Saturday, May 31, 2008

David Grewal on Network Power

How do standards, such as learning English as a minimum for success, emerge in the global economy? Harvard graduate student David Grewal has written one of the most important books on globalization in recent memory. His book Network Power will probably go down as one of the classics like Dani Rodrik’s Has Globalization Gone Too Far? I had a chance to talk with David about it:

David, what is the argument of your book?

The book was motivated by a puzzle. On the one hand, globalization is often celebrated for the new freedoms and opportunities it provides. Individuals are, it is claimed, freer now than ever before to roam the globe with their money, ideas, and ambitions—and to create a new world order outside the traditional hierarchies of states. On the other hand, globalization is often criticized for the inequalities and exclusions that it generates, and is sometimes alleged to represent a new kind of “empire.”

In Network Power: The Social Dynamics of Globalization, I advance an argument that tries to make sense of these different accounts. I argue that globalization can best be understood as the rise to dominance of shared “standards” underlying newly transnational and international networks in areas including media, trade, language, and even some forms of culture. These new global networks link people together as never before—but they also generate problems of insider/outsider dynamics that raise challenging ethical questions, for to become part of a global network often means adopting a dominant standard at the expense of alternative ones that could mediate the same activity.

I devote a significant part of the book to examining these ethical issues, including trying to consider what we owe to people left out of new global networks and whether (and how) we should try to destabilize a standard that has become dominant and threatens to eliminate local and less powerful—but nevertheless deeply valued—attachments of one kind or another. It is in this ethical assessment of the new power at work in global networks that I try to consider what a “fairer globalization” might look like, and which I hope will be of particular interest to readers of Policy Innovations.

How is your book different from all the other books on globalization?

Globalization is, rightly, a topic that has generated an enormous literature in a short period of time. What I try to do that may be a bit different from the many other interesting contributions to the discussion is to get at the heart of the power behind globalization. I locate this power in networks, which I understand as social structures that allow otherwise distant participants to coordinate their actions via shared standards. The idea of “network power” enables us to make better sense of the combination of voluntary (even eager) acceptance and profound resentment that we see in the responses of many people all over the world to globalization. A number of other books focus on one side or the other of what seems to me to be an integrated process, if we think about it more carefully.

Which other globalization books do you like? Which do you disagree with?

What a dangerous question to ask an academic! A few years ago, I was fortunate to serve as a teaching fellow in a course on globalization, which centered on a debate among the Harvard moral philosopher Michael Sandel, Harvard’s then-President Larry Summers, and the New York Times columnist Thomas Friedman. The students got to see early drafts of Friedman’s book, The World Is Flat, which has since become an international bestseller. If you wanted to sum up my criticism of Friedman’s thesis, it would be that the world isn’t flat, but it is networked—and that the evidence that Friedman offers for all the ways in which the world has been “flattened” might better be understood as arguments about how it has become networked. The difference between these ways of seeing the problem isn’t just semantic: for if the world is understood as flat, it’s very hard to understand the backlash against globalization or the complex insider/outsider dynamics that it generates. A view of the world as networked allows us a different sense of the whole process of globalization by putting the power of new global networks solidly at the heart of the analysis.

A year before that, I taught in another course on globalization—this time at the Harvard Law School—which featured a discussion between the Brazilian social theorist Roberto Mangabeira Unger (who is now Brazil’s Minister of Long-Term Planning) and the labor economist Richard Freeman. A few years after that course, Unger brought out a fascinating book called Free Trade Reimagined, which has not gotten the attention it deserves. It recasts the whole debate on “comparative advantage” in a way that is truly remarkable. I was lucky enough to be part of several discussions between him and the economist Sanjay Reddy while the book was being drafted, although Network Power was already too far along for me to be able to address his arguments in much detail. Unger taught an earlier version of this course with the economist Dani Rodrik, whose works I relied on in my chapters on international trade and on neoliberalism. Rodrik’s book Has Globalization Gone Too Far? remains an important classic in this debate and was rather courageously published in the mid-90s, before the “Washington Consensus” had yet attracted the critical scrutiny that it has over the past decade.

I think that the most interesting recent work on globalization comes at the intersection of moral philosophy and the political economy of international institutions, and brings ethical criticism to bear on the regulation of the global economy. Important philosophers now thinking about these questions of global justice include Thomas Pogge and Philippe Van Parijs, among others, and I’ve learned a lot from their works. I’m delighted to note, too, that it’s the Carnegie Council—through its seminars and its affiliated publications, Ethics and International Affairs and Policy Innovations—that is leading the way here by opening up an important space for systematic thinking about a “fairer globalization.” My earliest essay on “network power” was published in Ethics and International Affairs several years ago in a volume that collected critical responses to globalization and empire from such interesting commentators as Jedediah Purdy, Robert Hunter Wade and Pratap Bhanu Mehta, all of whom have helped to shape my thinking about these issues.

An excellent new book that combines work on global justice with the economic analysis of institutions is International Trade and Labor Standards: A Proposal for Linkage, by the moral philosopher Christian Barry and economist Sanjay Reddy. It’s just about to be released. It offers an integrated ethical and economic assessment of a critical question—perhaps even the critical question—concerning a “fairer globalization” and proposes a much needed rethinking of the relation between free trade and minimum labor standards in the developing world.

Your book explains how standards emerge in the global economy. Are those standards intrinsically good or is there a darker side to this story?

The emergence of shared global standards can come about in one of two basic ways. Either we can be deliberate about the creation of a new international standard—that is, transparent and participatory in the crafting of new rules and regulations—or we can allow one to emerge from country-by-country convergence on a dominant standard that governs access to a powerful network.

Let me give a concrete example from the book that illustrates the latter case. The Multilateral Agreement on Investment was an effort in 1998 to draft a treaty liberalizing capital flows among OECD countries, which failed in part due to public protests against it. While drafted among OECD countries, the agreement need not have been restricted to them ultimately. In fact, it appears that it was being designed with a longer-term aim of its being opened up for adoption by the developing world. Given the “network power” that such an investment treaty among the capital-rich OECD countries would have possessed, it might very well have become a global investment standard—but without ever having been the product of a genuinely global deliberation in the first place.

Using network power to catapult a standard to dominance in this manner strikes me as wrong—and part of my ambition in writing the book was to lay out just how these network power dynamics work, in order that future efforts of this kind can be revealed more clearly for what they are. The protesters who criticized the MAI may not have been entirely well informed about the proposal, but I argue that their intuitions were broadly right. If the world needs a global investment treaty—and it’s far from clear to me that it does—it should emerge from global consultation and not as the product of a closed-door deliberation by rich countries designed to be foisted on the rest at a later point in time.

1 comment:

Anonymous said...

Joseph Stiglitz (Nobel winner for economics and was Chief Economist at World Bank) said while on a trip to India, that 600 million people from India (out of the one billion!) have been left out of the “development” fold of globalization.

So, obviously, all India is not going to migrate into middle class, if anything the inequality is far, far worse now, after the advent of globalization. Similarly newspaper reports have pointed out how Chinese workers are working in apalling conditions, to chhurn out the low cost products, with poor pay, cramped rooms, no accident or health insurance benefits, no job security, no overtime, long working hours - so who is actaully benefiting from this sort of globalization? Corporates ofcourse, and the few privileged people of India nd China who have been able to get educated in engineering and technology! Not the vast majority of population.

Two books to read, which offer a counterperspective to Friedman's "The World is Flat."

The Harvard Professor, Pankaj Ghemawat's latest book, "Redefining Global Strategy," is more academically inclined. I read an article of his published in the journal, "Foreign Policy", where he argues that the world is, at best, only semi-globalized. His argument being that Cultural, Administrative, Geographic and Economic aspects of a nation come in the way of total globalization from taking place and cites examples of the same.

The other small, but interesting book, is by Aronica and Ramdoo, "The World is Flat? A Critical Analysis of Thomas Friedman's New York Times Bestseller." It is a small book compared to the 600 page tome by Friedman, and aimed at the common man and students alike. As popular as the book may be, some reviewers assert that by what it leaves out, Friedman's book is dangerous.

The authors point to the fact that there isn't a single table or data footnote in Friedman's entire book. "Globalization is the greatest reorganization of the world since the Industrial Revolution," says Aronica.

You may want to see
and watch
for an interesting counterperspective on Friedman's
"The World is Flat".

Also a really interesting 6 min wake-up call: Shift Happens!

There is also a companion book listed: Extreme Competition: Innovation and the Great 21st Century Business Reformation