ABSTRACT
Writing shortly before the global financial crisis which alerted many to the insolvency and instability of the Western financial system, Olivier Giscard d’Estaing – chair of the French Comité pour un Parlement Mondial, stated that the overwhelming task facing world leaders is to ‘restore confidence in the G[7] and global governments and corporations’ (D’Estaing 2007: 23). For D’Estaing, the absolute priority for international politics is the consolidation of global governance through an intensification of political interaction between state and non-state actors in order to resolve issues affecting more than one state or region in the absence of a single overarching authority with the power/legal competence to enforce compliance across the domains of global economic and political security. Reflecting the institutionalist bias favoured by Western liberal elites,
D’Estaing suggests two ways of restoring confidence in the public and private institutions of global governance, namely promotion of greater transparency at all levels of public and private decision making, and ethical responsibility in public and corporate life, for – in his esteemed opinion – the ‘capitalist system does not work if people do not behave in a moral manner, if they cheat or are corrupt’ (ibid.: 24). Only if surveillance, visibility and ethical responsibility are ensured and improved will it be possible for transnational elites to consolidate existing institutions of global governance and persuade sovereign governments of the need for supranational cooperation and compliance with some form of global governmental agency (funded by a transaction tax on energy, armaments and transport) to manage more effectively the tensions of capitalist globalization.1 Only a genuine transnational response to the crisis, argues D’Estaing, can address the political-economic contradictions of neoliberal globalization by enhancing institutional structures to legitimate corporate power and ensure effective rules-based governance of the global economy (cf. Garnaut 2013; Boyle 2010; Hicks 2002). In this chapter we examine debates on the implications of corporate glo-
balization for global governance and transnational policy coordination after the global financial crisis, building on the analysis of capitalist sovereignty
and corporate power. Although our main focus is the regulatory power of the global state form of capital – capital decoupled from the political constraints of national economies based on a fusion of identity and power – it is also essential to consider the structural interrelation between capital organized through international financial institutions and the regional, sub-regional, national and sub-state political forms of capital as these have emerged in the long development of the capitalist world system. This complex interrelationship is in a condition of flux as leading powers struggle to develop coherent forms of multilateral governance to manage the contradictions caused by uneven economic development and the monetary turbulence unleashed by a crisis that has exposed the fragility of the liberal international order. Whether the liberal order can transcend the structural logic of anarchy in
international relations depends not only on the capacity of contenders such as China to adapt to the norms of ‘international society’ and ‘rise peacefully’, but on the willingness of Western financial and security elites to adapt to the need for genuine multilateral global governance by enabling emerging market economies to exercise a level of decision-making power in proportion to their growing economic weight. It is in the ‘most powerful clubs of states (the WTO, IMF and World Bank) that neoliberalism is triumphant’ (Murphy 2000: 797), yet it is simply not possible to explain the ‘nature of global governance without understanding the ways in which powerful states construct and pursue their strategies’ (ibid.). From a rationalist perspective, orderly transition towards a multipolar international system is unlikely as inadequate incentives exist for Western elites to settle for positive-sum gains and relinquish their prerogative to determine geopolitical outcomes through offensive diplomacy, statecraft and war. This interpretation is supported by the attempt by the US to exploit the
crisis in Ukraine to isolate Russia in the G20 precisely as the US was under pressure for failing to ratify reforms to IMF governance agreed by the G20 in the wake of the global financial crisis (Stuenkel 2014). Indeed, America’s brinkmanship contradicts the early ‘G20 spirit’, according to which ‘advanced economies would support a greater voice for emerging economies in global governance arrangements and the latter would take more responsibility as full-fledged stakeholders of the global economy’ (Lombardi, cited in Callaghan 2014: 1).2 To this extent, at least, Bremmer’s (2012) conception of a ‘GZero’ world order in which no state or alliance of states can provide global leadership, seems disquietingly correct. This failure to embrace multilateralism, argues Lombardi, is likely to ‘give new momentum to regional alternatives like the Chiang Mai Initiative which set up currency swap lines between […] Asian countries’ (ibid.). It is also likely to accelerate the development of international monetary reset as the BRICS economies move to establish their own currency-swap arrangements and conduct trade outside the dollar system (Chandran 2015). Western condemnation of Russia over its policy in Ukraine reveals the link between Western financial and security interests after Russia – in its bid to promote multipolarity – hinted in January
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2014 that the G20 should proceed with IMF governance reforms without explicit US support (Harding 2014). Yet prevarication by the US is unlikely to silence calls from emerging economies for reform of transnational institutions to limit the fallout from Western mismanagement of the global economy and to expedite the introduction of a suprasovereign global currency based on the IMF special drawing right (SDR) model (Yong & Pauly 2013). As a precondition for the reproduction of capitalist relations of power,
sovereign states do not cease to exist in a financialized global economy. In contrast with traditional geopolitics which is defined by the logic of ‘national security’, capitalist geopolitics is defined by what Apeldoorn (2014) terms ‘ruling class security’. Within the emerging global totality, the state becomes ‘immanent to the field of social forces, enters into their service, and serves as a regulator of the decoded and axiomatized flows’ (Deleuze & Guattari 1977: 235, emphasis added). Indeed, it is important not to view the interrelation between world space and national territoriality as a
zero-sum game in which the importance of the former is presumed necessarily to entail the decline of the latter. By conceiving geographical scales as mutually exclusive rather than as co-constitutive, relationally intertwined levels of social interaction, this dualistic conceptualization cannot adequately theorize the essential role of sub-global transformations – whether of supranational political-economic blocs, national state territories, regions, cities, localities or places – in contemporary processes of global restructuring.
