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Globalisation? Internationalisation and Monopoly Capitalism: Historical Processes and Capitalist Dynamism

Author(s):Milward, Bob
Reviewer(s):Benneworth, Paul

Bob Milward, Globalisation? Internationalisation and Monopoly Capitalism: Historical Processes and Capitalist Dynamism. Cheltenham, UK: Edward Elgar, 2003. xii + 198 pp. $85/?55.00 (hardback), ISBN: 1-84064-869-4.

Reviewed for EH.NET by Paul Benneworth, Institute for Policy and Practise, Newcastle University.

In the UK, there is a very famous advertisement for a proprietary wood treatment product, with a man repeatedly shouting the slogan, “Does exactly what it says on the tin!” That would also make a good sub title for Bob Milward?s latest book, Globalisation? Internationalisation and Monopoly Capitalism, which does precisely what it says on the cover. The book’s main contention is that globalisation has mainly been understood as the extension of neo liberal structures and regulation, and has consequently been assumed to produce freely operating markets producing optimum welfare outcomes. To his titular question “Globalisation?” Milward instead answers “no!” and offers that the alternative answer is “internationalisation and monopoly capitalism.”

The central thesis to this book is that internationalisation has produced very stable and monopolistic institutional and business forms, and contemporary patterns of uneven economic development are created and sustained by these nexuses of business and political interests in a form which is far more international than multinational. He argues that wherever you begin to explore this system, it is hard not to conclude that the systems these structures provide are so far removed from the “free markets” that neo classicism/globalization advocates that they are not a useful conceptual structure for understanding modern capitalism. The book provides a tour through a number of such explorations, covering thematic areas such as industry, culture, trade regulation and international development, in a revelatory rather than didactic tone — that is the central message of the book becomes apparent through the chapters, rather than being explicated at every stage.

The book includes four framing chapters, three at the start and one at the end, which set up the main argument, that modern capitalism is best understood as a form of international, monopoly capitalism. Sandwiched in between are nine chapters each covering a separate analysis of the world economic system, which support this main contention. Each chapter follows a similar structure; the introduction problematizes the theme, then there is a presentation of evidence which leads to an analysis which in turn supports the main thesis.

This approach is neatly illustrated by the chapter on industry. The problematization is the Marxian standard, that labor saving innovation continually reduces the amount of labor inputs required in production. The requirement for increasing profitability has led to a shift to exploitation of cheaper labor outside home markets, illustrated through differential wage rates in the world?s textile industry (p. 68). The chapter also helps to establish the uneven exchange that is mediated through these commodity producing chains, something which is further expanded on in great depth in chapters 11 to 13. The chapter finishes, in common with the others, with a summary of what the chapter has sought to demonstrate.

This exploration approach is very interesting, because it ensures the book retains a degree of attachment to reality, which in turn makes the book very accessible to readers such as myself who have a general sympathy with, rather than deep involvement in, Marxian economics. Each chapter has a certain amount of empirical evidence and historical observation, and the use of the nine chapters has the effect of producing a crescendo, as the value of arguments in the early chapters which seem a little forced become more apparent as the thesis develops. The book is largely clearly written, and does bear reading from start to finish, which is a necessity for this book more than many because the argument does develop its weight and force over its fourteen chapters.

My main issue with the book is its poor treatment of a personal bugbear, the issue technological innovation and change. Innovation to Milward is important in the sense of labor saving and increasing the organic composition of capital, but there is no well argued model or conceptual framework for explaining how the devaluations which innovation brings are geographically distributed through monopoly capitalism. Monopoly theories of innovation assume that innovations are controlled by monopolists to maximize the returns they yield from them. Consequently, devaluations of capital are managed to maintain profitability, and do not change the geographical balance of power within capitalist relations of production.

While this is a perfectly acceptable model for closed states in sectors with single technological producers — such as privatized utilities industries — it is not a particularly useful model for complex markets where innovations shift and shape preferences and consequently the balance of power between various quasi monopoly capitalists in various locations.

This is important because of the later emphasis of the book on the way that underdevelopment is created and controlled. The argument is that because existing monopoly capitalists control the flow of technologies into less successful places, they are able to prevent less successful countries from developing their own technological bases. As Milward writes, he assumes that “the foreign firm always has the advantage over the domestic enterprise in terms of technology, markets, finance and know how” (p. 142).

China is an example of a country that has had great economic success by refusing to accept this logic, imposed by intellectual property regimes, and using copying techniques to stimulate industrialization. Although the book makes passing reference to the “Green Revolution” of high yield varieties, and the rise of IT in Bangalore, it does assume that the benefits and dynamics of these particular events are functionally controlled by monopoly capitalists. The book seems to beg a theory of knowledge capitalism which gets beyond the breathless individualism of a new transnational elite rhetoric.

I was also personally irritated by the error of fact on page 162 which claimed the European Coal and Steel Community was created in 1957. It was of course the European Economic Community and European Atomic Energy Community which were created in 1957, with ECSC created in 1952 as a precursor organization.

However, with respect to these criticisms, I accept that developing a theory of knowledge capitalism would have disrupted the development of the argument, which relies on a gradual accretion towards the final thesis. The book is generally speaking, well written and convincing in the way it develops its argument towards this thesis, and I personally enjoyed the book the more I read. In particular, the incorporation of contemporary events, such as the collapse of Enron, and the critique of the Washington consensus from Joseph Stiglitz, were a timely reminder that structuralist approaches to economics have indeed retained (regained?) their salience. Milward has used these and other examples to provide a welcome reflection on the precise significance of the late 1990s bubble economy in terms of the early 1990s assumptions of the victory of a particular kind of neo liberalist capitalism.

The market for this kind of research monograph appears to have decreased in recent years, and on the basis of Milward’s book, this must be regarded as a shame. Globalisation? is comparatively rare in apparently being written because of the author’s intrinsic passion for the topic, rather than as a money spinner, project output or Ph.D. thesis publication. And there is no doubt that Bob Milward has written a book which is intrinsically interesting, has a clear message, and is a useful contribution in a debate often muddied with hyperbole. At ?55, the book is probably outside the price range of individual academics and students, but it deserves a wide readership from those in both groups interested in making sense of persistent economic imbalances in twenty-first century capitalism.

Dr. Paul Benneworth is a Senior Research Associate at the Institute for Policy and Practise at Newcastle University, and a lecturer in socio-economic geography at Nijmegen University in the Netherlands. He contributed entries on the decline of British manufacturing and changing female unemployment to the recent Reader’s Guide to British History, and has published articles on innovation and economic development in Entrepreneurship and Regional Development, European Planning Studies and Urban Studies.

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Subject(s):Markets and Institutions
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII