AntePodium
An Antipodean electronic journal of world affairs published by The School of
Political Science and International Relations at Victoria University of
Wellington [III/99]
God’s Invisible Fist: power and knowledge of
the Asian Crisis
Kosuke Shimizu, Kansai Gaidai University, Japan
When we talk about the Asian Crisis, we hear many saying that “we” are ready
to help “them” (Asians) recover from the state of chaos. When we talk about
India and Pakistan’s nuclear testing, then it is often said that “we” are deeply
concerned with “their” behaviour which is against the “international consensus”
of non-proliferation of nuclear weapons. It is clear here that the term “we” does
not include “them” simply because the issues above are not “our” problems.
What strikes me here is the strict separation of “Self” and “Others”. Then the
questions we have to ask ourselves are how are “we” or “Self” constructed.
How are “they” made to represent “Others”?
After investigation, the meaning of the term “we” becomes apparent. The term
“we” represents the “international community”, a community which does not
include “them”. Thus, “international” is a signifier of the people who hold the
dominative power in world affairs. Here, “we” are in the ‘gentleman’s club’
while “they” stay outside and will never be permitted entry into this elite, thus
“excluding”, circle.
Feminists have been well aware of this unquestioned acceptance of the universal
identity. They continue to criticise the deeply biased dichotomy of “we”/ “they”,
and “men”/ “women” which has often been used to exclude women from “our
world”. Masculinist exclusivist practices, which enforce androcentric value to
IR students, are, they say, coloured with value-neutral narratives including
realist, behaviouralist, and positivist accounts of world affairs. As a result,
masculinist world affairs appear to be “natural” and to have nothing to do with
gender differences.
Similar aspects are also perceivable in the narrative of other dimensions to
world affairs. The issue of the “Asian Crisis”, for example, is articulated with
ethnocentric accounts. Many “Western” economists as well as theorists of
international political economy (IPE) show their “concern” about this regional
crisis, and attempt to provide a resolution of the issue. However, what is made
invisible by these narratives are those who are actually living in the area, and
suffering from deteriorating living conditions. This of course includes the
invisibility and potential for intra-nation conflict, social instability, attacks on
ethnic Chinese, for example.
The issue of invisibility of particular lives is far from trivial in the study of
world affairs because there are a significant number of similar events
perceivable around the world. These include environmental degradation in some
South East Asian areas, deforestation of rain forests, deprivation of control over
their own lives often perceived in indigenous peoples’ cases, the issues of
female “cheap” labour and the IPE of sex1.
These issues have been often neglected and made invisible by particular
narratives of malecentric ethnocentrism. In this article, I will mainly attempt to
analyse the established narratives of IPE, their application to the “Asian Crisis”,
and to reveal the extent to which their supposedly value-neutral objectivist
views are biased in terms of race and gender. My main aim is not to simply
describe the neglect. It is to analyse the causes of this neglect and its effect on
the lives neglected. In other words, my analysis is about the assumptions and
premises underlying the traditional narratives of IPE. To achieve this goal, I will
firstly provide a general over view of the relationship between the “Third
Debate” and IPE. Secondly, I will explain some post-positivist reading of IPE,
and introduce the Foucauldian argument as my standpoint which sees power and
knowledge as the central concern. Thirdly, I will try to give a detailed
discussion of how the issue of “Asian Crisis” can be positioned within this
debate. And fourthly, I will critically assess the consequence of the application
of modernist knowledge to the “Asian Crisis”.
Jan Jindy Pettman (1996), Worlding Women: a feminist international relations, Allen & Unwin, St.
Leonards, NSW.
1
Placing the Third Debate in IPE
The Third Debate has been commonly regarded as one between positivism and
post-positivism. By positivism here, I mean, an epistemological position
whereby research approaches rest on a mental technique of objectification
(objectivism). Their research programmes are extremely influential. They are
powerful enough to embrace the majority of IR/IPE students within their
influence. On the other hand, post-positivism represents critiques of positivist
approaches. Although it is very difficult to encompass the variety of critiques of
this sort under one heading, for the purpose of this paper I define postpositivism as an ideology which criticises objectivism and its unquestioned
acceptance of value-neutral scientific approaches. Thus it inevitably includes
critical international theory and postmodernism.
Despite the intensified debates between positivism and post-positivism in IR,
not many of these are documented in IPE2. This is, I presume, because IPE has
long been defined as a combination of international politics and international
economy. Both of them, particularly the latter, has been developed as a science.
In the case of international politics, behaviouralism provides a good example of
the scientific objectivist approach. In international economics, the theory of
markets and comparative advantage theory have been sophisticated by the
quantification of the fundamental essences of international economic activities.
The separation between international politics and international economy is only
one interpretation of IPE, however. There are others, namely mercantilism and
Marxism. Including liberalism, these three approaches are called the grand
narratives of IPE. In commonly used textbooks, mercantilism is explained as a
state-centric ideology, while Marxism is class-centric3. In this sense, the latter
two narratives of IPE do not accept the separation of international politics and
international economy. If one takes a mercantilist view, the economy is an
important device used to accumulate capital within a border. If one takes a
Of course, there are some exceptions. For example, Ralph Pettman (1996) “The Limits of Rationalist
Understanding of IPE”, a paper presented at ISA annual conference, San Diego; Roger Tooze and
Craig N. Murphy (1996), “The Epistemology of Poverty and the Poverty of Epistemology” in IPE:
mystery, blindness, and invisibility”, Millennium, vol.25, no.3.
3
See for examples, Ralph Pettman (1996), Understanding International Political Economy: with
readings for the fatigued, Lynne Rienner, Boulder: Robert Gilpin (1987), Political Economy of
International Relations, Princeton University Press, Princeton: and Stephen Gill and David Law
(1988), The Global Political Economy: perspectives, problems, and policies, Harvester Wheatsheaf,
New York and London.
2
Marxist view, then she/he sees politics as determined by the law of capitalism
and mode of production.
However, in the context of the Third Debate, the differences among the grand
narratives of IPE are not as significant as their commonality. What characterises
the commonality are their concentration on positivist techniques of
objectification and their contempt of what this objectivist attitude regards as
trivial.
All the narratives introduced above are based upon the concept of a “Self” who
looks at the world in an objective manner. This “Self” stands back to look at the
world, using logic and experiment, and creates models of that world which
she/he can manipulate in her/his mind and test empirically in terms of how well
they fit the substantive world. This is typical of scientific rationalistic
objectification which expands his/her cognitive potential. This has led to a
civilisation with a much greater command of technology, and a science “whose
reliability and practical utility far surpass those of any previous (pre-modern)
culture”4. However, objectification also individuates, that means, it can only be
achieved by moving the sense of the “Self” away from that of the society of
which the “Self” is a part. Of course, it is theoretically impossible to grow up as
a human being completely outside of human society. However, it is possible to
foster a sense of mental distance between the “Self” and the rest of the members
of a society, and, to be modernist is to do just that; to make of the “Self” “just
such an ‘individuated’ individual”5.
Objectification has had profound consequences for contemporary world affairs.
Ralph Pettman states:
The modernist mind-set has profound consequences for whole cultures.
It renders the existence of gods and the magic use of language seemingly
irrelevant ... It consigns such irrational activities as festivals to the sociocultural background. And it makes of community itself a much more
make shift affair6.
Ralph Pettman (1996), “Asian Globalism”, a paper presented at the ISA/JAIR joint conference,
Makuhari, September 20-22, p.5.
5
Ralph Pettman (1996), “Asian Globalism”, ibid, p.5.
6
Ralph Pettman (1996), ibid, p.5.
4
Modernist narratives in general, and the grand narratives of IPE in particular, do
not pay sufficient attention to this phenomenon. Why the neglect, then? Is that
an inevitable consequence of modernism? Is it a mere coincidence? It does not
seem to be so. The answer lies in the methodology of modernism itself.
As George states, the modernist way of knowing results in extreme
reductionism7. Modernists frequently reduce “a complex, ambiguous, and
heterogeneous matrix of existence” to a “simplistic, universalized image of the
‘real’ world”. They detach it “fundamentally” from the “everyday experience”
of that world8. As a result, although reality is always characterised by
ambiguity, contradiction, difference, and diversity, modernism is only able to
create partial representations of reality9. For example, mercantilists see the
world only in terms of inter-state relations. They contend that all markets should
be controlled and regulated by states, and that human interactions become
important for the world only if they are something to do with the state system.
Liberalists regard the world in terms of marketeering. In the logic of the liberal
political economy, individual desire for profit causes human interactions. These
human interactions, in turn, profit everyone if there is no or at least limited state
intervention. The world works efficiently only in this way, and no other way.
For Marxists, what determines the future world is the mode of production.
Superstructures such as politics, culture, and religion, are all determined by the
laws of production relations. Thus, when one mode of production is overtaken
by another, the world changes.
This kind of reductionism makes modernist IPE narratives far from
comprehensive. This is because the reductionism limits their theoretical scope.
Those human actions outside their main concerns are not be taken up because
they are regarded as trivial, or unimportant, or meaningless. Events occurring in
the context of everyday human existence, for example, are not given sufficient
attention by modernist narratives. Mercantilism has never taken racism
seriously, for example. Liberalism has never been concerned itself with the way
business practices discriminate against women, for example. And Marxists have
not elaborated a way of adequately accounting for gender imbalance in a post
capitalist society.
Jim George (1994), Discourses of Global Politics: a critical (re)introduction to international
relations, Lynne Rienner, Boulder, p.11
8
Jim George (1994), ibid, p.11; Ralph Pettman (1996), “The Limits of Rationalist Understanding of
IPE”, p.10
9
Jim George (1994), ibid, p.11.
7
The rationalist objectification practices on which the grand narratives rely also
result in linear histories. As I explained above, each narrative has its own theory
of development. The term development immediately reminds liberals, for
example, of the Rostow’s five stage “take-off” theory. For Marxists, it denotes
the transition from capitalism to communism. For mercantilists, the movement
towards state autonomy. For all of them, history is linear, straight, and not
reversible. Of course, a history of this kind becomes problematic when planted
on a society with a different cultural and historical background. Acute
confrontations can then occur between such grand stories of history and
everyday human behaviour.
Post-positivist reading of world political economy
Among the three narratives I introduced above, liberalism, specifically neoliberalism, is now enjoying hegemonic status in world affairs. The formation of
this neo-liberalist domination perpetuates the interests of not only the developed
world but it also perpetuates the plight of the Third World and the former
communist countries. For example, countries that have massive foreign debt are
“guided” by neo-liberal economic theory when determining how to pay off their
debts. These theories prescribe politics that minimise government expenditure,
and enhance foreign direct investment opportunities for transnational agencies10.
As we will see later in this article, this is the case in the Asian Crisis.
Post-positivist scholars in IPE show in detail the way in which the globalization
of capital came to dominate the contemporary world political economy. In the
1980s, states were expected to cultivate an appropriate “business climate” 11 in
order to attract transnational capital. Neglecting to do so would result in a loss
of cash flow from direct foreign investment, confronting them with a financial
crisis. The appropriate business climate was secured by the implementation of a
theory called “supply-side economics”12. This economic theory provided a
justification for tax-cuts and the implementation of economic policies favouring
business societies. Thatcherism in Britain and Reaganomics in the US are
10
Stephen Gill (1994), “Knowledge, Politics, and Neo-Liberal Political Economy”, in Richard Stubbs
and Geoffrey R.D.Underhill, eds., Political Economy and the Changing Global Order, Macmillan,
Hampshire, p.82.
11
Stephen Gill and David Law (1993), op.cit., p.100.
12
See for example, Bruce R. Barlett, ed., (1983),The Supply Side Solution, Chatham House, Chatham,
NJ.; and Lawrence Robert Klein (1983), The Economics of Supply and Demand, Johns Hopkins
University Press, Baltimore.
distinctive examples of this approach. Many of the Asian countries concerned in
the Asian Crisis have also subscribed to this theory. For example, APEC has set
a target for liberalisation of financial services by 201013.
What is basic to post-positivist scholars is not its assessment of these political
orientations. Rather it is its scrutiny of the changes in “ideas, norms and
expectations about the appropriate role of government, the importance of private
enterprise, and the virtues of markets”14 these political orientations entail. In the
modern capitalism, the dominant ideology serves particular interests of large
capital rather than those of individuals. What is important here is that ideas of
deregulation and free capital inflow and outflow get to be taken for granted. The
reasoning underlying this is that without the private sector, economic power of
the state is in jeopardy. This is particularly notable in the particular form neoliberalism took in the 1970s and the 1980s, namely, monetarism 15. Under the
influence of monetarist ideology, strict control of the money supply was chosen
as the best way to deal with inflation. This became widely accepted as the best
way to implement deflationary policies, despite its tendency to widen the gap
between rich and poor.
In the process of globalisation, ideas and knowledge construction perform an
integral role. Positivist academics, such as neo-classical economic theorists,
who regard themselves as sitting outside the changing social structure because
of their belief in the neutrality of objectification, are revealed as actually sitting
at the core of the process they are observing. Their standpoints are constructed
inside the making of the history they analyse. They are not detached from this
process as long as they exist in the world. As post-positivist scholars argue, the
knowledge systems these intellectuals create are the core of contemporary
capitalism, constituting and confirming the capitalist world, and enforcing the
individual to be an agent of international political economic life.
How does this knowledge construction work? To quote Cox:
The ontologies that people work with derive from their historical
experience and in turn become embedded in the world they construct.
What is subjective in understanding becomes objective through action.
http://www.apecsec.org.sg/econlead/bogor.html
Stephen Gill and David Law (1993), ibid, p.101.
15
See for example, Milton Friedman (1962), Capitalism and Freedom, Chicago University Press,
Chicago; Milton Friedman and Rose Friedman (1989), Free to Choose, Pelican, Harmondsworth.
13
14
This is the only way, for instance, in which we can understand the state
as an objective reality. The state has no physical existence, like a
building or a lamp-post; but it is nevertheless a real entity. It is a real
entity because everyone acts as though it were; because we know that
real people with guns and batons will enforce decisions attributed to this
non-physical reality16.
Following Cox, post-positivist scholars emphasise the same process of
knowledge constitution. To posit the absence of a philosophical dimension to
the global political economy, as positivists do, is anathema. Indeed, they seek to
develop Cox’s account by concentrating directly on arguments of epistemology
and ontology. They cast doubt on positivist IPE discourses by questioning the
philosophical presumption that a knowledge structure is something which
stands outside the process of social change. They emphasise that it is actually in
the process of constructing the global political economy.
But how do knowledge systems create reality? This question is not well
answered by IPE specialists. However, when we shift our focus to philosophy
there is an answer. Regarding modern power and knowledge relations, Foucault
notes that the chief function of domination is to “train” people. This type of
power does not use physical coercion. It is not oppressive in the traditional
sense. It does not force the masses to form a single, uniform, totalised figure.
Rather it;
separates, analyzes, differentiates ... It “trains” the moving, confused,
useless multitudes of bodies and forces into a multiplicity of individual
elements - small, separate cells; organic autonomies; generic identities
and continuities; combinatory segments. Discipline “makes” individuals;
it is the specific technic of power that regards individuals both as objects
and instruments of its exercise. It is not a triumphant power, which
because of its own excess can pride itself on its omnipotence; it is a
modest, suspicious power, which functions as a calculated but
permanent economy17.
16
Robert Cox (1992), op.cit., p.133.
Michel Foucault (1984), “The Means of Correct Training”, in Rabinow, ed., The Foucault reader:
an introduction to Foucault’s Thought, Penguin, London, p.188.
17
This power can be distinguished from the “majestic rituals of sovereignty” or
the “great apparatus of the state”18. This power is what he calls “disciplinary
power” which connotes that a particular knowledge system becomes its core
such as liberalism has become the core of current world political economic
affairs. Disciplinary power is subtle, ambiguous, and ubiquitous, and its success
has three aspects: “hierarchical observation”, “normalising judgement”, and the
combination of these two, namely, “examination” (or “subjectification”).
Hierarchical observation “...make[s] it possible to see ...[the] effects of power
[while] ... the means of coercion make those on whom they are applied clearly
visible”19. Modern architecture, for example, exercises “disciplinary power”. It
can be seen expressed in working class housing estates, hospitals, asylums,
prisons, and schools. These institutions are no longer built simply to be seen, or
to create specific spaces, but “to permit an internal articulated and detailed
control - to render visible those who are inside [them]”. As “... an architecture ...
[it] operate[s] to transform individuals: to act on those it shelters, to provide a
hold on their conduct, to carry the effects of power right to them, to make it
possible to know them, to alter them”20. The international financial structure
provides a good example in this sense. All economic activities are made visible
through the system of audit.
The second aspect of modern disciplinary power, according to Foucault, is
“normalisation”. This term he uses to refer to the micropenalties of time
(latenesses, absences, the interruptions of tasks), of activity (inattention,
negligence, lack of zeal), of behaviour (impoliteness, disobedience), of speech
(idle chatter, insolence), of body (“incorrect” attitudes, irregular gestures, lack
of cleanliness), and of sexuality (impurity, indecency) 21. Normalisation;
... refers individual actions to a whole that is at once a field of
comparison, a space of differentiation, and the principle of a rule to be
followed. It differentiates individuals from one another ... It measures in
quantitative terms and hierarchies ... the abilities, the level, the “nature”
of individuals. It introduces, through this value-giving measure, the
constraint of a conformity that must be achieved. Lastly, it traces the
18
Michel Foucault (1984), ibid.
Michel Foucault (1984), ibid, p.189.
20
Michel Foucault (1984), ibid, p.190.
21
Michel Foucault (1984), ibid, p.194.
19
limit that will define difference in relation to all other differences, the
external frontier of the abnormal ... In short, it normalizes22.
The third aspect of modern disciplinary power, Foucault says, is “examination”
or “subjectification”. This combines the technique of observing hierarchy with
that of normalisation. It entails a particular normalising “gaze”, or
“surveillance”, which makes possible in turn the classification and punishment
of individuals. Examination, Foucault says, is highly ritualised. In it, he finds
the “deployment of force” and the “establishment of truth” combined23 in such a
way as to allow knowledge to exercise power24.
Disciplinary power is the process, in sum, of exercising a knowledge system. It
objectifies individuals in relation to each other. It articulates the contemporary
social system and the values that define that system. It designates what is
abnormal and deviant. It forces normalisation on those who are defined as
abnormal, and it enters them into processes of reformulation and rehabilitation.
And as long as a difference between normal and abnormal can be said to exist,
so does disciplinary power.
What is the consequence of the exercise of modern power? The construction of
knowledge dominates world affairs. Therefore, so too does the mind-making
process of world affairs. This validates in turn the postmodern reading of the
relationship between power regimes and modern politico-economic thought,
whether this reading be of Machiavellian realism and the state-centric view,
Smithian liberalism and the expansion of capitalism, Karl Marx’s rage against
capitalism and the emergence of communist states, the popular acceptance of
welfare states and Keynesianism, or neo-liberal (neo-classical) economics and
monetarism.
Asian Economic Crisis
When we look at the issue called the “Asian Crisis”, the relationship between
knowledge and power becomes visible. There are many concerns about this
issue expressed by economists, state officials, and executive managers of
international organisations including the IMF and the World Bank. Underlying
22
Michel Foucault (1984), ibid, p.195.
Michel Foucault (1984), ibid, p.197.
24
Michel Foucault (1984), ibid, p.199.
23
these “concerns”, one can see several knowledge systems which look different
but which eventually support the dominant liberalist regime. These knowledge
systems include neo-mercantilist, neo-liberal, and reformist liberal narratives.
The neo-mercantilist argument
The neo-mercantilists’ argument in the context of the “Asian Crisis” is not
about Asian countries such as Indonesia, Thailand, Malaysia, Japan, or South
Korea. The mercantilist argument I focus on here is an American one. American
neo-mercantilism has been particularly interesting as it did not appear to be
mercantilist at all. It rather looked like a humanitarian approach to the crisis that
would “help” the countries concerned stabilise their economies. As such, it
deserves closer scrutiny.
In his article, John J. Lafalce, a member of the US House of Representatives,
expressed his deep concern about the Crisis25. He stated that there had been two
approaches the US could take regarding the Crisis. The first was “to use our
central role in the international economic community to restore economic
stability in Asia and safeguard the potential for economic growth there and at
home”26. This was apparently an interventionist position. However, what he was
concerned with here was basically the US economy. His use of “home”
demonstrate where his loyalties lie. The main goal here was to stabilise the
economies of the region in order to prevent the US economy from becoming
affected by the Crisis out “there”. This also becomes obvious when he said that
“[i]nevitably, that pain [of the Asian Crisis] will spread to our own economy, in
the form of lost export sales and investments, market turmoil, and increased
unemployment”27, if “we” do not act.
The second option he gave was to neglect the problem. In this option, he said,
“we can stand by as regional financial crisis blights the economic prospects of
affected countries and their people, and simply hope it will not spread”28.
However, he did not think this was feasible. This was because, other than the
abovementioned points, US inaction contained the risk of spreading economic
upheaval to other regions such as Latin America, Russia, and Eastern Europe
John J. Lafalce (1998), “The Role of the United States and the IMF in the Asian Financial Crisis”, a
paper presented at the Institute for International Economics, 27/January/1998,
http://www.iie.com/lafalce.html
26
ibid, p2.
27
ibid, emphasis added.
28
ibid.
25
where many countries had initiated reforms with IMF assistance, and were
making “serious progress”. The penetration of the Asian Crisis to these area
would “prove enormously costly to them as well”29. In retrospect, his argument
was correct that the crisis has actually spread to the above areas. Of course,
what he was actually talking about was not the peoples living in these areas, but
the international financial system. In fact, in all the comments he made, “we”
exclusively represented those who identified themselves with the international
financial system.
To avoid the collapse of the financial system, he advocates the first option. In
advocating the interventionist option, he demands the US cooperate with the
IMF. This is simply because “[t]he IMF may not be a perfect tool, but it is the
only tool we have”30. This is a typical mercantilist remark in the sense that he
assumes the state-centred view of the world where international organisations
are “tools” of particular states. By assuming the IMF as a tool for US policy, he
lists some objectives of his interventionist approach including currency
stabilisation in the area and the further opening of local economies.
What lies behind his deep concern about the Crisis was apparently his fear of
the spread of financial crisis. What is remarkable here is not the fact that he was
frightened with it, but his attempts to use the IMF, the leading institution of neoliberal ideology, in order to protect the US economy. When we assume liberalist
institutions are working for promotion of the liberal free market economy, then
its cooperation with mercantilist countries is not feasible. However, as I have
explained here, it is possible in practice.
This was made possible through their use of the “international financial system”
or “we’. As this system has much to do with American economic welfare, there
is a logic in Lafalce’s argument that what benefits the international economy
will also benefits the US. In fact, he states “the US and its citizens have a great
deal to lose if we permit regional economic problems to reverberate around the
globe unaddressed. It is incumbent upon this country’s political, business and
labor leadership to do everything possible to ensure the situation does not
deteriorate to that point”31. He creates and reinforces, in this context, a ground
where the US mercantilists and the IMF neo-liberal officials can fight together
against “them” and “their” problem.
29
ibid.
ibid, p3.
31
ibid, p7.
30
But what about the IMF? How do they react to this Crisis?
The neo-liberal argument
The IMF has been widely regarded as the most appropriate example of the
institutionalisation of neo-liberal thought. However, this reading of the
institution is one-dimensional. Susan George described the IMF as “messenger,
watchdog, international alibi and Gendarme for those who do hold financial
power”32. The IMF, she maintains, works for “the private banks, with states
(including their central banks and treasuries)” which are “the bedrock of the
world monetary system”33.
There are many critical observers concerned with the IMF’s actual functions.
Some argue that, in the event of the Mexican Currency Crisis 1994-5, the IMF
“successfully mobilised finance to ensure that external creditors were repaid,
thus insulating fund managers from risk” by transferring the cost of repayment
to the ordinary people living in the country34.
Since the “Debt Crisis” of some Latin American economies, the IMF’s function
to enforce liberal economy upon the “Others” in order to secure the
international financial system or “our” system does not seem to have changed.
In the event of the Asian Crisis, the unchangeable nature of the IMF was once
again confirmed. Michel Camdessus, the Managing Director of the IMF and the
most powerful figure in Asia at the moment35, stated, for example, regarding the
Crisis that “the task before us is very simple: to keep this crisis from becoming
a catastrophe of global proportions”36.
This parallels with the Lafalce’s logic that the main concern of the US officials
is to prevent their economy from being affected by the external turmoil.
32
Susan George (1990), A Fate Worse Than Debt: a radical new analysis of the Third World debt
crisis, Penguin, London, p47.
33
ibid.
34
Stephen Gill (1995), “Globalisation, Market Civilisation and Neoliberal Discipline”, Millennium,
vol.24, no.3, p407. See also, Robert Deuchars (1998), “Rights, Risk, and the Politics of Resistance: the
Multilateral Agreement on Investment”, a paper presented at Second Wellington Conference on World
Affairs, March, p10.
35
Asiaweek,
36
Michel Camdessus (1998), “Reflections on the Crisis in Asia”, a paper addressed at the
Extraordinary Ministerial Meeting of the Group of 24, Caracas, Venezuela 7/2/1998,
http://www.imf.org/external/np/speeches/1998/020798.HTM
Although their standpoints are clearly different, Lafalce is a mercantilist while
Camdessus is a neo-liberal, they find prevention of penetration of the Crisis to
be the common ground where they can cooperate with each other.
Once the cooperation of the two traditional economic thoughts is established,
then the IMF’s logic of neo-liberalism will be reinforced. Camdessus provides
some proposals to cure these economies in bad shape. He contends that there are
some points requiring changes in these areas. They include fighting against
corruption, making the world’s surveillance of developing economies more
effective, strengthening financial and banking systems, regional surveillance,
and liberalisation of international capital flows. As we can see, most of these
points are about “their” economies. This means that the Asian Crisis is “their”
problem for which “we” can give support. Then, who are “we”?
Let me take a closer look at these points. The first point, “fight against
corruption” requires no lengthy explanation. As the international system of
state-sovereignty tells us, the issue of corruption is a domestic matter. This
means that “their” crisis was partly caused by “their” undemocratic political
practices and their “inabilities” to manage their own affairs. Otherwise how else
would “we” know and be able to comprehend “their” corrupt practices. The
Crisis which is frightening “us” happened because of “their” problem. This
describes the first stage of Foucault’s disciplinary power - hierarchical
observation.
The second and the third points correspond to the Foucault’s second aspect of
disciplinary power related to surveillance and training - normalisation. The
second point Camdessus makes is particularly about surveillance. To strengthen
the international financial system, he contends that we have to “look for ways to
make our surveillance more effective and to enhance transparency.....Among
other things, we need to know more about the structure of countries’ external
debt, their reserve levels, how highly leveraged their corporate sector is”37. As
this paper was written for a presentation at the G 24 meeting where many
Ministers in developed countries were present, it is apparent that “we” means
those who are not involved in the Crisis, and “they” refers to those who are
involved. Then “our” surveillance should be conducted in order to not let
“them” make the same mistakes again, and make them fully aware that they are
under constant surveillance - thus they will “learn” how to behave.
37
ibid, p3.
Thirdly, Camdessus insists on strengthening financial and banking systems by
training the deviant economies. In this context, he argues that “the Fund has
been working to help develop and disseminate a set of ‘best practices’ in the
banking area, so that standards and practices that have worked well in some
countries can be adapted and applied in others”38. Here what he implies is that
“best practices” which are perceivable in some sound economies should be
adapted in other stagnating economies. It is again apparent that he dichotomises
“our” sound economies” from “their” economies in the Crisis.
Fourthly, he advocates “regional surveillance”. Although he does not directly
mention it, it seems to me that he is referring to regional development banks
such as the Asian Development Bank. As these Banks are associated with the
IMF and are part of the World Bank Group, “regional surveillance” simply
means “our” closer look at “their” economies. This parallels with Foucault’s
third stage of power - subjectification. In fact, he states “there is considerable
scope for improving policies when neighboring countries get together on a
regular basis to encourage one another to pursue sound policies”39. Here “they”
are expected not only to fully internalise the presupposed international norm deregulation and free market economy - but also to police each other.
Lastly, “liberalisation of international capital flows” comes under Camdessus’
scrutiny. This is apparently a liberalist cliche, but very strong one, despite many
critiques of the liberalisation and deregulation for being the central cause of the
Crisis40. This last point shows precisely what the international norms are. The
“good” practice and “sound” policies in the abovementioned points are, after all,
simply liberal political economic norms.
In sum, what characterises Camdessus’s argument is his modernist tendency to
segregate and dichotomise “our” sound economic practices and “their” defective
economies. As a result, the crisis of international financial system is
unconditionally re-named a crisis of Asia.
What has been illustrated by these mercantilist and liberalist narratives is a story
of international finance where the “West” and international financial institutions
ibid.
ibid.
40
See for example John S. Irons (1998) “Asian Crisis: an interview with Nouriel Roubini”, General
Internet, http://www.economics.miningco.com/library/weekly/aa012798.html
38
39
are teaching and guiding those economies in “crisis”. Actors here are the US,
the IMF, Indonesia, Malaysia, Thailand, South Korea, and Japan. The winners
in this story are the US and the IMF - us, and the losers are the Asian countries them. Are we missing something? Where are those who are actually living in
the area and suffering from the consequence of this bizarre game?
This is the most important point in studying world affairs. But unfortunately,
there are relatively few materials which deal with the actual impact of the Asian
Financial Crisis on everyday lives. For example, Sidney Jones reported that
migrant workers there are particularly vulnerable in this context41. He
maintains:
Malaysia initially announced it would be sending back 1m foreign
workers, mostly Indonesian, with some Bangladeshis and Filipinos.
Anwar Ibrahim, deputy prime minister, has since retracted that figure,
but the likelihood of mass deportations remains. Thailand has
announced a new crackdown on an estimated 800,000 illegal migrants,
most of them Burmese....the result [will be] physical violence against
migrants who become the scapegoat for social and economic
ills....These migrants are also subject to abuse in overcrowded
immigration detention centres, to extortion by officials in both host and
home countries and, in the Malaysian case, to unsafe deportation
procedures in overcrowded boats. In Thailand, where the line between
economic migrants and refugees is blurred, mass deportation may
involve sending Burmese nationals back to persecution and worse42.
This political economic condition of everyday lives are scarcely focused on by
IPE thinkers or by officials of states and international organisation. Why?
My answer is very simple; it is because they are analysing and discussing a
different world. What they are looking at is a world consisting of growth rates
of GDP, current account balance, trade balance, foreign direct investments, and
inflation rates while the human rights abuses like those highlighted above are
contained in the story of a different world.
Sidney Jones (1998), “Social Cost of Asian Crisis: the rigion’s economic upheaval may lead to a
human rights disaster”, The Financial Times, 26/January/1998, reprinted at
http://www.hrw.org/hrw/campaigns/asia-cst.htm
42
ibid, p2.
41
Dual ontology of the Asian Crisis
As I mentioned above, the Asian Crisis is an issue of the international financial
system. The term “international financial system” does not mean that a concrete
physical international system of buildings exists. It is purely a “man-made”43
abstract system. Of course there are connections among international or local
banks and financial institutions. However, the international system is something
different from the links. The international financial system which many
politicians and economists are concerned with is a particular system which is
constructed upon the liberal concept of open-market and deregulation. This is a
particular style of financial system. If one looks at Japan, then she/he would
immediately notice there is a very different form of the banking system. The
point here is that the existence of “the” international financial system largely
relies on general acceptance by each individual participant in the international
capitalist game.
As previously mentioned, the mercantilist argument in this case is apparently
connected to the neo-liberalist narrative of free market economy. Then they
seem to forget that there are many people living in the area and suffering pain
from the economic downturn. This is a direct result of modern knowledge which
has set limits on what they can say and perceive. They are trying to objectify the
“facts” of this issue which, in turn, prevents one from “listening to” or
“smelling” the issue.
IPE thoughts of the modernist sort often dehumanise issues by narrowly
capturing these issues in terms of state-centric or materialistic
conceptualisations of world affairs. This dehumanisation is, in the case of the
Asian Crisis, reinforced by those who are against the connection of
mercantilism and neo-liberalism. In the interview with Irons, Nouriel Roubini, a
reformist liberal thinker, expressed how deregulation-centred policies are
misleading. However, his argument is also limited, to the reductionist economic
approach which reduces the nature of the Crisis to a mere regulationderegulation debate. This blinds analysts to the actual effects of this Crisis on
people living the area concerned.
I deliberately used the term of “man-made” here in order to express two meanings. One of them is
apparently to say that the international financial structure is human-made. It is not a natural
phenomenon. The second meaning is to say that the international financial system is biased in terms of
gender relations. It has been often pointed out by feminists IPE scholars that the system is masculine in
its nature.
43
Then, the question here is of what the Asian Crisis actually means to us. To
modernists, the Crisis is an economic issue which has nothing to do with
peoples’ lives. It is rather about the international financial system, the US
economy and other developed (supposedly sound) economies, and how to
sustain them. It is about an extraordinary complicated system of economics
which non-specialists have nothing to do with. For those who have been
disregarded by the modernists, this issue is about their lives, their homes, and
their next meal. They feel the issue in their everyday lives. As a result, what
characterises the Asian Crisis debate is this duality of worlds. This is the very
reason of the dehumanisation of the issue and how the dehumanisation can
appear to be mundane, boring, not worth worrying about “here”.
This becomes apparent when we see the recent change in the focus of
economists and political economic scholars. About a year ago, the focus was
surely on the economies of South East Asian states. Now, it is on Japan which is
currently facing the crisis of stagnation and recession. Many of the latest issues
of world political economic journals deal with the issue of Japanese political
economy, and analyse how one can avoid adverse influences on the US
economy.
This shows how quickly those who are on the centre of international political
economy can forget the issue called “Asian Crisis” after the Crisis has spread to
some areas - Russia, Japan, and Latin America, despite the political economic
hardship many Asian populations are still suffering. Once the tide of economic
disorder started getting closer to the “home” country geographically and
economically, their focus has shifted onto how they can stop the tide where it is
- Japan. This means that the “Asian Crisis” in the narrative of those who are in
the centre has not got, and will not get, any focus related to the ordinary
population in the area of economic hardship, but will remain within the
narrative of the international financial system and of the US economy.
Conclusion
The Asian Crisis is an interesting issue for those who are working on IPE. From
the traditional narratives of IPE, especially the western neo-mercantilists and
liberalists, the Crisis often turns out to be a crisis of “theirs”. In these narratives,
countries such as Indonesia, Malaysia, South Korea, and Thailand should be
taking care of themselves simply because the Crisis took place as a consequence
of their inappropriate economic politics. What underlies here is modernist
objectification and “Self” / “Others’ dichotomy. Modernist language uses
“international community” and “international economic stability” in order to
enforce a particular system of knowledge to “Others”.
When we take a closer look at their language, it is apparent that the term
“international” actually signifies “Self”, or simply “us”. Modernist narratives
based on a particular “Self”, be it mercantilist or liberal, are functioning to
facilitate the world capitalist system in favour of “us”. As a result, the lives of
the people in the region are excluded from any analysis of the “Asian Crisis”,
and consequently, their lives are disempowered.
Duality of ontology is not peculiar to the issue of the “Asian Crisis”. Rather it is
a peculiar consequence of modernist objectification. Through the international
political economic activities and practices of those who subscribe to these
norms and principles of modern knowledge, their version of the world (a neoliberal one) is perpetuated. If my argument is correct then “God’s invisible
hand” becomes truly invisible, as do “they”.
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