable. This brand of "economism" is again prevalent. Certainly, economic growth may predispose to political pluralism and interdependence but experience shows that the analysis is dangerously incomplete.

The fifteen countries that participated in the International Labor Convention in 1890 did so because those that had adopted labor laws feared that other countries would undercut them if not persuaded to improve the lot of their workers too. This was akin to the arguments that had been made with respect to Britain's early Factory Acts and to those made today over obliging East Asia to adopt international standards of labor conditions or pollution control.

Links among firms and agreements between governments did advance the interdependence of the nineteenth-century European economy. Threats of spreading epidemics, which had given rise to the earliest international conventions a couple of centuries before, inspired many more conventions during this time. Railways were built to British standard gauge and their cross-border timetables were coordinated, as were postal and telegraphic services. There were plenty of signs of mutual activity. However, all stopped well short of anything deserving the label of full integration.

Because instruments of social change like educational systems were in the hands of governments, they could also be used to strengthen loyalty to the nation-state. "We have made Italy," it was said after the Unification, "now we have to make Italians." Economic growth meant higher tax revenues and full-time bureaucracies which could extend the state's influence still further. Educational and welfare systems, conditions of service and pension schemes, subsidies for ship building, help in export markets--all came to depend on state patronage.

The competence of individual governments was thus increased by tools of the kinds that made for interdependence. Governments were after all still engaged in the long process of centralizing the nation-state. It is noticeable, for example, that despite the way railway tentacles extended across borders, many were laid out as spiders' webs centered on capital cities. The whole of Europe was never made kin. Boundaries between nation-states and nationalities hardened, breaking the hearts of idealists when the workers abandoned pretensions to the Brotherhood of Man and flocked to join the armed forces in 1914. "Wherever the photographs were taken, London or Manchester, Munich or Paris," Don Haworth tells us in a Lancastrian memoir, "the faces in the crowds are the same, rapturous at liberation from the endless hum and clatter of machinery."

Externally, European countries sought their own empires and tied markets. At the end of the century, faced by cheap food imports from lands outside Europe, most responded to the anxieties of their citizens by protecting their agricultures. Britain stood aloof; it did not bring back the Corn Laws. Furthermore, countering the argument that only strong countries are free-traders, the Netherlands remained an open economy, as if it were a modern New Zealand. We can look on the late nineteenth century as a period when its own states set about checking Europe's integration.

Does the experience of this earlier time transfer to the present? Not entirely. There is extensive survey evidence to show that young Europeans are less nationalistic and militaristic than any previous generation. The prosperity to which they are accustomed, even in recession, means that they are not tempted to flee grinding toil into the imagined adventure of "joining up." That motive does not exist in remotely the same degree any more. Yet questionnaire data must always be handled cautiously as representing dreaming, which is free, rather than deciding, which may have a high price. Recall how misleading was the expressed pacifism of the Oxford Union between the wars. In any case, we are speaking only of Europe. It may be more significant for international affairs that in much of the rest of the world people have not yet been cosseted like young Western Europeans.

"Democratization:" Supply and Demand

A further effect of cheaper information is "democratization." This may be taken in the narrower, political sense to embrace pluralism, individualism and human rights; in a broader sense to include an ever-widening agenda of "rights" that is contested even in advanced Western circles. Liberals everywhere may think these things good, but agonizing adjustments are to be expected in conservative societies. The struggle is and will be between regional cultures, or the states embodying them, and universal or world culture. (To see world culture as permanently or inherently "Western," because it first flowered in the West and travels in Western vehicles, underrates its multiple origins, protean nature and breadth of appeal.)

To the extent that there is a directional tendency towards political freedoms and "tender" reforms, we may expect both their extension and efforts to repulse them. Different societies are of course experiencing quite different levels of social challenge. The clash over basic freedoms comes now in societies that have not had the kind of lead-in that the West enjoyed. To the extent that liberalism derives autonomously from new information, developing countries are in a cleft stick: educating their workforces opens the door to seductive written words, screen images, and electronic media which are likely to bring unintended and maybe pernicious consequences.

Even in Europe mass literacy is historically recent. By 1850 the proportion of literate Europeans was about 50 percent, but only about half the "literate" could read easily. Specialists working in adult literacy programs estimate that about 85 percent of Western European adults are functionally literate today, but the minimum standard is not high. In the non-Western world, however, literacy is spreading far faster than it did in Europe. As more people learn something of other systems of government and ways of life, the demand side of world politics will alter. On the supply side, governments will be struggling to dampen the calls made upon them.

In 1965 only twenty percent of radio and television sets were owned outside Europe and North America. By 1990 this proportion had more than doubled, with world totals of over two billion radios and one billion television sets. Satellite dishes are being miniaturized. Fax machines have spread widely. The telephone network--the largest single machine in the world--is becoming denser as entrant countries skip over older technological stages. Usage of the Internet is said to be going up by between 12 and 15 percent per month. Although user numbers are probably exaggerated by as much as an order of magnitude (because firms wall off many computers for security reasons), such rates of growth are amazing. International gossip among the computer-literate, mainly the young, leaks material that previously would not have come to light for decades, if ever.

The spread of education and literacy has been expanding the range of informed judgment by individuals from at least the time of Tyndale's translation of the Bible into English in the sixteenth century. Critical ideas flowered in the Protestant churches during the nineteenth century, contributing to a fragmentation of sects. The process began to work within Roman Catholicism early in the twentieth century. A similar ferment faces Islam in the late twentieth century, provoking a strong reaction in places, as in other authoritarian and male-dominated cultures or regimes. In a strictly intellectual sense, Islam is the least pliable of the world religions. Its guiding ideas and sacred works cannot be made over to order, given the "closure of
the Gate of Interpretation" as early as the tenth century. Yet Islam has not remained static since then and is not politically
homogeneous. Islamic North Africa led the world in science in what the West calls the Middle Ages, and Christendom borrowed heavily from it.

To speak baldly of "Islam" is to risk being misunderstood--though, if so, we ought equally to apologize for referring to "the West." For more refined purposes we would need to decompose such portmanteau categories and recognize not culture clashes but long series of particular conflicts. We might then see that the world's problems lie less in the supposed obduracy of whole religious, cultural, or ethnic systems than in the way communities within them are sometimes hijacked by groups opposed to democracy, human rights, or even peace with neighbors. In a small compass, nevertheless, some virtual stereotyping is unavoidable.

Islamic and other Third World regimes thus span a broad spectrum. Local circumstances will determine the intensity and decide the timing of eruptions there in ways too various to predict. Opinions differ as to whether fundamentalisms represent a return to the past, or its last gasp; the eventual answer may depend on the success or failure of Third World economic growth. Nevertheless, there is a pattern of confrontation between old and new systems of ideas, within Islam and beyond, which promises no early end to unrest over a broad swathe of the earth.

Globalized sources of news and entertainment will doubtless extend the sway of English, but will not make this or any other language universal in the foreseeable future. The next stage is likely to be the replacement of regional by national languages, as in nineteenth-century Europe. Then, the process raised average market size but did not forge a unified market. Rupert Murdoch has claimed that Hindi and Mandarin will expand because the most popular television programs in India and China will be broadcast in them. The number of hurdles for anyone with goods or services to sell will accordingly fall, but the world market will remain segmented.

Despite the confidence of many people in the telecommunications industry, it remains uncertain whether cheaper means of diffusing information will increase freedoms. For by the same token the costs of governmental propaganda and control will be lowered. Linking up young graduates by the Internet is one thing, but it is another to expect whole populations to participate, or to assume that unfocused interest groups cut much political ice. Nineteenth-century European experience suggests a complex process in which, although the international flow of information is unlikely to be stemmed, it may yet be compartmentalized and its messages altered; at any rate there will be censorship or attempts to induce users not to act on the basis of much that they learn. Manipulation of the news has already become a major issue, in some places an industry. Censorship by the assassination of journalists in Algeria is the limiting case. If even the United States government wishes to have mandatory access to electronic traffic, we can expect overt intervention by authoritarian governments. Press reports state that Singapore examined eighty thousand user files in 1994, looking for "pornography and other outlawed materials." Outrage in many countries at the dissemination of child pornography and political or ethnic messages of hate is likely to be the Achilles' heel of the Internet, much as these things may be defended on the grounds of civil liberty.

That national authorities do wish to control thought is plain. The freedoms conferrable by new technologies will be resisted, and political as well as economic markets will be contested. What makes this so likely is the anguish with which communities possessing their own cultures and professing rigid public standards of morality are greeting the arrival of Western films, broadcasting, and investigative journalism. Examples of objections to Western cultural products are easy to find around the world.

After all, within the West itself there is resistance to cultural borrowing, sometimes between next-door neighbors. When the Cour Constitutionelle of France ruled out key parts of the bill to ban foreign phrases (English phrases), the Socialist Jack Lang, who had held the post of minister of culture (meaning minister of French culture), proclaimed this to be "a capitulation to free market ideas." That Lang's side lost, except with respect to documents written by civil servants, is seized on too glibly. A trend in France, accepted by left and right, is to widen the definition of culture. Beyond literature, music, and architecture, even historical food sites have been "listed," including a "Trail of the Fried Carp" in Alsace. The "grammar of taste" is being taught to primary school children. Eighty percent of the funds come from government and the exercises are easy to laugh off as pork-barreling by cultural entrepreneurs. Yet they cast some light on the range of countervailing pressures that exists within the globalizing environment.

To cite a non-European instance, the governor of Tehran has forbidden the sale of clothing bearing Latin characters and T-shirts with images of Western entertainers. Once more, it would be facile to conclude from the incongruity of these prohibitions, from the power of fashion images to captivate youth everywhere, and from reports of
the elite corruption that wriggles round the rules in Iran, that cultural conservatives must lose. Professor Timur Kuran, a specialist on Islamic economics, maintains that sheer processing overload may prompt a retreat to comfortable social forms of knowledge, rather than the espousal of the critical forms hitherto associated with the West.

The Decay of Western Harmony

In Western nations, a sense of economic deceleration and worsening social and cultural ills does seem to be evident, and critical forms of knowledge are under assault. Admittedly every generation complains that wealth accumulates and men decay, and neglects less familiar signs of improvement. For all that, current readings of these matters are gloomier than ever. Persisting high levels of unemployment and the frustrations of temporary jobs amidst objective plenty cannot
help. There is a sense that the West's world leadership really is in jeopardy, despite trumpetings to disguise the fact. In 1951 John Jewkes noted the anomaly that the concept of the "disadvantage of an early start" had seldom been applied to the United States, despite a century of industrialization there. Yet a sequential transfer of economic leadership has been evident since at least the decline of Venice in the seventeenth century. There is nothing to astonish about the continuation of that trend, except the delusion that it halted before our time. John Powelson recently coined the term "chronocentrism" to describe the giving of undue emphasis to one's own period, as if it had been set apart from historical time. Although there seems no true economic law of "first in, first out," we do seem to have reached a point where whole groups of states rather than single countries are swapping positions in economic and power rankings.

In the West the experience of high average earnings gives point to the question raised by Walt Rostow as early as 1959, when he was writing The Stages of Economic Growth: What will lie beyond "high mass consumption"? Rostow was aware as he wrote that the baby boom was substituting for some part of further increases in material consumption, but he believed this was merely deferring the day when his question would have to be addressed, probably in moral terms.

The baby boom is over. Western society has chosen next to consume a high proportion of services. This however implies that average productivity growth will slow, unless extraordinary advances can be made in the efficiency of manufacturing. Sufficient advance on that front to stave off a relative decline of the West is unlikely. The productivity of personal services is hard to lift, even with a computer terminal on every professional's desk, since the essence of personal service is attention from a trained individual. At the same time, the providers of services expect to receive incomes similar to those of people with comparable training. They will raise their charges even though their productivity growth lags behind that in other sectors.

Existing gains in manufacturing productivity have been sufficient to depress blue-collar employment. The fall results from altered mixes of consumption and changes in technologies of production, which render many blue-collar and some white-collar workers redundant. Abstract analysis might say that labor markets are not clearing because real wages have not gone down enough to make poorly-educated workers worth hiring. But wages would have to fall a long way for that to happen, while the typical worker is said to become unemployable if he or she remains jobless for as little as eighteen
months (so much for the argument that education prepares us for life). The market-clearing wage (the level at which most employable people could find a job) would need to fall below acceptable levels, pressing down living standards, and thus ending the compression of post-tax earnings which has characterized Western countries since the Second World War. The implications for public harmony would be alarming. Social distances would widen further against a background of rising drug addiction, the easy acquisition of powerful weapons, and the deteriorating family bonds that guarantee a poor socialization of the young, especially inner-city males. We might expect that the premium on education would become so high that learning--the right, true thing--would be eagerly sought, but the current mood apparently forbids this.

The serious social problem is structural (rather than cyclical) unemployment, but the fundamental paradox is that it is being accompanied by voluntary withdrawal from work by youths who actually possess or could acquire modern skills. Their "physical and psychological flight from modern employment," as Denis Pym calls it, damages the stock of social capital; more and more people abandon