Global Capitalism and Neoliberal Globalization

Brian Shoesmith and Jude Genilo (2013) make an important observation in their edited volume, Bangladesh’s Changing Mediascape: From State Control to Market

Forces: that with an increasing expansion of economic globalization, market forces are

replacing the state’s control over media. The underlying assumption of their claim is that the market should be seen as an entity separate from the state. While there is cogency in such a claim, it suffers a tendency of conceptualizing media control through a “state versus market” binary, and it fails to see how a postcolonial state itself, following the path of Western capitalist states, serves as an integrator and entrepreneur in the market system during neoliberal globalization. In order to comprehend the integrative and entrepreneurial roles of Bangladesh alongside its regulatory agency vis-à-vis

communications industries, one must consider the endogenous transformation as well as its exogenous compulsions that come with the processes of economic globalization.

There are several competing paradigms of globalization that address the role of the state from multiple dimensions, including: political, economic, historical, sociological, cultural, and technological. Critical paradigms of globalization such as world-system (Wallerstein, 2004) and global capitalism (Robinson, 2004, 2011; Harvey, 2003, 2005; Wood, 2003; Panitch & Gindin, 2004, 2012) are particularly useful to theorize the role of nation-states in shaping communications industries at the macro level. The purpose of this discussion is to show that the liberalization of the media industry in Bangladesh is profoundly and historically intertwined with the integration of the state with global capitalism, and especially with its neoliberal restructuration.

Originated as a theory that examines issues of development and world inequalities, the world-system paradigm serves a ‘precursor’ to globalization theories from a historical sociological perspective. A world-system is a historical social system of interdependent parts that form a bounded structure and operate according to the logic of the international division of labor, distinguished by a trimodal structure of strong and weak states that constitute three distinct geographical and relational regions: center (or core), periphery and semi-periphery (Wallerstein, 2004; Arrighi, 2007; Amin, 2005a).8

According to this paradigm, capitalist nation-states play an indispensable role in maintaining a hierarchical structure by participating in a chain of local, regional, and global commodity production; ultimately sustaining the flow of direct profits to monopoly producers in the core and protecting the overall capitalist economy (e.g. by enforcing property rights, deploying monetary and military policies, and guarding trade routes). Compared to a statist approach, which focuses on the modes of production within a state, world-system analysis is particularly useful to explain the logic of the capitalist world economy and the location of the state within that world economy.

Another proponent of the global capitalism thesis, William Robinson, takes a transnational approach to theorize the integration of states with global flows of capital. He critiques the world-system paradigm for ignoring the changing association between production-relation and geography. He also argues that the world-system paradigm suffers from ‘nation-state centrism’ and ‘state structuralism’ that impede the theory’s ability to conceptualize the dynamics of globalization. In response, Robinson puts forward his theory of “global capitalism” that is characterized by two structural processes: the emergence of a transnational capitalist class (TCC), a class group grounded in new global markets and circuits of accumulation, rather than national markets and circuits; and rise of transnational state (TNS) apparatuses9 _(Robinson,

2004, 2011). According to his global capitalism theory, national production systems and circuits of accumulation, which were once connected by internationalization, have now become fragmented and integrated into decentralized and deterritorialized global circuits of accumulation by the processes of transnationalization as a result of the increasing power and activities of supranational agencies and transnational corporations

(Robinson, 2004, p. 10-14). Robinson’s work thus implies that the power of nation-states is being weakened by transnational corporatization.

Contrary to Robinson’s view, strong support for a renewed role of nation-states comes from the new imperialism thesis (Harvey, 2003; 2005). In theory, neoliberalism refers to political economic practices where the role of a state is to create and to

competition and collaboration within an interstate system (p. 27), unequal exchange of division of labor, production and flow of surplus-value between core and peripheral states (p. 28).

preserve an institutional framework for private property rights, a free market, and free trade. It also protects the interests of private property owners, businesses, multinational corporations and financial capital (Harvey, 2005, p. 2-7). However, in practice, the state plays a crucial role in implementing the processes of ‘accumulation by dispossession,’ with four key features: a) corporatization, privatization and commodification of public assets; b) financialization, deregulation, and merger and acquisition; c) the management and manipulation of crises, and d) state’s reformation of policies (Harvey, 2005, pp. 160- 165). Neoliberalism, in David Harvey’s account, does not necessarily weaken the power of nation-states. In fact, neoliberalization cannot even occur if the state does not perform its crucial role to deregulate and privatize the market by endorsing the required

neoliberal policies (Harvey, 2005, pp. 2-3). A similar argument is posed by Canadian Marxist scholars Panitch and Gindin (2004, 2012), who stress that globalization is not a process to bypass or to override the nation-states. States are the authors of

globalization, not its victims.10 _{Ellen Wood (2003) argues in the same line: capitalism, no}

matter how global in its extent, always requires the support of the extra-economic coercion that the state provides. Even in the era of global capitalism, the nation-state “remains the single most effective means of intervention” (Wood, 2003, pp. 65-67). This observation validates structural Marxist Nicos Poulantzas’ theory of the “relative

autonomy” of nation-states, which is still guided by asymmetrical interdependence and shifting power-relations between core-periphery and semi-periphery (Wallerstein, 2004).

The debate over the power of the state in relation to neoliberal globalization gains further momentum in the study of global media. Proponents of media globalization (such as Giddens, 1991), resemble Robinson’s theories and see global capitalism as a decentered, disembedding and deterritorialized power that enables global media to promote local by eroding the national. In contrast, critical scholars like Nancy Morris and Silvio Waisbord (2001) and James Curran (2002) argue that national governments are still key sites of power, particularly in forging communication policies. Despite the

exaggerated reports about the demise of nation-states, they remain “important agents in shaping the global media order and the structure of media markets” (Morris & Waisbord, 2001, p. ix-xvi). Although the coercive and discursive power of state control over

10 _{Notwithstanding Robinson’s view of global capitalism, Panitch and Gindin clearly oppose} deterritorialization hypothesis. Citing from Marx’s rare quotation, they explain that despite capital’s expansionary nature, it does not weaken state’s governing power: while national barriers are

communications remains highly asymmetrical, transnationalizing forces have not unilaterally taken over the national. Therefore, it would be premature to conclude that a post-state era has arrived (ibid, pp. ix-x).

While literature on globalization is useful to reaffirm the regulatory agency of the nation-state, it comes with a risk of homogenizing the agency of strong/core states for the rest of the world; especially given that most of the authors engaged in the debate take developed nation-state as the key reference point to draw their arguments. Ali Riaz (2005) contends that the Bangladeshi state is characterized by its peripheral location within the production circuits of the global capitalist system; however, its historical specificities is marked by postcolonial state formation process, which is common in many countries in the Global South (Riaz, 2005, p. 5-6).11 _{This duality makes it}

imperative for the study to bring in the postcolonial characteristics of the Global South into the discussion of global capitalism and neoliberal globalization. Samir Amin (2005b) identifies that the greater Indian region was engaged with the processes of global

capitalism, a long time before neoliberal globalization, as a result of colonial restructuring of class and social relations that turned the countries into peripheries of the modern global economy. The class struggles took new forms in postcolonial India.12 _{The Indian}

anti-colonial movement against the British Empire was characterized by a hegemonic identity of nationalism that privileged the upper-class bourgeoisie and the upper-caste. In addition, the internal struggles of class politics and identity politics within the formation of the nation-state resulted in inconsistent and uneven integration of peripheral and semi- peripheral economies to post-war global flows of capital dominated by core countries. In the wake of the new imperial formation, many countries in the decolonized Global South formed a movement for New International Economic Order (NIEO) aka the ‘Third World Project’ demanding the new geographies of global production to be fairer. However, the

11 _{Riaz deploys the concept of the periphery drawing from the Marxian analysis of production and} reproduction. In the world-system the core countries dominate both the means of production and the means of reproduction of the labor force as they continue to expand the accumulation of surplus by outsourcing production works to semi-peripheries and peripheries. On the contrary, the peripheral countries depend on the reproduction scheme that comes with wage goods and wage services, which contributes to a greater flow of surplus towards the core countries. As a result, the full circuit of capital production and reproduction cannot take place within the countries themselves. In turn the struggle for integration to world-system changes the patterns of class formation, class relations, and form of state in the peripheral societies. (Riaz, 2005, p. 5)

Third World movement faltered, especially with the new industrialized counties (NICs) breaking up with the historic alliance of the Global South, and subsequent rise of the BRICS (Brazil, India, South Africa, and China) nations as the “locomotives of the South”. “From the ashes of Atlantic liberalism and the Third World project rose global

neoliberalism” writes Vijay Prashad (2012, p, 17).13

Prashad cautiously avoids a top-down approach to theorize neoliberalism that makes the states of the Global South look like a mere receiver of neoliberal

globalization. He sees it as a collaborative project. Prashad criticizes David Harvey for ignoring the southern input in the formation of neoliberalism, worth quoting at length:

… What Harvey does not relate is the necessary demise of the Third World Project, and so the opening up of the countries of the South to the new

geographies of production. ... Neoliberalism had a polycentric rival—in the

G7, of course; but so too in the capitals of the Pacific Rim and in the emergent “locomotives of the South” (Brazil, India, South Africa, and China). The ruling classes in these societies had, like their European and American cousins, long wanted to abandon the cultural stricture of old Nationalism: the requirements of the social-democratic Welfare state in the Atlantic sector; and the requirements of the anticolonial Third World State in the continents of Africa, Asia, and Latin America. Small pockets of elite opinion harbored resentment at the anticolonial heritage. Out of those pockets came new intellectual agendas, including the revival of the Hayek school of liberalism, holding that the state must be excluded from the

economic activities as much as possible. Cultural ideas of individualism and enterprise were celebrated in the corporate media, at the expense of the national liberation ideas of socialism and the collective good. The impatient elites wanted to set themselves apart from the obligations of the postcolonial state. (Prasad, 2012, p. 6-7, my emphasis)

Prashad’s observation is relevant to the ideological transformation of Bangladesh from a postcolonial state to a neoliberal state and the impact this has had on the media industry. He notes that the “locomotives of the South” developed their own variant of “Neoliberalism with Southern Characteristics” (Prasad, 2012, p. 12).14 _{This characteristic}

13 _{For an excellent discussion of the rise and demise of the Third World movement, see Vijay} Prasad’s book, The Poorer Nation: A Possible History of the Global South (2012).

14 _{This observation also applies to explain the unique nature of “neoliberalism with Chinese} characteristics” that David Harvey (2005, p. 120) acknowledges. Yuezhi Zhao expands that the integration of neoliberalism as a political project by the Chinese state resulted in a hybrid form of socialism with the market economy, with embedding its communication system as an integral part of it. Zhao argues that “The Chinese party-state has not only embraced the market rationality and committed to the unleashing of individual entrepreneurial freedoms and other new sources of private power and interests, but also set in motion—either directly sanctioned or indirectly failed to

is helpful to explain the political reality of economic growth of Bangladesh, and the state’s hesitation to leave behind its postcolonial obligations. Surrounded by the Indian media universe, Bangladesh developed its own logic of integration to global capitalism, and the government seamlessly explains why and how it opened up its entire market to the new geographies of production but kept broadcasting ownership on a tight leash. Soon after its independence the country moved away from dictatorship towards a liberal democratic form of political rule and began to act in accordance with the

neoliberalization rules of the World Trade Organization by implementing deregulation, privatization, and multilateral Free Trade Agreements. For instance, Bangladesh punches above its weight by using its reserves of cheap labor as a currency to lead in exports of readymade garments to the core countries of the global economy. This in turn helps to increase the flow of capital to domestic industries, which, with transnational investments in the media and telecommunication sectors, was crucial to prepare the ground for the expansion of private TV channels (see Chapter 2). Here, postcolonial identity politics exist in the news production processes and structures of both state- broadcasters and private television channels, while they also adapt neoliberal market- orientation practices (Chapter 3, Chapter 5).

This trend is common in South Asia. The Indian state-administered broadcaster (with the status of a corporation) has grown to be the largest public media organization in the world in terms of number of stations. At the same time, it competes with highly partisan as well as highly commodified regional, national transnational private media enterprises. For example, most of the major U.S. media conglomerates have substantial investments in India, including Fox (Star Television), Disney (UTV) and Viacom (Viacom

18). This is because the Indian government allows foreign companies to fully own non-

news channels.15 _{However, unlike India, media ownership in Bangladesh is heavily}

politicized and its broadcasting system is protected from foreign ownership by the state. Similarly, Pakistan allows full foreign repatriation of profits from its telecommunications sector but not from its media industry. In both cases control of the media is an important

dispossession,” from the privatization of state-owned enterprises to the seizure of farmlands, and from the commodification of a wide range of cultural forms to the destruction of the environmental commons.” (Zhao, 2008, p. 6-7)

marker of the country’s contention over the politics of its identity and the preservation of its national image. This indicates that the integration of global capital in South Asia is unevenly distributed across different sectors in different countries. This also means that neoliberal globalization has not overridden the power of the state vis-à-vis media industries, but enables the state to perform its role of integrating the media system with global capitalism via advertising and telecommunications industries while retaining control of media ownership in the hands of local political and commercial elites. In this sense, the era of the nation-state is far from being over as Giddens (1991) or Robinson (2004) prophesizes, but rather a new era of nationalism-driven political power has arrived in the postcolonial terrain; a power which is deeply territorial in nature.