TRANSNATIONAL CORPORATIONS AND THE UNITED STATES IN THE GLOBAL ECONOMIC SYSTEM

Economic power in the early twenty-first century was multipolar, with the United States, Europe, and Japan representing two-thirds of world product, and China rapidly becoming a major player as well. Although the United States was not an economic hegemon and often had to bargain on an equal footing with Europe, it is economically still very dominant because it constituted such a large part of the global market in trade and finance. Several analysts depicted the transnational economy at the turn of the new century as an “empire” ruled by the United States, with strong support from its G7 partners and assistance from local members of the transnational capitalist class and their constituencies in other parts of the world.Footnote ⁶ Even if one does not accept this concept of US imperialism, it is hard to deny that the transnational capitalist system was, at least partly, the result of the United States' use of economic, military, and sociocultural might, and the support given by US allies.

Yet lately there had been major shifts in the relative importance of the home countries of transnational corporations (TNCs), and the number of TNCs that are not or are hardly US-owned or -managed had increased. According to an UNCTAD report on foreign direct investment and transnational corporations, in 2002 almost 90 percent of the top hundred TNCs were headquartered in the Triad (European Union, Japan, the United States), and the EU was leading with more than half of the top hundred. The United States accounted for somewhat more than a quarter, while Japan's share had decreased to less than 10 percent. In 2004, of the 140 largest Fortune 500 firms, sixty-one were headquartered in Europe and only fifty in the United States. And of the five hundred largest firms, only 185 then had their home base in the United States, while non-American TNCs grew much faster, especially those in Japan, Mexico, and Brazil.Footnote ⁷

The easy-money policies of the Federal Reserve under Alan Greenspan had kept the US economy nearly fully employed but had also helped cause a huge trade deficit, and major bubbles in stocks, bonds and housing. Crucial in economic globalization was that the American market serves as “buyer of last resort” for the global economy in William Greider's terms,Footnote ⁸ because it was the only major economy that year after year absorbed the large surpluses of production from other nations. Since 1994 the anual outflow of financial returns paid to foreign investors on the assets they held in America exceeded all of the profits, dividends, and interest payments that American firms and investors collected from their investments abroad.Footnote ⁹ In 2005 the balance-of-payments deficit was nearly 6 percent of gross domestic product (728·5 billion dollars), or close to 70 percent of the sum of all deficits globally. The budget deficit was almost 3 percent, not uncommon in the advanced capitalist world, but in Europe and Japan citizens continued saving. Early in 2005, the dollar assets (mostly US government bonds) of the central banks of Asia collectively surpassed $1 trillion. They were the ultimate source of the massive borrowings by American consumers against the rising value of their houses – then more than $2 trillion since 2000. At the end of 2005, Americans' savings were minus 1·5 percent, compared to figures fluctuating around 10 percent in the 1970s and 1980s.Footnote ¹⁰ Ironically, the United States was thus behaving in a Keynesian way – accumulating enormous federal deficits and consumer debts – while insisting that everyone else must follow neoliberal rules. Contrary to traditional Keynesianism, however, the redistributions in this case went to the large corporations, their CEOs, and their financial and legal advisers at the expense of the poor, the working and middle classes, and even ordinary shareholders (including the pension funds) – not to forget future generations.Footnote ¹¹

By lending large amounts of money to cover US deficits, central bankers of countries like China, Japan, and Taiwan funded US consumerism, which constituted a major market for their own products. In the end, this heavy, unbalanced reliance on finance capital that the United States employs to assert its dominance had a self-destructive element in it. It made the US economy extremely vulnerable to the flight of capital and a collapse of the dollar, but this vulnerability was two-sided – it also applied to those foreign economies that used the US market as the major repository for their excess productive capacity. If the United States collapsed economically, they would go down with it.Footnote ¹² The importance of the US market to foreign producers also forced them to adopt US level-playing-field practices. Because the United States had many competing suppliers, it could to a certain extent make them conform to the rules it set for the game. Despite America's economic vulnerability and diminished capacity, especially in manufacturing, it still put a heavy stamp on corporate globalization.

INSTITUTIONAL ARRANGEMENTS POSITIVELY SKEWED TOWARD UNITED STATES FINANCIAL AND ECONOMIC INTERESTS

US power over the IMF, the World Bank, and other international development banks had significantly increased after the end of the Cold War. Importantly, during the 1980s both the IMF and the World Bank were progressively invaded and influenced by neoliberal thinkers and their dogmatic belief in market liberalization as the economic remedy in each and every case. The Keynesian interventionist principles upon which the World Bank had been founded were now considered to be disruptive to “private sector growth.”Footnote ¹³ International economic cooperation and economic development were moved from being the primary domain of the United Nations to that of the World Bank, the IMF, and the WTO. The UN Economic and Social Council was degraded to a mere discussion platform at which countries receiving aid could only ventilate their hopes and longings. Formally, foreign countries are sovereign states, free to reject neoliberal economic development programs. But this became a problem when they fell into debt, for they were highly dependent on US-dominated loan conditions and interest rates. In fact, the US Treasury controlled the IMF and the World Bank, and if they did not meet a loan request then all other international lending organizations would refuse a loan. This meant that the US Treasury was effectively the world's creditor bank and it insisted on neoliberal terms for debt repayment in the form of “structural adjustment programs.”Footnote ¹⁴

Many members of the transnationalist capitalist class (TNC executives, investors, bankers, globalizing politicians, state officials and other governmental actors, professionals, consumerist elites – categories that partly overlap, of course) were US citizens and took the lead in the further global dissemination of neoliberal beliefs and practices that helped transnational capitalism. American policymakers (both governmental and nongovernmental) were influential in circuits of the World Bank, the IMF, the WTO, private international relations councils and think tanks that were active in this domain and more generally in the “Davos culture.” These institutions, as well as commodity exchanges, the G8 countries, the US Treasury, and so on were mostly controlled by those who shared the interests of the major TNCs and vice versa. But it is difficult to assess the precise significance of US influence, as other countries (particularly America's G7 partners) generally tended to support the policies advocated by these American actors and agencies. Critics have argued that the “Washington consensus” was forged by US economic and military power, and achieved as a consequence of America's “enormous structural power” that was “deeply inscribed into the nature and functioning of the present world order.”Footnote ¹⁵

The Organization for Economic Cooperation and Development (OECD) was one of the other major bodies promoting neoliberal globalization. This became especially clear in the OECD's proposals for a Multilateral Agreement on Investment (MAI) negotiated from 1995 onwards. If this had materialized, it would have seriously diminished the already limited autonomy of local and state authorities to regulate foreign investments and the operations of TNCs in the realms of economic, environmental, and social affairs. However, the abandonment of the MAI was due as much to opposition from a wide variety of transnational and local campaigning groups as to a diminished appetite for further financial-market liberalization among some governments after the Asian crisis of 1997–98, and disagreements among the G7 countries. The international campaign coordinated by Friends of the Earth, Fifty Years Is Enough, and other international and local groups succeeded in amplifying and leveraging government disagreements up to the point of defeating the MAI. In the end it was France's withdrawal from the process that led to the MAI's demise in December 1998.Footnote ¹⁶

But this defeat was a temporary – some observers would say pyrrhic – victory for “global civil society.” The issues to be covered under the MAI resurfaced on the public global agenda through the General Agreement on Trade in Services (GATS) in the framework of the WTO. GATS encompasses a much wider area of activities than financial investment alone, and became a major target of intense opposition from anticapitalist globalization activists worldwide.Footnote ¹⁷

One may safely conclude that the “international financial system [had] been shaped to extend US financial and political power, not to promote the world public good ... In the process it [had] opened up a bridgehead that [had] created opportunities for many more US corporate interests beside those of finance.”Footnote ¹⁸ This means that the United States did not have to rely on the kind of formal imperial institutions used by earlier leading powers such as Spain, France, or Britain, as the British political scientist Alex Callinicos has contended, since “the operation of the existing global order is structurally biased in its favour.”Footnote ¹⁹ The latter had been strongly enhanced by America's soft power, which entails the ability “to structure a situation so that other nations develop preferences or define their interests in ways consistent with one's own nation.”Footnote ²⁰ In other words, the international financial system that was positively skewed toward US interests included voluntary affiliations with US financial–economic and political power and “empire by invitation”Footnote ²¹ among foreign elites and their constituencies.

In some cases neoliberalization occurred largely through coercion, either militarily, as in Chile, where an early experiment with neoliberal state formation took place after Pinochet's coup in 1973, or financial, via the operations of the IMF in the Philippines or Mozambique in the 1990s, for example. But usually neoliberalization had to be accomplished by democratic means, and required the active construction of political–ideological consent, as has happened since the early 1970s. Beginning in the United StatesFootnote ²² and Britain as epicenters, where neoliberalism became dominant during the Reagan (1981–88) and Thatcher (1979–90) years, it spread from there to many other parts of the world, varying from place to place.Footnote ²³

THE CONTINUING PREDOMINANCE OF UNITED STATES-STYLE CORPORATE BUSINESS PRACTICES

Globalizing firms were increasingly dealing with multiple governments beyond that of their country of origin. This inevitably set a process of homogenization in motion, which had been intensified by the growing practice of joint ventures and strategic alliances between two or more companies of different nationality.Footnote ²⁴ More important, however, were several conditions that pushed TNC business organization and production across the world to converge on the US model of “free-market” capitalism characterized by relentless globalization of production, division of labor, investment, and capital markets; the creation of new opportunities for detaching domestic firms from national systems of finance, innovation, skill formation, and industrial relations; and celebration of “glamorous” fast-moving American commercial/managerial culture with its hero worship of CEOs.Footnote ²⁵ These conditions included the massive growth of international trade, the precarious intertwinement of American and foreign economic interests related to the huge US trade deficits since the mid-1990s, and the accelerated, more immediate influence of financial capitalism, in combination with the size of the US market. Other significant factors were (selective) US pressure at the WTO and elsewhere to attain level playing fields in antitrust and corporate governance, as well as US pressures on international business standards after Enron. (A prominent example of the latter was the extradition to America of three former British bankers, who allegedly conspired with executives at Enron to defraud their then employer, NatWest.Footnote ²⁶) Yet most important in this homogenization of TNC cultures was the voluntary adoption of neoliberal beliefs and practices characteristic of the Anglo-American form of capitalism by corporate managements of many stripes elsewhere in the world. The management of some TNCs might deviate to a degree from the American exemplars (for instance with regard to personnel management or social policy), but nevertheless felt compelled to conform by the need to keep up with competition in the global marketplace.

The US-style, relative homogeneity of corporate cultures can further be explained by a conducive combination of social mechanisms and institutional arrangements. First there was the education and socialization of newcomers into US management styles. Most business education was dominated by American managerial ideologies and practices. Business schools started out in the United States, and were then introduced in Europe, and had shown an enormous growth since the 1960s, increasingly also in the rest of the world. Leading American business schools had formed strategic alliances with counterparts elsewhere in the world, which also led to the founding of international business schools, positively biased toward US business models. Other routes through which US managerial thinking reached other countries were the operations of foreign affiliates of successful and well-known American companies. Of special interest are the large American management consulting firms that had been operating all across the world.Footnote ²⁷ Quite a number of non-American executives had participated in management development programs abroad, especially in the United States or their affiliated counterparts in Europe (e.g. INSEAD and IMD in Switzerland) and elsewhere.

US neoliberal think tanks (such as the Heritage Foundation, the Hoover Institute, the Center for the Study of American Business and the American Enterprise Institute), experts, and mentors had gained significant influence in the media, in education, in professional organizations, and in politics. They had also been influential to economists, globalizing politicians, and businessmen abroad, for example, in various countries in Latin America.Footnote ²⁸ Since about 1990 neoliberalism had dominated most economics departments in the major US research universities as well as the business schools (including those of prestigious universities such as Stanford and Harvard). The US research universities were also training grounds for many foreigners who took what they learn back to their countries of origin (in education, research, the media, and policymaking), as well as into international institutions such as the IMF, the World Bank, and the UN. Thus a transnational discourse of neoliberalism had been created that had a global reach.Footnote ²⁹

Other sources of inspiration were the frequent speaking tours of American management gurus abroad and a widespread focus on American companies and management practices in media and business magazines. A significant influence in the diffusion of the American way of managementFootnote ³⁰ in many Western and Westernized parts of the world was also the large number of popular books on management originating in the United States, either in their original version, in translation, or as summarized in books written by local management thinkers.

Particularly in Europe, there were some counterstrains in management thinking that recognized gaps between management theory as derived from North American business schools and local practices. They advocated a management style more based on local characteristics, such as the political and cultural pluralism of Western Europe.Footnote ³¹ During the previous few decades Japan had often been mentioned in this connection as a country especially apt in borrowing US management practices and adapting them to the local environment. The question arises to what extent existing practices differ from the American-style corporate model. The keiretsu system of tight relationships with suppliers and financial institutions had been a distinctive feature of Japanese businesses' institutional framework, one which constrained the “Americanization” of Japanese corporate policies. The system's group ties with permanent suppliers hindered free competition to set price levels of their products. But since the stagnation of the 1990s there had been much pressure on Japan to give up the close relationships and cross-subsidies concerned, and to adopt the US competitive model. We must also remember that US corporate capitalism both at home and abroad did not always live up to its self-professed free-market doctrine either. While “embedded liberalism” as it developed during the postwar boom was in decay,Footnote ³² American “free-enterprise capitalism” was still subjected to various government interventions, albeit hardly of a New Deal type any longer.

Recently, within European business circles occasional calls had been made for completely abandoning the US corporate model, referring to its overemphasis on narrow-minded shareholder interests and short-term thinking by mighty, self-interested CEOs obsessed by stock market results, and its associated highly competitive, individualistic culture within the firm. The Dutch entrepreneur Donald Kalff, for example, suggested that instead of continuing or adopting this “sharks model” one should build on the various valuable business models that could still be found in Continental Europe and which were closer to European norms and values – models which aimed first of all for economic value addition rather than mere financial profit. This would entail more pluriformity in managerial thinking and a more team-oriented corporate culture based on trust and cooperation. In this conception, the primary focus was on social innovation, since technology and financial investments were abundantly available in Europe.Footnote ³³ Dissenting voices such as these are notable exceptions to the general rule, however. The overall trend towards US-style managerial thinking remained a fact.

JUDICIAL AND OTHER REGULATORY MECHANISMS IN THE AMERICAN MOLD

The strong global impact of the Anglo-American form of capitalism was also reflected in the juridical domain. From the early 1990s onwards, in business law the Anglo-American model of the business enterprise and competition began to replace the Continental European model of legal artisans' and corporatist control over the profession.Footnote ³⁴ Globalization and governmental deregulation have not entailed an absence of regulatory regimes and institutions for the governance of international economic relations. Private regulatory systems, such as international commercial arbitration and a variety of institutions including debt security and bond-rating agencies that fulfill rating and advisory functions, are essential for the operation and expansion of transnational capitalism. Although they function as mechanisms of what Rosenau has called “governance without government,”Footnote ³⁵ these agencies still tend to have ties to specific nation-states, and Anglo-American agencies in these domains have significantly expanded their influence abroad. Since the 1980s there had been an enormous growth of arbitration resulting from the globalization of economic activity, which had led to sharp competition for arbitration business. Multinational legal firms further increased the competition, using their capacity to look for those institutions, sets of rules, laws, and arbitrators best suited to their interests. Thus the large British and US law firms had used their power in the international business world to impose their conception of arbitration and more largely of the practice of law. This was at the expense of, among others, France, which used to have an outstanding position in financial and insurance services, but French law and accountancy firms found themselves at an increasing disadvantage in legal and accounting services given the difference between the French legal system (the Napoleonic Code) and the Anglo-American law that dominates international transactions.Footnote ³⁶

Specialists in conflict and arbitration come from the two major groups that have dominated legal practice in the United States: corporate lawyers, experienced as negotiators in the creation of contract, and trial lawyers, specialized in jury trials. The growing importance in the 1980s of such transactions as mergers and acquisitions, as well as antitrust and other litigation, contributed to a new specialization in which judicial attacks and behind-the-scenes wheeling and dealing were strategically combined to reach the optimum outcome for the client. Under these conditions, judicial recourse became a weapon in a struggle that was most likely to end before trial.Footnote ³⁷ “Notwithstanding its deep roots in the Continental tradition, especially the French and Swiss traditions, this system of private justice is becoming increasingly ‘Americanized,’” as Saskia Sassen astutely observed.Footnote ³⁸

As with business law, since the mid-1980s US debt security and bond-rating agencies had become much more influential abroad, particularly in Europe, Japan, and Australia.Footnote ³⁹ Other US legal practices, such as the legal device of franchising, were also being spread across the world, as is the emerging field of conflict resolution in business matters. This growing Anglo-American impact could be seen as “both a function and a promoter of US financial orthodoxy, particularly its short-term perspective.”Footnote ⁴⁰

This tendency also became manifest in accounting practices. Foreign firms enlisted on the New York Stock Exchange had to comply with Sarbanes-Oxley, which was enacted by the US Congress in 2002 to improve corporate transparency.Footnote ⁴¹ Similarly, if the NYSE or Nasdaq were to take over and integrate with the London Stock Exchange, listed British firms would have to conform to US standards. Furthermore, new global electronic trading methods replacing national exchanges and leading to a single, global financial market also fostered adoption of common accounting and listing standards tending toward US norms.

On 1 January 2005 the European Union introduced new accounting standards for all companies registered on the stock exchange in its twenty-five member states that were expected to make some difference regarding corporate transparency and accountability. These concerned the existing International Financial Reporting Standards (IFRS) that had been developed worldwide in previous years, which countries such as Australia, China, Japan, and a number of Latin American and African countries had already introduced or would do soon. Their purpose was to make the financial reporting of companies more transparent through a common set of accountancy rules, which, as an expected consequence, would allow investors from different countries to compare them more easily. (This seems a rather optimistic view, because of the separate laws that were still in place in the various countries that have to be taken into account as well.) It comes as no surprise, then, that this system had already moved in the direction of the other major worldwide system, the US GAAP (Generally Accepted Accounting Principles – required for publicly traded companies by the US Securities and Exchange Commission), while the latter had shifted somewhat towards the IFRS, albeit more slowly. The core of IFRS is that each financial year the balance sheet figures must all represent their current “real market values.” The idea behind this is to establish what the company is worth financially if it were sold right now, which easily leads to great fluctuations in the annual figures over time, due especially to vicarious values of the so-called derivatives, and to a lesser extent also in its estimated goodwill and financial obligations regarding pension rights. European CEOs and financiers were inclined to consider this short-term focus “very American.” Traditionally, they tended to look more at a company's continuity over the years, although in recent years one could note a move toward the former perspective among European businessmen.Footnote ⁴² This all means that the American accounting rules were apparently more influential in setting the overall tone.

SHORT-TERM COMPETITIVE ADVANTAGES OF SHAREHOLDER OVER STAKEHOLDER CAPITALISM

There is another key factor, however, that explains the growing importance of US-style capitalism globally. American corporations, or other firms that modeled themselves after these, had – at least in the short term – powerful competitive advantages compared to businesses firmly embedded in social market economies in Europe and Asia. The social costs that the latter firms carried, and which enabled them to function as social institutions without undermining the social cohesion of the larger societies in which they operated, were at the same time burdens in any competition with enterprises operating in global free markets. American corporations had only few obligations to deal with such “externalities.” Hence the kind of stock market-based, corporate capitalism aimed at the short-term interests of CEOs and shareholders that American companies epitomized (and which was linked to a minimal welfare system and flexible labor markets) tended to crowd out social market capitalism and other forms of associative, stakeholder capitalism.Footnote ⁴³ Needless to say, this changeover was also deliberately assisted by those members of the business world and political elites at the local level who welcomed US-style corporate capitalism.

In the case of stakeholder capitalism, which still existed in various forms in Europe in particular, the managements of these companies retained the notion that shareholders should not become an overprivileged sectional interest group, and try to take care of the interests of the corporation as a whole. This included honoring the social-contract conception regarding employment regulation and the character of the welfare state, and also meeting certain obligations to the society of which the company was part. Such an inclusive approach might be reinforced through a shareholder base being committed to the company whatever the share price (for example, family or employee ownership or cross-share holdings in which friendly companies held shares in each other – especially relevant in attempts to counter hostile takeovers) or through a system of corporate governance that protected the company from free-market extravagances.Footnote ⁴⁴

Europe's stakeholder capitalism was under continuing pressures from both the capital markets and neoliberal ideologues, and part of Europe's business and financial elite is increasingly attracted to American capitalism, with its high financial benefits for top executives and its glamorous deal-making. The European Union had also tried (although not consistently) to enforce the free-trade rules of the WTO, thereby, oddly enough, even challenging the United States in specific cases when individual US states such as Massachusetts and Maryland (in 1997 and 1998) tried to uphold American laws to prevent contracting with European companies doing business with brutal dictatorships in Burma and Nigeria, respectively.Footnote ⁴⁵ Yet, notwithstanding these pressures and temptations, the distinctive European approach to capitalism, which was deeply embedded in Europe's economic and social institutions and values, had been able to survive thus far. But critical observers wondered how long this situation was going to last.

DIFFERENT TRAJECTORIES

In the new era of enhanced globalization most governments had less power over domestic and foreign TNCs than they once had, which made it harder to take regulatory measures. A substantial number of governments also wanted to refrain from this and actively pushed neoliberal globalization further, which can be explained by the structure of the transnational capitalist class and the role of politicians and governmental officials therein,Footnote ⁴⁶ bent on capitalist globalization in this vein. It is in this regard that TNCs benefited from state power and public resources; the neoliberal “free market” did not exclude generous state business assistance.Footnote ⁴⁷ Structural changes in the world market economy brought about by policy decisions, and corporate strategies taken by those with structural power (as opposed to relational power), were decisive here.Footnote ⁴⁸ It was particularly the combination of American structural power – military, financial, and commercial – that had produced the asymmetry of regulatory power among the governments of capitalist countries outlined earlier.

The governments of almost all states, from those that resurfaced after the collapse of the Soviet Union to old-style social democracies and welfare states such as New Zealand and Sweden, had adopted, either voluntarily or in response to coercive pressures, some version of neoliberal theory and brought at least some policies and practices into line with it. This does not mean, however, that the rapid proliferation of neoliberal state forms throughout the world from the mid-1970s onwards was solely the result of US imperial influence. As David Harvey correctly points out, one should also take the domestic component of the neoliberal turn into account (which was not necessarily always the same as “empire by invitation” orientated on the US). It was not the United States that forced Margaret Thatcher in 1979 to opt for a neoliberal approach or Deng Xiaoping in 1978 to embark on a course towards economic liberalization in China. The same applies to Japan's move towards neoliberal reform under Prime Minister Junichiro Koizumi, leader of the ruling Liberal Democratic Party since 2001. Nor can the partial moves towards neoliberalization in India in the 1980s, Sweden in the early 1990s, and the Netherlands since the mid-1990s easily be attributed to the imperial reach of US power. On the other hand, however, there can be little doubt about the strong overall influence of US economic power in this regard over the previous thirty years.Footnote ⁴⁹

In order to understand the complicated and geographically uneven paths of neoliberalization it is necessary to examine more closely the activities of the business elites and financial interest groups in the production and dissemination of ideas and ideologies.Footnote ⁵⁰ Attention should also be paid to local contextual conditions and institutional arrangements that differ greatly among states, and the transition to neoliberalism has varied as a consequence. The changing internal balance of power within a particular state over time is an important factor. This refers to the relative powers of organized labor on the one hand and businesses and corporations on the other, and their respective capacities to put pressure on state power. Most interesting is the outcome of the complex interplay between external forces and internal dynamics. While in certain cases the former may reasonably be interpreted as dominant, in many instances the relationships were more intricate, whereby specific local groups adopted neoliberal restructuring as the way forward. In Chile, for example, it was the upper classes that sought US help in mounting the coup of 1973, and it was they who opted for neoliberal reform with the help of a group of US-trained local economists (known as los Chicago boys). In Sweden it was the employers who sought European integration as the means to “lock in” a neoliberal domestic agenda that was in jeopardy. IMF restructuring programs were unlikely to be implemented without a modicum of internal support from some influential locals. A number of countries that successfully rejected IMF advice regarding structural neoliberal reforms (including Malaysia and South Korea in the 1990s) suggest that there were limits to the power of the US Treasury–Wall Street–IMF complex.

Governmental attempts to create a “good business climate” to attract and retain geographically mobile capital also played a role in adopting neoliberal policies (or aspects thereof), particularly in the advanced capitalist societies (such as France, despite calls for “economic patriotism”). The degree of neoliberalization present in a society was increasingly taken by the IMF and the World Bank as an indicator of a good business climate, which led to significantly enhanced pressure on all states to adopt neoliberal reforms.Footnote ⁵¹ Contingent geopolitical considerations have played their part as well. Compare, for example, South Korea's position as a frontline state in the Cold War that initially won it US protectionism for its state-led developmentalism. On the other hand, US backed counterrevolutionary governments in Central America and elsewhere had frequently become the target of the IMF's penchant for neoliberal restructuring.Footnote ⁵²

CHALLENGES AND COUNTERMOVEMENTS

To be sure, the American face of a great deal of capitalist globalization was not essential or inherent to it, but a contingent form of a process that was necessary to the global diffusion of neoliberal ideas, values, and practices. This means that if US influence could be excluded, or in the highly unlikely event that the United States ceased to foster corporate capitalism, this form of globalization needed not end but could very well be continued and dominated by other states or agencies that were strong proponents of it. It had been suggested that this was likely to involve the handing over of the baton to a transnational, hegemonic capitalist constellation carried by major TNCs.Footnote ⁵³

To some extent, economic globalization might obtain a different character if American social liberalism were again to set the tone in US politics as it did with Roosevelt's New Deal and Lyndon Johnson's Great Society programs in particular, and cooperate with political strains in Europe that valued the public realm, equality, and the importance of the social contract, and wished to promote fairness and equality of opportunity. In this regard Europe housed the major potential countervailing power and values regarding US neoliberalism,Footnote ⁵⁴ although Europe's actual condition was less rosy than some believers in the European Dream suggested.Footnote ⁵⁵ On the other hand, the joint involvement of European and American political and economic elites in the further opening up of a “free market” in Europe concerned a form of subglobalization of the worldwide operations of corporate capitalism.

There were signs of growing resistance towards and resentment of the powers of the Wall Street–US Treasury–IMF complex. Within the transnational capitalist class some divisions had become manifest in recent years. Rifts had emerged among the corporate elite (particularly over climate change and sweatshops) and among officials of the World Bank and other parts of the international financial establishment (specifically over the Asian financial crisis). Furthermore, some members of the OECD and G8 had expressed their skepticism on neoliberal globalization, and within the UN there had been some important struggles over closer links with corporate partners. Some of its earlier supporters (including the economists Jeffrey Sachs, Joseph E. Stiglitz, and Paul Krugman) and participants (such as the former international speculator George Soros) had come to criticize neoliberalism's major tenets, even to the point of suggesting some return to a modified Keynesianism or a more “institutional” approach – from better regulatory structures of global governance to closer supervision of the speculations of the financiers.Footnote ⁵⁶

More radical challenges to neoliberalization came from the “antiglobalization” or “alternative” globalization movements, which included many of the new social movements concentrated around environmental, feminist, minority liberation, labor, or welfare issues, as well as movements for regional autonomy and specific religious movements. Some sought to de-link totally or partially from the process of neoliberal globalization. Others (such as the Fifty Years Is Enough movement) sought global social and environmental justice through the reform or dissolution of the IMF, the WTO, and the World Bank (although, oddly enough, the core power of the US Treasury was rarely targeted). Still others (particular environmentalist groups such as Greenpeace and Earth First!) emphasized the theme of “reclaiming the commons.” In several parts of the world (including South Korea and South Africa) energetic labor movements had emerged, while Indonesia was witnessing the rise of a labor movement of great potential. In much of Latin America progressive–populist and socialist movements were flourishing, if not in power, and likely to transform grassroots resistance into state-led, sometimes strongly nationalist, oppositions to US economic influence.Footnote ⁵⁷ They all offered counterweights to the predominance of US-led neoliberalism.

Various observers suggested that a possible, albeit temporary, solution within the bounds of any capitalist mode of production would be some kind of new New Deal that had a global reach.Footnote ⁵⁸ But there was as yet no global alliance of social agents really capable of translating the global New Deal vision into practice. Despite a growth of democratic–egalitarian alliances at the global level in previous years, they were no match for the hegemonic transnational networks. The grand vision of a global New Deal entails the need to construct a Keynesian system of controlled capitalism on a worldwide scale. In an era that has witnessed many labor parties and unions in Europe and elsewhere in the West embracing the neoliberal tenets of the “Third Way,” the chances seemed slim that left–liberal and social-democratic forces would endorse such drastic reforms in the near future.Footnote ⁵⁹ More importantly, it was difficult to imagine a global New Deal since states would not agree to a single New Deal authority. But today one can perhaps envision regional New Deals, for example in Europe, now that the recent global financial crisis has dealt a devastating blow to the international trading and financial system.

It may not take long before regional alliances form and disrupt the Washington Consensus, thus undermining the global financial framework that has until now been much to the United States' benefit (or rather that of its financial–economic elites and their political allies). What this means for the future of neoliberalization in the international arena and the power balance regarding corporate globalization remains to be seen.