Capitalism,coronavirus,and war in the digital age: Interview with Radhika Desai

Yu Hong:

I learned that your new book Capitalism, Coronavirus, and War: A Geopolitical Economy (Routledge, 2023) is being translated into Chinese. Congratulations! And please tell us a little bit about how this book came about?

Radhika Desai:

The book has proximate origins and long-term origins. Most immediately, it started when it was announced that there was a pandemic, and everybody should stop coming to teach and so on. For me, it happened on a Thursday. It so happened at the same time to write an article for a Canadian left magazine, Canadian Dimension, for whom I then wrote regularly. The editor was sending me reminders, asking, “Where’s my article?” So, I thought, what am I going to write about? Obviously, I’m going to write about the pandemic. So, that weekend I simply sat, I read everything I could possibly read to understand what was happening, not just in public health terms, but, economically: how the previous couple of weeks stock markets had been falling like stones, the economy faced catastrophe, while the Federal Reserve was injecting torrents of liquidity into the financial system.

I focused on informing myself and on refraining from the many conspiracy theories that were already proliferating. I decided that I was going to write about the political economy of the pandemic, specifically about how the pandemic was going to reveal the weaknesses of neoliberal financialized capitalisms. It was going to expose the weaknesses of these capitalisms while at the same time making them even weaker. So, it started as a book on capitalism and coronavirus. In fact, the first article I wrote that weekend was called “The Unexpected Reckoning: Coronavirus and Capitalism.” I started by saying there was some poetic justice in the fact that the pandemic has hit these countries in the middle of March, because the middle of March, the ideas of March, was, in Roman civilization, the time of reckoning, of counting up all debts and settling all outstanding accounts.

I said this is the time of such reckoning and such settlement for these neoliberal financialized capitalisms, metaphorically speaking. The kind of capitalism that the West, particularly the Anglo-American West, the British, and the Americans and their fellow offshoots of Britain, have been building for the last four decades, is going to get its comeuppance, its reckoning, its judgment day. When this article was published, it got lots of attention: various websites republished it and Penguin, the most influential and biggest publishing firm, the publisher of the most successful books, even wrote to me and said, “Why don’t you convert this into a book for us?” In the end, that went nowhere. But I then decided that I was going to continue writing about the pandemic, how it was unfolding and how it was a reckoning for these neoliberal financialized capitalisms. I could not write about its public health aspects. I’m no medical expert, but about the political economy and the geopolitical economy of the pandemic that I knew lots about.

So I continued to write many articles over the course of the next months and by the time the sixth one—about how “The Fate of Capitalism Hangs in the International Balance of Power” given that China was doing excellently against the virus, on top of having avoided all the ills of neoliberal financialized capitalism over previous decades and, as a consequence, was, more or less single-handedly moving the world’s economic center of gravity away from the West—I got another invitation, this time from a series editor with another giant publisher, Routledge—to convert these articles into a book. Of course, the book is not just a collection of articles. Rather, I brought the analyses I was developing about various aspects of the crisis and integrated it into a new and powerful indictment of the economic system of the West. This was the immediate origin of the book.

The other long-term root of the book lies in the kind of analysis that I am presenting in this book. It comes out of what I call geopolitical economy, which is a new way of understanding world affairs that I have been developing for the last couple of decades.

The first book came out in 2013, called Geopolitical Economy: After US Hegemony, Globalization, and Empire (Pluto Press, 2013), because I feel that our ability to understand what’s going on in the world is not helped, but rather hampered by the dominant perspectives that we have, which talk about globalization and US hegemony.

I call these discourses “economically cosmopolitan.” In them, nation states don’t matter and there are no national economies. The world economy is a seamless whole. However, in reality, not only do nation states matter, not only are they not just cultural objects, but profoundly material ones in the sense that the biggest differences among countries are not which languages they speak or the food they eat. Rather, it is that some are rich and some are poor. In this sense, they matter a lot. This is the most important thing about nations. And so, they are profoundly material. So, we must take nation states and national economies seriously. Therefore, as a consequence, geopolitical economy as an approach also argues that there is the dialectic of what Trotsky called uneven and combined development, which is really, the way I look at it, nothing other than the dialectic of imperialism and anti-imperialism, and in which the appearance of socialist countries, beginning with the Soviet Union and continuing today in China and many other countries makes sense. Indeed, the appearance of socialism so early in this history of capitalism, and its refusal to go away notwithstanding the demise of the Soviet Union, makes full sense only from this kind of perspective. Only in this perspective is it not an aberration.

The other important thing about geopolitical economy is that it is inspired by a Marxism, or what I would call a return to the original Marx, because we also have a lot of interpretations of Marx and Marxism, which are very problematic and which essentially tried to reconcile Marxism with neoclassical economics. And that to me, is trying to reconcile the irreconcilable. Right? Anyway, so, from the point of view of geopolitical economy, to understand the dynamics of the capitalist world you have to understand the contradictions of capitalism because the drivers, the motor of these dynamics, lies in those contradictions of capitalism and the contradictions of capitalism are more or less erased by the attempt to reconcile Marxism and neoclassical economics.

So, anyway, so I subtitled this book, a geopolitical economy. And in many ways, the book updates the analysis that I had arrived at a decade ago. And I would say that when the geopolitical economy was published, most people did not know what the word multipolarity meant. Today. We are talking about nothing but multipolarity. We are talking about China, we are talking about de-globalization, and so on.

Yu Hong:

Thanks for bringing up the concept of geopolitical economy. I actually got to know your work from it. I wonder what are some of the ongoing debates within this framework and how do these ongoing debates bear on our understanding of digital capitalism, like everything related to media and communication?

Radhika Desai:

The principal debate that geopolitical economy is essentially creating or giving rise to is whether the world is essentially a seamlessly unified one, where digital communication is concerned, and the answer geopolitical economy gives is no. National economies are real, and nation states are very real. They are responsible, on one hand, for imperialism and on the other for opposition to imperialism. Because unless you have a fairly strong state, you cannot resist US power or imperial power. Indeed, the very reason why the United States and other Western countries advocate neoliberal policies for the developing world is that those policies essentially weaken the ability of the states to control economies, to foster development in these economies, and so on.

So, the point is that imperial countries have very strong states capable of exerting power and influence on the rest of the world, but they don’t want anyone else to have such a state. This explains the current antagonism toward not only Russia and China, which we all know about, but also countries, such as say, Venezuela or Cuba that have the temerity to stand up to Washington’s power.

Now, what does all this have to do with digital technology? I would say, first of all, that in the discourse of globalization, and to a lesser extent, also, in other cosmopolitan discourses, digital communications is taken to be one of the strongest signs that the world is united or unifying. We have the Internet, globalization, and so on. In reality, the world of the Internet itself is riven by national conflicts and rivalries. And there is another important thing: part of the analysis that geopolitical economy makes is that to understand what’s wrong with the world today, we have to understand that the bulk of the problems arise from the senility of capitalism, from its compounding, mounting contradictions.

It is as though one small part of the world, namely the Western world, especially the Anglo-American world, which is the most neoliberal and financialized, is suffering the worst problems and inflicting them on the rest of the world. The problems of this part of the world are the chief problems facing the world.

What does again all this have to do with digital technology? The key with digital technology is that in these countries—let us confine ourselves to the United States for now—there is a commitment to developing these technologies under the sign of private property as the private property of corporations. So, today, the stock market is exploding. It is rising to new heights, even though the US economy is not doing at all well, chiefly because of the power of these so-called “Magnificent Seven,” as these digital companies are being called. So, the whole US economy has become a playground for these digital companies. However, there are a number of problems.

First, while they claim to be pushing the frontiers of science to benefit humanity, they are very often actually causing harm.

For example, Meta and other such digital companies are simply not being brought to account for the harm being caused to children, or even to adults in terms of suicide rates, and so on. Furthermore, there is the harm they are also causing in terms of fostering political division, because of the algorithms they use. They tend to create polarizing opinion. It is ironic because in the old days in the 1950s and 1960s, everybody said that the mass media is bringing everybody to the middle of the political spectrum. But now we have social media and it has the opposite effect. It polarizes opinion. It is removing everybody from the middle of the political spectrum and putting everybody to the extreme ends of it. And the algorithms cannot work any other way if these companies are to make money. So, the whole problem lies in the fact that the West is engaged in advancing information and communication technology under a regime of private property. Moreover, this problem is systematically misrepresented. Rather than getting to the root of the problem and saying, at the very least, that these companies need to be regulated, the Western political class generates entirely made-up stories about Russian interference or Chinese interference in their elections and politics. If they are to be true to their paymasters, among whom these digital companies are amply represented, they cannot confront the fact that the very media companies that they are fostering, which they are allowing to operate in these ways in these profit-making ways, are manipulating people, not Russia or China. This is their real problem. So to me, the sickness of capitalism is very much manifest in the private ownership of the social media and the private development of digital technologies in Western countries.

The second thing is that actually the potential contained in these technologies to make life easier, to create new possibilities, to have good social effects, both for individuals and for societies, is actually not being realized. In reality, the media, the Internet, and all these platforms are crying out to be a nationally owned public service, but that is precisely what is not being allowed in Western countries and it is not even being countenanced. Meanwhile, countries like China are realizing their potential—for communications, for ease of people’s use of infrastructure, for payments and a whole range of uses—more fully than ever.

These are, for me, some of the basics of how I approached the question of digital media today.

Yu Hong:

In the Department of International Development at LSE, you delivered a very good talk on the upcoming Indian political election. And I think you brought up a very important subject matter, which is land ownership. In the discipline of media and communication, by contrast, we study things that are immaterial, such as communication, symbols, and meanings, but pay no attention to land. But what you were talking about in your presentation really struck me as a rather very fundamental political economy issue. Could you elaborate a little bit more why such a traditional issue, which seems premodern or, if not premodern, at least not very fashionable in the eyes of many media and communication scholars is worthy serious attention. In other words, what might the issue of land and its ownership have to do with industrialization, modernization, and indeed digitalization?

Also, I want to ask you about digital capitalism in India. You mentioned in your talk that land reforms have not been carried out in India like in China and, as a result, the land is being owned as private property. How do you see the situation where land, in a capitalist economy, is owned by a small handful of people.

Radhika Desai:

First of all, let me say that you have asked an enormous question. I’m going to try and answer it as systematically as I can.

First of all, let me point out that the equivalent of land in the immaterial world of digital media is spectrum. That is to say that there is something on which all this rests and it is a finite resource. And as a consequence, it should actually be nationalized and how it can be used should be determined from the point of view of the overall social good. But let me come back to land. First of all, the fact that land is privately owned in Western countries and capitalist countries like India, unlike in China where it is owned by the state, lies at the core of many problems. Look at it this way. What was the 2008 North American Financial Crisis? It rested on housing, the inflation of the price of housing, and therefore of land, and then all the financial assets that derived from the land.

So that is the first thing. Essentially, since the days of classical political economy, certainly Marx, but many others also felt that land should be nationalized. There was also the Henry George movement that has argued that that land should be nationalized, because the fact is that the owner of the land can become rich without making any effort, first by getting rent from the others who do not have land and must pay for its use. Second, often the price of land goes up not through any effort of the owners—say a new railway line was built near it or some minerals were found under it—but thanks to wider social efforts or developments. This sort of enrichment of the “rentier”—this French word has become quite widely used for this sort of unearned income or enrichment—was always considered illegitimate.

Land is fundamentally something that, as a natural monopoly, should be in public ownership. It is a finite resource and, moreover, nobody has produced and so no one should benefit privately from it. The land is given to societies free by nature, so societies should own it and control it and use it in the social interest. That is the most fundamental point.

Now we come to India and its land question.

China after the revolution had a massive land reform and, incidentally, China’s land reform forced very radical land reform in Japan, South Korea, and Taiwan Province of China and, to this day, much of the productive dynamism, industrial success, and relative well-being of the people of these places are attributed to that land reform which introduced greater egalitarianism than is normal for capitalist countries. India also had land reform, but it was of a very limited type. Where there had been big landlordism, it was removed. However, that still left relatively unequal ownership of land, because the immediate beneficiaries of the limited land reform were the better-off tenants who now came to own the land. And they did not permit land reform to go further so poorer cultivators still remained without land.

So, since the late 1960s, the major upheavals have been taking place in Indian politics, with the decline of the Congress party, the rise of the so-called regional parties whom I prefer to call the parties of the provincial propertied classes, and the rise of Hindutva, which is the Indian variety of right-wing, I would say, fascist nationalism. These developments are deeply tied up with the political consequences of this land reform, because the beneficiaries of the land reform became what Marxists would call kulaks or rich farmers or rich peasants and capitalist farmers.

Once they had become rich and capitalist farmers, they did not continue to expand within agriculture. Instead, they started investing in urban industries and so on and transformed themselves from rich and capitalist farmers into capitalists pure and simple. This represented a major change. When India became independent, they were a couple of dozen really big business houses. Today, all but a small number of these old big business houses have been eclipsed by a new layer of big businesses. And they come from these groups, essentially. So, they have transformed the Indian economy. They have transformed Indian society, marking the entry of lower groups into the elite. And they have transformed Indian politics.

Now, in terms of the digital media, in India, as far as I understand it, the digital arena, like in the United States, is the plaything of big corporations. For example, one of the biggest corporate business houses, that of Mukesh Ambani, has been allowed to extend his “Jio” telephone network all over India by initially underselling his competitors by offering really cheap deals. But over time, he will essentially take over. So, the digital industry, which is a natural monopoly and should be publicly owned, or at least heavily regulated in the public interest, is operated as a private monopoly. As in the United States, you have a small number of big monopolies, which essentially then charge rent for the use of the platforms that all actually to be available and accessible to all.

Yu Hong:

As I understand it, India has not built up an industrial foundation for everything digital. Do you think that has anything to do with land ownership?

Radhika Desai:

As you know, India is good at software though the manufacturing story is quite different. This is a symptom of what is deeply wrong with the way India has developed, particularly since the 1980s and 1990s. Let me take them by turn. The first is that India’s computer manufacturing capacities and hardware manufacturing capacities are not developed at all. The reason for that is very simple. Indian manufacturing has not realized its potential. In the early days of independence, Indian manufacturing did advance a fair bit, chiefly because the state was playing a very big role in it.

But now what has happened is that the state has stepped back to a considerable extent, not completely, but to a considerable extent (when, in fact, it should have expanded its role and done in the interests of all Indians) and is essentially expecting the private sector to do things. But within the private sector, it is favoring just a small number of big corporations so that the kind of successes that India could have in the software field have not been replicated in the manufacturing sector. Indian manufacturing has not stepped up to the plate as far as computer manufacturing is concerned. That is one part of it. And that, again, as I say, has to do with the inequality, ultimately rooted in the failure of land reform after independence, and the shift toward more and more market and so on.

Then, on the contrary, Indian successes also have a problematic side. From the beginning, the independent Indian state made a very flawed decision. It did not invest in primary education so that to this day India is one of the biggest repositories of illiteracy in the world. But at the same time, the state invested vast amounts of money in higher education, so that the kids who get a good education at the primary and secondary levels, which usually means education in a good private school, are probably going to go to higher education and when he or she gets there the kid will benefit from state provided and subsidized higher education. So, it is been a sort of welfare state for the rich in this respect.

So, a relatively small elite gets fairly good education and can be as good as anybody else. But the vast majority of the people in India are not educated. For example, still today in elections, parties use symbols, because otherwise, how does an illiterate voter vote? At least they can recognize a symbol. So, this is more generally the case in South Asia. Just yesterday, we heard in the news that Imran Khan’s party was banned in Pakistan and he is in prison. His candidates could not use their cricket bat symbol, which was the most recognizable symbol representing their party. So, we have liberal electoral democracy, but it functions on symbols basically.

Yu Hong:

Coming back to geopolitical economy, what do you think are the biggest lessons people have learned from decades of developmental projects, including but not limited to those in the area of media and communication? I think there are some broad lines of agreement being formed, right? For instance, it would seem to most people neoliberalism is dead or at least dying. Or are there are lingering doubts about that? It was interesting to ponder that the prevalence of possessive individualism has been what makes neoliberalism attractive even though as an economic policy it does not work. The neoliberal consensus has been kind of weakened, hasn’t it? What remains of neoliberalism?

Radhika Desai:

That is again a massive question. First of all, let us talk about the limitations of neoliberalism. I think that is a good way of approaching the complex question you raise.

Let us remember that neoliberalism was first adopted when Mrs. Thatcher and Ronald Reagan and politicians like them came to power, though we should not forget the critically important prelude in Chile. They claim that it was going to revive capitalism. It hasn’t done so. That is point number 1. Point number 2, which follows from point number 1, is that because it has not revived capitalism, it has not recreated the sort of broad-based prosperity which the Western countries witnessed in the three post war decades (at least, relatively broad-based because I have to say in the United States, for example, it is always important to remember that it was the white working class that mostly enjoyed the kind of benefits of the economic policies of the period, not black working class) was not recreated.

It is not surprising that as a consequence, neoliberalism did not win hearts and minds. I would say that there is another reason why. Because of the social order that was created in the post Second World War period, the kind of mildly socialistic order with the Keynesian Welfare State, with defense of workers’ rights and so on, is still quite popular today in England. For example, the National Health Service is more popular than the queen or now the king. How popular this institution is can be appreciated if we remember that Mrs Thatcher would have dearly loved to privatize the whole thing, but she did not dare because it would have been so deeply unpopular that it would have cost her electorally. So people do remember some of that, they retain some sense that there are some things that are public that should be public or should not be privatized, and so on.

The third thing I would say is that neoliberalism is based on a big fraud. What do I mean by that? What we call neoliberalism today is essentially some version of neoclassical economics, which emerged in the late 19th century and, then, over the next many decades became more refined and its Austrian wing, the most determinedly free market wing of neoclassical economics, emerged as the cutting edge of what many decades later we would call neoliberalism.

This type of approach tends to justify capitalism by talking about competition, competitive markets, and how wonderful they are and how they somehow manage to give everybody what they want and achieve a harmonious coordination of the efforts of vast numbers of individual private actors, and blah, blah, and so on. But the new classical economics was born precisely at that historical moment when capitalism was being transformed into monopoly capital. Marx had been very clear that the result of competition ultimately was monopoly. Because once you have competition, once all the weak, participants are out-competed, they are pushed out of the business, then you have only one or a handful of companies left standing, and they essentially monopolize or oligopolize the field.

Marx had argued that once this point is reached everybody would be able to see that capitalism has become ripe for socialism, because monopoly massively socializes labor. Instead of having the efforts of different people coordinated by markets, what you see in monopoly capitalism is these giant companies have hundreds and thousands of workers whose efforts are coordinated by conscious planning in the firm. If you can do that, if you can plan Walmart, why can’t you plan an economy? This is a question that he thought people would ask. So, since the early 20th century, the Western world has been paying the cost, and the whole world has been paying the cost, of keeping Western economies capitalist when, in fact, they had already then become ripe for socialism, with everything that entails in terms of economic crisis, the wars, the imperialism, not to mention the increasing senility of capitalism.

Now, the fourth point is that neoliberalism has, from the start, been based on a lie. It talks about competition, but in fact, the economy is no longer an economy of competitive capitalism but of monopoly capitalism. So, all the talk of competitive capitalism legitimizes the power of giant monopolistic corporations and gives monopoly corporate capitalists more freedom, precisely what they should not have. And everybody can see that. One of the reasons why you have had so much populism is because ordinary people can see that big corporations are what they are up against. In the United Kingdom, for example, I’m amazed that there are not enraged people with pitch forks, that people are not in the streets when natural monopolies like railways and water provision and so on have been privatized and the results have been disastrous. The privatization of the post office, for instance, led to the recent scandal in which postmasters were treated so badly, falsely accused of fraud and required to “return” vast amounts of money they had not taken and they did not have, and many of them even committed suicide.

Privatization of publicly owned utilities and enterprises has been a major plank of neoliberalism. The argument has been that private ownership makes them work more efficiently and effectively. However, the reality has been the opposite. The real consequences of the privatization of these big monopolistic ventures, which should be in public hands, should be heavily regulated for the public good, can be seen by everyone: what were good, solid affordable goods and services now become more expensive, of lower quality and often involve massive corruption. So, inevitably, there is resentment against big capital. So, for example, even with COVID, a large part of the reason why in the West COVID was so difficult to manage is that people did not trust the vaccines, because they have learned not to trust the big pharmaceutical corporations. Big pharma is a bad word in the West.

To these four points about neoliberalism, I will add a fifth. Rather than reviving the productive economy, creating good jobs, and so on, neoliberalism has created financialized system which is both a cause and a consequence of the sickness of capitalism. It is at once a cause and a consequence. It is a consequence in the sense that once conditions are bad for capitalist investment, then what do capitalists do with the money they retain, their profits? They do not invest it productively, so they invest it in financial assets. That gives a massive boost to finance and to financialization.

Another thing that happens, and it is also then independently a cause, is that when financial activity expands, it expands easy money. This does not make it easy for all to borrow—debt is deeply political—but makes it easy for the rich and the powerful to borrow money to use it in speculation and make lots more money. When this becomes possible, it attracts more people away from making productive investment and toward making financial investment. And the more you have financial investment, the more money is channeled there, the more you strangulate production.

In all of these ways, it has actually created a very absurd economy plagued with what I like to call “necromancy.” Necromancy means the love of the dead. As Marx said, to produce goods and services, you need living labor. So, you and I have to work, we have to make work in farms or fields or factories to produce goods and services. That is living labor, the work that produces things, in the act of producing them. Whereas the labor that is embodied in an already produced object, say like this phone or whatever, it is dead. There is labor in it but it is completed labor, what Marx called dead labor. Now, what financialization does is that, rather than invest in the production of goods and services that will employ living labor, it boosts the prices of existing assets, whether it is houses or factories or farms or whatever, which embody only dead labor. This investment in dead labor diverts investment from activities that employ living labor while bidding up the value of dead labor. This is the sense in which it is a form of necromancy. In that sense, it is an extremely absurd type of economy. And because it is so bad, it is creating so much resentment against big corporations and also a political backlash against neoliberalism generally.

The big problem here is that over the period of its dominance, which is now over four decades, neoliberalism has essentially de-legitimized any seriously leftist discourse, that the benefit of this backlash against it is going to the extreme right. Politicians like Trump and Johnson are exploiting the discontent against neoliberalism. For instance, Trump fights elections by saying I am going to address your economic woes not by reversing neoliberalism but by attacking China. Now, how is attacking China going to improve the lives of ordinary Americans? And Boris Johnson wins elections by saying he is going to take Britain out of the EU and used the money this will allegedly save to “level up” the north, because the north of England is suffering. The north was the industrial heartland of Britain, and now, it has become the rust belt of Britain. So these politicians exploited the discontent with neoliberalism to come to power. But once in power, they did nothing to address the difficulties of those whose votes brought them to power. People are still discontented and upset. In that sense, neoliberalism is not working for them.

Meanwhile, China retained its economic dynamism precisely because it is a planned economy. While there is absolutely nothing wrong in having a certain amount of private activity, and even some very big private corporations, so long as it is all regulated in the national interest, it remains a planned economy and a meaningfully socialist one.

While I’m sure there were many mistakes made along the way, the Communist Party of China has shown that it can plan the economy effectively and part of this ability comes from having the capacity to learn from mistakes. So, China and other countries that have adopted neoliberalism less fulsomely have actually done better. That was so clear by the turn of the century, when Goldman Sachs’s Jim O’Neill coined the term BRIC (which later became BRICS), saying that these countries were growing faster and, therefore, they are going to become the growth leaders, and so on.

Now, mind, when you have incompetent governments like the government of Bolsonaro in Brazil or Modi in India, they have set back the growth of some of these countries.

In the field of development, the idea that all you have to do for growth and development is to apply neoliberal policies, which was quite popular and was being bandied about by World Bank and the IMF, is now increasingly questioned. If you were the economy or trade or finance minister of your country, and if you looked at the world, what do you see? The West is ailing, China is prospering. What’s the difference? The practical demonstration that China is making a success of itself. Non-neoliberal or anti-neoliberal socialist policies are working.

Yu Hong:

Now, you are bringing up China. There is one thing you said that strikes me, which is about different versions of globalization. From a comparative perspective, how would you map out different versions of modernity like globalization and even development?

Radhika Desai:

About “globalization,” let me say, first of all, that I had just become, in the early 1990s, a newly minted assistant professor when talks about globalization really took off. From the beginning, I have always been skeptical. Globalization discourse alleged that states and governments had become irrelevant and there were no such things as national economies. So, we have a transnational economy, multinational corporations, free trade, and so on. My reaction was, “What are you talking about?.” Governments still intervene in economies and even control them. Multinationals account for a small fraction of total economic activity and even big “transnational” corporations actually rely on their home state and invest largely in their region, rather than “globally.”

It was no wonder, therefore, that no sooner had this discourse emerged in the mid 1990s than scholars began questioning it. So various skeptics wrote articles with titles like “the death of the nation state has been greatly exaggerated,” and so on. And they began to show that actually if you look at the trade figures, the investment figures, and other figures, the idea of some kind of historically unprecedented globalization is not borne out. These skeptics made a sufficiently powerful case to force the boosters of globalization discourse to make that discourse much more ambiguous. They say you are right. Maybe it’s not that the world is globalized, maybe it’s globalizing, maybe it’s not even necessarily doing that, and maybe the changes we are witnessing are not all going in the direction of globalization.

So globalization came to mean everything and its opposite. It would be very frustrating. If you were trying to pin down a definition of globalization, you would have found it very difficult. I was with the skeptics and in my book, Geopolitical Economy, I took a further step. If we were right, if we skeptics were right that globalization is not an accurate description of what’s going on in the world economy, then the question arises: why did people suddenly start talking about globalization in the 1990s? The answer I gave is that it was the discourse of the Clinton administration to open up world trade more generally, but especially to get other countries, in particular the big East Asian economies, to lift capital controls. That was the big drive of the Clinton administration and many of them did lift capital controls and, more or less immediately, they discovered the dangers of doing so, in the form of the East Asian financial crisis of 1997–1998.

By 2000s, with the George Bush Jr. administration, the term globalization was swiftly demoted and the term “empire” began to be used. Bush Administration officials started giving interviews saying, “We are an empire now.” This is the period of the Afghanistan war, the Iraq war, and there seemed to be no limit to American hubris.

So that is the Western meaning of globalization. And quite frankly, I will say one other thing about the Western meaning before I come to the Chinese meaning. While I have long argued, globalization is untrue, that there is no such thing, I would now go a step further to say the word globalization is meaningless and counterproductive. What do I mean by that? Because if you say that we live in a global economy, you don’t even begin to ask the questions that you need to ask to understand it, because you think everything is global: trade is global, food is global, digital technology is global, and everything is global. There are McDonald’s everywhere, Starbucks everywhere, and that is the end of the story.

In reality, if you want to understand the world economy, you have to understand say, trade and what is happening to trade, which countries are trading more, which are trading less, where are the imbalances, and so on. You have to ask far more specific questions. Similarly in the case of financial flows: where is finance flowing from? In what form? To where? why? Under what circumstances? These are the questions you need to ask. For instance, you can say “production is globalizing” because Foreign Direct Investment (FDI) is going up. However, only if you ask the sort of specific questions that I mention will you know that the bulk of it was going to China. But if you used terms like globalization, you’d never know this, right? The term globalization tends to obscure more than it reveals. It prevents you from asking the real questions. So, it is actually better to shelve the term and study things concretely, whether it is digital communication, trade, interconnection, financial flows.

Now to China. One of the things that was happening when everybody was talking about globalization, more concretely what was happening is that the United States, essentially, US governments were adopting a series of measures in economic policy such that its corporations were incentivized to outsource. Now, before saying more, let me deal with an important point people don’t understand. When they say outsourcing, they think that some big US corporation is investing in China. However, that is not so. That would be FDI. Bulk of what’s called the internationalization of production actually involves outsourcing and that is different. That is what happens when Walmart, for instance, contracts with the Chinese company to supply it with certain products, say coffee makers or whatever. Fine, but it is the Chinese company that is making its own investment. It is a separate company. The relation between Walmart and the Chinese company making coffee makers is a market relationship. It is not an ownership relationship. Walmart does not own that company. Walmart has a contract with that company.

Around the time when people started talking about globalization, a great deal of this outsourcing was occurring. And China joined the WTO in the year 2000 and well before that, its footprint in world trade was expanding. Chinese authorities ran a generally very good industrial policy, the like of which every country should run, which was aimed at expanding the competence of its own manufacturers. Thanks to this industrial policy, China did very well in this period. In the past three or four decades, China has executed the greatest industrial revolution in history: the first one may have taken place in this country, but the Chinese iteration involves more workers, more production than ever before, than any other single instance of industrialization. Because all of this productive expansion in China was taking place at a time when everybody was using the term globalization, the term has entered a Chinese lexicon. However, there it means something very different.

So, in China, the term globalization means increasing China’s interconnection with other economies, but not in the “free markets and free trade” ways of the Western meaning of globalization, effectively lifting all regulation, but rather by precisely regulating these relationships of trade, investment, and so on, for mutual benefit.

Now, China makes it a point of not telling its partners what to do. The partners are free to choose whatever they want to do. So, if the United States wants to practice its own version of “globalization” by encouraging outsourcing to China, it is free to do that. But US governments are responsible, not China.

Today, the problem with neoliberalism is being recognized in the United States and Biden is already talking about industrial policy. And China is not saying, no, you cannot have industrial policy. They are saying, please go ahead. Biden does not have an effective industrial policy, but that is another issue.

So, if other countries wish to pursue their own industrial policies, China will say, fine, let us see what, depending on your aims and our aims, we can agree on. At the end of the day, I’m not against the integration of the world. I think the integration of the world is a good thing. But you see, let me put it this way. Imperialism integrated the world. That was not a good thing. The world should integrate on a mutually beneficial basis for different societies. Imperialism integrated the world by allowing some to dominate others. This is exactly what the West would still wants. In the past, the West wanted the subordinated world, the Third World, to produce inputs, raw materials cheaply. Today, it wants the Third World to produce even sophisticated industrial goods cheaply, right? And the Third World is saying, no, we don’t want to do it. We also want to improve the livelihoods of members, of our own society, and so on.

Anyway, so in China, the word, globalization has a very benign and positive, meaning which is perfectly congruent with China’s own experience of the 1990s. But it has to be recognized that there are two very different meanings. When Westerners say globalization, they definitely don’t mean what people in China, including important Chinese policy makers, mean and to this day, in all this slew of documents about foreign policy like the Global Development Initiative and the Global Security Initiative that have been produced, China continues to use the word globalization, but in its own way to mean cooperation, mutual benefit, negotiated, trade, negotiated investment relations, negotiated financial relations, negotiated people-to-people relations, and so on, because everything has to be negotiated so that these relations do not harm, but enhance the economies and cultures of these different countries who are partnering.

Yu Hong:

Fascinating. I think I’m going to ask you one more big question. To give advice to critical scholars moving forward, what are some of the burning questions and puzzles?

Radhika Desai:

That is very big. But before going there, can I just say one thing? Part of the cosmopolitan discourse is that economy is or should be a seamless whole in which nation states don’t matter. It has always argued that the best thing the government can do is to step back from managing the economy. But in reality, that has always been the way in which the powerful countries have subordinated less powerful countries, because their purpose is to get the subordinate countries to open up their economies for exploitation in a variety of ways by Western capital. Leaving economies open facilitates this. But this advocacy of a small or no government role does something else too: the only successful experiences of development have occurred where governments have regulated their economies and the international economic relations that their economies enter into to foster productive capacity. This is true of China today, as it was true of Germany, when it was industrializing, or even the United States when it was industrializing.

Yu Hong:

So, imperialism can be framed as integration through subordination.

Radhika Desai:

Imperialism is subordination dressed up as integration. To have a world order without imperialism, this sort of integration needs to be replaced with coordinated integration. The most important way you can resist Imperialism is by having a state capable of managing your economy effectively. Another way of putting it, in geopolitical economy terms, is to say that imperialism wants to create relationships of complementarity between the powerful economies and the less powerful economies. The former produces high-value goods, the latter low-value goods, the former gives credit, and the latter pay interest, and so on. Resistance to imperialism involves rejecting these relations of complementarity and trying to produce relations of similarity. We also want to have a highly productive economy. What is wrong with that? The fact that this is an entirely legitimate goal is undermined by the fact that the West, at least rhetorically, keeps referring to the development of the Third World as its main goal. It just doesn’t like it when the Third World actually develops.

On the contrary, in the name of development, it actually imposes imperial subordination. So, having a developmental state is that pursues real development rather than what the West means by it, is absolutely key to resisting imperialism, because the core of imperialism is economic subordination. It is to not allow you to have a productive economy capable of matching that of the imperial countries, which is why you see today that the United States is absolutely having kittens because China is demonstrating its superior productive capacity across a whole range of fields, whether it is in electric vehicles, or digital technology, Huawei, and blah, and so on.

Of course, racism has always been there to somehow tell Westerners that they are somehow intrinsically superior. No, folks. We are all human beings. If you can figure out how to make this or that, we can also figure out how to make anything. It is not magic. It is made by human beings. Other human beings can also make it. The US establishment that is producing this discourse about China “stealing” US technology just don’t get that. And racism has blinded them to understanding that.

So you were also asking about the big puzzles and questions? From this point of view, I have many different concerns. Obviously, I’m worried about India. And I worry about whether we are going to see a further entrenchment of this kind of fascist rule of Modi, or whether we will be able to see in the coming elections some kind of resistance building to it. Certainly, many political forces are trying. Maybe it will not be very powerful but if at least something is there, then it creates the basis for building on it.

On a world level, the economies of the Western world are themselves in a very, very bad shape. So how will they perform? And how will the cracks in the productive system show? And also remember what’s happened in the Western world, particularly in the United States and the United Kingdom, is that there are absolute mountains of entirely financial activity which have been hitherto reliant on this low interest rate policy. Now, having raised interest rates, the Federal Reserve is now pausing because going beyond 5% or so is going to bring down this financial house of cards. So, when will the financial crash come? What form will it take? Has it already begun with the banking crisis of last year?

Another question I think about is that with elections in the United States, the United Kingdom, India, and many other countries that are so neoliberal, to what extent will we see any resistance being voiced? In what form? It should take a socialist form but the socialist option in Western countries has been so demonized that discontent to neoliberalism has only benefited the right, which exploits it to come to power but then reverts to neoliberalism anyway. So there is no effective alternative to neoliberalism. In this scenario in the US case, the possibility of civil war is already being spoken about. Even a year or two ago, people were writing books about civil war, how civil war can happen again in the United States.

That this is not at all an impossibility is clear when we see that this election year even in the mainstream media, now people are beginning to question whether Biden should continue to be the candidate. If not Biden, then who? How will the Democratic Party manage this very problematic situation? And overall, the other question is, how will the rest of the world react to do all this? Overall, I often feel that one small corner of the world, the North Atlantic, is in deep trouble, and the rest of the world is so caught up in it, essentially, ensnarled in its problems.

Now, in this context, China, Russia, and many other countries are essentially saying that they are going to create a different type of world and that they want to lay the foundations for a different type of international economic governance, which is more equal, which is not imperialist, which is more cooperative, which is more focused on development rather than war. To me, what the West is offering the world is only war, and more war. China, Russia, and other countries are offering the world development. The situation remains one of Gramsci’s famous words about the 1930s: “the crisis consists in the fact that the old order is dying and the new cannot be born. And in the interregnum, a whole series of morbid symptoms appear.” This is roughly paraphrasing him but I would say that we are living in this period of interregnum. Are we going to see continuing war? Are we going to see nuclear war? All of these are very present questions, and how exactly will the world find its way out of this onto a more sensible path?

In this situation perhaps the biggest problem is the left, which ought to have become very strong in the course of 45 years of neoliberalism—after all, if the right is doing this, then the left should have been able to mobilize people’s discontent. But instead, the left in Western countries particularly and also in most of the Third World, has become very weak. We desperately need to have left forces reposition to make an appearance, because the right is only going to collapse things, and the right’s conduct is going to lead to collapse, and somebody has to be there to pick up the pieces. We will all be there. But the question is, are we organized into a coherent left force to do this? This is the key issue. This is the key problem. And I would say that it is not just research that is going to show us what will happen. I think we also have to act. It is not just about understanding. I think the time has also come to act and to try to do something about it.

Yu Hong:

You said that the left needs to unite, to act, and to organize. In the case of China, we see an organic linkage between Chinese left-wing intellectuals and the Chinese state. And the Chinese state is indeed working very hard, trying to correct the ills of the neoliberal aftermath. Then, local governments and social forces become activated agents. So, there is a tendency on the left to look downwards to see how the local fabrics actually contain big corporate giants like Alibaba and Tencent, which are not Western Silicon Valley giants but share similar patterns of behaviors. In other words, before the central government starts to re-regulate, there is a tendency to put the hope on the local. Domestically, you either focus on the state or pay attention to the local. On the global level, we are increasingly interested in alternative alliances. Some people have been exploring and trying to better understand BRICS. But the issue is, when you talk about BRICS, the national rivalry starts to emerge.

Radhika Desai:

You ask a very interesting question and my answer would be as follows. One of the reasons I proposed geopolitical economy is to oppose perspectives like globalization and US hegemony, which are inappropriate and inaccurate but yet dominate the discipline of international political economy. Geopolitical economy is better able to answer the principal questions surrounding the “relations of producing nations” (as Marx put it).

And there is also international relations and so-called realism, which tends to behave as though all countries are naturally antagonistic toward all other countries. This is simply not true. The reason why realism insists on this is that it silences criticism of the imperial countries. If you criticize imperial countries by saying, look, they are being aggressive, they say, “well, all countries would be aggressive if they could be aggressive.” This is not true. And that is the other another very important reason why geopolitical economy is important, because it is the capitalist countries that have been internationally aggressive, that have been imperialist. And the causes of that imperialism lie in the contradictions of capitalism. If you don’t have a capitalist economy, you don’t need to be internationally imperialist. And I think you can demonstrate this. If you ask me what would be a really good book someone could write, I think it would be about how China’s foreign policy has been fundamentally different from that of the imperial countries and how this difference is rooted in the fact that China’s economy is socialist and that of the imperial countries is capitalist.

And for that matter, the Soviet Union’s was also fundamentally different from that of the capitalist countries. You see, in capitalist countries, in the name of the national interest, what is pursued internationally is the interest of big corporations. In China, that does not need to happen. China or the Soviet Union, when they talk about the interests of their countries, that is what they pursuing. Broadly speaking, I would say this would be the case.

Often those who are skeptical of the BRICS and their potential to change the world say that these countries are so very different and they are going to fight with each other and squabble with each other and so on. No, there is absolutely no need for them to do so. Of course. It is possible that say Brazil or India, which remain capitalist countries, may be encouraged by their big capital to engage in a certain amount of international aggression, and so on. It is possible. I don’t know. However, they don’t have the capacity to carry this out against other countries which are no longer as powerless as they were in the heyday of Western imperialism.

Anyway, let me return to the matter of the BRICS inevitably disagreeing. Here, the assumption is that if you have many countries involved, they are bound to disagree. No. On the contrary, if they are not capitalist countries, or if they’re not powerful capitalist countries, the possibility of them cooperating is much greater. You don’t disagree with somebody just because they are different from you. You disagree with them when you have fundamental conflicts of interest, and those arise out of imperialism and the need to resist imperialism. So, if you don’t have that, then agreement is much more possible. Look at the relationship that Russia and China are now developing, it is unprecedented. If you think about it, a large part of what went wrong in the post Second World War period was the Sino-Soviet split.

Indeed, as Russia and China cooperate with one another more and more, I would also hope that this cooperation will lead Russia to develop economic policies that are more and more socialistic in content. In a war, to some extent, this happens anyway. So, if that happens, that would be very good. And I would say that other countries too, if the governments really want to witness the development of their countries, they should join them in their own way, looking after their own interests and their people’s interests. But I would say that the possibilities of international cooperation are limitless and are absolutely huge. China is already showing that in a number of ways.

Yu Hong:

Fabulous. I think this will make a very good dialogue piece for Communication and the Public readers. Thank you!