The world was supposed to end in either water or fire, so who would have thought it might implode in a frenzy of global trading on the spread between currencies? That at least is the apocalyptic scenario the journalist William Greider proposes in One World, Ready or Not: The Manic Logic of Global Capitalism, his critique of the deregulation of the international financial markets and the rise of the global economy. Deregulation, he contends, is inexorably blurring the boundaries between nations, undermining the authority of current political institutions and creating a de facto international order that operates by its own rules.
Mr. Greider's concern is markets writ both large and small: the so-called free market, the notion of which has increased in influence since the end of Communism, and the financial markets, which view the monetary and fiscal policies of nations as inconveniences — or as fodder for speculation. The convergence of the ideology of the free market and the power of the real market is beginning to control what previously had been the social contract between a government and its citizens, Mr. Greider argues. Moreover, the balance of wealth, in the form of investment, infrastructure and savings, is beginning to tip from the mature industrialized countries to the developing nations.
But the developing nations are repeating the horrors of early capitalism: the exploitation of child labor, murderous working conditions, environmental degradation. The power of "the market" and its desire to operate without consideration for externalities, or what might be called collateral damage, has rendered government ineffective or complicit. The dialectic between the exploiters and the exploited — or the haves and have-nots — will inevitably explode into violence, as it did in revolutionary France and National Socialist Germany.
Mr. Greider stops short of predicting the rise of another Hitler, but he notes that it makes no sense to continue the cycle of growth and development that each time broadens the gap between the rich and the poor. It is foolish to depress the wages of those who should become the consumers of goods being produced, and yet that is what happens when companies migrate in search of ever-lower-wage workers who will toil under ever more dangerous conditions. Capital is more mobile than labor. Mr. Greider turns this economic truism into anxiety about the future of democracy.
And well he might. Capital detests cheap sentiment. It moves on as it needs to, in search of its own enhancement. Did a state government subsidize a factory? So what? The partnership had a good run; it's over. Will a thousand people lose their jobs? Sorry, but they should have been saving and taking courses at the local junior college. Will a proud old industry fade away? Not to worry, new industries will emerge. A thousand jobs will bloom.
Mr. Greider argues that the world has been through this before, in the 19th century. We know what happens when people are expropriated, as happened during the Enclosure Movement in Britain. They become immiserated and it takes generations for the nation to recover. Why do we have to do it again? Capitalism doesn't need to be cruel. Rationality dictates that it takes a slightly smaller margin of profit and that the margin be plowed back into development. It's not necessary to intensify the inherent conflict between labor and capital. It's not necessary to accept working conditions that lead to such tragedies as a fire at the Kader toy company near Bangkok, which killed at least 188 people, many of them children and teen-agers, more than the Triangle Shirtwaist Fire in New York in 1911.
Mr. Greider notes that the Triangle Shirtwaist Fire turned into one of those defining political moments. Public outrage led to reform and gave momentum to a growing labor movement. It was an outrage that almost doesn't seem possible anymore, when the public's greatest outrage is reserved for demanding tax cuts and politicians are stuck in the wax of inconsequential political scandals. Even if there were a national consensus, it is hard to imagine American politicians having the will to fulfill Mr. Greider's agenda:
"Restore national controls over global capital. Tax wealth more, labor less. Stimulate global growth by boosting consumer demand from the bottom up.... Reorganize monetary policy to confront the realities of a globalized money supply, both to achieve greater stability and to open the way to greater growth."
Mr. Greider clearly thinks government ought to be doing something, but is he correct about what it should be? Should government's main role be as regulator? Mr. Greider seems to have no vision of government as an engine of opportunity for its citizens. Capital doesn't build schools or hospitals or roads or airports. Government does. Mr. Greider wants government to regulate markets, to protect workers, to protect human rights, but he doesn't seem to have a vision of how to give people the skills to assert control of their lives. One of the more insightful remarks comes from an entrepreneur, who says, "If you don't inherit capital, you have to borrow it." If you don't get yourself born into a family that can get you educated and keep you healthy, some other entity has to help. Unless you regard the gap between haves and have-nots as the right and proper natural order.
Mr. Greider observes that the liberal welfare state is fading as an ideal. Even where it is still strong — in France and Germany — it is under attack. But he doesn't point out that governments complaining about the expense of "entitlements" are in effect cannibalizing themselves. They are abandoning the vision of upward mobility that has stood the United States, if not the post-colonialist powers like Britain, in good stead. Capital has never wanted to build schools for the skilled workers it demands or lines for the communications systems it needs. It's hard to see arbitraging across borders as the worst excess of capitalism.
Still, One World, Ready or Not is thought-provoking. Mr. Greider points out, using Singapore and Iraq as examples, that political freedom for individuals is not the natural outcome of economic success. If nothing else, he reminds us how fragile the idea of democracy is.
Barbara Presley Noble, the former At Work and Business Book Review columnist for The New York Times, has an M.S. in journalism from Columbia University and was a Knight-Bagehot fellow in business and economic journalism at Columbia.