Angus Cameron, Ronen P Palan-The Imagined Economies of Globalization (2003) PDF

the imagined
economies of
globalization
the imagined
economies of
globalization
angus cameron & ronen palan
SAGE Publications
London Thousand Oaks New Delhi
To Leah Kharibian and Katja Palan
Angus Cameron and Ronen Palan 2004
First published 2004
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Contents
Acknowledgements vi
Introduction 1
Part 1
1 Perception, Representation, Theory Construction

and the Globalization Debate 25
2 Performative Discourse and Social Form 46
3 Configuring the Global: Globalization as

Spatio-Temporal Narrative 69
Part 2
4 Business Globalization and the Offshore Economy 89
5 The Private Economy of the Post-National State 109
6 The Anti-Economy of Social Exclusion 130
7 Conclusion 152
Notes 162
Bibliography 172
Index 184
Acknowledgements
The distant origins of this book lie in a series of obscenely long lunches held
at Sussex University in the summer of 1995. Many people contributed to
our discussions during this period and, if we do not mention them by name
here, we extend our gratitude to them anyway.
Of those who contributed more directly to its production, we would like
to thank Ash Amin, Ray Hudson, Gordon MacLeod, Mike Bradshaw,
Colin Williams and Roger Lee. Particular thanks are due to Bob Jessop, Ben
Rosamund, Adam Tickell, Jamie Peck, Robbie Shilliam and Kees Van Der
Pijl, whose strong support for this book from the outset made it so much
more difficult, but also so much more enjoyable, to write. We would also
like to thank our friends and co-workers on the Review of International
Political Economy past and present. Special thanks go to Lucy Robinson
and David Mainwaring at Sage, for their extreme patience in waiting for the
final manuscript.
Introduction
What, if anything, is the relationship between the facts and fictions of

globalization? What, in other words, is the relationship between the con-
crete processes and institutions of globalization global brands and firms,
institutions of global governance, globalizing technologies, etc. and the
various stories, myths, ideologies and rhetoric that surround them? To
what extent do the latter affect the former rather than merely describe
them? And to what extent can globalization be thought of as a real objec-
tive process as opposed to a form of communal story-telling driven by
parochial interests? These questions may at first appear to be of interest
only to academic social scientists with a penchant for obscure theoretical
and philosophical debates. However, these are precisely the kinds of ques-
tions that have gradually been rising to the top of the globalization agenda,
troubling, it seems, even the less theoretically inclined commentators.
To take just one example, the Dean of the Yale School of Management,
Jeffrey Garten, recently asked a range of leading corporate chairs, chief
executive officers (CEOs) and company presidents about the ways their
corporations were bracing themselves for being global (Garten 2001). As
one might expect, Garten begins his study from the conventional position
according to which globalization is viewed as an objective process of
market integration on a global scale, driven by developments in transporta-
tion and communication technologies. He treats globalization as a testable
empirical proposition, citing approvingly a McKinsey study that purports
to show that while 20 per cent of goods and services currently produced
enter international (and therefore global) trade flows, the proportion could
increase to 80 per cent within thirty years (2001, 76). Taking globalization
as a measurable and testable phenomenon in this way tends to cover a
familiar and limited range of issues: to what extent have corporations truly
gone global? Are financial markets operating on a truly global scale? What
is the role of the state, if any, in this new global world? How should firms
best position themselves to take advantage of these changes?
Garten is primarily interested in just these issues but, in spite of his
ostensibly very conventional view of globalization, he also asks a very
different set of questions. Rather than devote his study to objective processes
(although he clearly believes such things exist), his study revolves around
interviews with the worlds business leaders about their beliefs and opinions.
In other words, Garten seeks to analyse objective processes of globalization
by gathering together the subjective opinions, beliefs, fears and predictions
2 THE IMAGINED ECONOMIES OF GLOBALIZATION
held by corporate managers. He recalls, for instance, the words of Michael

Bonsignore, chairman and CEO of Honeywell, who tells Garten that,
the merger that created DaimlerChrysler was really one of the pivotal events
in my thinking. BoeingMcDonnell Douglas, ExxonMobil you saw these
combinations and you thought My goodness, all bets are off. There is no
more conventional wisdom on what is possible. (Garten 2001, 71)
True to his words, a year after this interview Bonsignore launched a

huge merger between Honeywell and GE, and, in doing so, affirmed and
helped further extend a trend seen as central to globalization. Similarly,
Garten also shows how James Wolfensohn, the president of the World
Bank, affected changes in the World Banks thinking inculcating his own
vision of a global economic future into the collective thinking of an organi-
zation that had historically been both conservative and strongly wedded to
the notion of the discrete national economy.
In fact, reading Gartens book one gets the distinct impression that far
from describing an objective and exogenous phenomenon, the sort of
changes and trends that he associates with globalization are a complex
interplay of the strategies and tactical manoeuvres of large corporations,
international organizations and states. These organizations are seeking to
identify a meaning for globalization from which they then extrapolate
implications for the strategic futures of their respective organizations. They
employ armies of analysts and consultants to help them predict and then
prepare for a world yet to come into existence. Might this imply that what
is taken to be empirical evidence for globalization is nothing more than the
material effects of coping tactics adopted by these corporations combined
with the competitive strategies of states?
The merger of Daimler and Chrysler may indeed be taken as concrete
evidence of the globalization of the automotive sector and, by extension, of
the world economy as a whole. But we should not forget that globalization
itself at least globalization as an objective fact did not produce the
merger. Rather, it was put forward as an audacious bid by the two compa-
nies to take advantage of what their CEOs anticipated was the likely impact
of globalization in the future. Globalization is, therefore, often used as a
form of shorthand to encapsulate the multiplicity of cognitive and institu-
tional processes which result in phenomena such as corporate mergers but
it should not be confused for the processes themselves. However, some-
where in the process of responding to these various phenomena the fact that
globalization is shorthand tends to be forgotten. As a result, many com-
mentators do not seem to notice that in the process of adapting to and
preparing for globalization, company managers and state administrators
also contribute to the very process they claim to be responding to and, in
doing so, contribute to and extend its meaning. Globalization, therefore, is
Introduction 3
not a simple and unmediated process that can be described objectively.

Rather, it is a mediated concept what we know about globalization comes
to us through the filter of theories and images that prescribe both its form
and consequences and our responses to them. Globalization is not just a
phenomenon. It is also a story.
Gartens study is in fact typical of the ambiguity surrounding the aca-
demic treatment of globalization. On the one hand, we would like to adopt
a scientific approach, and treat our subject matter as objectively and dis-
passionately as possible. By convention our theories are constructed from
the perspective of the detached observer, as if our thinking and reflection
do not intervene or affect in any way the subject under investigation. The
language of theory is presented as a neutral tool, the theorist (or narrator)
setting him- or herself outside the social phenomenon they seek to explain.
On the other hand, we know that this is never the case. We know that in
the social world, ideas, perceptions, representations and theories actively
shape the very reality that is under investigation. We know that policy-
makers, CEOs, NGOs, anti-capitalist protesters and new social movements do
not react to globalization as such. Rather, they react at best to a mediating
discourse which tells them what globalization is, how it affects their lives
and, most crucially, how it will affect them in the future. The aggregate
reaction and response to the mediating discourse, in turn, is an important
component shaping the reality of globalization itself.
Social scientific theories are, therefore, very different from theories in
the physical sciences something often overlooked in the globalization
debate. Social scientific theories are not purely descriptive, nor are they
purely prescriptive they are part of the very process of societal change
they claim to describe and analyse. As Andrew Sayer notes, People are self-
interpreting beings who can learn from and change their interpretations so
that they can act and respond in novel ways, thereby producing novel stimuli
for subsequent actions (Sayer 1992, 234). This is true even if the theories
in question are wrong. Even if globalization could be demonstrated to be
no more than a myth as some have indeed claimed (Shipman 2002), this
would not invalidate the theory. Rather, the question needs to be posed
differently. The issue here is not simply whether or not a given theory is true
in the conventional sense that is, an empirically testable proposition but
whether the stories contained within it are believed by sufficient numbers of
people prepared to invest serious time and money in them. If enough such
people exist, and if they command sufficient economic, political, social and
cultural resources, then any myth, however outrageous or outlandish, to
some extent becomes a reality. If the president of Honeywell believes in a
global future, and manages to persuade his board of directors to share his
vision and if they are collectively prepared to do something about that
future, then that future comes one step closer. If enough policy-makers
and CEOs believe that in thirty years time 80 per cent of goods and services
produced will enter international trade flows, then it is incumbent on them

that they prepare their states and companies for that eventuality. In the
course of that preparation, they will effect important changes in the nature
of that objective reality for which they are preparing. Of course, the real-
ity that eventually arises from their attempts to enact a theory may bear little
resemblance to what they actually predicted and prepared for indeed it is
highly unlikely to do so. But the fact remains that theories and perceptions
must be considered important causal factors in the changes that we witness
even the most objective social scientist to some extent sees that which they
expect and/or have been prepared to see (cf. Feyerabend 1993).
Not every myth, however, is believed and not every story is acted upon.
Why, then, are the various stories of globalization, those told by its propo-
nents and opponents alike, so readily believed by so many? The reasons
why particular stories of social, political and economic reality become
acceptable, are taken as truth or common sense, are varied and complex.
Material interest certainly plays a role, but the reasons why certain theories
are accepted and others are not cannot be reduced to mere ideological ploys
propagated by interested parties. In fact, as Regis Debray (1981) argued,
the cultural and historical specificity of mythologies means that a general
theory of myth-making is probably impossible. One thing is clear, at the
very least these stories become common sense because they are constructed
historically in a way that generates plausibility. This suggests, in turn, that
cultural theories and literary criticism may be of much greater use for politi-
cal science and political economy than is normally acknowledged.
The historiographer Paul Ricoeur (1981) argues compellingly that
social theories, including history, should be considered as a special example
of story-telling. They are no different in essence, he maintains, from other
forms of story-telling, except in the ways they are deployed, consumed and
reproduced as representations of objective reality as truth. Social theories
and historical analysis employ the same techniques of narrative construc-
tion that are common in all other fictions, myths and legends, differing
from the latter not in their internal structure, but in the assumed relation-
ship they have to the external world. This implies, in turn, that the gener-
ation and reproduction of social theories as stories is a dialogic and
evolutionary process which takes place not only in the world out there,
but in the forms of inter-personal and inter-institutional narrative con-
struction we are all, wittingly or not, engaged in. This is, therefore, equally
true of that range of stories we (currently) call globalization theory.
The process of theory construction as narrative construction, of gener-
ating plausible stories about plausible worlds, therefore has important
implications for the way we treat theory. We can no longer accept the con-
ventional notion that theories are external to the realities they seek to
describe as if they inhabit a world parallel to social reality. Rather, we can
only understand the role of theory, belief, narrative and so on, as integral
Introduction 5
parts of the production of social reality itself. In the case of globalization,

we will argue here, the relationship between its objective processes and
manifestations and the construction of theories about it is in itself under-
theorized and, furthermore, is partly obscured, because in time the historical
evolution of the theory has gone unnoticed or been forgotten.
We will examine, therefore, in this book the processes of production
and consumption of stories about globalization. This is a complex process,
and crucially, we would argue, not one confined to formal academic or
policy debates. From a legal and economic perspective, which tends on the
whole to be where we acquire our knowledge about globalization, the act of
merger between Daimler and Chrysler, for instance, was a transaction, a unit
of transfer of legal control, an exchange of ownership titles and the moment
of the creation of a new legal entity. From a sociological perspective the
one that we seek to advance in this book the merger was an act, a social
performance, conducted for the benefit of observers. This act is not viewed
by its various audiences in any nave or unmediated way. Rather, the act
is interpreted by a host of professional observers, analysts and academics,
as well as ordinary members of the public, who construct a picture of its
significance, place it in an historical context, and frame it in a more or less
coherent narrative of social development. This emerging narrative in turn
serves to suggest a limited range of plausible implications of these develop-
ments for the future. Out of this welter of observations, performances,
interpretations and predictions certain collective stories then emerge. These
are the partial and heterogeneous narratives by which any society informs
itself about itself and in response to which its members can prepare for
future action.
We should make it plain from the outset that we are not claiming to
have made some startling discovery about the nature of social reality. Far
from it; the power of naming and narrating social realities has been recog-
nized for centuries as one of the most powerful aspects of social reproduc-
tion and regulation. Listen to Thomas Hobbes, normally credited with
being the father of the realist theory of international relations, writing in
Leviathan in 1651:
the most noble and profitable invention of all other, was that of SPEECH,
consisting of Names or Appellations, and their Connexion; whereby men
register their Thoughts; recall them when they are past; and also declare
them one to another for mutual utility and conversation; without which,
there had been among men, neither Common-wealth, nor Society, nor
Contract, nor Peace. (1951, 100)
For Hobbes, society itself is a function of speech and of naming because it

is only through speech that mankind can develop the communicative struc-
tures required to manage complex and abstract practices and concepts.
Speech, therefore, consists of common social narratives, what Hobbes calls

universals, that define the domain of the social. Hobbes continues;
There being nothing in the world Universall but Names; for the things
named are every one of them Individual and Singular. (1951, 100)
Hobbes, the alleged realist, was obviously perfectly aware of the

epistemological gap between the world of things and the realm of words
a problematic that is often thought to emerge in Western philosophy only
between Hegel in the eighteenth century and contemporary deconstruction
theories. Hobbes was clearly aware that we are discussing not the real in
any unmediated and unreflective way, but rather universalls names or
abstractions. Stripped of the hype, globalization is at root a concept, a
universal name, in Hobbes terminology. But because the act of naming is
also an act of constitution and universalization (objectification), it is not a
disinterested or innocent act. Indeed, the act of naming and the construction
of stories around these names are so important that we cannot understand
globalization (or, for that matter, any other social phenomenon) indepen-
dently of the processes of communal story-telling and the rules of narrative
construction.
As Alfred Schutz once said:
I can look upon the world presenting itself to me as one that is completed,
constituted, and to be taken for granted, but, when I do this, I leave out of
my awareness the intentional operations of my consciousness within which
their meanings have already been constituted. (quoted in Bloor 1983, 9)
This should be viewed as a warning to any social theory that seeks to pre-
sent itself as objective by ignoring the processes by which meanings are con-
stituted. Schutz concludes from this that a reflexive glance is necessary, by
which we are to catch ourselves in the act of conferring meaning (p. 9). This
reflexive production of meaning is fundamental not only to understand
how Hobbes Universalls are constituted, but also to the unique human
capacity of preparing for an uncertain future. A key theme of this book,
therefore, is that this elemental reflexivity must be incorporated as a central
epistemological assumption and accommodated in any informed social
scientific thought. All too often, however, it is not. But this propensity for
reflexive self regulation (Onuf 1989, 62) must be incorporated not only in
order to better understand contemporary developments, but also to guide
us to the extent that it is possible, to future possibilities of action, to the
novel directions that may be taken.
This book, therefore, offers a reflexive glance into the shaping of the
stories of globalization. But although in the course of our argument we
place great stress on the rules of narrative construction, this is not intended
Introduction 7
to invalidate approaches to globalization as an analytic or descriptive

construct. Neither do we wish to validate them. Nor do we want merely to
force more careful thought about the quality of some of the assertions that
are made in the name of globalization their status, their applicability, their
relationship to the practice of business and states. Our aim is far more
ambitious. We will show that, over and above the various concrete
processes of technological, economic and institutional change which are
commonly presented as the essence of globalization, the more fundamental
significance of the concept is the role it is playing in rewriting the collective
imagery of society. Again, we are not saying, in principle, something par-
ticularly new: a constant theme in cultural theory of the late twentieth
century has been that of the disempowering nature of modern global capitalism
which has engendered, as Christopher Lasch famously put it, a culture of
narcissism in Western societies (Lasch 1979). There has been much con-
cern with the debilitating effects of mass consumerism and the pressures of
exhausting modernities (Brennan 2002, Bauman 1998a). But the link
between these cultural phenomena (which tend to be analysed on a micro-
and/or domestic scale) and narratives of global political economy is rarely
made. What we argue in this book is that contained within the complex
dialogic relationships between rhetoric, perception, practice and institutional
adaptation, is a subtle rewriting of the basic spatial imaginary of the state,
and hence of the entire social field. This is not, however, the process con-
ventionally associated with globalization that of the scalar transcendence
of the territorial nation-state and its replacement by a larger global
domain. Rather, the pervasive adoption of the narratives of globalization is
having the effect of altering the very meaning of spatiality within and across
contemporary states.
We are aware, of course, that the reflexive nature of social change
complicates matters, and we are in danger of falling into an abyss of end-
less recursive loops, as each observation, analysis or utterance becomes a
social act adding to the array of acts under investigation. Like the mutu-
ally reinforcing perceptions and misperceptions in R.D. Laings collection
of poems, Knots, observation of anothers observation becomes in itself an
observation to be observed, and so on da capo sine fine (1970, 13). Not
surprisingly, many economists and social scientists shy away from these
apparently never-ending loops of mutual causality. Yet, the reflexive nature
of social change cannot be ignored, and indeed, remains an underlying, if
often forgotten theme in social investigation. The myths of globalization
should not, this implies, be taken as a reason to dismiss the concept, but are
as important, if not more so, as its empirical reality indeed, they are an
integral part of that reality.
The book is founded on the proposition that in place of the single,
unified spatiality of the nation-state, globalization opens up a multiplicity of
spatial domains each characterized by different modes of social being and
identity. The image of the bounded, sovereign, territorial space of the state
which equated to the imagined community of the nation (Anderson 1991)
is being replaced by a fundamentally different image of the state whereby
the relationship between state, citizen, economy and polity is redrawn. To
put it differently, the imagined community of the territorial nation-state,
the dominant and perhaps constitutive imagery of political life in the past
two centuries, is very rapidly giving way to a series of imagined economies
which maintain the fiction of the state and indeed perpetuate it as a legal
entity but situate it within a radically different set of boundaries and
notions of social space. So the state continues to play an important role: but
it is a very different state. The transformation of the state takes place
through the deterritorialization and denationalization of myths of identity
and belonging particular to the nation-state of the nineteenth and twentieth
centuries, which in turn necessarily imply a radical recasting of the spaces
of the political. Of course, the political domain was never entirely national,
nor has it now become entirely globalized, nor are we arguing that global-
ization necessarily and inevitably generates these effects. We argue simply
and empirically that the prevailing narratives of political action and engage-
ment are changing, and they are changing in and through the production of
the particular imagery of globalization.
Narratives and practice
Although many analysts often seem to forget it, social and political theory
involves the articulation and mobilization of metaphors and images
images that are not purely decorative but are intended, however indirectly,
to have concrete outcomes as they are applied. Writing theory, therefore,
draws on the knowledge and techniques of narrative construction which,
like its literary, musical or artistic counterparts, is rule-bound. Conse-
quently, theories of historiography, the specialized branch of investigation
that examines how theologians, philosophers, historians and scientists tell
their stories, can provide an important insight into the processes that are
under investigation in this book, namely, those associated with globaliza-
tion and, as we shall come on to explain in due course, social exclusion.
In saying that, we do not want to give the impression that everything
can be reduced to a mere discourse if by that we mean elevating words
above things to produce what Pierre Bourdieu dismissed as an intellectual-
ist theory of knowledge (1991, 235). For a particular discourse to be per-
suasive, to play a powerful mediating role in human practice, it must
correspond in some way to the active experience of participants: it must, in
other words, be subject to what Freud would describe as a reality check.
The plausibility of a narrative relies on this reality check, though this does
not mean that the narrative must correspond to some crude positivist
Introduction 9
or empiricist criteria of truth in order to be plausible.1 There is a complex

relationship between practices and structures on the one hand, which to all
intents and purposes, appear external to the individual and have power of
coercion over him (Durkheim 1937, 5) and, on the other, the subjective
area of practice, the actions and decisions of individuals with different
levels of responsibility and power, which ultimately cannot be predicted or
legislated for (Bourdieu 1976). Indeed, when one of these two approaches,
the objective and the subjective, is privileged over the other, mistakes are
inevitable.
Paying attention to the communal story-telling in the constitution of
heuristic concepts has two important implications for this study. First,
there are important differences between the type of concepts, ideas and
research methods that function well in academic work, and the type of
concepts, ideas and narratives that are effective in policy discourse. Policy-
making, whether by business or government, is indeed based on a differ-
ent order of theory than the conventional academic one (Thrift 1998a,
162). Whereas for the former, the objectivist tendencies characteristic of
academic studies emphasize certainty, rationality and objective historical
forces, the latter, the policy-makers, whether in business or in government,
tend to think about issues such as globalization in very different terms.
Business is interested in globalization not for aesthetic reasons but primar-
ily as a challenge and an opportunity for profit-making; business asks itself
how can it prepare for it, not simply in order to adapt and survive, but
also, crucially, because it may be materially advantageous to do so there
is profit to be made.
Theory in business and policy-making is essentially the art of futurology.
A century ago, Thorstein Veblen (1904) argued that the anticipation of
future development is a key aspect of capital formation. As for the captains
of industry, anticipation of future earning is capitalized in the stock market
and debentures, and then set to work in the reorganization of industry.
Capitalization of future earnings and the task of preparing for the future is,
therefore, the fundamental task of the modern business strategist.2 The
anticipation of the future, whether capitalized through stock markets by
firms, or whether it is used for political contestation and emerging political
programmes, necessarily operates through narratives that themselves oper-
ate within bounded spaces of opportunity we are all, this implies, forced
to choose our future from a limited set of possibilities. All theories, including
those of globalization, do not therefore simply mediate between thought
and reality (as though these things occupied different positions on the same
static temporal plane), but also mediate between the past, present and
future. This is because, as John Commons dryly remarked, man lives in the
future but acts in the present (1961, 58).
Living in the future but acting in the present requires a narrative that
connects the two; it requires, in other words, a narrative that renders a
conception of progression through time intelligible. Globalization is such a

very attractive and powerful concept for policy-makers not least because it
is about the future, about preparation for the future, and hence about the
capitalization of future earnings. For corporate policy-makers globalization
is far more important as a vital source and opportunity for profit and
wealth creation than it is as a theory of social change. The central assump-
tion of the many organizations that fund studies of globalization and of the
countless executive and academic seminars for its analysis and discussion,
is that the better prepared we are, the better we will fare when the global
future comes to pass. Knowledge about globalization therefore has a
current as well as a predicted future value.
But as everyone prepares for this anticipated and/or feared future, the
indeterminacy of the discourse combined with practical actions leads to a
compression of historical time as the future is drawn, through competitive
emulation, into the present. Thus, as business invests heavily in logistical
and operational facilities to embrace the opportunities of globalization,
and as states adapt their institutions to cope with the supposedly new
political and economic terrain they have predicted, both set in motion
processes that accelerate the creation of the very thing they prepare for. If we
understand this predictive process as one of the basic dynamics of the
relationship between perception and conception in relation to globalization,
we immediately sense that much academic reflection is missing an important
point about the nature of the story-telling in contemporary history.
Academic reflection, which also constructs a history from the past, through
the present to the future, has tended to be too static, too one-dimensional in
its story-telling, and has as a consequence failed to appreciate the much more
complex picture that has already emerged in the area of policy-making.
The second important dimension brought in by taking the rules of nar-
rative construction seriously is that overt narratives always contain other
covert narratives. In fact, predicting the future itself has a history and
previous predictions have become institutionalized into the fabric of what
we take to be the structure of the world economy. There are, for example,
other histories of globalization (cf. Hopkins 2002). Globalization has
appeared in other guises within communal stories that predicted different
futures. As the discourse has developed, we have witnessed a compression
and repression of the history of globalization itself, as elements of previous
stories subside or disappear altogether to make way for a new story that
renders the current presentation of globalization coherent with its past. But
the institutional effect of the previous predictions is not lost; it is still with
us in some way. So, for example, stories about the crisis of the state in the
1970s (OConnor 1973; Habermas 1975), the challenge of the evil empire
and the exhaustion of natural resources in the 1980s, the rise of Japanese
and south-east Asian industrial hegemony in the 1980s and 1990s, and the
current clash of civilizations and the threat from radical Islam in the
Introduction 11
Middle East (Achcar 2002), all of which have formed elements of the larger
narrative of globalization, have to a greater or lesser extent dissipated over
time. But they leave traces that can be unearthed and help understand the
process of change. As de Certeau notes:
In their respective turns, each new time provides the place for a discourse
considering whatever preceded it to be dead, but welcoming a past that
had already been specified by former ruptures The labour designated by
this breakage is self-motivated. In the past from which it is distinguished,
it promotes a selection between what can be understood and what must be
forgotten in order to obtain the representation of a present intelligibility.
(1988, 4; emphasis in original)
The present intelligibility of globalization and with it the contem-

porary state therefore paradoxically entails an intricate process of
forgetting; a complex delimitation of what is acceptable, desirable, possible
and, above all, normal to contemporary life. But knowledge of these past
stories is useful in understanding the formation of contemporary discourses
of globalization in particular and social formations more generally.
Although redundant in the current formation, these secondary stories of
globalization have elicited certain responses at varying levels at different
times with specific institutional and social outcomes.
Our task in this book will be, therefore, partly to reconstruct this
history of global futures that have at various times contributed to the
formation of theories of globalization. This is significant because it will
demonstrate that the dominant narrative of globalization contains a hidden,
foundational narrative (in fact, a set of narratives), in which past, present
and future are re-written.
The lost national economy
But why should the redrawing of conceptual boundaries be so significant?

Why place the emphasis on rhetoric and perception? Surely the real legal
and physical boundaries between societies and economies continue to func-
tion much as they always have irrespective of any conceptualization? The
meaning of an alleged change in the concept of the spatiality of the nation-
state can be interpreted only within an interpretation of the meaning of the
nation-state itself. What discursive baggage does the concept of the nation-
state carry? What kinds of practice does the concept legitimize? The answer
to these questions, of course, cannot be simple there never was just one
fiction of the state but rather a set of normative expectations interpreted
and applied in local contexts and according to local conditions. The
national state of the industrialized north is manifestly very different from
the post-imperial state of the south, and the east Asian state of the early
twenty-first century is not the same as the European state of the nineteenth
century, however much conventional state theory may seek to establish
them as equivalents (cf. Anderson 1998).
Despite the many empirical differences between states, there has been
nevertheless what the French sociologist Dominique Schnapper calls the
idea of the state (1998) a pervasive and idealized, if not as universal as
we tend to think, notion of the nature of society and its relationship to the
state. This ideal-typical conception of the state has long provided simulta-
neously both a normal format of statesociety relationship, and a legiti-
mizing ideology of this same format called the nation-state (Delanty 2001).
So long as this idea of the state is generally accepted is plausible the
world can be seen as naturally divided into nations or peoples. These
nations and people construct institutional structures that advance their
unique notion of the good life. The state serves (or at least should serve)
as the political expression and the institutional arm of the nation. The state,
therefore, should advance the economic, cultural and political goals of the
nation as a whole. The nature of the national economy has conventionally
been understood in similar terms, as a servant to the nation. The world
economy has, therefore, traditionally been conceived of as aggregate dis-
crete national economies separated along political boundaries.
It is because of this traditional conception of state, nation and econ-
omy as territorially and normatively co-extensive that Zygmunt Bauman
maintains that the development of the modern nation-state accompanied
the rise of calculative rationality. The specific category of the nation-state is
founded on the notion of society as an organized and mechanical organiza-
tion of people (Bauman 1992, 6). In a similar vein, Nicos Poulantzas saw
the nation-state as an historically specific matrix of spatial and temporal
forms, the precise combination of which would alter over time as the nature
of economy and society altered (1978). In both cases, this need to self-
consciously design, monitor and adapt society reveals that it has always
been a fundamentally reflexive form of social organization. In that sense it
may be argued that from its earliest formal manifestations, the state has
been constantly (re-)created in pursuit of changing needs and conceptions of
the nation. The material reality of the nation, of course, was represented
in the state hence these are mutually constitutive concepts.3
There were certain logical imperatives embedded in the concept of the
nation which also pervade political discourse. They served as intuitive
truths and, therefore, as common narratives. An immanent and discrete
collectivity represents the nation-state, as Bauman notes, as a self-organizing
historical entity sharing in the formation and execution of collective goals.
The matter of collective goals is simultaneously a question about ethics, i.e.,
which of these goals are honourable, and a question about technique: how
a self-organizing community is best to achieve such goals (Schnapper 1998;
Introduction 13
Palan 2003). The representation of economic closure, of an homogenized

national economy, was central to the idea of the subordination of market
forces to the goals of the state. It may be debated at length whether there
was indeed ever a nation, let alone a national economy, that corres-
ponded to the ideal of closure (we would argue that there was not), how-
ever, the imperative of the logic of the nation legitimized a particular
political economy centred on the closure of the state. The idea that the state
was the political arm of the nation or the community was translated into
the practice that the community had a responsibility to educate its popula-
tion, to provide them with work, healthcare and so on. The state, as the
collective arm of the nation, had the right to control and subordinate
market forces for the benefit of the nation.
The identification of the nation as constitutive of the social body gen-
erates a series of logical propositions, which the state must then enact. The
nation was predicated upon the presupposition that its members share in
some epic spiritual journey.4 The agglomerations of people who happen to
reside within a given political boundary and/or share linguistic or other
attributes were viewed as having a common destiny. In this context patri-
otic feelings were translated into various forms of nationalist ideology
which ascribed meaning to the collectivity and to the role of the individual
within it (Anderson 1991; Smith 1992).
Consequently, nationalist theory is strongly prescriptive in that it sug-
gests that the spiritual unity of the nation must be translated into both a
responsibility on the part of each individual towards the whole and, in turn,
a responsibility on the part of the nation towards the individual. The lofty
goals of the nation necessitated that the individual, legally and morally con-
stituted as a member (citizen), subordinate him or herself to the common
good.5 Each member of the nation was charged with responsibility towards
maintaining the physical and spiritual continuity of the father/motherland
and with providing future generations with the right conditions to continue
the journey. Throughout its history, therefore, the nation has performed a
central constitutive role with regard to the state, informing and legitimizing
new forms of social organizations and new forms of surveillance.
This is equally true with regard to specific formation of the national
economy. The strongly territorial idea of the nation-state was from the out-
set closely bound up with the extension of regulatory control over the assets
and transactions of the national population and the emergent institutions
of the private and public sectors. From the late Middle Ages to the mid-
nineteenth century a gradual but very deliberate process of carving out and
consolidating the fiscal state took place throughout Europe (Bonney 1998)
a process that subsequently informed processes of nation-building
throughout the world.6 At the same time as delineating demographic, politi-
cal and juridical spaces, the state border also serves to separate and create
the domestic and the international economies as discrete spaces. Some
conception of a bounded political economy is, for example, a prerequisite

for the regulation of all forms of inter-national trade, a concept that has no
meaning except in a world economy divided by national borders. The image
is of an inter-national economy with the emphasis on the reflexively mediated
goals of mutually recognized state economic and political sovereignty. John
Maynard Keynes, for example, argued that in order that free trade
achieves its intended goals, capital markets should be strictly controlled by
national governments. Even neo-liberal economists argue enthusiastically
for a goal of global free trade as an instrument of national economic
growth and welfare maximization.
Whereas the national economy was understood in the nineteenth
century as the material base for the spiritual pursuits of the nation, a power
base from the strategic and spiritual goals of the nation, the same national
economy in the twenty-first century implies something very different: the
primacy of a national form of regulation in support of capitalist accumula-
tion. An imaginary vision of a national economy was set to legitimize the
shared goal of the new interventionist state. The Bretton Woods agreement,
for instance, imposed strict limitations on international movements of capital
in order to protect the new national macroeconomic planning measures of
the 1930s (Helleiner 1994, ch. 2.)
Notwithstanding its contradictions, the assumed relationship of spatial
correlation between economy and society contains an assumption of sub-
ordination that remains commonplace throughout the social sciences.
Among sociologists it is represented most clearly in the work of the struc-
tural functionalists. Talcott Parsons, for instance, viewed the economy and
politics as two functional sub-systems of the social system. Similarly David
Easton (1953) followed the Marginalists in defining the political system as
an alternative mode of resource allocation analogous to that of the econ-
omy. These ideas were then echoed in the first wave of development theory,
namely modernization, which was predicated on the necessity of the
creation of proper (economically, politically and morally) conditions for
the economic success of the nation-state in a world economy (e.g. Rostow
1960).
But in advocating a particular political system, modernization theorists
and liberal economists, together with the rest of the literature predicated
on the concept of a national economy, were already acknowledging the
centrality of political choice. The notion of the national system which is
in practice the discrete political and economic systems of the state working
in combination as the national economy implied not only a discrete
separation from external environments (the world market, other sovereign
states), but also a self-organizing and self-producing capacity on the part of
the nation-state itself. National economic policy is, after all, a matter of
choice, a choice which is, ostensibly at least, open to the nation. The
nation may choose to adopt open borders and a free trade policy, or it may
Introduction 15
choose instead a varying degree of protectionist policies. Economists have

on the whole argued in favour of the former and against the latter, but the
issue of choice, and hence the ideological debate surrounding national
choices, was central to the political debate. During the golden years of the
sovereign national economy, therefore, the period between roughly 1930
and 1980, we saw impassioned debates as to which national economic
policy was to be taken.7 It was a period characterized throughout the world
by a battle between isolationists and universalists, between advocates of
protectionist, nationalist and socialist policies, and advocates of free trade
and open borders. Under this ideological guise, governments of all political
persuasions and degrees of democracy presented their constituencies with a
stark choice between going it alone or submerging the national economy
in an increasingly transnationalized economy.
These sorts of political debates were predicated on a single central
assumption, namely that the state was the sole and proper intermediary
between the demands of the international market and the demands of its
citizens for social and economic equality and other social goals. The myth
of the nation-state can be seen broadly as a guide for action. The problem
that globalization poses, so the argument goes, is precisely that by eroding,
and undermining not only the state, but also the idea of the state, the
entire format of political life that dominated the past two centuries is also
under threat.
The trifurcation of the state
What then, is this new narrative of state and society that has emerged to
replace the old one? How do the new imagined economies of globalization
differ from the imagined community of the nation-state? The dominant, if
paradoxically hidden, imagery of globalization, the imagery that is at the
base of policy-making, we argue, is not the conventional cartography of
two-dimensional lines delineating spaces of territory, a shift from the
national to the global, but a tri-partite cognitive map distinguishing
between distinct socio-economic spaces characterized in part by different
socio-economic velocities. As this suggests, globalization does not create a
global system that is little more than the state-writ-large by which we
mean, having essentially similar attributes to the familiar system of nation-
states as described above, albeit now operating on a vastly larger scale.
Rather, in the emerging imagined economies of the state the various systems
of authority and sovereignty can no longer be seen to occupy the same
spaces as they did in the territorial state and nor are their boundaries
coextensive. They are posited instead in an array of different normative and
cognitive spaces whereby the boundaries of the state (which have never
been depicted as so secure and so real as they are in the context of debates
Private sector Third sector/ Public sector

social
economy
Offshore Private Anti-
Institutions: Institutions: Institutions:

World/global economy National economy Local/peripheral
Global markets National state bodies economy
Global firms Formal labour market Community
Merchant banking Local state bodies Family
Global cities Domestic firms Neighbourhood
Media corporations Borders Welfare state
Global governance Domestic market Informal labour market
(WTO, UN, OECD, Retail banking
World Bank, etc.)
TNCs
Alliance capitalism
Processes: Processes:
Globalization Privatization Processes:
Technicization Liberalization Dependency
Securitization Deregulation Stagnation
Virtualization Modernization Decline
Growth Globalization Exclusion
Growth Marginalization
Obsolescence
Normative Normative Normative

characteristics: characteristics: characteristics:
Economic Political Static
Dynamic Dynamic Uncompetitive
Site of competition Competitive Inflexible
Impersonal Entrepreneurial Pre-global
Apolitical Flexible Residual
Fluid Globalizing Dependent (aid or
Future-oriented Privatizing welfare)
Developing Enabling (business) Un- or de-skilled
Expanding Modernizing Outmoded
Technological Market-led Third world
Real Employed Unemployed
Onshore Underclass
Mainstream Economy (Social inclusion) Welfare and/or informal

economy (social exclusion)
Change in status only available through:

Flexibilization, Retraining, Reskilling, Insertion,
Integration, Modernization, Development,
Formalization, etc.
FIGURE 1 COGNITIVE MAP OF THE IMAGINED ECONOMIES OF GLOBALIZATION AND

SOCIAL EXCLUSION
Introduction 17
on globalization) are rendered multiple, complex and dynamic. For the

purposes of our argument, we have labelled these emergent spatialities as
the offshore, private and anti-economies.
This trifurcation of socio-economic space does not mean that the emer-
gent spatialities are equivalent. Rather, there is a distinct hierarchy between
them and an unavoidable historical dynamic. This hierarchy can be
expressed in two ways. First, the status of placeless globality (the so-called
borderless world), exemplified here by the offshore economy, has a
strongly normative content in relation to the other two. Globality, whether
understood as a consequence of inexorable and concrete historical
processes or as part of general social theory, is presented as an ideal socio-
economic destination for the other two, which must adapt themselves or,
rather, those people, places and institutions that they contain to become
more global. Second, a distinction is drawn between a space of globality
and near globality characterized by competitiveness, fluidity, flexibility
and social inclusion and a space of non-globality and/or anti-globality
characterized by boundedness, stasis, redundancy and a specific form of
archaic localness, that of social exclusion.
Despite the hype, people still inhabit as the anti-globalizers are correct
to point out the world of states, and these states, if anything, are playing
an ever bigger role in the control, organization and surveillance of daily life.
But what the anti-globalizers (that is, those who deny that globalization is
taking place) appear to ignore is the fact that these are very different sorts of
states from the ideals of the nation-state to which they appeal. To begin
with, a good portion of national economic activity, particularly finance,
has increasingly shifted towards a de-territorialized space of flows (Castells
1996). This offshore economy consists of largely unregulated legal spaces,
external to but nevertheless supported by the state system and which appear
to be perfectly suited for capitalist accumulation (Palan 2003). This space of
the offshore economy has long been confused by the hyperglobalizers
(whether proponents or opponents) with globalization itself. When such
commentators talk about a global market, global trade or global finance,
what they have in mind is essentially the offshore financial market. But how-
ever significant it might be, the offshore economy is far from encompassing
the entire range of human activities in the modern world. On the contrary,
for the greater proportion of humanity that is touched by globalization,8 the
experience of global finance and offshore is mediated in one of two formats.
These we describe as the private economy or competition state (Cerny
1994) and the anti-economy a space of exclusion lying beyond the
norms and practices of the emergent global order.
The private economy or the competition state is the increasingly domi-
nant discourse of statehood in the context of globalization. This in itself
shows the folly of the hyperglobalizers. No longer content to organize
national life within its boundaries, the modern state seeks to legitimize itself
as a competitive entity operating in a globalized world which means, as

we will see, a world that acknowledges the centrality of offshore. This con-
ception of the private economy has been expressed in a number of ways
by several different authors and in many policy programmes, but in all
instances refers to the need for the state, real or perceived, to adapt to globali-
zation. This adaptation, in all cases, involves a gradual withdrawal from the
direct ownership of the means of production (usually through a process of
privatization), coupled with various measures to increase the competitive-
ness of domestic workforces (for example, through (re-)training pro-
grammes, wage and productivity deals and/or the curtailment of union
power), lower regulatory barriers to both domestic and international invest-
ment (for example, through the creation of export processing zones) and so
on. Both ways of describing the adaptive moves of the state combine to
transform the public space of the nation-state into a realm that is essen-
tially private and economic in terms of its normative character. This does
not, of course, mean that the public character of the state has disappeared,
but rather that with the fragmentation and dislocation of the spatial unity
of the nation-state, the public realm has ceased to be the definitive one. This
is, for example, clearly expressed in the discourse of governance, as dif-
ferentiated from government in many globalization debates. Rather than
the primary role of the state being the reproduction of the nation, there-
fore, it is increasingly geared far more towards the reproduction of the pri-
vate national economy against normative standards set by an ideal-typical
economic globality. In its role as a normative space, however, the private
economy of the contemporary state also plays another, significant function
that of policing the boundaries of the real state. As such, the private econ-
omy of the state, however much it may be separate (at least theoretically)
from offshore, in fact combines with it to form a single, if differentiated,
space of inclusion. The private economy, therefore, also serves as the central
axis upon which the mapping of the spaces of globalization is currently
configured and in response to which a wide series of policy measures are
enacted by states, firms and other international actors.
The creation of this normative space of inclusion reveals a third aspect
of globalization one that has gained least attention and which has tended
to be kept separate in the public and academic imagination; that of social
exclusion. How and why have the poor come to be understood as the
socially excluded? How, indeed, is it possible to conceive of a notion of
social exclusion at all? Where is the space beyond the social to which the
poor have been consigned? Where, for that matter, is the space of social
inclusion? We want to argue that the emergence of both the concepts of
globalization and social exclusion (both first appear in the 1970s) is not
coincidental. Rather, globalization and social exclusion both represent
attempts to capture something essential taking place in the nature of social
spatiality and specifically the spatiality of the nation-state. The concept of
Introduction 19
social exclusion entails a subtle (and occasionally not so subtle) respatialization

of social relations and, quite specifically, an elision of social and economic
identities. As a leading critic of the concept of social exclusion, Ruth
Levitas, argues,
the way [social exclusion] is currently being used actually obscures the
questions of material inequality it was originally intended to illuminate: it
has been co-opted into a different discourse, with different purposes and
different effects It presents society as experiencing a rising standard of
living by defining those who have not done so, who have become poorer,
as excluded from society, as outside it. (Levitas 1996, 7)
The curious spatiality of social exclusion alluded to by Levitas is a

consequence of a profound dislocation of established conceptions of the
normal relationships between economy, society and state. It produces a
situation whereby the poor can be seen as outside of society, because the
fundamental meaning of the social is undergoing a significant change.
Indeed, some have declared that these changes herald a death of the social
(Rose 1996, 1998; Delanty 2001) or a society entering a state of siege
(Bauman 2002). Increasingly, to borrow Scott Lashs pithy phrase, the poor
are constituted as a class not in but of civil society (1994, 133).
It appears to us, therefore, that the discourse of social exclusion opens
up a third imagined economy within the contemporary state a space of
anti-economy where the rules of globalism and privatism do not, or do not
yet, apply. By calling this the anti economy we are not suggesting that
spaces and places of poverty and exclusion are in any sense uneconomic.
Rather, we are suggesting that in the emergent normative spatial hierarchy,
certain modes of existence that were once accommodated within the idea
of the state (Schnapper 1998) have effectively been written out of normal
society normality being defined in terms of proximity to ideals of global
economic participation and consumption.
The power of the discourse of globalization is the underlying but
always implicit assumption concerning the immanent and mutually consti-
tutive nature of these three spatialities. These three overlapping elements
simultaneously delineate the content of the global and generate a spatial
and temporal hierarchy for the state in relation to it. Each is distinguished
by different normative characteristics, types and levels of institution,
dynamic historical processes, degrees of territorial embeddedness, and
levels of access to reflexivity as an instrumental resource.
The tripartite scheme above summarizes our attempts to map together
the elements of the configured imaginary of contemporary techno-economic
globalization. The offshore, private and anti-economies presented here are
constituted within and constitutive of the narrative configurations of globali-
zation. The three categories are not intended as fixed or wholly separate
spatial categories, but rather combine to form an overlapping hierarchy of

normative economic domains which are located within and across states to
varying degrees, are subject to varying degrees of political and legal influ-
ence, and are constituted through differing institutional structures. Whilst
each of these concepts, offshore, private and anti-economy, contain a
strong implication of spatiality, these spaces do not, and indeed are not
intended in our narrative to conform to a conventional territorial geography,
nor are they wholly separate from it. Their relationship to conventional
territorial spatialities is best envisaged as becoming less place bound, and
therefore increasingly placeless, with increasing globality. The relative
degree of access to and mobility between these three domains by individu-
als and firms has significant consequences for their respective degrees of
access to the fruits of the world economy. Each element of this scheme has
both a discursive and a concrete institutional form already, though they are
understood to be in a process of active evolution.
These cognitive spaces, it should be stressed, are only partly descriptive
of tangible spatialities. Although each can be associated with particular
spaces, places and institutions, their importance lies less in what they
describe than in what they narrate. In representing a dynamic respatializa-
tion of social and economic relations, the discourses of globalization and
exclusion posit the immanent development of new spatial forms to which
policy-makers, industrialists, jurists and ordinary people must adapt.
The evidence for the existence of these cognitive spaces lies, therefore, as
much in the pronouncements and futurologies of politicians and business
leaders which will lead to concrete institutional changes as it does in
tangible phenomena.
The global politics of poverty and the poverty of global politics
In the course of its growing plausibility and acceptance, a concept with

the power of globalization entails the recasting and, in some cases, the
forgetting of older stories (de Certeau 1988). Nowhere is this more true
than in the case of poverty. As the basic metaphors of social life have
changed, so specific sets of social relationships, which relied on older
forms of social solidarity, have also changed. In the case of the poor, who
have, for centuries, always been with us in other words constituted as
part of a social whole to which us, the non-poor, have a responsibility
they have been renamed as the socially excluded, placed somehow out-
side of society.
The effects of this recasting of poverty as exclusion are, as a number of
commentators have argued, profound indeed (for example, cf. Levitas
1996, 1998; Byrne 1999; Bauman 1998b; Rose 1996, 1998; Procacci 1978,
1999). In a world where identity is forged through consumption and is itself
Introduction 21
consumed, the poor have achieved, in Baumans (1998b) terms, the status
of flawed consumers. As such they are cast out of the realm of moral
obligations, in a society where mutual obligation on the basis of belonging
has been replaced by mutual obligation to consume. However, and just as
alarming, the respatialization of social relations which both of these con-
cepts represent has far-reaching consequences for the possibilities of what
we can do about poverty. As the basic metaphors of social life are being
transformed, as we are passing from the imagined community and into a
world of disjointed and fluid imagined economies, so the possibilities of
politics also change. This is not just because existing political institutions
might be simply rescaled (for example, through the creation of global
institutions of governance such as the WTO or the International Criminal
Court in place of/additional to national institutions), but because the mean-
ing of the political itself must change.
How can we resolve the increasing dislocation of geographies of
economies from geographies of societies and polities? For some, the solu-
tion to the respatialization of the political engendered by globalization is
straightforward; political engagement itself must go global. And some
forms of political action have indeed gone global on the streets of Seattle,
Milan, London, Johannesburg and anywhere else the travelling circus of
global governance comes briefly to earth. Calls are also heard, often as
part of the same strategy, to go local, to resist the inexorable rise of face-
less global institutions by reinvesting in community and place. Colin Hines
(2000), for example, has gone so far as to propose localization as the most
appropriate and salient manner of resistance to globalization as though
somehow simply going in the opposite spatial direction will serve to rein-
vent older forms of political and social solidarity. For all that we may share
some of the concerns of the various anti-globalization movements that have
developed in recent years, this is not what we mean here by the political.
The anti-globalization movement is one aspect of a politics of globalization
(that is, a politics that is reactive to globalization taken as fact) but does
not represent, in our view, a particularly coherent response to the changes
outlined above the vertical and normative fragmentation of the very idea
of society and, by extension, the possibility of an effective polity. In short,
until we understand the complex respatialization of social life of which
globalization and social exclusion are two important narrative components,
the nature of the political will remain elusive. Of one thing we can be sure,
however: the politics of the imagined community of the nation-state cannot
pass easily into a viable politics for the imagined economies of globalization.
Our reasons for writing this book are, therefore, quite deliberately and
explicitly political, though we do not write in pursuit of a pregiven politi-
cal agenda. Rather, the fundamental purpose of developing this argument
represents an attempt to investigate and discover the boundaries of the
domain of the political that emerge from our understanding of the emergent
spatiality of the contemporary world. It is our contention that the political

(either in the general sense or in the form of specific political responses)
cannot simply or easily be read off from contemporary debates about globali-
zation and/or exclusion, because to do so takes them too literally as descriptors
of concrete phenomena. Rather, the spatialization of the political must
necessarily be linked directly to the complex spatialities of the social that
are being produced through the transformation of the fundamental imagi-
naries of the state. If this politics has, for the time being at least, a small p,
this is because it is to be found less in the actions and pronouncements of the
official political debate the public globalizers and their public opponents
and the formal debate on exclusion than in the ways the various narra-
tives of globalization and exclusion have come to be incorporated and insti-
tutionalized in everyday life. If this suggests a much more mundane account
of globalization and social exclusion than that provided by the passions of
high politics, then this, we argue, is precisely because both globalization
and social exclusion have become mundane. It is their utter normality a
normality that has been achieved with a quite extraordinary speed
wherein lies their power.
Structure of the book
In arguing for the veracity of the respatialization of the contemporary state

outlined above, we need to go through a series of steps. Before we get to the
three chapters that make the substantive case for the existence of our three
imagined economies the offshore, private and anti we need to outline in
more detail the foundations of our argument. To do this, Part One consists
of three broadly theoretical chapters. The first outlines the main current
positions in the academic and policy debates on globalization, and its rela-
tions to theory construction and perception, both to establish the dominant
conceptualizations of the debate and to identify any weaknesses and omis-
sions. In devoting this chapter to the discussion of globalization we are not
seeking to privilege this particular debate over that of social exclusion
which, as we have already suggested, is closely linked to it. Rather, we are
acknowledging the fact that globalization, however conceived, is the touch-
stone for the process of respatialization we are arguing for here.
Globalization has acquired, in Bob Jessops (2002) terms, an ecological
dominance in current social debate, a dominance that we have no choice
but to acknowledge.
Following from this we lay out in greater detail our theoretical posi-
tion, using elements of the globalization debate to explore the relationship
between theory and reality; narrative and performance. In doing so we
draw on the work of historiographers, literary theorists and theologians as
much as we do economists, political economists and political scientists to
Introduction 23
explore the significance of narrative forms and structures in negotiating

spatial change. Chapter 3 follows on from this, exploring in greater detail
the dialogic process of socio-spatial change, arguing that the establishment
of a narrative as powerful as that of globalization entails dual processes of
retroscription and proscription a simultaneous rewriting of the past
and future which seeks to establish and maintain plausible stories about the
present. Part Two consists of three chapters which examine each of our
three imagined economies in turn, considering both their empirical forms
institutions, processes, people and places as well as the ways in which they
relate to each other in the production of a new spatial imaginary for the
contemporary state. Our concluding chapter reflects on the implications of
the production of this imaginary and specifically explores the nature of the
political within which it might be appropriate, possible and/or necessary to
intervene in and alter it.
PA RT O N E
1
Perception, Representation, Theory
Construction and the Globalization Debate
This book analyses the concrete processes of globalization through a study

of the historical relationships between narratives of social reality and
processes of institutional change. The basic argument that we make is noth-
ing new: namely, that there are no objective relationships between observer
and observed. As a result, the very process of observing a social phenome-
non such as globalization, and therefore participating in, as some authors
describe it, a process of communal story telling (Ricoeur 1981), interferes
in what is assumed to be a wholly externalized, objective process. But
clearly it is not enough to assert in a theoretical and abstract fashion the
existence of some relationship between narratives and institutional change,
we need to demonstrate concretely how these relationships have developed
into their contemporary forms.
We are, of course, not the first to have noted the importance of theory,
perception and rhetoric, and not the first to attempt the ambitious task of
incorporating these concepts into an analysis of globalization.1 Despite this,
although only rarely explicitly acknowledged, the relationship between rep-
resentation and phenomena, between narrative and globalization, is pre-
sent, if only obliquely, in the majority of studies. But an analysis of this
relationship is conducted often tacitly and rarely in a systematic way.
Furthermore, by and large there is little attempt at drawing on the social
scientific theories that deal specifically with the relationship between
history and narration. This chapter examines the manner by which the rela-
tionship between globalization and narration has been portrayed so far.
The chapter is not intended to be comprehensive, and it does not reproduce
the progressivist wave thesis that characterizes many histories of globali-
zation. Indeed, in the first section of the chapter we argue against such pro-
gressivist accounts, partly because they tend to misrepresent globalization
theory as evolutionary, and partly because, in doing so, they leave out
older, apparently cruder versions of globalization, which none the less have
played an important role in their time. After that, we go on to demonstrate
the ways in which the problematic relationship between globalization and
representation has been treated so far. For convenience of presentation, we
divide existing approaches into four, characterized as mainstream, Marxist,
Gramscian and culturalist approaches. We will examine each in turn, con-
cluding with the way we propose to use methodologies drawn from cultural
studies and literary criticism in our study.
The wave thesis
One of the favoured devices among academics in analysing globalization is

the notion of phases or periodization. In a recent book, Charles Albert
Michalet, himself the author of one of the earliest accounts of globalization
(1976), identifies three phases in the evolution of globalization: the multi-
lateral system of the early 1950s and 1960s; the internationalization phase
of the 1970s that saw a period of massive relocation of manufacturing and
assembly lines to the Third World; and globalization proper which began
in the 1980s (Michalet 2002). In a previous study, one of us (Palan and
Abbott 1996) described a similar progression in the globalization debate
from the point where state and globalization were viewed as two incom-
patible structures, to a more nuanced approach whereby state and globali-
zation are viewed as mutually constitutive. There are many other such
accounts, the common thread running through them being the notion of
evolution and progression; the idea that both globalization in practice and
the globalization debate have evolved through phases, including phases of
learned experience.
The notion of progression and periodization is undoubtedly a useful
device. But there are problems. The implicit assumption in academic
accounts is that through discussion, debates, etc. the latest studies of global-
ization have learned from and transcended past analysis, as well as engaged
in new empirical analysis, and as a result provide us with a fuller picture of
the processes at work. However, if there is, indeed, a relationship between
theory and practice, between narration and institutional change, then the
older, apparently less sophisticated accounts must have played a role in
shaping the very institutional change that the latter fuller accounts seek to
describe. The problem is that the wave theories tend to gloss over this his-
torical relationship and, as a result, the latest, fuller accounts are in dan-
ger of submerging the earlier histories, losing something important about
the dynamics of the process.
To take one of the better examples of the wave thesis, Hay and
Marshs edited collection of essays Demystifying Globalization (2000) pre-
sents the evolution of theories of globalization in terms of a series of
Perception, Representation and Theory 27
phases or waves coming in a roughly chronological sequence. The first

wave, dubbed business globalization, is largely dismissed for its exagger-
ated parody of, and wild extrapolation from, contemporary events, and
because it is marked by a casual empiricism (2000, 4). Business globaliza-
tion consists of those accounts which, although particularly popular among
business and management theorists, are also perpetrated by academics,
journalists and many politicians. It is a body of theory that announces, with
scant attention to the complexities of the issues at stake, the advent of a
borderless world (Ohmae 1990) marked by the end of sovereignty
(Camilleri and Falk 1992), the end of the nation-state (Ohmae 1991) and
the end of geography (OBrien 1992). This is the view of globalization as
a powerful, driven and homogenous planetary force that is undermining the
state system. The evidence used in support of business globalization is often
crude, selective and of questionable validity; a fact that tends to confirm the
suspicions of its critics that the theory is used instrumentally to justify ques-
tionable corporate and/or state activities.
The second wave of globalization theory evolved as a critical response
to the first, with theorists employing rigorous and critical empirical analy-
sis to question and refute some of the wilder claims of their predecessors.
This second wavehas pointed to a number of factors, each of which,

taken on their own, puncture fairly convincingly such a global mythology.
Taken together they constitute a devastating refutation of the business
globalization thesis. (Hay and Marsh 2000, 5)
Second wave theorists such as Elmar Altvater (1993), Scott Lash

(1994), Paul Hirst and Graeme Thompson (1996), Michael Mann (1997),
Ellen Meiksins Wood (1997), have sought to unpick the claims of the first
wave in two main ways. First, they argue that much of the empirical
evidence used to demonstrate the globalization thesis points to the forma-
tion of a triadic-core (Castells 1998) of the world economy (consisting of
the US, Europe and East Asia) rather than anything truly global and that
this itself is nothing new. The great novelty claimed on behalf of globali-
zation, therefore, is either no more than an attempt to repackage older
forms of (imperialist) capitalist domination in a new form or simply
mistaken. Second, and following from the first, they demonstrate that far
from withering away or being eradicated by globalization, the state per-
sists as the primary location of political, economic and cultural identity.
From this, most conclude either that globalization is no more than a myth
of contemporary capitalism or that, if it exists at all, it is more fragmen-
tary and contingent than its more slavish promoters would have us believe
(Mann 1997).
This second wave has given way, however, to a third. The third wave
of globalization studies is broadly in agreement with the findings of
the second, but has a more theoretically informed and critical take on
globalization, and shifts the locus of attention from the macro to the micro.
Hay and Marsh place themselves within this third wave:
we reverse the conventional direction of causality appealed to in the liter-

ature on globalization. We ask not what globalization (as a process with-
out a subject) might explain, but how the insertion of subjects into
processes might help to explain the phenomena widely identified as
globalization. Globalization (in so far as it can be identified as a
tendency) becomes then for us not so much that doing the explaining (the
explanans) as that to be explained (the explanandum). (2000, 6; emphasis
in original)
Third wave theories take globalization seriously, but not as a purely exter-
nal, causal process. Rather, globalization processes understood to be mul-
tiple and often fragmentary (Dicken et al. 1997) are examined critically
to identify the political and economic dynamics underlying their structura-
tion (Hay and Marsh 2000, 7). Third wave theories bring together the
empirical evidence of the second wave and a more reflexive and critical
understanding of the nature of historical change to demystify globalization
in other words to lay bare the means by which globalizing processes have
come into being and have been recognised collectively as globalization.
This characterization of successive waves of globalization theory (each
coming progressively closer to the truth of the process) is in may ways
quite convincing and we do not wish to dispute that the third wave is of
considerably more sophistication and interest than the first. Indeed, this
book itself probably falls within the ambit of the third wave. There is,
however, a problem here concerning the nature of truth with respect to
globalization.
The wave thesis asserts very strongly that from the array of available
globalization theories, some are better than others in that over time and
through critical reflection they have become empirically more accurate, rig-
orous and complete and theoretically more sophisticated. As exercises in
social scientific analysis, the second and third waves are presented as more
measured and dispassionate with respect to their subject. Business global-
ization, by contrast, is dismissed as empirically flawed, theoretically nave,
ideological (or just plain ignorant) and anything but disinterested. Because
business globalization theory is unscientific and used instrumentally and
unscrupulously by corporations and states, it is therefore false and does
not need to be taken seriously or subjected to any detailed analysis in its
own right (Hay and Marsh 2000, 4).
But however over-simplified and dubious business globalization theo-
ries may appear to the academic observer, they have none the less played,
as we will see in this book, an important role in shaping the institutional
manifestations of globalization. This point is, in fact, conceded by Hay and

Marsh themselves:
[The first wave] is still extremely influential amongst the self-styled media
gurus of the information age as it is amongst political and business lites
and, indeed, among certain sections of the academic Left. It is tirelessly
rehearsed in the editorial columns and business pages of the financial,
tabloid and broadsheet media alike and is often associated with a certain
neo-liberal triumphalism and the view (rather more widely held) that there
is simply no alternative to neo-liberalism within the contours of the new
global political economy. (2000, 4)
Strange, then, that such pervasive and persuasive theories can simply be dis-
missed, particularly by those who wish to advance a reflexive understand-
ing of the processes of globalization. Indeed, it appears that business
theories are pervasive and persuasive not least because they are crude and
simple! But what does simplicity and crudity mean here? It means a partic-
ular type of narrative that is not particularly favoured among academics,
but appears perfectly respectable to the business and policy-making com-
munities (Thrift 1998b). Furthermore, tireless rehearsals of these theories
cannot be dismissed outright but must be viewed as perhaps the most sig-
nificant aspect of their impact. For such crude theories are consumed and
reproduced by those who soak up this torrent of media comment and analy-
sis, further promoting and strengthening a particular narration of global-
ization which despite its flaws is still extremely influential in other
words, serves as a guide for action. The problem with the belief that social
scientific rigour can bring us closer to the truth about globalization can
demystify it is that empirical rigour and theoretical sophistication do not
necessarily seem to have anything to do with plausibility.
There are, therefore, different narratives of globalization particular to
specific communities, and different voices through which they are articu-
lated. What may appear to be the most sophisticated account in one voice
for one of these communities is not necessarily the latest or the best for
the others. Conversely, the best theories may not necessarily be the most
influential theories, and if they are not, they will play a lesser role in shap-
ing institutional change than the cruder theories. The relationships between
these different narratives, and between narrative and practice, cannot be
resolved on a purely theoretical plane. It is an historical and hence ultimately
an empirical relationship. For this reason, although much of this book con-
cerns narratives and performances of globalization and the multiplicity of
interpretations and voices they involve, our story is essentially empirical.
This suggests that we need to differentiate the various theoretical
approaches to globalization in other ways; ways that do not assume that
globalization is a phenomenon that can be known through the application
of better theory, better methodology or the collation of more detailed

statistics. In keeping with these claims, we differentiate between the various
accounts of globalization not in progressivist terms, but rather in the way
they treat the relationship between narratives and concrete phenomena.
This allows us to identify four broad and to some extent overlapping cate-
gories within the globalization literature: mainstream, Marxist, Gramscian
and culturalist. Whilst these may have developed at different times and in
relation to/reaction against each other, we are not asserting any strong
chronological succession in these categories. Rather, we understand these
various takes on the nature of the relationship between representation and
reality with respect to globalization as coexisting, but performing different
functions for different sets of producers and consumers of globalization
theory.
Mainstream approaches globalization as truth
We describe mainstream theories of globalization as those that take the

concept more or less literally as referring directly to real, concrete pheno-
mena which have led or will inevitably lead towards the creation of a
world characterized by the dominance of political and economic systems
constituted on a global scale. As one might expect, this category contains
the overwhelming majority of accounts of globalization, including those
labelled business globalization above. Whilst this category certainly
includes those accounts of globalization produced by and aimed at the busi-
ness community, it is by no means confined to it. Indeed, pretty much all
everyday accounts of globalization, including those produced by its most
vocal opponents in the anti-globalization/anti-capitalist movement, fall
into this category.
That these accounts may take globalization literally, however, does not
mean that they are necessarily unreflexive about the significance of repre-
sentation and narration. Conventional social scientific praxis (as found, for
example, in much orthodox economics and political science), although
routinely recognizing the role of ideologies and, as a consequence of the
constructivist turn, the importance of rule constructions and norms
(Sandholtz 1999), nevertheless generally treats the relationships between
words and things as a diversion; a noise, that can either safely be ignored,
or alternatively, should be overcome. There are, first and foremost, the
spheres of real economics the practice of resource distribution, production,
consumption, and so on and the sphere of real politics that area of
human activity dedicated to the distribution of power and the organization
of collective human needs and desires. The conflicting material interests of
different classes and status groups shape these spheres, and those with the
greatest access to resources and power manipulate the objective needs of
society to their advantage. In doing so, as well as mobilizing the material

and institutional resources of economic and political power, these classes
harness the sphere of symbols and ideology to advance their parochial inter-
ests.2 The powerful role played by ideology and political symbolism is,
therefore, a well-established theme even in conventional political thought.
But the task of the political scientists, it is believed, is to see through these
ideologies and identify the real issues, material interests or thirst for power
masked by ideology. Conventional social science, therefore, seeks objectiv-
ity by avoiding the alleged pitfalls of ideology and representation by con-
centrating on hard facts.
Not surprisingly, such approaches to globalization engage in heated
debates over the phenomena (what counts as evidence to prove or deny the
existence of globalization), and pay scant attention to the problems of how
any of this is linked to questions of representation. All too often the
assumption seems to be that the systems of representation, discourse and
meaning that the concept contains and reproduces serve only to obfuscate
the real data and are not, therefore, themselves an integral part of the data
used by the social scientists.3 Globalization is therefore treated as an objec-
tive external force a variable in the words of David Lake (1999).
Coming from backgrounds in business and mainstream political
science, the largely untheorized and unreflexive theories of globalization
which make up the bulk of mainstream approaches are perhaps predictable.
However, there are other sections of the debate which still take globaliza-
tion largely at face value, but which seek to develop more sophisticated and
informed responses to it. Lake himself advances some of the more interest-
ing ideas about globalization from a methodological individualist position.
Questioning the conventional assumption that globalization is a primary
motor behind current trends toward expanded global governance (1999,
42), he argues that globalization is creating a governance deficit because
current forms of global governance structure are reflected in the persistence
of the early industrialising model in the United States [and are] premised
upon a large private sector that reflected the early American economy, the
constitution left large residual rights of control to individuals and the states
(1999, 45). Indeed, Lake could not be more forceful in his critique:
The same inertia that prevented the United States from developing greater
state capacity is today preventing the realisation of greater or more effec-
tive global governance. The private actors prospering in the interstices of
political authority are not leading the charge for super-national entities
designed to regulate their behaviour more effectively. (1999, 46)
For Lake, although globalization is still an exogenous variable, it cannot

explain everything. On the contrary, its concrete effects on state and global
governance must be interrogated in terms of long-standing institutional
structures, which affect the capacity of powerful actors to force through

change. Essentially Lake is blaming the particular institutional mindset of
US business culture for lacking the vision and imagination to create effec-
tive global institutions. Tacitly, Lake is acknowledging the central role
played by narratives of, in this case, proper economic, political and busi-
ness practice in shaping institutional futures.
However, since this is still a mainstream account of globalization, Lake
has no need to forefront the possibility that globalization itself may be
constituted in and through these same narratives. Lake shares with his target
audience an understanding that the relationship between narratives of globali-
zation and the institutions and practices they describe is self-evident
globalization is a fact and theories about it represent attempts to quantify,
describe and predict the dimensions of that fact. In spite of the claims he
actually makes, the realm of ideas and narratives that of theory is
regarded as passive and descriptive with respect to real globalization.
The same can be said of an entirely different branch of globalization
theories, theories of cosmopolitan democracy. An example of the more
sophisticated end of the mainstream approach, globalization is interpreted
by this school of thought as heralding the rise of a global human con-
sciousness and the possibility of a more fluid and multi-scalar hence
cosmopolitan form of post-national democratic participation. According
to Martin Shaw, for example, globalization can be interpreted as the third
wave of democratic revolutions (2001, 629). In a similarly utopian vein,
Daniele Archibugi argues for the establishment of democratic international
institutions which will manage the global system much in the way state
institutions have traditionally managed national society. His very concrete
and grounded proposal for the formation of a fully fledged International
Criminal Court is, however, shot through with narratives about the true
nature of global society. For example:
Cosmopolitan democracy suggests the creation of institutions and channels

of representation for all individuals, not just for a single class. The objec-
tive is not the abolition of classes, but the more modest one of ensuring
that the demands of citizens, irrespective of their class, are directly repre-
sented in global affairs. It means resolutions being taken by the majority,
rather than by a single class To be a cosmopolitan now is no longer
simply to feel oneself a citizen of the world but also, and above all, a citizen
for the world. (2002, 32; emphasis in original)
However laudable these suggestions may be, epistemologically they are con-
structed on a theoretical framework in which concrete institutions are to be
established in response to real, global phenomena which generate, in turn,
the capacity of individuals to feel that they are citizens for the world. Echoing
the universality of globalization, the subjective effects of globalization can
be mobilized to advance individual and collective narratives of identity and

belonging for the creation of institutional forms of cosmopolitan demo-
cracy. Whether identity can be deliberately marshalled in this way is a
matter of debate it presupposes a very great deal about the way individual
and collective identities are forged. However, the significance from our
point of view is the largely tacit acknowledgement of the centrality of ideas
and narratives about the self, and the self in relation to emergent spatialities
of state and global systems, upon which this ostensibly rational and practical
policy proposal is founded.
Even where theories of cosmopolitan democracy appear to be at their
most concrete, they are based fundamentally on changing social, political
and economic narratives. David Held, for example, asserts that,
Globalization is best understood as a spatial phenomenon, lying on a con-
tinuum with the local at one end and the global at the other (1998,
13). In appealing to the idea of a spatial phenomenon, Held is both assert-
ing the concrete reality of the emerging global system whilst, at the same
time, imposing his own quasi-territorial imagery upon it. Helds account,
therefore, clearly involves the creative use of the instruments of narrative
construction descriptive metaphors which are designed to present a con-
vincing image of a new scalar geography of world affairs. However, the role
played by these representations is ambiguous. On the one hand there is a
tacit acknowledgement of the significance of narrative representations in
shaping the future direction of globalization. The purpose of Helds image
of the continuum and the broader argument of which it is a part is funda-
mentally one of political agenda-setting. Held is using a specific representa-
tion of the global system to open up new spaces of democratic engagement
and participation and, along with Archibugi and many others, creates new
institutions of governance and regulation appropriate to those spaces. He
is, therefore, using these narrative tools instrumentally to provoke the
establishment of new political institutions and processes that will be appro-
priate to and necessary in the new global order.
On the other hand, the global order itself is placed outside of this realm
of representation Held presents globalization as a set of processes that
exists independently of his particular descriptions of it. The attempt to
reimagine cosmopolitan democratic participation, therefore, involves the
application of alternative ideas onto a pre-existent tendency within the
world economy of globalization. It is certainly the case that these ideas are
intended to alter the course of globalization, but the process itself is under-
stood meanwhile to be logically and empirically prior to this ideological
intervention.
What is interesting about these various positions is not the relative
veracity of their conflicting accounts of the consequences of globalization,
but their degree of conceptual commonality. Drawn from the entire politi-
cal spectrum, they view globalization as a logical and necessary outcome of
a spatial expansion brought about through a form of timespace compression

driven primarily by economic and technological change. The shift from
nation-state to globality is essentially horizontal the space of socio-
economic organization covers a wider area of territory and hence the
political issues faced by society are the same, albeit within a wider spatial
framework. For the cosmopolitan democrats, globalization is the extension
and expansion of the liberal democratic model world-wide; for pro-market
liberals, globalization implies the spatial expansion of the liberal state
model. For the others, globalization is essentially the outflanking of the
state and hence a shift in the balance of forces in national politics. And yet, these
fundamentally empiricist claims are underpinned by a subtle constructivism
the instrumental and purposive nature of the descriptions used betrays
cognition, however vague, that the reality of globalization now and in the
future is one based on interpretation and representation.
Although we have represented mainstream approaches to globalization
through academic works that are at least partly reflective about the com-
plexities of their subject, authors who are neither social scientists nor busi-
ness theorists produce the vast majority of such accounts. By far the greater
number of accounts of globalization are generated by journalists, policy
analysts, policy-makers, management consultants and other commentators
for whom the reality of globalization is simply a fact to be reported on,
adapted to or coped with. In addition to these articulated accounts, the
increasing institutionalization of the idea of globality particularly with
respect to economic activities means that an increasing majority of the
population, especially in industrialized societies, encounter narratives of
globalization on a daily basis through advertising, the symbolism of prod-
uct brands, participation in banking and credit systems and so on.4 These
aspects of the narratives of globalization are generally (and not just by
mainstream approaches) treated as unproblematic artefacts after-effects
of the institutionalization of the emerging global reality. As such, their
other function that of carrying and reproducing effective and affective sto-
ries about the facticity of globalization is simply ignored.
We will return to the significance of these routine narrative perfor-
mances of globalization in the following chapters. For now we need to con-
sider the way in which other sections of the academic community have
responded to mainstream accounts.
Marxist approaches globalization as false consciousness
Marxist accounts of globalization form the greater part of those character-

ized as second wave theories bringing a critical rigour lacking in literal-
ist first wave accounts. It would be wrong to suggest, however, that these
critical and oppositional approaches entirely shed the literalism of those
they criticize. Indeed, a significant proportion of such accounts also takes

globalization literally differing from the literalists only in that the reality
of globalization is seen as both negative and as simply the most recent
expression of a pernicious world capitalism which is itself taken as real.
In terms of the way issues of representation are understood, therefore,
Marxists of various hues assume that there is a clear functional relationship
between representation, ideology and power: power (generally equated
with capital) instrumentally and cynically employing representations of
globalization to legitimize itself. Essentially the picture is of a collective
hypocrisy and/or conspiracy built into conventional descriptions of global-
ization as exogenous and inexorable. Marxist and various forms of radical
anarchist and ecological critiques point out that the version of globalization
promulgated by politicians, business people and neo-liberal economists
which claims that globalization is a product of irreversible technological
and economic change, is in itself an ideological representation intended to
serve identifiable interests. The advantage in presenting globalization as an
objective, natural force, and hence as an exogenous event, is that it leaves
government with little choice but to accept the dictates of the market. It
leaves governments with no alternative but to accept what under close
critical scrutiny appears to resemble the neo-liberal fantasy of so-called per-
fect market competition. Perfect, not in terms of open competition (merg-
ers, acquisitions, oligopolistic cartels, are all practices used by business to
avoid the scourge of perfect competition) or even in terms of equal access
and support for Third World agricultural goods, but perfect in terms of
reduced government intervention, taxation and redistributive policies. The
failure of governance noted by David Lake is explained from a Marxist per-
spective not as a failure, but rather an intentional policy aimed at reducing
or removing the various regulation, taxation and redistribution policies of
the Fordist state.
At the same time, the presentation of globalization as an exogenous
variable is accompanied by the assertion that (a) policies of trade liberali-
zation, financial deregulation and, more recently, tax harmonization
and standardization have clearly advanced globalization; and (b) that in
any case, national governments, particularly those of the core capitalist
economies, have been active in promoting the very globalization that is
assumed by mainstream theorists to undermine the state. Since the suppos-
edly exogenous, technology-driven process is in fact an internalized policy
goal of core states, it follows that any attempt to present it as an objective
external force is therefore a political act. The deployment of globalization
as a neo-liberal ideology is therefore presented as the creation of a false
consciousness foisted on an unsuspecting world by the power-mongers of
big capital.
From a strongly anti-globalization perspective, for example, Barry
Gills argues that,
Globalization has become an extremely broad concept that can encompass

everything, thus rendering the term either meaningless, confusing, or seduc-
tive to the unwary. However, when the concept is expressed as neoliberal
economic globalization its meaning becomes clearer. (2000, 45)
He continues:
The main historical thrust of neoliberal economic globalization is to bring

about a situtation in which private capital and the market alone deter-
mine the restructuring of economic, political and cultural life, making
alternative values or institutions subordinate. (2000, 5)
This commonly held view of the relentless subordination of alternative

forms of social organization to the market via the ideology of globalization
is widely accepted. It is, however, every bit as seductive a view as the neo-
liberal version denounced for its confusing seductiveness. Just as for the
certainties of the no alternative liberal version of globalization, there is no
need to bother here with the complexities of a reflexive order. On the con-
trary, the picture is straightforward: there are those who wish to confuse and
seduce in the name of globalization, using it to conceal their true agenda,
which is to bring about a new phase of capitalist domination and repression.
Standing against this are those who reject and resist this project.
The apparent advantage of such a position is that it implies a clear
agenda for political engagement the enemy is known, all we have to do is
expose, denounce and fight it. But there are clearly problems with this
approach. First, the denunciation of globalization and capitalism, which is
explicitly the denunciation of globalization as capitalism, clearly conflates
the two. Opposition to globalization, therefore, simply becomes a flat
denunciation of capitalism in its latest stage. This is not an analysis of
globalization, however, but a polemic against capitalism in general, as
though they are one and the same thing. In our view, this is clearly not the
case capitalism is not a single, undifferentiated entity and is not global
in any complete sense and the one should therefore not be confused with
the other. Second, since we already know in advance what policy-makers
mean when they employ the language of globalization, there is no particu-
lar point in paying close attention to their utterances. Why should we con-
cern ourselves with the detailed minutiae of their deceptions and lies when
we already know their not-too-well-hidden agenda? To engage with the
detailed content of discourses of globalization is at best pointless and at the
worst positively dangerous, since we risk taking it seriously on its (their)
own terms and, in doing so, participate in the reproduction of the lie.
However, by the same token, there is no particular reason why we
should pay attention to the language of resistance since the agenda of the
anti-globalizers of this kind is also apparently perfectly legible. More
problematic from our point of view is that such forceful, straightforward

views of life, unfortunately often lead progressives and radicals straight into
the camp of conservatives, nationalists and racists. The rejection of global-
ization, as the latest stage of capitalism, seems to be advanced in what often
appears as nostalgic yearning either for the national stage of capitalism,
which suddenly seems to have been not so bad after all, or to some equally
nostalgic vision of community, a nineteenth-century romantic idea
denuded of class struggle, albeit dressed up as the alternative.5 The extra-
ordinary degree of overlap between the agendas of communitarian and
nationalist opponents to globalization, despite ostensibly being situated at
opposite ends of the political spectrum, is just one illustration of this
(Rupert 2000).
In terms of the role of representation, the cruder end of the Marxist
approach is almost as literal in its analysis of globalization as that which it
opposes. The only difference is that real globalization for the Marxists is
a class-derived ideology a series of cynical and expedient representations
used to mask the truth of the global gamble (Gowan 1999) from a hapless
public. The issue of representation itself, as with the literalist approach, is
of little interest because it is already known and thus can be ignored.
Gramscian approaches globalization as hegemony
Other approaches, including the more sophisticated Marxian ones, are

careful to avoid such a stark and over-simplified view. Various commenta-
tors, who take their inspiration in one way or another from Antonio
Gramsci, reject the view that theory and policy statements merely mask the
agenda of an otherwise coherent group intent on bending the world to their
will. Gramscian approaches accept, as indeed most mainstream theorists
would happily acknowledge, that the globalization agenda is capitalist
through and through. There is no debate about that. However, class hege-
mony, as Gramsci taught, is an on-going and dynamic process requiring
intricate political strategies of alliance formation, complex processes of ide-
ological adaptation, constant reinterpretation of events and processes, and
the careful management of capitalist affairs, including the institutionaliza-
tion of power gains. On this reading then, globalization is understood to
be a dynamic, multiple, and evolving set of processes and institutional
responses, the precise trajectories of which are not easily predictable
(Dicken et al. 1997; Peck and Tickell 2002).
As such, the representation of this fluid and multifaceted concept
cannot be reduced to a simple all-encompassing ideology, and nor can it be
interpreted as a simple mask concealing hidden, but none the less clearly
known intentions. Whatever the consequences of globalization, which has
so far certainly failed to fulfil its promises for the vast majority of the
worlds population, these outcomes are not simply the result of mean-spirited
class-conscious strategies. Rather, ideas including, but not reducible to
ideologies, are embedded in practices and vice versa. The practices of the
business manager and the political bureaucrat shape and are in turn shaped
by their perspective of the world, a perspective experienced subjectively as
genuine, and their perceptions of what is feasible and desirable.
Stephen Gill, for example, interprets the thick maze of transnational
regulations, standardization and norms of conduct that have evolved over
the past three decades as a form of new global constitutionalism (Gill
1998).6 Unlike Lake, who views these changes as evidence of a deficit of
governance due to a combination of the traditional power of private
actors in Anglo-Saxon social formations, and an inevitable inertia on the
part of the institutions of the nation-state, for Gill this is an intended out-
come driven by identifiable class alliances. To say that this is intended,
however, is not to allege the type of nefarious conspiracy implied by the
radical opponents of globalization. Rather, the purposive trajectory of
globalization on the Gramscian reading is a product of a complex mixture
of ingrained practices and discourses within particular class fragments,
combining with different elements, gradually adapting to new conditions
and emerging modes of understanding and representation. Global constitu-
tionalism is driven primarily in the form of problem-solving, and it is
aimed to facilitate trade, investment and the free movement of capital
because this is considered a public good.
Here, the whole category of representation is seen in an entirely
different light. Theories, discussions, debates, reports and so on are not
insignificant to the understanding of processes of change as the literalists
would have it, nor are they merely masks or ideologies to fool the masses.
On the contrary, the whole gamut of what falls under the blanket category
of representation constitutes the way by which change takes place in the
form of problem-solving, advantage-taking and adaptation. The practical
and pragmatic character of much of the debate shows how important per-
ception and representation are to policy-making. The key point is one of
access, because the practical debates and practices of business managers
and bankers are quite different from the practical debates and practices of
Third World peasants. It so happens that for complex historical reasons the
former have been able to create and reproduce a hegemonic position rela-
tive to the latter and hence play a far more prominent role in determining
policy in the age of globalization.
In this sense, Marsdens observation that there are three related global
conversations a conversation of the market, a conversation of practice
and a conversation of community might be brought into a Gramscian
reading. The language of the market is the grammar and vocabulary that
enables people to identify themselves as competitive individuals in a world
dominated by the production and consumption of commodities. It is global
in its reach, and it is a form of symbolic exchange that reproduces certain

forms of capitalist accumulation. According to Marsden, the conversation
of the market consists of the system of symbols that define and calculate
comparative advantage. It mediates a worldwide conversation about com-
petition and consumption (1993, 496).
The conversation of the market has to be distinguished, however, from
the conversation of practice, which comprises the system of symbols that
finds likewise patterns in behaviour and calculates the consequences of
actions. It mediates a world-wide conversation about human organization
and efficiency (p. 496).
Social change, therefore, does not come about purely as a consequence
of quantitative calculation, nor is it simply the outcome of power and force;
it is the edifice of customs and habits that render human interaction feasi-
ble world-wide. Finally, the conversation of community consists of the
system of symbols that defines identity in terms of responsibility and com-
mitment. It mediates a world-wide conversation about how to repay debts
to the past and how to understand hopes for the future (p. 496).
These three ongoing and evolving conversations combine into a meta-
lingual monoculture which underpins and adds cohesion to the multiple
and fluid elements of globalization. The hegemony of class is therefore
articulated and maintained primarily through such a monoculture, which
itself is heterogeneous and consists of different conversations. Indeed, the
apparent plurality of the different conversations is a source of power,
because it belies the underlying homogeneity of the monoculture.
It may be argued that the hegemonic powers of the market
Westernization, Americanization, McDonaldization and so on (cf. Taylor
1999) are driven primarily through these conversations as opposed to
intended, goal-oriented and political actions of business. This is language that
is spread through the world, Marsden notes, by popular culture: commer-
cially driven movies and TV programs, popular music and pulp fiction. Indeed,
the global reach of the modern media makes this language truly international,
a world-wide idiom of human aspirations (1993, 499).
There is, none the less, an important debate going on. From the
Gramscian position, however complex and nuanced the treatment of repre-
sentation might be, it is not the language that is of interest, but the market
itself, or, more appropriately, the logic of capital. Language is ultimately
seen as a fetishized form of the market, the medium through which capitals
commodification tendencies are described and articulated. Capital itself has
penetrated language and custom, so that representation and custom are
effectively the voice of capital, considered to be an omnipotent social
power. The form of circulation and communication of such ideas, the
privatization of the media which allows the intended spread of a very parti-
cular monocultural language, are evidence of the class nature of these
processes. Indeed, the language is not simply a conduit or instrument of
domination, but enables people to identify themselves as competitive

individuals in a world dominated by the production and consumption of
commodities (Marsden 1993, 503). It allows people to creatively and con-
structively engage in their own domination, while assigning them a certain
form of identity which they then become proud of.
Culturalist approaches globalization as narrative

and performance
The centrality accorded to the language in Gramscian approaches overlaps

with a range of other theories we have brought together here as cultural-
ist. By labelling them in this way, we are not suggesting that they all some-
how subscribe to some common culturalist agenda. No such thing exists.
Rather, we are trying to identify an area of common theoretical and method-
ological ground that they share with respect to issues of representation.
Specifically these approaches, despite emanating from diverse theoretical
positions, overcome the ambiguities produced by treating globalization as
an exogenous fact. Rather, they treat globalization critically in the same
way that they would treat any other historically specific social concept as
a complex nexus of ideas, narratives, institutions and processes, drawn
together in a manner that attempts to encapsulate and say something meaning-
ful about the nature of contemporary social reality. Most importantly, all
of these approaches question the representation of globalization as a fact
out there and stress the complex, disputed and contingent nature of the
production of globalization as a social narrative and performance. As
Wendy Larner and Richard Le Heron put it:
What concerns us [Larner and Le Heron] is that most theorizations of globali-

zation done from the core (e.g. global cities, world financial restructuring),
are outlined as the stories about globalization (e.g. disrupting the nation-
state and the arrival of global processes), or from the core but positioning
globalization as an afterthought to nation-centred analyses. (2002, 415)
In rejecting these core stories (which also, on our reading, involves reject-
ing the predominant story about these stories the wave thesis), and call-
ing for an approach based on post-structuralist political economy, Larner
and Le Heron not only refute claims that globalization can be reduced to a
set of empirical and/or ideological facts but also decry the undecon-
structed methodologies and theories that underpin them. They call for a
more situated and contextualized treatment of the concept of globaliza-
tion, recognizing the reflexive nature of the process of the production
of globalization as an idea, as well as a set of practices and processes.
Globalization is no longer treated as an exogenous phenomenon and nor can
it be reduced to empirical analysis of processes and institutions however

constituted. Rather, in claiming that globalization is a governmentality after
Foucault etc. (Dean 1999) they draw in the insights of post-structuralist
theory concerning the mutually constitutive and dialogic relationship
between words and things (Foucault 1970). In their words:
globalization can be understood as a governmentality; both a spatial

imaginary and a set of practices through which people and places are
understood in particular forms. This opens up room to examine the
progressive/regressive elements in neo-liberalizing spaces around compet-
ing views of subjectivities How are economies, populations and individ-
uals constituted (both discursively and technically)? How do people
imagine themselves? Both of these questions require us to denaturalize,
make specific and be more nominalistic about terms like economy, society
and agency. (Larner and Le Heron 2002, 415)
Although very much a minority voice in the debate on the meaning and
implications of globalization, such calls have been growing in recent years
as commentators from longer established traditions come up against the
limits of treating globalization as an empirical fact. This is partly because a
more reflective and careful reading of business globalization theory reveals
an extraordinarily complex and rich but ambiguous narrative taking place
at the ostensibly cruder end of the debate. It is also because as globalization
has risen up the political agenda, the inadequacies of reactive oppositional
positions have become all too obvious. Despite the vast amount of media
attention that has been given to events such as the Battle for Seattle, no
coherent oppositional position has developed, no positive or very convinc-
ing alternatives have been formulated and, in any case, the spread of
globalization in practice continues unabated.
One of the more important expressions of this rising interest in the role
of narrative and representation has emerged from sources that might in the
past have been considered supportive of the anti-globalization movement
and to represent the Marxist approach outlined above. Hardt and Negris
Empire, as its title suggests, does indeed retain much of the tone and
style of conventional Marxist/Gramscian political theory indeed it is quite
explicitly an attempt to reinvigorate communism for the twenty-first
century. Whilst the authors clearly have tremendous sympathy with such
positions,7 they reject them in their own analysis by coming to the startling
conclusion that Empire (a term they use in preference to the loaded,
partial and empirically compromised concept of globalization) represents a
positive political opportunity:
Empire is a step forward in order to do away with any nostalgia for the
power structures that preceded it and [we] refuse any political strategy that
involves returning to that old arrangement, such as trying to resurrect the

nation-state to protect against global capital. We claim that Empire is
better in the same way that Marx insists that capitalism is better than the
forms of society and modes of production that came before it. Marxs view
is grounded on a healthy and lucid disgust for the parochial and rigid hier-
archies that preceded capitalist society as well as on a recognition that the
potential for liberation is increased in the new situation. In the same way
today we can see that Empire does away with the cruel regimes of modern
power and also increases the potential for liberation. (Hardt and Negri
2000, 434)
The emergence of Empire offers renewed emancipatory and revolu-

tionary possibilities, precisely because it involves a fundamental rewriting
of the terrain of the political. Just as the development of the capitalist state
for all its problems and contradictions represented for Marx and Engels a
marked improvement on the idiocy of rural life and the feudal past, so
Hardt and Negri see in the partiality and fragility of the ontology of glob-
alization opportunities for renewed revolutionary praxis. Crucially, this
involves for them a reflexive engagement with the narratives of globaliza-
tion on the part of the multitude, rather than the misplaced nostalgia of
localist and nationalist agendas. They go so far as to propose a rather open-
ended political manifesto or rather an account of what a political mani-
festo would have to encompass to deal with Empire. In their words:
Today a manifesto, a political discourse, should aspire to fulfil a Spinozist

prophetic function, the function of an immanent desire that organizes the
multitude. There is not finally here any determinism or utopia: that is rather
a radical counterpower, ontologically grounded not on any vide pour le
future but on the actual activity of the multitude, its creation, produc-
tion and power a materialist teleology. (2000, 66; emphasis in original)
By stressing practice (actual activity) along with prophecy and desire in the
promotion of a materialist teleology, this is a discourse that seeks to chal-
lenge globalization both as a set of processes and institutions and, at the
same time, as a set of stories about the future. A materialist teleology is a
contradiction in terms if we accept, as the majority of anti-globalization
and orthodox Marxist positions do, that the material is the empirical.
Here, Hardt and Negri present us with an ontology that is comprised as
much by narratives, representation, immanent desires and their embodi-
ment through performance and practice, as it is by concrete institutions.
This is not to suggest that such institutions are of no significance, rather
that an exclusive focus on their concrete and ideological functioning what
Larner and Le Heron refer to as the core stories misses the point that
they are but artefacts of a wider and more varied materiality.
Myth, discourse and reality: the semisphere
The account of approaches to globalization given above is necessarily brief

and is not intended to be in any way comprehensive. There will no doubt be,
therefore, other examples of globalization theory which fall outside or across
the categories outlined above. For our purposes this not important these
categories are intended to be illustrative rather than definitive. What we have
tried to demonstrate is, above all, that it is incorrect to argue that the ques-
tion of representation has not been included in the globalization debate so
far and remains somehow to be added. In fact, the problematic relationship
between practices and ideas runs throughout all the various approaches to
the concept, the major difference between them being the ways in which they
incorporate reflexive consideration of these problems into their accounts of
the concept or, more commonly, simply ignore their presence altogether.
That said, even some of the most sophisticated and theoretically informed
accounts of globalization do not seem to have finally come to grips with the
function of representation with respect to a concept as powerful as global-
ization. Even its most ardent critics are to a large degree held in thrall by the
possibility that globalization might well be real.
If, as we believe, our thematization is broadly correct, however, then it
suggests, as Larner and Le Heron do, a need for an alternative conceptuali-
zation of globalization focusing specifically on this problematic relationship
between practice and narration. If, therefore, we are to transcend the
undeconstructed methodologies of the broad swathe of globalization
theory, where should we look for alternatives? More importantly, perhaps,
where should we look for alternatives that bring us closer to the subject at
hand without reproducing the largely unreflexive distance of mainstream
and many Marxist approaches from their subject, and without descending
into the intellectualist obscurantism of seeing everything as text the
absolute relativism of crude postmodernism.
The approach we will outline in the next two chapters, and apply
throughout this book, tries to break out of the strait-jacket of globalization
theory, by drawing on a synthesis of anthropology, historiography, cultural
studies, literary criticism and psychoanalysis all disciplines for which
questions of narrativity, representation and identity are core considerations.
Our approach is, therefore, concerned primarily with the basic tenets of
human social organization globalization and, by extension, social exclu-
sion, being presented not as new social facts, but as partial and contingent
attempts to manage human society in unique historical circumstances. The
fundamental principles of such an approach are summarized well by Elemr
Hankiss:
Humankind has always had to create, and continuously recreate, a micro

world for itself within a not too hospitable universe. Throughout the
millennia of their history, people have developed two strategies for this
purpose. (2001, 47)
Hankiss distinguishes these two strategies as the Promethean and the

Apollonian: The technological, scientific, or Promethean strategy seeks to
control the world physically and socially; to use resources of this world to
create a more or less closed human universe which protects and fosters
human life (2001, 47); the Apollonian strategy is the history of how
human communities have generated and continuously regenerated spheres
of symbols intended to protect them in a dangerous and fearful world
(2001, 48).
Hankiss argues, therefore, that from the very beginning of human
history people have had to work and fight not only for their physical
but also their spiritual survival. And they have done so by surrounding
themselves with the spheres of symbols (2001, 49). Furthermore, the two
strategies, the technical and the symbolic, overlap (2001, 49). Daniel
Bougnoux says the same thing when he writes: Man inhabits a world
not made of things, but which is a forest of symbols in which representa-
tions (not only verbal representations) constitute the familiar order this
empire of signs enfolds our natural world like a semisphere (Bougnoux
1993, 93; our translation).
We inhabit therefore, in practical terms, not a world of things if by
this we mean some purely objective world prior to the symbolic assignment
of the object nor a world of ideas a purely subjective world prior to
objects. Rather, we inhabit what Bougnoux calls the semisphere: our feet
may be firmly stuck on the ground, but our bodies move through a plasma
of symbolic exchanges. Whether we are aware of it or not, the semisphere
is made up, in Lacanian terms, of neither words nor things (Stavrakakis
1999). To complicate matters further, human psychology has evolved in
such a way so that we live, and can only function well, as if we inhabit a
world of things the real in Lacanian terms and also that we tend to
think of more complex phenomena as extensions of this reality. A failure
of the subject to construct itself in its early childhood as a separate entity
inhabiting a world of things, results in a pathology in adulthood in which
the real and the hallucinatory are hopelessly mixed. At a second level of this
reality, common sense, mundane concepts, as well as the language of
power and authority what Bourdieu (1991) refers to as authorised lan-
guage provide us with a world that is simple, comprehensible and
straightforward. The necessity for people to live their daily lives in ways
that accept and operationalize this ordinary and normal world belies the
subtlety and complexity of the psychological and social processes that are
taking place.
For example, to put it in the context of globalization, Jonathan
Friedman notes that:
The entities that are usually spoken of as constituents of global social

reality nation-states, regions, ethnic groups, etc. are commonly under-
stood as socially constructed aspects of total social processes. They are
practiced and must be continuously so in order to exist at all.
Institutionalization, culturalization (the creation of rules, codes, models
for) are the primary practices involved in the stabilization of social
process, as they necessarily involve a conscious replication of structure.
(1993, 208)
The theoretical implication of such an understanding is to shift the balance

of our investigation from a static emphasis on state and globalization as
natural physical forces or entities, to social forces that require dynamic
processes of institutional replication and culturalization. So that, as we will
see, the terms and concepts we use national, state, global, included,
excluded, rich, poor, and so on are in themselves forms of institutionali-
zation that require considerable social energy to maintain even a semblance
of continuity. Before discussing the specific narrative renegotiations of con-
tinuity with respect to globalization, the next chapter lays out in greater
detail the theoretical approach we are taking.
2
Performative Discourse and Social Form
The difference between history and science is not that history does and science
does not employ organising schemes which go beyond what is given. Both do.
The difference has to do with the kind of organising schemes employed. History
tells stories. (Arthur Danto, cited in Mink 1974, 110)
Economics is a form of storytelling. Economic stories, however, are frequently

taken as true and can have direct consequences in the material lives of
individuals. Further, all narrative genres carry with them ideological implications
and place limits on what it is possible to do, think, or be, within their boundaries.
(Koritz and Koritz 1999, 408)
That there is a relationship between theories and realities has been the stock in
trade of much Western philosophy, at least since Plato likened our knowledge
of the world to the interpretation of shadows cast on the wall of a cave. This
is a vast subject that we have no intention of covering here in a comprehensive
way. That said, we do need to establish for the purposes of this book quite
how we understand this relationship and what its implications are for the
study of globalization and social exclusion. That is the task of this chapter.
Broadly speaking, we draw on two sets of important debates: first, the
tradition of thought that is concerned with the relationship between history
and text, among which the names of Michel Foucault, Pierre Bourdieu,
Cornelius Castoriadis, Michel de Certeau, Paul Ricoeur and Stephen
Greenblatt are perhaps best known.1 Second, we will draw upon another,
parallel tradition that is concerned with the relationship between space,
narration and social praxis, within which Henri LeFebvre, Marshall
Sahlins, David Harvey and Nicos Poulantzas have made significant contri-
butions. By employing interpretative techniques drawn originally from
linguistics, sociology, historiography and literary criticism, we wish to develop
a positive theory of both globalization and social exclusion as narratives. In
doing so, we would like to learn something about the processes that are
taking place, but not to be restricted to dealing with these concepts solely
within their own narrow terms of reference. We examine them both for
their own merits but also, and perhaps more importantly, because of what
the specifics of their manifestation and reproduction tell us about social
reality at a more fundamental level. In other words, we take the narratives
of globalization and social exclusion seriously, but not literally.
Performative Discourse and Social Form 47
History as narrative in the work of Paul Ricoeur
Following the arguments developed by the literary theorists Scholes and

Kellogg (1968), in a short, brilliant essay in the 1960s entitled The
Narrative Function, Paul Ricoeur (1981) summarized as well as advanced
many of the ideas underpinning our approach to the relationship between
action and narration. Ricoeurs aim in his essay was to show, according to
his editor, the structural unity of historical and fictional narratives
(Thompson 1981, 274). Crucial to Ricoeurs reading is the idea of the
erosion of the narrative distance between author and subject. Ricoeur
rejects the common pretence that the narrator stands wholly outside of the
tale he or she tells, and in doing so identifies a new kind of narrator, the
histor. The significant difference between the essentially modern histor and
the traditional historian, the singer of tales, is that the modern histor
derives his or her authority, from the documents which he reads and no
longer from the tradition that he receives (1981, 280).
The two type of historians, the traditional and the modern, ultimately
serve similar functions, but they relate to their object of enquiry in different
ways the premodern historian reiterates established and traditional stories
about the world and derives authority from a specific knowledge of the
stories told and an institutionalized relationship to the texts (for example,
the relationship between an ordained priest and the text of the Bible).2 The
histor, by contrast, is not bound by inherited traditions or reliant on the same
kind of institutional power. Rather, the histor constructs coherent narratives
about the past, present and future, through the selection and compilation of
documentary and empirical evidence about the real world. But the shift in
the roles of these narrators takes place within the very concept of a point
of view which characterises the narrator as such and which must be placed
on the same level as the configurational and reflective nature of the narrative
act (1981, 280).3
Now, the anxiety raised by such an understanding of the task of
history arises from its alleged implication of complete relativism (or
nihilism). If any work of history, and the reality to which it refers, is noth-
ing but a constructed narrative, then historical theory tells us more about
the narrator than about the subject of narration, which is a nihilist pre-
occupation.4 Consequently, the danger is that all stories are equally valid
and, therefore, that everyones truth, whether it belongs to Marx, Hitler, or
Bush, is equally valid. This accusation of relativism, whilst common in rela-
tion to non-positivist social theories, is, in our judgement, not relevant
unless one takes the notion of social constructivism to an extreme. The
American philosopher Nelson Goodman (1978), who was repeatedly
attacked for his unashamed and explicit relativism, dismissed his critics by
pointing out that he never claimed that truth or reality were ever entirely
open to interpretation and reconstruction.5 Whilst worlds are made in the
sense that they are human constructions, they are not made out of thin air.
Rather, worldmaking as we know it always starts from worlds already on
hand; the making is a remaking (1978, 6). In other words, we are simply
back to the basic proposition, namely, of the relationship between text
and social reality, not of the privileging of one over another. As Clare
Colebrook notes, a text cannot be divorced from the process of its recep-
tion, for such process plays an active role in the meaning and effect of text
(1997, 112).
The necessity of a prior world, or, in Goodmans conception, a multi-
plicity of worlds, implies that for all that history may be produced and
made, it is made out of pre-existing conceptions of reality that are, to
a greater or lesser degree, transformed through a range of processes.
Goodman lists these as composition and decomposition, weighting,
ordering, deletion and supplementation and deformation. All of these
processes allow for the possibility of new elements of reality to be created
(and we would argue some aspects of the globalization/exclusion debates
have this created nature), but also set the limiting condition that whatever
new elements may be added to the world, they must also incorporate, albeit
in a changed way, elements of existing worlds.6
Why, then, does such a limited set of narratives dominate in particular
places and at particular times? Well, one answer (or one set of theories)
maintains that the success of one discourse over another is a product of
power: the strength of the dominant narrative does not derive from its
intrinsic truth-value, but from the fact that it serves the interests of certain
social groups. The idea that social discourses are controlled and promoted in
this way, by socio-economic classes, gender groups, racial groups, powerful
faiths and so on, is often associated with Marxist theories of ideology.7
An example of the way the narratives of history are seen to be con-
structed in such approaches can be found in the idea popularized by Robert
Cox in international relations that history is written by someone and for
someone. Many have read into Cox the idea that writing history is purely
an instrumental pursuit, as if historical studies are used merely to serve
someones interests. Ricoeur avoids both the extreme relativism of an
entirely intellectualized account of social reality and the instrumentalism
of Marxian class analysis. For him, the parochial interests of historians
and/or those they serve is only part of the story. Certainly interest operates
as a factor of selection of what seems important to a particular historian.
The latter retains from the past only what, in his estimation, should not be
forgotten, what is memorable in the strict sense (1981, 295).
However, Ricoeurs basic premise is that the game of telling is included
in the reality told (1981, 294); it is not something that can be avoided or
overcome, and most importantly, it is not easily manipulated.8 The narra-
tive function, to use his own phrase, is simply a central, constitutive and
unavoidable dimension of human society. This is an important point. The
rejection of the clear distinction between ideology and the real, and the idea
that history, economics and science can be treated as forms of story-telling,
raises two sets of important questions.
First, to what extent can we develop a general theory of the relation-
ship between history, praxis and narration? Second, how should we theo-
rize the relationship between the rules of narrative construction since all
forms of story-telling are rule-bound activities and the narrative itself
the text, the picture, the article, the speech, etc. which is routinely taken
to be a faithful representation of reality out there? As in the case of
narrative and practice, there is no clear distinction between the two: how
we understand the rules of narrative construction necessarily affects our
understanding of the relationship between history and the text.
With respect to the first set of questions, Clare Colebrooks study of
the narrative function asserts that
the relationship between text and history cannot be given in a pre-formulated

theory; on the contrary, the interaction between text and the world,
between the materiality of the text and its produced meaning and between
art and history should be the object of investigation in each critical prac-
tice. (1997, 26)
We should move away, she argues, from a general theory of narrative struc-
ture towards the idea of text as practice (1997, 28). That is, text, whether
literary or scientific, is a component of the very objective world that is
under study; it is a material practice like any other material practice.
Lacking a general theory of the relationship between text and the
world, the second set of questions, concerning the relationship between the
rules of narrative construction and the narrative itself, plays a more promi-
nent role. If a narrative has this pervasive and foundational, but historically
and socially specific, character, the issue of what then constitutes an histori-
cal fact comes to the fore. The relationship between rules and utterances
is centrally constitutive, as it is the historically specific rules of narration,
Bourdieus authorized language, that fundamentally determines the nature
of fact in any given narrative.
In a similar vein, Ricoeur rejects the positivist conception of the fact as
a singular statement a simple, one-dimensional event which the historian
inserts into the right place in the correct chronology. By positing such facts
as having a multi-faceted and reflexive nature, Ricoeur fundamentally alters
their meaning as elements in narrative forms.
[I]f we take account of the fact that historical events derive their historical
status not only from their articulation in singular statements, but also
from these singular statements in configurations of a certain sort which
properly constitute a narrative, then what we must place at the centre of
the epistemological discussion is no longer the nature of historical explanation

but its function. (1981, 276; emphasis in original)
Historical events translated into narratives are not the links in some
predetermined chronological chain, but also function as part of the defini-
tion of the chain itself. As such, to be historical an event must be defined
in terms of contribution to a plot (Ricoeur 1981, 277; emphasis added). In
the same way as a literary author imagines characters and events which will
populate and articulate the plot of a novel so that the ending is plausible,
so the historian (and with regard to the narratives of globalization and
social exclusion, we will argue below, the economist, the journalist, the
politician and the person-in-the-street) also writes with a plausible end in
mind. Ricoeur again:
[A]story describes a sequence of actions and experiences of a certain number
of characters, whether real or imaginary. These characters are represented
in situations which change or to the changes of which they react. These
changes, in turn, reveal hidden aspects of the situation and the characters,
giving rise to a new predicament which calls for thought or action or both.
The response to this predicament brings the story to its conclusion.
Accordingly to follow a story is to understand the successive actions,
thoughts and feeling as displaying a particular directedness in this sense,
the conclusion of the story is the pole of attraction. (1981, 277)
The historian, then, does not record events as they happen, but selects
information and facts, fills gaps and draws logical connections to meet a
standard of narrative plausibility. Events are therefore recounted at least in
part because they contribute to a desired and/or predetermined conclusion
and this, in turn, has profound consequences for the way in which we com-
prehend the nature of descriptions of the social world. But we have to be
subtle about this matter: as Ricoeur asserts, rather than being predictable,
a conclusion must be acceptable (1981, 277; emphasis in original). The
narration does not have to be linear or teleological, it merely has to be
acceptable, and that means, in turn, that there may be many plausible
endings in historical narratives.
Looking back from the conclusion towards the episodes that led up to it,
we must be able to say that this end required those events and that chain
of action. But this retrospective glance is made possible by the teleologi-
cally guided movement of our expectations when we follow the story. Such
is the paradox of the contingency acceptable after all, which characterizes
the understanding of any story. (1981, 277)
Ricoeur is suggesting here, plausibly in our view, that since historical

narratives have essentially the same form as fictional ones, they too are
written in a manner whereby the entirety of the plot is written into every stage
of the story and just as a painter employs certain techniques to create the
illusion of depth and time on a two-dimensional canvas, so the historian
employs certain techniques to create an illusion of the progression of time
and space. Furthermore, both the producers and consumers of such narra-
tives are equipped with the relevant epistemological tools needed to follow
the story in the proper way. For this reason, despite the fact that no one
seriously defends positivist conceptions of historical fact, they are so crucial
to our comprehension of narratives about the real world that we (includ-
ing the we who do this for a living and should know better) find it almost
impossible to dispense with them. Western traditions of historical explana-
tion and social science more generally are by now so far removed from their
epistemological foundations that they can no longer see them. Despite this,
these foundations are continually bolstered by narrative practices of which
we are only dimly aware and yet we reproduce them on a daily basis.
Crafting the narration of globalization: the act of framing
Let us develop these ideas more concretely in the light of the globalization
and exclusion debates. Like all social theories, theoretical and empirical
studies of globalization and social exclusion are advanced through a series
of controversies articulated in the form of political, journalistic, economic
and academic pronouncements (although, we hasten to add, they cannot be
reduced to such pronouncements). The debates and arguments that sur-
round these pronouncements are aimed, however indirectly and perhaps
without intention, at eliciting certain responses from a range of institutional
actors states, firms, political parties and so on and, ultimately, from
society as a whole (this is, of course, true of this book as well). Responses
to pronouncements concerning social reality the actual policy responses
of the various actors addressed are arrived at by what seems to be, and is
certainly claimed to be, rational calculation. Quite often we are able, there-
fore, to retrace the steps that have led certain actors to pursue particular
policies. We are also able to see in these processes a relationship between
interests and policies.9
In the social sciences, quite often that process of retracing the rational
calculations of actors in a particular social setting and over a given histori-
cal time-period is taken to be a complete causal explanation. But these sorts
of explanations overlook the fact that an important theoretical step takes
place prior to such rational calculation: the all-important act of framing a
debate, which is a technique of narrative construction. What does this
mean? The idea of framing suggests that in order to identify and differenti-
ate between outcomes and their stimuli, the participants in any debate must
first generate, implicitly or explicitly, an area of broad agreement over how
and where lines of differentiation are to be drawn. In other words, to make

themselves heard, to bring certain areas of disagreement into sharp relief
and to make political points clear, advisers, consultants, policy-makers and
theoreticians must establish discursively an area of common understanding.
This is so because the very possibility of such a separation is obtainable
only if the parameters of the debate are well understood by its participants.
The elements of debates concerning the meaning and transformation of
social reality are embedded, therefore, in a broader discourse that frames
the specific discourse within a set of common terms of reference.
One way of illustrating the importance of this common framing is to
examine what happens when a debate is conducted across the boundaries
of two separate frames. In the aftermath of the September 11th 2001 ter-
rorist attacks on the United States, a Muslim priest from the West Bank
town of Tul Karem was reported to have offered a solution to the crisis in
his Friday prayer; President Bush should convert to Islam and all would be
well. Now, this may have been a logical and rational solution from the per-
spective of the priest in Tul Karem the whole world would adopt Islam,
establish a world Islamic State and peace would come on earth but clearly
it was an absurd proposition as far as the American establishment was con-
cerned. Here we see the power of framing. What seems to the cleric from
Tul Karem a wholly serious and logical proposition within the frames of
meaning he inhabits Islam and the politics of the West Bank is so com-
pletely outside the frames of reference of the US establishment as to seem
at best an absurd joke and at worst wholly offensive. In fact, all we are
witnessing is the (very unequal) meeting of two distinct frames of reference;
two mutually exclusive frameworks each boasting their own histors.
Notwithstanding these differences, during the process of coalition-building
conducted by George Bush and Tony Blair prior to and during the subse-
quent offensive on Afghanistan, an active process of reframing of precisely
these political and theological debates took place. It may have been more
limited than the priest from Tul Karem would have wanted, but it did pro-
duce a reasonably common frame of reference within which Western and
Islamic governments could, if only temporarily, meet. Bush may not have
converted to Islam, but he certainly began to make references to the Koran
very quickly indeed!
Here the framing was done for instrumental political purposes. In aca-
demic work the framing is less instrumental and intentional, but serves
none the less as an important preparatory and ongoing theoretical opera-
tion. It is a narrative device which persuades the reader and/or participant
of the importance of political and social messages and requires them to
respond in particular ways. In the case of the priest from Tul Karem the
dissonance between the two frames is obvious. In most cases, however,
framing takes place much more subtly, and is often unrecognized by
participants.
Martin Heidegger, for example, demonstrates how the emergence of

modern thought, specifically the Newtonian revolution, was in essence a
revolution in framing. Newton was able to develop his theories because
of the
axiom being with every body. That means the distinction between earthly
and celestial bodies has become obsolete. The universe is no longer divided
into two well-separated realms all natural bodies are essentially of the
same kind Accordingly, the distinguishing of certain places also dis-
appears. Each body can in principle be in any place. The concept of place
itself is changed; place no longer is where the body belongs according to its
inner nature, but only a position in relation to other positions. (1983, 286)
As a result, nature is now the realm of the uniform spacetime context of

motion (1983, 292). This act of framing created the possibility that the
mode of questioning and the cognitive determination of nature are now no

longer ruled by traditional opinions and concepts. Bodies have no con-
cealed qualities, powers, and capacities. Natural bodies are now what they
show themselves only in the relations of places and time points and in the
measures of mass and working forces. (1983, 292)
Heidegger does not tell us in this essay precisely how the new frame has
come about, but it is clear that the new framing, or epistemology as some
would call it, employed spatial metaphors and linguistic constructs, as well
as informed perceptions of space, time and the material world, to produce a
new understanding of the world. It was done, moreover, in a way that
abstract and, indeed, what were at the time considered rather artificial
metaphors of spacetime became in time so naturally interwoven into daily
praxis, so imperceptible, that they passed from reflective thought.10
There are, therefore, different degrees and depths to framing. It is
much easier for us to perceive and acknowledge the bounded frames of
George W Bush and the priest from Tul Karem, because they are subject to
processes of active and deliberate negotiation. The protagonists may not be
aware that they are doing this, but the effect of their discursive and practical
interactions, however indirect, always serves to redraw the boundaries of
the debates in which they participate. It is far more difficult to see through
the longer historical processes wherein the framing involves (in Newtons
case) natural and physical relationships that appear to be real and, there-
fore, less negotiable and closer to direct experience. Although clearly sub-
ject to a process of vigorous negotiation, the framing of the globalization
debate operates at a deeper and less perceptible level than the Bush/Priest
case, but does not involve epochal epistemological shifts of the kind discussed
by Heidegger.
At whatever level it is forged, however, a frame acts in two main ways:

first, it delineates the boundaries of a debate by defining what is proper to
(and therefore what is properly left out of) it much in the way the touch-
line of a football pitch differentiates between the inner space of the game
where the rules apply and the outer space where they do not. At the deepest
level, epistemological framing bounds the horizons of thought itself
(Foucault 1972). Second, the frame establishes differential spaces within a
debate, by defining the primary positions and arguments and the dividing
lines between them just as the lines on a football pitch establish the different
teams territories. Once achieved, discursive framing renders the develop-
ment of a position beyond its own limits, from which it can be attacked or
stand as an alternative, very difficult (but not impossible).11
Globalization and social exclusion as acts of narrative framing
An insight into the operation of framing around and through the concepts
of globalization and social exclusion is to be found in the ongoing debate
concerning the future of the nation-state future in inverted commas
because, as we saw in the introduction, the debate emphasizes the imminent
demise of the nation-state. Much of the discussion about the meaning of
globalization and exclusion is framed precisely within parameters set by our
common understanding of what the nation-state has been in the past, is
now, and ought to be in the future. Many globalization theorists, for exam-
ple, are explicit in their belief that the state is about to wither away, or at
the very least to undergo fundamental change as a result of the disaggrega-
tion of national territory; others reject this prognosis and in fact reject the
very concept of globalization as mere hype. They do so largely in defence
of the idea of the nation-state, which they claim, with apparently consider-
able empirical evidence to support their argument, is as lively as ever. The
relationship of social exclusion to the state is more ambiguous. At the very
least, however, it implies a process of differentiation of the normative space
of the state and the creation of an externalized domain which, if it does not
threaten the state as a whole, reconstitutes certain core responsibilities of
the state with respect to particular groups. In both cases, it is important to
note that even when the whole purpose of the debate has been to declare
the death of the state, these debates are predicated on the establishment of
common frames of reference based firmly on the conventional conception
of the territorially bounded nation-state.
To debate the relationship between the state and globalization, in
order that these concepts can function properly as descriptors and predic-
tors of the future of the state, they have to be constituted within an episte-
mological frame whereby both the territorial state and the extra-territorial
spaces opened up by globalization and social exclusion can be seen to
inhabit the same spatio-temporal plane. Not surprisingly, the easier way of
doing this is favoured. Hence, the global system explicitly predicted by the
concept of globalization takes a form that is essentially similar to but larger
than the territorial nation-state; it is routinely accorded a concrete and appar-
ently conventional spatial representation. According to this view, even
relative to the largest continental states controlling significant portions of
the earths land mass, globalization implies processes on a larger, planetary
scale. Hence, the problem for the state is that an increasing portion of
human activities is operating on a geographical scale larger than the state.
This sort of spatial essentialism runs through the entire globalization debate
and it is taken so much for granted that many fail to notice that it really is
not empirically verifiable at all.
To take one plausible argument against this type of naturalized fram-
ing of globalization, it is argued that the state is a concrete social organiza-
tion with its own historical institutions and boundaries, while globalization
is no more than a concept; a term used to describe a series of otherwise dis-
connected processes. Strictly speaking, the relationship between globaliza-
tion and the state is one between a concrete institutional structure and a
descriptive concept; that is to say, since they belong to separate epistemo-
logical orders, the extent to which they can interact is questionable. How
could a mere concept change an institution as established and enduring, as
real, as the nation-state? The concept of globalization may be able to say
something about the state, but in belonging to a different order of existence
cannot affect it directly. Globalization as a concept is therefore presented as
external to the concrete reality of the state.
However, as Justin Rosenberg (2002) has pointed out, a curious slip-
page has taken place within the contemporary debate whereby theories of
globalization, that is theories that seek to explain the processes that have
led to globalization, in other words theories that seek to explain the
processes whose aggregate outcome may merit the appellation globaliza-
tion, have somehow turned into what he calls globalization theories, that is
theories according to which globalization has itself become the causal
factor. Theories that describe social change leading to globalization turn
out, all of a sudden, to be theories that explain social change as caused by
it. This sort of slippage arises precisely because of the ways in which the
nature of the epistemological framing of the debate itself changes. Because
of the overwhelming concern with the spatial dimensions of economics and
politics in conventional accounts of globalization, it has very rapidly turned
from being employed as a speculative and sometimes voluntaristic concept
(e.g. Ohmae 1990), to being treated as a spatio-temporal reality, equivalent
to, and interacting with, the state (e.g. Giddens 1998).
By the same token, the state itself has also been transformed through
these processes of representation. Its territoriality, which has for many
years been the inviolable and indivisible basis of the nation-states sovereign
integrity, has become more fragmentary and fluid. In order to occupy the
same frame of reference, we can see a process taking place whereby the
global has come to be constructed more in terms of the state and the state
in terms of the global. These two concepts, which for so long have seemed
to be mutually exclusive, suddenly seem to be made of the very same stuff.
So long as we do not enquire too closely into the precise nature of that
stuff that we accept it as common sense and natural the material real-
ity of both is not only secured but becomes mutually constitutive.
Globalization has not only become more real (reality being articulated as
the territorial conventions of the nation-state), reality has also become more
global!
Let us be clear, however, that our interest in the minutiae of the con-
struction of the epistemological framing of globalization and social exclu-
sion is not born of a desire to somehow improve or replace this framing
with another that is somehow better or more sophisticated. Here and else-
where in this book, we are not interested in showing the deficiencies of
current framing in order to replace them at last with the right framing.
Rather, our aim is to be better aware of the complex relationships between
certain theoretical and conceptual processes, including the operation of
framing of arguments and subsequent policy responses. We want to
demonstrate that policy is not reacting passively to structural forces
(merely adapting to something that is already existing), but rather that it
operates within a context of intervening and intermediating cognitive
processes.
Indeed, a similar process of framing can be seen to take place in the
context of social exclusion. As we will see, the concept of exclusion is ren-
dered comprehensible in the light of the concept of inclusion. And the not
too subtle message in the globalization and social exclusion literature is that
the space of inclusion, though rarely defined explicitly (because it is so nat-
ural that it does not need defining), is in most cases understood to be that
of the nation-state. However, whilst at one level this seems to confirm the
status of the nation-state as the prime organization constituted in and con-
stitutive of social space and, therefore, the provider of welfare and social
cohesion, it also denies, or at least fundamentally alters, the role of the state
vis--vis its citizens. By constituting a space beyond the social, the debate
on social exclusion, simply by presenting particular categories of the poor
as the excluded, serves to disaggregate the spatial contiguity of the nation-
state in a manner exactly parallel to that of globalization. Again, the terri-
torial integrity of the state is both asserted and rendered more complex as
the spatial requirements of the exclusion debate become naturalized. In this
case, reality (again the reality of the territorial state) has become more
locally exclusive as exclusion has become more locally real.
The nation-state (or, rather, a retrospectively developed idea of the
nation-state) serves, as we will see, as the point of departure against which
difference can be gauged a background and counterfoil for our

understanding of globalization and social exclusion. The state has become
the white wall, as Deleuze and Guattari (1987) call it, that provides the
very possibility of signification. The surprising centrality of the state, fram-
ing the prevailing imageries of globalization including those who firmly
predict the end of the state is a central component in our interpretation.
Framing time
The frames of reference of the territorial state and those of globalization

and exclusion are brought together in order that a specific set of processes
can be articulated. They are intended to create a set of common terms
through which a story unfolding through time can be told. This means that
the temporal dimension itself must also be brought into line with the frames
of reference of these debates time itself must be configured to fit with the
normative requirements of the unfolding narratives of the globalized and
excluded world.
Whatever else it may be, globalization is explicitly a story of temporal
change it posits up front the idea that the world is becoming more
global. This teleological aspect of globalization, although it has been noted
many times, has not led to much consideration of the way in which time is
represented through the concept. Rather, the teleology of globalization has
tended to be treated, particularly in Marxist analyses of false conscious-
ness, as a convenient fiction used instrumentally to legitimize specific insti-
tutional changes brought in by powerful and interested actors. The
temporal expectations of globalization are certainly deployed in this way,
to justify all manner of specific changes in the nature of economies and soci-
eties (Peck 1998), but to reduce the temporal aspects of globalization to
these activities misses some of its more profound implications. Specifically,
globalization, in combination with social exclusion, represents the opening
up of new normative temporal domains the differentiated velocities of
social life anticipated by Virilio (1986), Bauman (2002) and others. How
does this come about?
Here, Ricoeurs analysis of the narrative function offers a clue. One of
the big mistakes made by conventional historiographers, he argues, is that
they view narrative as narrowly bound to a strictly chronological order
(1981, 278). If we accept this conception of linear sequential time which,
given that this is the way we experience the passage of time, is not hard to
do then the idea of history as narrative seems to be commonsensical. If
time itself is sequential, then the task of the properly disinterested historian
or social scientist is to excavate and narrate the real sequences of real
history. However, this apparently natural process of strictly sequential,
linear temporality has the effect of locking social life into a pre-determined
structural unfolding of the system. If this were true then our capacity to
influence the future would be reduced to zero human life would simply be
governed by blind fate or an extreme form of structural determinism. Just
as knowledge of social reality does not come to us in a ready-made, unmedi-
ated manner, so this is also true of social time. The stories we tell ourselves
about ourselves (and not by any means only those of historians) are very
specifically stories about the passage of time. They tell us what used to be,
what will be (quite explicitly in the case of globalization) and, perhaps most
importantly of all, how we are moving from the interpreted past to the
anticipated future. As Ricoeur argues,
any narration combines, in varying proportions, two dimensions: a

chronological dimension and a non-chronological dimension. The first
may be called the episodic dimension of the narrative. Within the art of
following a story, this dimension is expressed in the expectation of contin-
gencies which affect the storys development; hence it gives rise to ques-
tions such as: and so? And then? What happened next? What was the
outcome? Etc. (1981, 278)
The episodic dimension holds a considerable power over the individual and
collective imagination, not least because it seems to correspond to our lived
experience of the passage of time. However, as a narrative account of the
passage of time, any such history is a representation; like a realist painting
which tries to fool the eye into believing that the painted object is real, nar-
rative seeks to represent historical events in a manner comprehensible to
minds trained to think of time as sequential. This suggests, as Nelson
Goodman (1978, 20) powerfully put it, that reality in a world, like realism
in a painting, is largely a matter of habit.12
The realist habit of narrating history as episodic sequence is much in
evidence in conventional theories of globalization. Such accounts seek to
answer precisely the sort of questions that Ricouer poses: And so? And
then? What happened next? What was the outcome? However, as the
quote above suggests, Ricoeur adds a second non-chronological dimension
to the function of the historical narrative which runs counter to the logic
of the episodic sequence. He borrows from Louis Mink the notion that any
narrative, including historical narratives which claim to merely describe the
found world, also constitute a simultaneous process of configuration of an
entire period. Narrative, Ricoeur claims,
does not consist simply in adding episodes to one another; it also con-
structs meaningful totalities out of scattered events. This aspect of the art
of narrating is reflected, on the side of following a story, in the attempt to
grasp together successive events. The art of narrating, as well as the
corresponding art of following a story, therefore require that we are able
to extract a configuration from a succession. (1981, 278; emphasis in

original)
This leads Ricoeur to an important conclusion: every narrative can be con-

ceived in terms of the competition between its episodic dimension and its
configurational dimension, between sequence and figure (1981, 278). The
narrative is a form of contestation, and any narrative displays complexity
far beyond the mere chronological addition of facts. To broaden the argu-
ment further, the act of narrating any account of social reality and its develop-
ment entails simultaneous processes of definition, interpretation and, in the
more general sense, exclusion the story of social reality is not merely
found and related, but is actively, if not consciously made. As Ricoeurs
editor and translator John Thompson argues, human action may be
regarded as a text: action, like a text, is a meaningful entity which must be
constructed as a whole (1981, 15).
The competition between the episodic and the configural will play a
central role in our own narrative. We will seek to demonstrate that the
simple imagery of globalization, as an end point beyond which the world
can be reflexively rebuilt, is the product of a far more complex configural
narrative than is commonly acknowledged.
Framing space
Just as positivist conceptions of historical fact have been challenged by criti-

cal theorists and the hermeneutics tradition, so conventional conceptions of
the nature of social space have been critically reappraised. In much the
same way that critical historiographers have explored the constructed
nature of historical narratives, recent critical geographers and others have
responded to that fact that such narratives are always presented in spatial
terms (cf. Crang and Thrift 2000). Furthermore, the spatial framing of his-
torical arguments and the visualization of events is not simply a neutral
process independent of the events that are taking place out there. As a con-
sequence the idea that space itself is not the natural, given substance we
assume but that it is produced has gained considerable currency in recent
years. Space conceived as something actively and discursively produced can
no longer be seen, as in conventional mainstream geography, as the passive
backdrop against which the events of history are played out (Soja 1989).
The idea that social space has a form distinct from physical space and
that it is, moreover, socially reproduced, has been a consistent theme in a
growing body of theoretical work in anthropology (e.g. Shapiro 1997;
1999), critical and social geography (Soja 1989; Harvey 1990; Thrift 1996;
Keil 1998; Crang and Thrift 2000), literary theory (Berman 1984; Ross
1988, 1995; Moretti 1999) and sociology (Poulantzas 1978; Davis 1990;
Lefebvre 1991; Zukin 1993; Castoriadis 1998).13 Although this has its
roots in some of the earliest challenges to the spatial orthodoxies of acade-
mic geography, for example in the social geography of the French anar-
chist and communard Elise Reclus in the 1870s (Ross 1988), the
development of this more critical and constructivist approach to social
space is much more recent dating primarily from the 1970s and a reasser-
tion of space in critical social theory (Soja 1989).
At one level, the production of space refers to something we are less
interested in here, namely the creation and transformation of the real
spaces of architecture and topography, in which the background of social
interaction, the city, the landscape and so on, the apparently neutral and
unchanging backdrops to life, are viewed no longer as merely neutral con-
tainers but living, dynamic, affective and rich in symbolism. Even the most
evident physical barrier, the limits of the earth, is in part a socially con-
structed limit, best exemplified in the commonsense adage, the sky is the
limit. As Paul Virilio has demonstrated, however, we are living in an era in
which literally the sky is no longer the limit. For Virilio, the technology that
has effectively removed our physical barriers, also serves to remove barriers
to the imagination. The limitless sky is for him the harbinger of a different
sort of social relationship embedded in a new conception of territory where
space, and indeed social reality as a whole, is virtualized and internalized
(Virilio 1997; Der Derian 1998). The task of such hermeneutic approaches
to social space, therefore, is to read the rich semiological map, stripped of
its naturalized symbolic value.
But the issue of the production of space is not only about providing
a more complex description of the landscape or reading of the semiotic
compasses of everyday life; to view the world of artefacts and architecture
as a form of communication. Such approaches are very important, but of
greater significance here is the notion that space generally, and not simply
certain spaces, is discursively reproduced. As such, space itself, or spatiality,
to use Sojas terminology (1989), needs to be understood as a dialectic
process that is constituted in and by all social forms, processes and practices.
Perhaps the best known and most influential theorist of socio-spatial
production, the French philosopher Henri Lefebvre, argued that a complex
and dialectic spatiality is a fundamental aspect of social reality:
Social relations, which are concrete abstractions, have no real existence

save in and through space. Their underpinning is spatial. In each particu-
lar case, the connection between this underpinning and the relations it sup-
ports calls for analysis. Such an analysis must imply and explain a genesis
and constitute a critique of those institutions, substitutions, transpositions,
metaphorizations, anaphorizations, and so forth, that have transformed
the space under consideration. (1991, 404; emphasis in original)
Social and spatial relationships, Lefebvre claims, are mutually constitutive

or, to put it terms of the narrative function outlined above, the social nar-
rative is a spatial narrative. Our capacity to affect, think, imagine, speak,
indeed to act in any manner whatsoever in society, is both enabled and
bounded by a mental map which is at the same time a spatial map. Such
a map includes co-ordinates for the familiar concrete spatial forms that set
limits on our physical movement hard, solid spaces through which we
cannot move and liquid, gaseous spaces that we can traverse. And yet, over
and above these, it is the spatiality of our metaphors and our knowledge of
the spatio-temporal environment that they reproduce, that contribute com-
plexity to the plot and which create rhythms and conclusions. Social rela-
tions are, therefore, spatial relations; their concreteness is ipso facto spatial;
their underpinning is spatial, says Lefebvre. This view, in turn, contains a
dynamic theory of change: it assumes that spatial forms are never static,
and considering that they underpin social relations, it follows that social
relations the principles we can infer by analysis themselves are under-
going continuous if not constant change.
As this suggests, the production of the spatial environment is subject
to a process of emplotment similar to that of the historical narrative
proposed by Ricoeur and others. That the former is plotted across space
rather than time constitutes a significant difference, but not one that
prevents us from applying to spatial narratives the same sort of critique
that Ricoeur applies to historical ones. To adapt Ricoeurs terminology,
social narratives not only extract a configuration from a succession
succession being a chronological temporal distribution but also extract
a configuration from a spatial distribution. Whereas the tension in the
historical narrative is that between chronology and simultaneity
between, in Ricoeurs terms, the episodic and configural function of
the narrative in spatial terms the tension lies between territoriality
and simultaneity. Here the simultaneous aspect of spatiality is different,
however, in that it refers less directly to temporal simultaneity things
happening at the same time than to spatial simultaneity the co-pres-
ence, co-extension and overlapping of spatial forms that are expected
and/or claimed to be discrete, internally and externally coherent and con-
tiguous. Again, therefore, spatial narratives contain a hidden configural
function which stands in tension to the foregrounded territorial function.
Describing the landscape also encapsulates it, categorizes it and alters it.
Just as, the whole novel is present on every page (Weigand, quoted in
Mink 1974, 114) in order that we reach the acceptable conclusion so
we can read the entire spatial order at every point on the social landscape.
This does not mean that social space is undifferentiated, rather that the
pattern of differentiation is present in all of the various elements of the
spatial narrative.
So, for example, as we have already pointed out, conventional readings

of the territorial state posit a very strong form of territorial coherence
within national borders and a very strong form of territorial rupture at
the border. This is reproduced through the languages and practices of law,
economics (the national economy), politics, citizenship, official language,
culture, sport, religion and so on. Few would defend the idea that these
many different spatial forms actually correspond to each other, or to the
lines on the map indeed such an idea is indefensible but most of us
nevertheless act as though this were the case. Indeed because, as in the case of
the historical narrative, our spatial experience and expression is grounded in
pervasive epistemologies and their institutional expressions which predetermine
what constitutes space and how space is to be both read and inhabited, it is
extremely difficult to act other than in accordance with prevailing spatial
orthodoxies. By the same token, the theories of spatial causality that are con-
tained within such orthodoxies render the reading, let alone transformation,
of spatial dynamics very opaque.
For example, Kathleen Kirby shows how the Enlightenment concept of
the individual, the naturalized individual-as-actor that we take for
granted today, is a fundamentally spatial category.14 Or rather, she demon-
strates how awareness of the spatial metaphor embedded in certain con-
cepts helps explain a more general problematic of narration of the role of
the individual in society.
[P]roblems with the Enlightenment individual derive it seems from its

spatial form. The individual (it has become commonplace to point out),
is undivided within itself, and unquestionably separate from other subjects
and the external environment as a whole. Graphically, the individual
might be pictured as a closed circle: its smooth contours ensure its clear
division from its location, as well as assure its internal coherence and
coherence and consistency. (1996, 38)
The implications of such conceptions, she continues, are profound:
Inside the circle of the rational self all is consistent, co-operating; outside lies
a vacuum in which objects appear within their own bubbles, self-sufficient
Ego. Will, thought, perception, might be depicted as rays issuing outward
from this solitary mind to play over the surface of Objects. (1996, 38)
This spatial reading of the individual begs a question about the nature
of the line of causality that resulted in such a conception of the self-
contained, bounded self. Is it the case, for example, that the notion of the
modern individual has produced alongside it a proper spatialization
within which that particular historical construction of the self can be
articulated and can function effectively? Or was it the other way around did
changing conceptualizations of space and concomitant spatial practices

(for example, the organization of productive labour into specialist units
separate both from each other and from the domestic sphere) impact on
the nature of the individual? Neither explanation seems convincing on its
own but rather both seem to be simultaneous processes, the one implying
and reinforcing the other. Whatever is the case, the epistemological
framing of spatial dynamics, such that they appear as and are claimed
to be ontologies, only rarely reaches the realm of public debate. It is our
contention that the debates on globalization and social exclusion, as fun-
damentally and unavoidably spatial narratives, provide just such a rare
moment a very open and public narrative re-configuration of socio-
spatial form which is re-plotting our basic social maps in ways we simply
cannot ignore.
As such, what is interesting about globalization and social exclusion is
not that they involve a reconfiguration of spatial form; as implied above,
this is immanent to social life. Social space is dynamic and therefore is con-
tinuously, if not constantly, reconfigured. Rather, what is important about
globalization and exclusion is that the reconfiguration is of such a magni-
tude, and is taking place at such a pace, that it cannot remain hidden it
is forced out into the open. Since we, as academic commentators, politi-
cians, journalists, economists and ordinary individuals are unaccustomed to
dealing with such grand shifts in our basic conceptual framing at the level
of explicit discourse, perhaps we should not be so surprised that the result-
ing attempts to figure out what is going on have tended rather to miss the
target. By trying to deal with socio-spatial change at the level of the empiri-
cal which is familiar and comfortable territory to a social science praxis
still steeped in the predilections of positivism we might expect to find
silences around matters of epistemology and hermeneutics.
Framing the social
If social life is made possible through the internalization of precognitive

maps of the social world, which encapsulate the content and delineate the
boundaries of our discursive frames, where do we find them and how are
they plotted in the first place? Clearly, conventional cartography presents us
with one set of spatial co-ordinates those most familiar as maps correspond-
ing, however abstractly, to territories. However, for all their apparent
groundedness in the physical forms of the landscape, such maps particularly
political maps outlining the boundaries of national and sub-national state
spaces represent not real spaces but political, economic and juridical
boundaries imposed by people. As such, the boundaries of political maps
are graphic symbols which embody the configural narratives of a prevailing
spatio-temporal order.
Whilst conventional maps are those that we recognize most readily and
most uncritically, the configurations they contain are also narrated through
other media whose mapping function is less obvious. The literary historian
Franco Moretti observes that literary maps in other words, those maps
implied and contained within fictional narratives constitute important
elements in the reproduction of spatio-temporal conceptions. Fictional
narratives, Moretti argues, contain their own geography which allows the
reader to see two things:
First, they highlight the place-bound nature of literary forms; each of

them with its peculiar geometry, its boundaries, its spatial taboos and
favourite routes. And then, maps bring to light the internal logic of narrative:
the semiotic domain around which the plot coalesces and self-organizes.
Literary form thus appears as the result of two conflicting, and equally
significant forces: one working from the outside, and one from the inside.
It is the usual, and at bottom the only real issue of literary history: society,
rhetoric and their interaction. (1999, 5)
The relationship of the literary novel to the production of space has,

therefore, a dual character. On the one hand it serves to write the spatiality
of, in the case of Morettis work, the nation-state, not as it is in any empiri-
cal sense, but as it ought to be according to the normative predilections of the
time, the author and ultimately the reader. The nation-state of the countless
fictions, novels and social commentaries then merged, in time, with an
empirical nation-state constructed in the image of the imaginary one. This is
Ricoeurs argument about the merging of fictional and historical narratives.
The novels that Moretti analyses are written within the context of a pre-
vailing and hegemonic spatial imaginary which acts as a constraint, whether
the authors or readers are aware of it or not, on the possible spaces that
can be written. This corresponds to the delimited notion of worldmaking
developed by Nelson Goodman and outlined above. We might also add a
third dimension to this, which is in fact implied throughout Morettis subse-
quent account of the relationship between the modern novel and the nation-
state, that the imaginary maps that are produced by literature and the other
arts are not socially neutral with regard to their subjects. The depiction of
the landscape of England in the eighteenth-century novel was not, therefore,
innocent but, as Moretti notes, operated a form of literary exclusion
whereby the nation-state was reduced to a small area of central England,
highly gendered and entirely divorced from the rest of the UK.
Benedict Andersons (1991) famous account of the production of
imagined communities of the nation-state also examines the significant
role played by fictional narratives in contributing to the formation of
nationalisms and nation-states. He goes one step further, however, adding
the census, the map and the museum to various forms of vernacular and
nationalist literature to explain the ways in which the territory of the state
also came to delineate, at least in theory, the boundaries of the national
culture. But the literary novel, and as Anderson shows, the whole parapher-
nalia of other communicative technologies, was in the process of producing
(or rather affirming) an historically evolving notion of collective identities.
These were not necessarily co-extensive with political boundaries, although
interesting relationships evolved between the institutions of the state, politi-
cal ideologies, and these broader cultural socio-spatial formats, to generate
between them a complex mapping of the nation-state. Indeed, considering
that each nation-state drew on different, histories, different novels, operating
within different territories, if sharing much in terms of institutional and
political innovation, the concept of the nation-state can only be an ideal-
type; each nation-state produced a different, if in many ways similar, format.
State theory, generally speaking, is interested in commonality, in finding the
basic, universal principle. But this academic pursuit is itself a component of
the modern way of story-telling, its universalizing and homogenizing struc-
ture plays precisely the same role. Goodman makes a similar point with
respect to the nave empiricism of the sciences:
Truth, far from being a solemn and severe master, is a docile and obedient
servant. The scientist who supposes that he is single-mindedly dedicated to
the search for truth deceives himself He seeks system, simplicity, scope;
and when satisfied on these scores he tailors truth to fit. He as much
decrees as discovers the laws he sets forth, as much designs as discerns the
patterns he delineates. (1978, 18)
The same is, of course, true of the social sciences. This implies that the
relationship between concepts of globalization and social exclusion and
those social sciences that claim to stand back from them and debate them
at a distance is in practice much more intimate. Put another way, could we
have thought of globalization or social exclusion, let alone institutionalize
them in theory and practice, without the century or so old world of the
social sciences?
Globalization as fas
How then do we propose to advance our investigation? In his famous study

of the role of mythology in human societies, Ernst Cassirer demonstrates
how thoroughly high modern Western cultures are drenched with atavistic
fears and superstitions (Cassirer 1955). Such mythologies are not merely
hangovers from a primitive past that we have yet to eliminate; they are
integral to the very fabric of modernism and, by extension, to any and all
politics. Myths do not simply play a legitimizing role. mile Durkheim
notes that representation is not a simple image or reality, a motionless

shadow projected onto us by things. It is rather a force that stirs up around
us a whole whirlwind of organic and psychological phenomena (1984, 53).
Representations, the stories we tell ourselves about ourselves and about the
world we live in, are guides to action and forces of change in themselves,
stimulating and constraining the entire gamut of human emotion, from
happiness to despair, from violence to love. Societies are not simple or
closed systems, they contain multiple levels and many different narratives.
Nevertheless, an overlap between Hankiss Promethean and Apollonian15
strategies is achieved at every historical period with the aid of what may be
described as a foundational story. These foundational stories, without
which social life would be devoid of meaning, have been central to Western
philosophy and social theory for centuries.
In Western philosophy, religion, particularly within the Judaeo-
Christian tradition, has conventionally provided a source for these myths,
claiming originary and divine truths as the basis for social order. As modern
philosophy has moved away from religious essentialism, so new secular
foundations have been found in, for example, constructions built around
ideas of human nature, economic realism, structural functionalism, psy-
choanalysis, the nation, and so on. In each case, these founding stories are
constructed with the aid of differing and often multiple narrative structures,
but the presence of such mythologies themselves remains constant. Similarly,
contemporary societies also develop their own myths of origin without
which they have no picture of themselves.
In The Practice of Everyday Life, Michel de Certeau develops an
account of human praxis which is founded upon an instituted and formally
sanctioned mythic space. He employs the ancient Latin noun fa-s to describe
what he calls a mystical foundation, without which human action cannot
take place. The creation of the fa-s the institution of the foundation, he
remarks, was conducted by special priests called fetia-les who would con-
duct rituals which would create the field necessary for political and mili-
tary operations (1984, 124). The establishment of the fa-s, the socially
constructed field or space necessary for political action, has historically
not been confined to the Romans. Indeed, we argue that until recently
particularly in northern Europe, north America and other parts of the
industrialized world the nation has played very precisely this role of the
fa-s, serving as a foundational myth in modern society. For all its prevalence,
the founding myth of the nation, as demonstrated most famously by
Benedict Anderson (1991), does not take a single form across time and
space, but comes into being, in part at least, to serve the prevailing interests
and powers at work in a given place (Delanty 2000, 2001). In whatever
form, however, the nation particularly when institutionalized as the
nation-state has functioned historically as simultaneously a concept, a
praxis, a political programme, a set of institutions and a social fact (in a
Durkheimian sense) all rolled into one. Combining all these elements, the
concept of the nation opens a space and provides a foundation for the
operations of the military men, diplomats or merchants who dare to cross
the frontiers (de Certeau 1984, 124).
From such a perspective, the current debate on globalization, which
on all sides tries to find a truth behind ideology and symbols, is missing a
crucial point. Whether one belongs to the booster or hypercritic (Dicken
et al. 1997) factions that have polarized the debate in recent years, it is not
possible to somehow strip the ideology and/or discourse out of globaliza-
tion, either to demonstrate its real nature, or to refute its existence alto-
gether. Rather, globalization can only be properly understood in the
context and as an integral part of an emergent fa-s, one being deployed skil-
fully to replace and/or reform that established around the central fiction of
the nation. Just like its predecessor, globalization is simultaneously a con-
cept, a praxis, a political programme, (increasingly) a set of institutions and
a social fact, all rolled into one. It is for this reason that debates about fac-
tuality of globalization have proved to be so fruitless. This is not to suggest
that there is no empirical evidence to support the claims made for globali-
zation far from it, and we will analyse particular aspects of that evidence
in subsequent chapters. It is, however, to state that anyone attempting to
treat globalization as being only one of these things (as either a concept, an
ideology, a political programme, an institutional structure, or a social fact)
at once mis-recognizes its social and political function and, unwittingly,
reaffirms its mythology.16
Although it is all around us, thoroughly infiltrating and shaping the
world we inhabit, the narratives that underpin and give force to the concept
of globalization as an articulation of a contemporary fa-s have been largely
misunderstood. As a result the power, rhythm, nature and effects of globali-
zation are also misunderstood. Our aim in this book is not to argue that
globalization is the contemporary fa-s in any complete sense. That would be
to misunderstand the way in which the fa-s itself functions as a precognitive
framework for social identity and praxis and, in so doing, to reduce it to a
single set of processes and institutional arrangements, those that have come
collectively to be labelled globalization. As Montrose argues: a closed and
static, singular and homogenous notion of ideology must be succeeded by
one that is heterogeneous and unstable, permeable and processual (quoted
in Colebrook 1997, 25). In our description, we emphasize precisely these
qualities of globalization as fa-s, heterogeneity, instability and permeability.
We are not even particularly bothered whether the reader will accept
the correlation between globalization and de Certeaus notion of the fa-s.
Rather, we will ask you to suspend judgement, to accept provisionally that
any society, at any time, necessarily operates within some kind of fa-s and
that globalization might be an integral and very significant part of its
contemporary manifestation. We therefore also ask that our argument is
judged less on its methodological and theoretical assumptions than on its

concrete descriptions and interpretations. We will examine the phenomena
of globalization (and by phenomena we refer as much to the conceptual
aspects of globalization as we do to its empirical manifestation) as evidence
of changes in the contemporary fa-s of Western (post-) industrial societies
changes that are having consequences far beyond the spatial and conceptual
limits of those societies. In analysing globalization as part of a history of the
production of the contemporary fa-s, we propose a distinctive perspective on
changes taking place in the contemporary world and in particular the
changing construction of the normative socio-spatial relationships between
globalization, nation, state and citizens.
Conclusion
What we have argued in this chapter is that our conceptions and perceptions
of social reality are framed for and by us in a number of different, but over-
lapping ways. First, an a priori framing, the epistemological plane without
which social communication and meaning cannot take place because it is
immanent to the social itself, delimits what can and cannot be said and done.
For all that this clearly imposes constraints on social knowledge and action,
such a plane also provides the foundation upon which debates about knowl-
edge and action can take place at all. We are all bound to occupy such epis-
temological planes, even if we are aware of their existence and can be
reflexive about the limitations on us that they imply. Being reflexive about
the existence of gravity does not mean that we can abandon it.
Unlike gravity, however, the epistemological plane is not an external
reality, but an internal, social one. As such, whilst we may not be able to
escape it, we can at least alter its dimensions; our conceptual foundations
change sometimes, as Thomas Kuhn (1962) most famously observed,
quite suddenly even if we still have to have them in some form or another.
The conceptual foundations of the nation-state are, whether we are aware
of it or not, being transformed by the related discourses of socio-spatial
change that are globalization and social exclusion. As the passions aroused
by both concepts and/or processes indicate, the effects of their incorpora-
tion into the fa-s of the contemporary nation-state are being keenly felt.
However, responding to them effectively presupposes that we understand
them for what they are. Resisting a narrative is, after all, a very different
thing to resisting a set of concrete institutions not least because if we mis-
recognize the meaning of those institutions, as evidence of the fa-s rather
than the fa-s itself, we can end up reinforcing them by reproducing the very
narratives on which they are based. The next chapter examines this process
of framing in greater detail, by tracing the processes through which socio-
spatial epistemological frames are reproduced.
3
Configuring the Global: Globalization as
Spatio-Temporal Narrative
[S]ocial science must include in its theory of the social world a theory of the
theory effect which, by helping to impose a more or less authorized way of
seeing the social world, helps to construct the reality of that world. The word or,
a fortiori, the dictum, the proverb and all the stereotyped or ritual forms of
expression imply a certain claim to symbolic authority as the socially
recognized power to impose a certain vision of the social world, i.e. of the
divisions of the social world. (Bourdieu 1991, 106)
Every story is a travel story a spatial practice. (de Certeau 1984, 115)
As we have seen in the previous two chapters, narratives, and a tacit

acknowledgement of the vital role they play in determining institutional
change, pervade the literature on globalization. That the literature itself,
except in a very few cases, does not reflect on this systematically means,
as the quote from Bourdieu above suggests, that it lacks a theory of the
theory effect it is unaware, somewhat ironically, of the source of its
own powers of persuasion and reproduction. Without a general aware-
ness of the significance of theory, let alone the particular role played by
narratives, the debate has been unable to take advantage of the theories
we surveyed in the previous chapter. Often, it seems, the globalization
debate has become lost in its own rhetoric and, because it does not see
rhetoric as constitutive of the real, cannot find its way out (Rosenberg
2002).
How, though, do the ritualized expressions of globalization impose
their vision? By what process can narratives become institutions? How can
a narrative configure time and space? The purpose of this chapter is to sug-
gest one way of understanding these processes both generally and specifi-
cally in relation to narratives of globalization and exclusion. We introduce
a way of visualizing the narrative configuration of social space, taking the
form of a configural cycle which, we argue, can be identified in both sets of
discourses. We then examine each of the four phases that make up this cycle
in detail, linking them directly to elements of the globalization/exclusion
literature.
Spatial form
Proscribed Retroscribed
Spatial responses Spatial trajectory

(e.g. coping, resisting, (e.g. local to national to
managing,) global)
Theory of causality.
(e.g. economic
determinism, nationalism,
imperialism, etc.)
FIGURE 2 (RE-)PRODUCING SPATIAL FORM
The configural process
Although in practice narrative configuration is an immensely complex and

nuanced process, for the sake of convenience we shall divide our explo-
ration of the narrative construction of the dominant thinking on globaliza-
tion into four distinct phases. These phases, although presented above as
sequential for the purposes of clarity, are effectively simultaneously pro-
duced (configured) as integral parts of a spatial story, irrespective of who is
telling it or how it is being articulated. These four are: spatial form itself
(including, but not reducible to, real concrete spaces); a conception of the
trajectory of spatial change; a theory of causality associated with that tra-
jectory; and a series of spatial responses to the spatio-temporal matrix thus
constructed. We can visualize this process schematically in Figure 2.1
The first phase of this cycle consists of a stated (in other words, nar-
rated, represented and performed) conception of spatial form which is
either taken to exist now, to have existed in the past and/or which is pre-
dicted in the future the global, for instance, in the case of globalization.
As this implies, it consists not of one spatial account, but two, which
between them generate an impression of historical time. These two
accounts are: first, a retroscriptive account which provides the origins of the
spatial narrative; and second, a proscriptive account, which provides the
end point. These two accounts are mutually constitutive the beginning
Configuring the Global 71
and end of the spatial story are written, as we saw in the previous chapter,
with respect to each other. This two-phased spatial story implies a series of
moves that rationalize, legitimize and describe (that is, emplot) the assumed
and/or claimed transition from one to the other.
The second phase, implied in the first, involves the identification of a
spatial trajectory the direction of spatial change. This spatial movement
also translates into a time vector, producing the impression of sequential
chronology. The third phase then defines a causal dynamic in relation to
this trajectory a mechanism or process is identified as the motor behind
this change. In the case of the nation-state, for instance, the most-cited
cause of its spatial consolidation, at least in conventional accounts, is the
existence of a nation which demanded territorial unity to match cultural
homogeneity (cf. Anderson 1991, 1998). In the case of globalization, the
underlying process is almost routinely said to be economic; the power and
reach of capital bursting through conventional territorial boundaries to cre-
ate a borderless world (Ohmae 1991). The fourth phase of this process
consists of the various responses taken by actors (individual, corporate,
institutional, etc.) to the unfolding spatial narrative. In the case of globali-
zation, such responses have in the recent past taken the form of, to mention
but a few examples, corporate restructuring, product rebranding, welfare
retrenchment, fiscal reorganization, labour-market adjustment and, most
visibly of all, violent mass protest. These various responses bring us back
full circle, informed by and informing emergent spatial forms. In the next
sections, we trace the travel story of conventional accounts of globalization
and exclusion by examining each of these four phases in turn.
Phase 1 spatial form: retroscription and proscription
Although the cyclical nature of the diagram above suggests that a particu-
lar spatial form should contain the starting point for the process of spatial
reproduction, the narrative function analysed in the previous chapter
implies the emplotment of a whole process and the hence the simultaneous
production of the beginning and the end. For any story must have a begin-
ning, an end and a narrative that links the two in a credible, chronological
line and the story of globalization is no different. The story is written,
however, at a certain present, and thus involves the simultaneous concep-
tualization of a point of past departure and a point of future arrival (how-
ever vague) a double-writing of past and future in the image of the
present. This is an important point; we normally tend to take theoretical
representations of chronological time at face value as though they corres-
ponded to experiential time. The chronology of a social scientific narrative
is supposed to echo the chronology of events in the real world. Because
such scientific narratives are presented as though separate (spatially and
temporally) from the real world they describe, their constitutive nature is
suppressed.
But, if we think of this privileged class of narrative as travel stories
told, and if we understand such stories, after de Certeau, to be spatial
practices, then we must treat theory differently. As Ricoeur argued, the
conclusion of any narrative is built into its plot the end is written into the
beginning and vice versa. The strongly implied sequential chronology in
the narrative of globalization is a retrospectively constructed chronology
articulated through narratives of spatial and scalar change. So that what is
presented as two sets of objective historical conditions, separated in time
the nation-state and the national economy, on the one hand, and the global
economy on the other in fact comprise two mutually constitutive elements
in the narrative of globalization.2
Following in this line of thought, we note that in the first of these defini-
tional phases the retroscriptive, mainstream globalization debates equip the
coming global system with a point of departure a state of nature against
which the changes it represents can be gauged. In fact, nearly all accounts of
globalization posit the same starting point from which the process of global-
ization is said to constitute a departure the nation-state. The retroscriptive
phase implies, indeed builds, a foundation for the second, proscriptive phase.
Here a future, in this case represented by the image of global spatial form,
is posited as the end point of a process of transformation.
Although contested, this implies a global space that differs fundamen-
tally from the space of the territorial state and constitutes, variously, its
compromise or destruction. The impression of chronological time, of move-
ment between the point of departure and the point of arrival, is produced
through the spatial discrepancy between these two historical points. Since
globalization is spatially larger than, and in fact contains, the nation-state,
the reader is left to fill in the gap between the two spatial orders by imagi-
ning a period of transition from one to the other. The period of time
between the beginning and end of this process (neither of which need be
defined very clearly so long as they are plausible in relation to each other)
is then left to be filled in by the reader who must conclude that it stretches
between them.3 This form of narration glosses over the fact that for all the
empirical evidence that can be brought to bear to demonstrate an historical
transition from territorial state to non-territorial global space, neither can
be reduced to the empirical evidence. Of course, there was never a moment
in time when a particular fixed form of a nation-state reigned supreme,
nor is there a moment in time when an idealized global system will come
into being. Rather, both the point of departure and the end point are imagi-
ned, but, because both are plausible, they impose a more or less authorized
way of seeing the social world (Bourdieu 1991, 106). The two concepts
are therefore not merely describing a situation, rather what takes place is
a double, quasi-chronological moment of retroscription and proscription
through which the beginning and end of the transitional process in question
are simultaneously defined in relation to each other.4
This is not to say necessarily that there was never any real transition
between one phase and another; at this stage we are merely inviting the
reader to pay greater attention to the narrative structure that has emerged
to describe these developments, and to ask ourselves in turn whether under
close scrutiny the narrative is not found wanting. The transition is, for
example, often presented as an unproblematic given. For example, Ellen
Meiksins Wood sums up the central claims of globalization theory as
follows:
Globalization is in the first instance concerned with geographic space

and political jurisdiction. What defines the present historical moment is
supposed to be the breaching, transcendence or obliteration of national
boundaries by economic agencies, and, correspondingly, the weakening of
political authorities whose jurisdiction is confined within those boundaries
manifest not only in the expansion of markets but in the transnational
organization of corporations, the more or less free movement of capital
across national borders, and so on. (1997, 552; emphasis added)5
Globalization is assumed to have compromised a particular, known and

established past, one characterized by national boundaries and national
economies. A conception of chronological time is smuggled into such
accounts through these violent transitional metaphors of breaching, tran-
scending and obliterating.
The retroscriptive sweep of the globalization and exclusion debates
presents the nation-state in a new light; as one unit in a coherent world of
discrete national economies, maintained by sovereign states that to a
greater or lesser degree represented the natural boundaries of the people-
nation (Poulantzas 1978). This may seem self-evident it is certainly pre-
sented as such but it is not. In fact, not long ago few sociologists and state
theorists would have been prepared to accept such a description of the
nation-state at face value (see for instance Jessop 1999; Mann 1984; Poggi
1978). And yet, many modern sociologists seem to have accepted this process
of retroscription as a factual description, as if it were the non-theoretical
element in the story of the changes represented by globalization. So, for
example, Riccardo Petrella describes a very familiar process by which
Global markets are putting an end to the national economy and national
capitalism as the most pertinent and effective basis for the organization and
management of the production and distribution of wealth (1996, 62).6
Similarly, in his account of the coming borderless world, Ohmae
(1991) can simply assume that in the past the political and economic
boundaries of the state were identical. In these accounts, readers are invited
to focus their attention on a single statement that globalization is putting
an end to the national economy and the sovereign nation-state. Whilst this
seems to many to be an obvious statement, given the transformation of the
nature of the world economy in recent decades, the particular way it is
couched is important to its meaning and function. In the case of Petrellas
assertions about the global economy, for example, the very architecture of his
argument its syntax creates a hierarchy among the sets of facts presented,
and the relation of the observer to them. This hierarchy leads the reader
unwittingly to participate in, and therefore accept, that the second part, the
one alluding to the national economy, is the less contentious element in the
sentence. It is presented as unproblematic, not because we all know exactly
what the national economy might be, but because the syntactical structure
of the sentence creates a powerful relationship between the past, present and
future. Considering that the future is less known than the past or present,
the future, represented by the concept of globalization, is the element within
this statement that is treated as the more speculative aspect of the sentence.
In contrast to the relatively unknown global future, the past and present,
captured in the concept of the national economy, are naturally deemed better
known. So that in the contemporary spatial imaginary the common sense
of spatial experience and expectation the nature of the national economy
appears, by virtue of the structure of the argument, a solid fact.
This is demonstrated by the fact that Petrella sees no need to define in
any detail the content or meaning of the national economy or, elsewhere,
the nation-state. Rather, he and many other scholars, devote their time to
the more speculative element in their accounts: globalization. The structure
of the sentence simply presumes a prior, self-evident definition of these two
contentious spatio-economic and spatio-political concepts as opposites of
that which is represented by the global. The existence of the discrete
national economy and the fully sovereign nation-state which as
Fernand Braudel (1979) claimed, existed empirically only very briefly
during the 1860s and 1870s and then in only a handful of European
states becomes both given and known phenomena against which the
future can be gauged. Having established this past for globalization, atten-
tion turns to the newly self-evident fact that globalization represents some
kind of assault on it obliteration, transcendence, breaching, and so on.
Phase 2 the trajectory of spatial change
As we have argued in the previous chapter, a relationship between the past

and the future, between state and globalization, has to be narrated con-
vincingly by the mechanics of the epistemological framing. In other words,
state and globalization must share something in common to enter into a
relationship with one another. Conceptually, the narrative must present
them as inhabiting a common epistemological plane. Only once this plane
is established can the imagery of historical movement be produced through

implied changes in the nature of that epistemological plane. In the case of
the globalization debate, that historicalchronological movement is narrated
through the vehicle of the shift in geographical scale. State and globalization
are thus placed on the same spatial terrain they are deemed to be made of
the same stuff. Ellen Meiksins Wood tells us this when she asserts strongly
that Globalization is in the first instance concerned with geographic space.
David Held, as noted above (p. 33), does the same when he characterizes
globalization as a spatial phenomenon. He continues:
[Globalization] denotes a shift in the spatial form of human organization

and activity to transcontinental or interregional patterns of activity, inter-
action and the exercise of power (1998, 13; emphasis added)
The picture drawn by Wood, Held and many others is that of a proliferation
of spaces and scales of action which do not alter the nature of space itself.
The assumption of spatial continuity frames local, national and global
together so that they can be compared and contrasted. Once the idea of a
continuum is accepted, taken as given, an historical semblance is generated
to the plot through the metaphor of stretching. All of a sudden it simply
makes sense that globalization implies the
stretching and deepening of social relations and institutions across space

and time such that, on the one hand, day-to-day activities are increasingly
influenced by events happening on the other side of the globe and, on the
other, the practices and decisions of local groups and communities can
have significant global reverberations. (Held 1998, 13)
Without entering into a debate about the veracity of the empirics Held
appeals to, we can see how they are being configured into a coherent
historical narrative; at least, one coherent enough to be plausible. Whether
such spatial relations actually exist or not, the way they are presented here
appears to provide evidence and weight to the argument that some form of
spatial stretching is going on. The power of this sort of construction lies in
its authoritative linking of selected empirics with apparently self-evident
metaphors of movement between them. The metaphor of stretching, which
implies a gradual, continual movement, is interpreted by the reader unwittingly
as an historical explanation for the changes from the local to the global: so
that under the guise of a spatial metaphor, it provides a crucial temporal
link. That the metaphor of spatial stretching is just that a metaphor is
lost, with the result that what is a theory is presented as an unproblematic
description of reality out there.
However, as was argued in the previous chapter, metaphors and
other linguistic devices used to describe social and spatial forms are never
so innocent.7 The metaphors and analogies used within a narrative entail a

configural function. They are not external to theory they are an integral
component of the theory. Although Helds account of the spatial contin-
uum between local and global is unusual for being made explicit (most
commentators simply assume that this is the case), it is none the less typi-
cal of the way a theoretical link between territorial state and globalization
is established. From an analytical perspective it is interesting to note, there-
fore, that under the guise of apparently simple descriptive metaphors, it
frames a set of political arguments about the future role of the state. The
metaphor asserts, in effect, that globalization and the state share the same
spatio-temporal domain. The metaphor is employed to frame the argu-
ment, except that globalization is a more complex spatial terrain than that
of the state. Whereas the political, economic and social activities of the
nation-state were defined by and contained within its territorial boundaries,
these activities at a global level are bounded only by the limits of the globe
itself. And here comes the crucial message: the metaphor of spatial contin-
uum is used by Held to persuade us of the political consequences of break-
ing down the hermetic nature of the state boundary and the consequent
opening up of different spatial scales. This shows that, without enquiring
into the truth-content of the argument whether it can stand up to close
empirical scrutiny and/or falsification the structure of the narrative
employed produces a subtle but powerful statement about the historical
and chronological relationship between nation-state and global system,
each of which is discovered in contrast with the other.
Phase 3 theory of causality
Whatever the spatial trajectory of globalization is understood to be, any

such change necessarily implies a causal dynamic. In the context of global-
ization, the causal dynamics most often cited, or at least implied, are those
of economic and technological change. The expansion and transformation
of the world economy, the internationalization of production, the develop-
ment of the Internet, increasing use of computerized systems, the creation
of the 24-hour global financial system and so on are routinely paraded as
the forces driving the deterritorialization of formerly national economies.
Other manifestations of globalization, such as global culture (Featherstone
1990; Walzer 1995), and institutions of global governance which, respec-
tively, have been presented as the successors to nationally organized cultural
and political systems are generally seen to have come in the wake of eco-
nomic globalization as after-effects. As with so much of the mainstream dis-
course of globalization, this fundamental techno-economic determinism
tends simply to be assumed techno-economic globalization being pre-
sented as having an essentially neutral, but inexorable dynamism.
Whilst the recognition of economics as the cause of globalization has

become part of the concepts common sense, the very radical departure that
this represents goes curiously unremarked. It is radical because the economism
of globalist discourses contrasts sharply with the causal mechanisms under-
pinning the spatial imaginary of the nation-state which is routinely declared as
its immediate predecessor. The causal dynamics of the territorial state were
understood to be products of natural and/or traditional links between the
people-nation, national cultural and linguistic unities and the national terri-
tory. The conjuncture of these various elements of the national consciousness
produced the imagined communities of the nation-states and provided the
causal dynamic for their consolidation (Anderson 1991). Economics was also
a part of this process, of course, with the economies of scale available to the
bureaucratic state assiduously promoted by early advocates of the formation
of a national system of political economy (List [1844]1885).8 But economics
normally came later; it was supposed to be employed by the nation-state to
advance determinant goals. Economic changes were rarely presented as the
sole causes of national spatial consolidation, nor were they externalized in the
way they have been in the context of globalization.
The not-too-well-hidden message then becomes one of the economy
over society: the triumph of the market over people. Whether this is good
or bad, our point is that the debate concerning the relationship between
state and globalization, states and market, is not conducted in some neutral
discursive realm where scholars are able to evaluate carefully and objec-
tively these propositions: the debate is conducted with a narrative configured
in such way that the triumph of the market is built into the story.
The fundamental shift in the theory of spatial dynamics that this
implies has gone largely unnoticed because of the way that the transition is
couched in naturalist metaphors of erosion. The image of gradual, incre-
mental movement, something that cannot be clearly defined and identified
at any particular moment in time, lulls the reader into accepting the
unstated proposition that the precise mechanics of transition, the forces
and movements, are not something we should concern ourselves with too
much they are either too complex or perhaps too gradual and slow. Since
processes of shift, erosion and stretching were gradual and natural, the
point at which they became irreversible, when pre-existing social relation-
ships were stretched to the point of no return, that moment in time is not
the significant moment. Indeed, because state and globalization are placed
on the same continuum (that is, global is the same as state but more so), but
the relationship of causality is not (that is, it represents a shift from politi-
cal to economic principles), the actual forces of change, those that are shift-
ing geographical scales from one end of the pole to the other, must be seen
as external to both state and globalization.
This theory again is found at the level of metaphors used. To return
to Petrella for example, he argues (and readers will be familiar with the
pervasiveness of such arguments) that The growing globalization of the

economy is eroding one of the basic foundations of the nation-state, i.e.
the national economy. The national space is being replaced as the most
relevant strategic economic space by the nascent global space (1996, 67;
emphasis in original). In such accounts the future (articulated through
globalization) erodes the present and the past, both of which are retro-
spectively captured by the concept of the national economy. The use of
terms such as erosion, withering, fragmenting, nascent and other
essentially physical metaphors are common in the globalization debate
and, to our mind, are very important to the construction of its meaning.
To take what is probably the most common of these, that of erosion,
which implies a long-term, gradual, physical process, its importance stems
from its ability to convey a number of images simultaneously. First, it con-
tributes to the retroscription of the nation-state/national economy by sug-
gesting that that which is eroded has also a quasi-material form. In other
words, the metaphor of erosion contributes to the impression that nation-
state may be a natural state of affairs, both physically and normatively.
The nationalist theory of the sacred unity of people and state, the ideology
of the nation-state, is thereby brought in on the sly (Palan 2003, ch. 6).
Not surprisingly, the complaints about erosion produced by globalization
tend to emerge from nostalgic yearnings for the natural life of the nation-
state. Second, erosion presents us with an image of a dynamic force that is
simultaneously unstoppable and wholly external to that which it erodes.
Just as the slow drip of water will wear away the hardest rock, so eco-
nomic globalization, presented as a long-term, gradual process immanent
to the practice of economics itself (and therefore not a product of any state
or states), wears away the natural boundaries of the territorial state and
its economy. Third, as this implies, erosion occurs when two natural phe-
nomena meet both the nation-state/national economy and the process of
globalization (and, by extension, the global system that it is creating) are
naturalized. That globalization thus entails one natural spatial form nat-
urally overcoming another, neatly avoids the problems that would be
raised were either of the end points of this process of spatial transforma-
tion, or the process itself, to be seen as the products of a human-inspired
political economy of space. It also, by reinforcing the image of globaliza-
tion as external and unstoppable, has a considerable bearing on the range
of responses to the process.
Interestingly, those who are largely critical of globalization, particu-
larly from the various Marxist positions, replace these naturalist processes
with much more dramatic and violent ones. Meiksins Wood, for example,
refers in the quote above to obliteration and breaching rather than
erosion. The syntactical game here is very similar, in spite of the contrasting
language. Globalization is still real, but is an act of violence done to older
forms of social organization by (usually) big capital. Instead of lulling the
reader to sleep with tales of gradual change, the violent language primes the
reader to react with anger at the (capitalist) villains who are perpetrating all
this obliteration and breaching. Globalization is not, of course, natural here
but the nation-state retains something of the communitarian character
found in more gradualist accounts. Globalization, by contrast, is external-
ized in other ways as a class strategy but is no less inexorable for that!
Whichever of these sequential historical processes of spatial change is
employed, underpinning them all is a powerful image of the nation-state. As
a sovereign territorial entity, the states legitimacy is seen to have rested
upon its capacity to mediate between the domestic economy which is its
proper sovereign domain, and the external domain of the pre-global world
market. Although the disruption of this presumed spatial unity is presented
as the primary consequence of globalization, it is at the same time consti-
tuted as a logical and, indeed, necessary precondition for globalization.
Indeed, it is not clear which constitutes the other! Is it the presumably
commonly agreed concept of the national economy that defines globali-
zation as its opposite form? Or is it globalization that defines the
national economy, again the latter being defined simply as the opposite
of the former? Concepts are defined and made understood through the
constitution of difference (De Saussure 1983). Concepts such as globalization
or nation-state have no meaning aside from the implicit comparisons with
other concepts. Despite clear appeals to a universal and inclusive planetary
spatiality, therefore, for the most part the way the global is narrated in the
literature is much more limited: it means not the nation-state. In practice,
the two concepts are mutually constitutive and mutually defining within
narratives of globalization.
It is for this reason that globalization has all of a sudden taken on the
causal role noted by Rosenberg (2002). Because it is implied to be chrono-
logically subsequent to the nation-state, it seems logical that it should also
be the causal process by which national economies are eroded or obliter-
ated. But this is not a theory, or at least not a proven theory, but a method
that Petrella and others usually employ to advance a normative argument.
Consequently, what we learn from Petrella, and many others of all political
persuasions following similar arguments, is that in their view the global
economy cannot coexist with a functioning national economy and, of
course, vice versa. The reason for this is that the two concepts national
economy and global economy are descriptive of spatial containers and
hence must be mutually exclusive because, it is assumed, they inhabit dif-
ferent positions on the same spatial continuum. They are also, however,
mutually dependent for their meaning since each provides the opposite set
of conditions that defines the other.
It is clear that awareness of these linguistic and narrative techniques
may help to evaluate with fresh eyes the empirics that are supposed to lend
support to conventional narratives of globalization. The retroscriptive and
proscriptive phases of the debate show us how the emplotment of globalization

as an historical phenomenon takes place. They provide the temporal and
spatial boundaries that contain the elements of the narrative and in their
definition constitute a process of filtering which renders some narratives
more relevant (that is, having more descriptive and/or causal force) than
others. Many accounts of globalization, for example, trace the process back
through time to specific, empirical, moments. Commonly cited points of
origin include, for example, the Marshall Plan, which is seen by many as
having laid the groundwork for the process of economic internationaliza-
tion, Americanization and subsequently globalization (Ambrose 1971).
Accounts having such a start point are then reinforced by the identification
of other empirical moments which contribute to the overall picture (for
example, the oil crises of the early 1970s and all that flowed from them).
Notwithstanding that these events have had enormous significance on
the nature of contemporary political economy, however spatialized, their
specific inclusion as elements in the story of globalization is not self-evident
(neither event was specifically designed to create a global economy), but
rather is an act of retrospective selection to reinforce a developing narrative.
As this implies, any act of selection also entails a parallel process of
exclusion. In this case, those events with the greatest causal significance in
creating a global economy are all essentially economic, not least because
they obviously fit the economic conclusion to the narrative of globaliza-
tion most clearly. However plausible the resulting narrative whole, it is one
that systematically excludes other stories about the world which might lead
to very different conclusions. We will consider these in greater detail when
we examine the reinscription of poverty through the twin narratives of
globalization and social exclusion in Chapter 6.
Phase 4 responses and actions
Responses to globalization on the part of national governments have been

shaped in large part by the way the meaning of the concept has been con-
structed through the various phases of socio-spatial production outlined
above. Importantly, since globalization is seen through the metaphors and
acts of framing described to take the form of an external, natural and there-
fore unstoppable economic force, the proposed general response to globali-
zation by these experts has been one of adaptation. Since globalization is
something external to the state and inexorable, so the state, through reform
of its institutions of political, social and economic governance, must adapt
itself to the new, post-territorial, state of nature.
There is, indeed, little doubt that this naturalist narrative has been
deployed effectively as an instrument of change of domestic policy throughout
the world. It is, in short, a political discourse masquerading under the guise
of physical and spatial metaphors. In the UK, for example, Hay and Watson
(2001) have identified the use of globalization as a discourse of no alter-
native a discourse that naturalizes change and precludes any form
of alternative development.9 As they put it: animated by perceptions of
globalizations perceived logic of no alternative, Labour now appears to act
on the neo-liberal necessity of averting capital flight (2001, 11).10 More
generally, the basis of Anthony Giddens Third Way politics, which has
been highly influential in shaping recent UK policy, is that governance
must adjust to the new circumstances of the global age (1998, 72; empha-
sis added). The European Commissions White Paper on Employment,
Growth and Competitiveness (CEC 1994) lays out four policy objectives
both for its member states and for Europe as a whole which are explicitly
defined as being necessary in the wake of globalization (CEC 1994). As
Peck (1998) has pointed out, globalization is increasingly deployed by
national authorities and corporate management as a universal causal agent
the catch-all excuse that explains and legitimizes everything.
The deployment of globalization to rationalize action can be under-
stood in two ways. First, globalization is being used as an ideological ploy,
mobilized simply to justify existing parochial interests and/or governmental
and/or management incompetence. Hence, for example, the massive over-
capacity in the electronics sector world-wide which has recently resulted in
mass redundancies in the mobile communications and semi-conductor
industries is explained as a function of global market adjustment, rather
than wrong-headed and short-sighted investment policies and practices and
profiteering. However, such discursive deployment is not only ideological
it is not simply cynically used by governments and firms to cover their mis-
takes or legitimize unpopular policies. Rather, arguments concerning the
nature of globalization can be seen as part of the reflexive nature of policy-
making. In other words, irrespective of whether the claims made on behalf
of globalization, and enacted through the various processes above, are cor-
rect or not, they are nevertheless consumed as serious analysis and hence
are subsequently deployed as an apparently secure basis for current and
future action.
Governments and multinational corporations are not, of course, the
only actors responding to arguments about globalization. The most obvious
alternative reactions to the practices and discourses of globality have come
from the various anti-globalization and/or anti-capitalism protesters who
have targeted WTO and G8 meetings and the outlets of multinational cor-
porations. As suggested above, however, for all that these protests represent
radically different readings of and reactions to globalization, they never-
theless reproduce much the same logic of spatial change. The protesters
take the story of globalization seriously, indeed literally, and in reacting
against it in trying to impose upon it a different ending ironically serve

to reinforce it. They reinforce it both in the literal sense steel barriers are
erected around G8 meetings, for example, to keep them out but also in the
metaphorical sense. The image of an all-consuming, conspiratorial global
capitalist monster conjured up by the protesters serves only to reify it further;
the monster becomes an integral part of the general fiction of globalization.
The argument ceases to be one of whether globalization exists or not, but
whether, since it is so clearly a reality, it is good or bad. This is not to sug-
gest that any form of resistance to globalization is ultimately futile or that
there is nothing to resist, and nor are we trying to impugn the motives of the
majority of the protesters. It is, however, to state that resisting globalization
understood as a phenomenon, albeit one that is externalized in a different
way, as a conspiracy on the part of big government and big capital, does
not recognize the subtleties of the ways that narratives about social space
operate. Indeed, the focus of resistance against those institutions that directly
and explicitly promote globalization misses the point that the reproduction
of the process is driven by much more diffuse and mundane forces.
Although less vociferous than the protesters, other sections of national
populations can be seen to be reacting to the narrative of globalization. The
parallel process of localization (or glocalization: Swyngedouw 1992), for
example, although often presented as another natural product of globali-
zation, is also understood to be an expression of cultural reactions to
globalization. Friedman presents the process of localization as a direct and
necessary response to globalization. Localization, he argues, is produced as
a consequence of the reflexive negotiation of selfhood in response to the
chaos unleashed by global decentralization (1990, 312). Localism in
cultural terms, Friedman argues, constitutes an attempt to recapture, or indeed
create, authenticity and particularism as the specific product of the global
transformation of the local society (1990, 327). The mobilization of the
local community as a response to globalization is earnestly promoted, less
by such communities themselves, than by many of the chief story-tellers of
globalization itself. Giddens Third Way is perhaps the most striking example
of this, combining a phenomenological account of globalization with an
explicitly communitarian agenda as a response to it.11
Such mobilizations of authentic local cultures as expressions of place
and identity are, albeit differently from the anti-capitalism protesters, pro-
moted as sites of resistance to the detached and impersonal globalization of
the global economy. The neo-communitarian mantra of think global act
local and the promotion of such concepts as globalization from below
(Gills 2000; Hines 2000) are both attempts to mobilize forms of localist
political and civic activism presented as an alternative to global capitalism.
Again, however, such engagements with the issues surrounding globaliza-
tion tend to contribute to its reification as something out there that can be
resisted by reinventing and reasserting the in here of local community.12
This may be a laudable aim, but drawing a boundary between the global
and the local serves to contribute to precisely the same processes of retros-
criptive and proscriptive spatial definition that are characteristic of main-
stream accounts of globalization. By providing, as it were, the other side of
the coin, neo-communitarian theorists serve only to make the coin thicker!
Whether supportive, adaptive or oppositional, all of these responses to
globalization as a process of spatial change, essentially take place within the
narrative process itself. They are not, in spite of the various ways by which
globalization is constructed as external, separate from the process they seek
to describe. As this implies, in order to understand more fully the way that
a concept such as globalization works, we need to step back from what has
become a very narrow mainstream debate and examine critically the develop-
ment and function of the concept and the many contradictions it throws up.
To understand the way that globalization is serving to re-map the spatio-
temporal matrix of the contemporary world, we therefore need to examine
the process of retroscription and proscription as a whole and to recognize
it for what it is. We also need to examine the causal dynamics of globaliza-
tion, not as some externalized, neutral process of erosion or economic
determinism, but as a product of many complex processes, narratives and
performances that are not confined only to those institutions and individu-
als who engage with it deliberately and explicitly.
Completing the cycle
As argued above, these four phases, or something very like them, are imma-
nent to any form of narrative spatio-temporal configuration all stories
about historical space, past, present or future, irrespective of who tells them
or how they come to be related, consist of these elements. This is in part a
nominalist argument the act of naming is an act of selective differentia-
tion, regardless of whether the objects named are physically transformed in
any way. The drawing together of the many and disparate facts of global-
ization and their agglomeration within the global narrative, brackets them
off from the roles they play in other narratives (those of the nation-state
most obviously) and provides them with an apparently logical and empiri-
cal connection complete with trajectory, cause and consequence. Important
though this act of naming is, however, it is only the start of the configural
process. Once the process so named becomes accepted as logical and natural,
the fact that it is a selective, exclusive, partial and fragmentary collection of
previously unrelated (or, at least, differently related) facts disappears from
view. As this implies, following de Certeau (quoted above p. 11), the act of
configuration is, at the same time, an act of forgetting.
The retroscription of the nation-state forgets (despite appeals to the
contrary; Krasner (1994)) that the state was never sovereign in any absolute
sense. The proscription of the global future forgets that there are other social
dynamics than those of technology and neo-liberal economics. The logical
trajectory from local to national to global forgets that processes of historical
spatial differentiation are neither logical nor mono-directional. These things
and many others alongside them must be forgotten because they are ele-
ments of older stories; other configurations. The power of the narrative of
globalization, therefore, lies as much in the silences it creates as in the clam-
our of its public debate. Before going on to examine what these silences
might be and how they are structured-out of the globalization debate in
practice, we will consider some of the ways in which the configural narra-
tive of globalization, once initiated, is reproduced.
Narrativity and performativity
So far, we have treated what we take to be the dominant imagery of global-

ization and analysed it as a narrative. But narratives have to be told to be
disseminated and reproduced. The way in which the tale of globalization is
generally understood to be told within the mainstream academic debate is
through the academics themselves, in the form of a rather limited and often
very incestuous conversation. Aside from each other, the major source of
globalist narratives discussed by academics are those told by industrialists,
management consultants, economists, politicians and a plethora of other
active globalizers that is, those primarily responsible for constructing the
concrete institutional and policy frameworks of the global economy. If this
list of contributors seems somewhat restricted, this reflects only the stag-
gering myopia of the mainstream debate. For all its very grand claims to
represent a new historical epoch encompassing the whole of humanity on a
world-wide scale, those voices that contribute to the formal public debate
on the meaning, direction and consequences of globalization (our own
included) are suspiciously few in number.13 They are so few because the
configuration of globalization is a reflexive act; it is self-motivated in de
Certeaus terms. The contributors to the mainstream debate are not only
configuring an historic epoch, they are also, very deliberately if not neces-
sarily consciously, configuring it in their own image; they are, therefore,
also configuring themselves. The narrative boundaries around the epistemic
space of globalization not only define what it is and where it is, but what
can be known and said about it, how and by whom. Economists, this is to
suggest, have a privileged voice in the globalization debate because it is
about economics. Since they are experts in economics, economists clearly
(they believe) have more and better things to say about globalization than,
say, narrative theorists, art critics, engineers, priests, waiters, children, train
drivers, or indeed anyone else without access to those knowledges and
modes of expression that have become the authorized language of globalization
(Bourdieu 1991). In Ricoeurs terms, those possessing these privileged and

privileging idiolects are the histors powerful not just because of the
documents they read, but because they produce, own and interpret the docu-
ments in the first place, as well as the idiolect in which they are written.
If globalization has its high priests, however, it also has its heretics and
they also have a voice. We have already alluded to the voices of protest that
have sought to add their own clamour to that already taking place within
the fortified meetings of the G8, the WTO, and so on. But, as suggested
above, this alternative and oppositional globalism is also, albeit in a dif-
ferently self-appointed way, part of the same discourse. Since often they
take globalization literally more literally indeed even than some of its
more ardent promoters they are not outside the cycle of narrative config-
uration, but an integral part of it. Who ever heard of a good story, after all,
where all the characters agreed with, or liked each other?14
These two groups the high priests and heretics of globalization
dominate the formal debate, though the former are by far the more signifi-
cant.15 This is not only because they constitute a powerful majority and can
claim to be the experts, but because it is largely their version of events that
has come to constitute the common sense of globalization and, as such, it
is their version that has entered the realm of everyday practice. This brings
us to the group that, despite being largely silent in the formal debate, indeed
silenced by it for the most part, nevertheless carry out most of the labour
of representation of globalization (Bourdieu 1991, 234).
For all that academic attention has focused, understandably, on the
formal narratives about globalization, it has, at the same time, downplayed
its performance. As we suggested in the introduction, some performances
of globalization the merger of Daimler and Chrysler, for example are
incorporated into the debate as evidence. But in addition to these spectacular
events are the much more mundane acts which, through constant repetition
in daily practice, serve to reinforce narratives of normal globalization. As
this suggests, the stories of globalization have entered and affected the
everyday practices of most people in the industrialized world and many of
those beyond it.
These practices using credit cards, accessing the Internet, investing in
stock markets, buying global branded products, consuming global
lifestyles, to name but a few do of course appear in the mainstream globali-
zation literature. However, they are, for the most part, treated as evidence
of the existence of globalization; they are used to demonstrate that the insti-
tutional framework of the global economy is real, to the extent that ordi-
nary people can and/or must be part of it. Treated in this way, ordinary
consumers, bank customers and workers are taken to be bit players in the
unfolding and external global drama. Their behaviours are, therefore,
viewed as the after-effects of a prior globalizing process the mainstream
debate writes such behaviour as a response to globalization. This seems
to us a very partial and limited way of understanding the role of everyday

practice in reproducing discourses of spatio-temporal reality. For a con-
figural spatio-temporal narrative to be effective, the role of practice is funda-
mental at every stage it is precisely the behaviour of ordinary (that is,
non-expert and non-reflective) people that normalizes the epistemological
frame of a discourse. It is their activities, their performances of global
narratives, that ultimately produce the reality of globalization itself.
Cornelius Castoriadis argues precisely this point in his account of the
Imaginary Institution of Society, asserting that the imaginary structure (in
Lacanian terms) provides the medium through which everyday practices
and problems are mediated and comprehended. When it is asserted that the
imaginary plays a role with respect to the institution only because there are
real problems that people are not able to solve, writes Castoriadis,
this is to forget, on the one hand, that people manage to solve these prob-
lems, precisely to the extent that they do solve them, only because they are
capable of the imaginary; and, on the other hand, that these real problems
can be problems, can be constituted as these specific problems, presenting
themselves to a particular epoch or a particular society as a task to be com-
pleted, only in relation to an imaginary central to the given epoch or
society. (1987, 133)
In other words, the practical expectations carried within the narratives of

social reality simultaneously inscribe the imaginer, the imagined and the
timespace of imagination. People adapt to new imaginaries, new configu-
rations, not through theorizing them in loud public debates, but through
problem-solving activities that are mediated through historically and geo-
graphically specific imaginary constructs. If globalization presents itself as
a series of problems, that is, unfamiliar sets of social conditions, systems,
institutions and so on, these are as much problems of imagination (for
example, imagining the economy to be global rather than national), as
they are problems of reality (for example, national economy is real, global
economy is a theoretical construct). This is because the configural nature of
spatio-temporal narratives (imaginaries) also involves altering the nature of
the reality itself, in this case, such that the concepts of the national and
global economies can be brought within a common frame of reference.
The effects of this can be very partial and very subtle. Whilst much of
the academic debate has concerned itself with establishing truths about
globalization either producing evidence to prove its existence or, vice
versa, to deny it utterly globalization, in practice, requires no such proof.
Nor, for that matter, is it required to be particularly coherent or meaningful
to be effective in its effects on everyday practice. Nelson Goodman captures
the fragmentary nature of practical perception and cognition in his analysis
of an habitual reality:
For the man-in-the-street, most versions [of the world] from science, art,
and perception, depart in some ways from the familiar serviceable world he
has jerry-built from fragments of scientific and artistic tradition and from
his own struggle for survival. This world, indeed, is the one most often
taken as real; for reality in a world, like realism in a picture, is largely a
matter of habit. (1978, 20)
If reality in general is, for all practical purposes, jerry-built and frag-
mentary, but none the less real for it, then the truth-seekers of the globali-
zation debate (or any other for that matter) seem to have missed the point.
What matters in terms of the reproduction of the realities of globalization
is not whether or not it can be proved, but whether or not narratives
about it can be used to cobble together versions of the world which are
sufficiently coherent to be habituated in practice. When Goodmans
man-in-the-street uses his credit card, and in so doing contributes to the
further expansion of the global credit economy, it is not because he has
accepted the empirical proofs of globalization, or even that he is aware of
the concept at all. Nevertheless, he still contributes to the reproduction of
the narratives of globalization by consuming global products and
lifestyles in a global manner and by accepting as immediate, concrete
reality a series of distant and/or virtual economic transactions of which he
has little or no comprehension. Globalization, this implies, is not real but
it is normal.
Put another way, globalization is taken to be real because the various
retroscriptive and proscriptive narratives about it have become normalized
in and through practice, thus rendering it plausible. Writing about what he
called the scriptural economy of modern Western society a society in
which the orality of the premoderns has been subsumed into a complex
network of written voices de Certeau places considerable emphasis on
the mutually reinforcing and dialectic relationship between credibility and
practice:
The credibility of a discourse is what first makes believers act in accord

with it. It produces practitioners. To make people believe is to make them
act. But by a curious circularity, the ability to make people act to write
and to machine bodies is precisely what makes people believe. (1974,
148; emphasis in original)
On this reading, globalization is at one level an act of faith all that is

required to make it real in practice is a sufficient degree of belief that it is
real or, at the very least, a sufficient degree of normalization such that
people, like our credit card user above, have no need to doubt it. Later in
the same passage, de Certeau goes on to state very clearly how such credi-
bility is established:
normative discourse operates only if it has already become a story, a text

articulated on something real and historicized (une loi historie et histori-
cise), recounted by bodies. Its being made into a story is the presupposi-
tion of its producing further stories and thereby making itself believed
From initiation ceremonies to tortures, every social orthodoxy makes use
of instruments to give itself the form of a story and to produce the credi-
bility attached to a discourse articulated by bodies. (1974, 149; emphasis
in original)
The story of globalization carries the force that it does precisely because it
is a story that has been easily and readily incorporated into normal prac-
tices, normal institutions, normal expectations. It matters not one iota that
this new global normalcy has involved a radical rewriting of the past and
some very far-fetched predictions for the future, and nor does it matter that
the concept is fragmentary and incoherent. After all, the concept of the
nation-state was (and still is) fragmentary and incoherent to such an
extent that it has arguably never existed in any complete, demonstrably
real form but has nevertheless served admirably as the functional, normal
reality for many of the worlds citizens for a very long time. Globalization
is not real in any absolute sense, but it has proved to be sufficiently real it
is, in Ricoeurs terms, acceptable to its own conclusion.
PA RT T W O
4
Business Globalization and
the Offshore Economy
There is something odd at the very heart of the globalization debate. The
simplified version of business globalization, which presents globalization
as an homogeneous, global force undermining state and society, has been
far more influential than perhaps it merits on grounds of empirical rigour
or theoretical sophistication. The theory implicitly (and at times, explicitly)
suggests that globalization evolved gradually in the background of the
world economy, but at some point in the 1980s reached a critical propor-
tion such that states were forced to wake up and adapt to the new reality.1
On this reading, globalization is something external to the state, and worse,
circumvents all those political processes, including regulatory and demo-
cratic processes, that take place within the boundaries of the state. Since
globalization occupies a domain beyond the purview of any conventional
politics, many reach the easy and apparently obvious conclusion that it is
driven purely by technology and the (allegedly) natural inclination of
people to truck, barter and trade. The implied chronology of events suggests
forcefully that once globalization has established itself, states are simply
forced to adapt to it.
The chronology of events implied by business globalization has a
superficial rationality about it, but it proves rather contradictory under
closer examination. This is because whilst it posits globalization as a fait
accompli, something that can only be adjusted to retrospectively, at the
same time it depicts globalization as a teleology; as something that may
reveal its potential in the present, but which will only reach full maturity in
the future. So the globalization that business globalization speaks of is
simultaneously present as well as about-to-be-present. This odd combi-
nation of past, present and future embedded in the same concept, and the
propensity of its advocates to conveniently forget the role of the advanced
industrial states in promoting globalization (Michalet 2002) and the gains
for their multinational businesses, have persuaded many that the theory is
not much more than an ideology. For its critics, globalization presented as
something external and irreversible under the slogan of there is no alter-
native, clearly serves political aims.
All this is well known and has been debated ad nauseam. The question
that has not been asked often enough, however, is where these crude images
of globalization come from in the first place? And why have they proved so
powerful and enduring? Are we seriously to believe that they have their ori-
gins in a mistaken interpretation of the evidence, as Hirst and Thompson
(1996) suggest? Is it a conspiratorial ideology, as Barry Gills and others
(2000) suggest? Or could it perhaps be a product of powerful foresight, an
ability many of its proponents seem all too happy to credit themselves with;
anticipating the future as it takes shape in the present? These are important
questions because, as we will demonstrate, by identifying the origins of the
imagery of business globalization, we can better understand its continuing
power and not only clarify the reasons for the peculiar but generally
accepted chronology according to which globalization has evolved outside
the life of the state system, only to be discovered at the moment it becomes
a reality, but also demonstrate how it has helped shape the underlying
imagery of the state that we discuss in this book.
We suggest, therefore, an alternative interpretation for the emergence of
business globalization theory. In doing so, we are not dismissing the existing
debate as irrelevant; far from it. But we do present a different explanation for
the way the dominant imagery has emerged, and has then been incorporated
into ongoing debates to legitimate far-reaching transformations of state and
politics. The simplistic imageries of business globalization are, in our view,
not entirely wrong or cynically opportunistic. Rather, they identify, select,
exaggerate and reify certain existing trends and practices as though they rep-
resent globalization as a whole, without acknowledging or analysing their
limitations. This process of selection produces the imagery most commonly
associated with globality 24-hour markets, placeless currencies, transna-
tionalized networked production systems and so on all of which seem to
typify contemporary economic activity as existing beyond and without regard
to the boundaries of the territorial state. This common imagery, however, has
its origins in a subtle elision that has taken place between the evolving narra-
tive of globalization and more specific developments that emerged in the
1970s: those of offshore.2 So, when globalization is asserted as a placeless
and stateless, planetary force, what commentators are actually referring to,
apparently unwittingly, is only one part, albeit a very important one, of a
putative global system, that part currently embodied in the institutions and
practices of the offshore economy. Furthermore, because of the off-shore
character of these developments, they appear to be both outside the state and,
therefore, to herald the advent of a borderless world (Ohmae 1990). These
easy assumptions are, as we will see, largely mistaken.
The Offshore Economy 91
This chapter examines the role played by both the theory and practice of
offshore in the development of the contemporary fa-s in two main ways. First,
we examine briefly the institutional and legal form of the real offshore
economy itself, partly to establish clearly what we mean by it, and partly to
excavate some of the other stories about it.3 Specifically, we want to expose
the close connections, both historically and contemporaneously, between
specific nation-states and offshore institutions. Second, we examine critically
the spatial narratives contained within the idea of offshore to assess the role
it plays in the normative spatial and temporal configuration of globalization.
The institutional dimensions of offshore
What, then, is offshore? And how could it be confused for globalization?

Although the offshore economy is now a well established and extremely
significant element in the contemporary world economy, and although its
origins can be traced back for a very long time, the precise definition of
offshore is elusive. The better-known aspects of the offshore economy are
the offshore financial markets, or the Euromarkets, and tax havens. But
as one of us has argued in previous publications, in practice offshore is
a much broader category that consists of all sorts of sovereign spaces
essentially defined by their relative lack of regulation and taxation compared
to nation-states (Palan 1998a, 2003). Of these, we emphasize four main
elements that, whilst distinct in their institutional form, mode of operation
and their relationship to conventional economic spaces, nevertheless share
certain important characteristics. The four are: offshore financial markets,
offshore financial centres, tax havens and export processing zones (EPZs).
Before we discuss the question of the relationship between these spaces and
the imageries of globalization, we will briefly describe each of these in turn
before going on to discuss the role they play in relation to discourses of
globalization and exclusion.
The offshore financial markets
As with the concept of offshore more generally, there is little agreement

among financial experts as to the precise definition of offshore finance.
Distinction is drawn, for example, between international, multinational and
offshore banking, all of which are closely intertwined but can nevertheless
be distinguished according to the way they trade, their participants, the cur-
rencies with which they deal and their regulatory location. We do not wish
to be drawn into this very complex debate here and so will concentrate on
that aspect of the offshore financial markets which seems most to typify the
characteristics of offshore the Euromarket.
The Euromarket has two distinguishing characteristics. First, it is

essentially a medium for lending and borrowing the worlds most important
convertible currencies. It is a wholesale or inter-bank market in which the
commercial banks are its principal intermediaries. They collect deposits and
use excess liquidity to lend or transfer to other banks in the inter-bank
market and the process is repeated until the funds are lent to business enter-
prises. Second, what distinguishes Eurocurrency transactions from conven-
tional domestic or even international banking activities is that these
markets operate outside the jurisdiction of the national authority that
would normally regulate trading in a particular currency. They are therefore
not subject to state regulations such as reserve requirements, reporting or,
most importantly, taxation.
In that sense, the offshore financial market must be distinguished from
international market trading in US dollars or other convertible currencies.
A market for a particular currency can be international, but still regulated
by the state in which the transaction is taking place. So that, for example,
an international loan provided by a New York bank is subject to the finan-
cial regulation of New York State and any national regulations imposed by
the Federal US Government. A properly offshore market, on the other
hand, is one in which the regulatory authorities of the guarantor state give
up their regulatory role voluntarily or because the market operates beyond
that states, indeed any states, regulatory reach.
The Euromarket itself began life as an inter-national, rather than a
fully offshore market. Starting in the early 1950s, a market in US dollars
emerged in Europe as a small inter-bank operation used primarily by a few
European commercial and central banks. This market was developed to
ease liquidity problems produced by the cost of reconstruction after the
Second World War. European economies were so heavily dependent upon
US exports and finance that some way needed to be found to ease the pas-
sage of funds through the world financial system. The international market
in US dollars was a convenient means of circumventing the bureaucracy of
the US financial system, as well as making inter-bank, dollar-denominated
loans quicker and easier to organize.
Although the point at which the offshore Euromarkets properly
emerged is subject to debate, it is generally acknowledged that a market
that was not directly regulated by any state emerged in the autumn of 1957
(Burn 1999, 2000). The most plausible explanation for this change focuses
on the policies and institutional structure of the British government. During
the 1957 Suez Crisis and the ensuing run on sterling, the British government
imposed tight restrictions on trading in sterling and raised interest rates to
slow movement. To get around these measures, British-based banks began
actively to solicit $US deposits to use in trade credits (Sengupta 1988, 26).
Although still ostensibly British-based, these dollar transactions were con-
sidered to be taking place outside of the exchange rate system, reserve
requirements or any other regulations of the British state, and therefore

outside all state regulation.4 In 1963 this rapidly expanding Eurodollar loan
market was supplemented by the emergence of the Eurobond market based,
then as now, in the City of London. From the late 1940s to 1963, an
increasing portion of international loans were expressed in $US and were
managed by US banks. But the imposition of the 1963 Interest Equalization
Tax (IET), which imposed a levy of up to 15 per cent on all subsequent
purchases by Americans of foreign debt and equity, effectively barred
foreign borrowers from the New York financial markets.5 This stimulated
the creation of the Eurobond market which consists of bonds underwritten
by international banking syndicates and therefore not subject to any countrys
securities laws (Park 1994). Again, the British government was active in the
creation of this reactive innovation (Burn 2000).
The Euromarket became, to all intents and purposes, the first unregu-
lated global wholesale financial market. Because it is not considered to be
located in or regulated by any one state, the market inhabits a kind of
juridical commons, analogous to the status of the high seas in Law of the
Sea (Palan 2003). For this reason, the Euromarket and the currencies in
which it trades are sometimes considered to be stateless money (Roberts
1994). In contrast to the Law of the Sea, however, the legal status of the
Euromarket has never been codified in any multilateral setting or document
which means, effectively, that the Euromarket persists due to the willing-
ness of states to sustain it.6 As a result, as we will see below, the Euromarket
has a material existence in various types of financial centres. It maintains,
however, its offshore status due to a variety of provisions and legal
arrangements that different states have put in place to distinguish it from
onshore spaces of regulation. In that sense, the Euromarket is only fic-
tionally offshore, for it lives its life in the familiar financial centres of the
world. In spite of the allusion to shores, of which more below, the bound-
ary between offshore and onshore is more likely to be found running down
the corridors of international banks than along the political boundaries of
the state. Notwithstanding this, the Euromarket remains largely unregu-
lated because of the fiction of its existence beyond the jurisdiction of any
state. Because of that same fiction, the Euromarket is considered to be a
global financial market.
Offshore financial centres
Whilst the offshore financial market is fully integrated, internally coherent

and, therefore, apparently global, it is not located offshore in any literal
sense. Rather, it is situated in and between different types of financial centre
all of which are located, physically and juridically, in major onshore cities.
In that sense, offshore finance is not at all external to the state, but the
spaces of flow, as Castells calls them, are materially located in the state.
But as we will presently see, states have established a variety of unique
juridical arrangements to sustain the fiction of the offshore financial
market.
The literature distinguishes three types of offshore financial centres,
or three different legal arrangements: the so-called spontaneous offshore
sites, such as London and Hong Kong; variations of International Banking
Facilities (IBF) (or onshoreoffshore centres) such as New York and
Tokyo; and tax havens. These three categories should be considered ideal
types, as each offshore financial centre and tax haven offers its own
unique bundle of financial regulations. Because of their importance to the
concept of offshore we will treat tax havens in the next section. Here we
will examine the spontaneous IFCs, through the example of London, and
the IBFs.
The best known and the most important of the spontaneous offshore
centres is the City of London.7 It is so designated because Londons
Euromarket facilities allegedly emerged spontaneously, without official
direction or even notice. Londons position as the heart of the offshore
financial market can be traced back to attempts by successive British gov-
ernments to re-establish London as the centre of global financial activities
after the Second World War.8 Under provisions put in place during the
Second World War, British banks were not allowed to deal in foreign cur-
rencies. However, under the 1947 Exchange Control Act, some British
banks were given permission to deal in foreign currencies, leading to the
opening of the Foreign Exchange Market in London in December 1951.
Although all other currencies could now be traded freely, the 1947 Act
maintained restrictions on sterling, which could only be bought and sold by
designated banks. A deteriorating balance of trade and the 1957 run on
sterling, prompted the imposition of restrictions on credit, including banning
re-financing in sterling. This then led to an unparalleled expansion of over-
seas borrowing and lending. In this way, the Bank of England in effect
walled-off sterling, but allowed dealings in other currencies free of regula-
tions (Grant 1967). After 1957, Britain progressively relaxed exchange
controls, culminating in the 1979 UK Banking Act, the first act of the incoming
Thatcher government, which removed all exchange controls. Since then, the
City of London has been effectively considered as an offshore financial
market in its own right.
An International Banking Facility (IBF) is a more stringent type of off-
shore centre, in which companies must apply for a licence to trade. Unlike
the spontaneous offshore centre, IBFs have been set up in order to com-
pete with other offshore centres (Lewis 1999). The first IBF was the Asian
Currency Union (ACU) set up in Singapore in 1969 in response to the
increased foreign exchange expenditure in the region caused by the Indo-
China war and other conflicts in the mid 1960s. A tightening of credit in
1967 and 1968 contributed to rising interest rates in the Eurodollar market,
meaning that tapping existing dollar balances in the Asia-Pacific region
became attractive to many banks. Singapore took advantage of this by set-
ting up facilities that gave incentives for branches of international banks to
relocate to Singapore. Its first licence went to the Bank of America to set up
a special international department to handle transactions for non-residents.
As with all other Euromarket operations, the ACU required banks to main-
tain a separate set of accounts in which are recorded all transactions with
non-residents. Although banks operating within the ACU are not subject to
exchange controls, they are required to submit the detailed monthly reports
of their transactions to the government (Hodjera 1978).
As other elements of the offshore economy have become increasingly
important in the world economy, so many governments have established
IBFs as a means of both participating in the offshore economy and control-
ling its effects on domestic institutions and markets. The New York IBF, for
example, came about as the result of a prolonged and complicated battle
between the US Treasury, the Swiss government and a number of
Caribbean tax havens. With the active encouragement of the New York
banking community, particularly Citibank and Chase (Naylor 1987), the
US Treasury came to the conclusion that since it could not beat the rise of
offshore, it had no choice but to encourage its own offshore centres (Hines
and Rice 1994). A swift volte-face took place, culminating in the establish-
ment on 3 December 1981 of the first New York IBF. A decade later, more
than 540 IBFs had been established across the US to take advantage of the
cost and tax benefits they offer: New York had the largest number (over
250), California had 100 and Florida 80. However, as they are quite restric-
tive relative to other offshore centres, interest in IBFs has waned lately
(Lewis 1999).
Tax havens
The third type of offshore financial centres are tax havens. Tax havens,
with their attendant imagery of small tropical islands, jet set lifestyles and
legal ambiguity, remain the best-known elements of the offshore economy.
That said, despite their importance both to the popular imagery of offshore
and to its real institutional structure, tax havens present their own defini-
tional problems. This is because today practically every offshore centre can
function as a tax haven to foreign residents (Ginsburg 1991).
The Gordon Report to the US Treasury Department states that there
is no single, clear, objective test which permits the identification of a
country as a tax haven (OECD 1987, 21). However, Adam Starchild pro-
vides a useful working definition when he states that tax havens are coun-
tries that have enacted tax legislation especially designed to attract the
formation of branches and subsidiaries of parent companies based in

heavily-taxed industrial nations (Starchild 1993, 1). Following in a similar
vein, Richard Johns defines tax havens as products of deliberate state policies
that aim to attract thereto international trade-oriented activities by
minimisation of taxes and the reduction or elimination of other restrictions
on business operations (Johns 1983, 20). The different ways of defining tax
havens as distinct from other offshore centres mean that estimates of their
number vary greatly. However, the latest IMF study lists seventy jurisdic-
tions, estimated to manage some $2.1 trillion in assets, with business grow-
ing at up to 15 per cent a year (Stewart 1996).
The emergence of the modern tax havens was a complex affair. In one
form or another asset havens, where rich families and individuals can pro-
tect some or all of their wealth, have existed for a long time. During
the interwar years, tax shelters were devised primarily for and by wealthy
families rather than corporations (Picciotto 1999). Since 1945, tax havens
proper began to proliferate alongside the massive expansion of foreign
direct investment (FDI) by multinational enterprises. The growth of tax
havens was also stimulated indirectly by the efforts of the US government
to use the tax system to encourage the international investment pro-
grammes of US companies. Profits from overseas subsidiaries of US com-
panies were taxed only when remitted home, providing ample incentive for
these firms to relocate, even if only to brass-plate offices, in tax havens.
Although there are as many varieties of tax haven legislation as there are
such jurisdictions, it is common none the less to distinguish three classes of
tax havens: those with zero income tax and corporate licence fees; those with
low income tax; those where taxes are only levied on domestic earnings, with
foreign earnings subject to low or zero taxation. Notwithstanding the great
variations among tax havens, they tend to share the following attributes:
Minimal or no personal or corporate taxation.

Effective bank secrecy laws. Quite often bank or state officials are
barred by law from disclosing the origins, character and name of hold-
ers of funds.
Few, preferably no restrictions on regulations concerning financial
transactions, together with the maintenance of a code of anonymity and
secrecy.
The territory must possess political and economic stability hence, pre-
ferred jurisdictions are dependencies of large, prosperous and stable
states (for example, the Channel Islands and the Isle of Man, which are
both UK dependencies).
It should either be supported by a large international financial market or
alternatively be equipped with sophisticated information exchange facili-
ties and/or within easy reach of a major financial centre. Gibraltar, for
instance, has invested heavily in its communications infrastructure.
Tax havens have agreements with major countries to avoid double

taxation and regulation.
As pressure has built on tax havens in recent years, particularly over bank
secrecy measures, some of these attributes have begun to be of less signifi-
cance. The precise package offered by each tax haven also varies depending
on the type of service they offer. Some exploit particular niche markets in
financial services based on their proximity to particular markets or because
they are able to offer specific regulatory environments tailored to market
needs. Others, particularly the longer established, larger tax havens
(Switzerland, the City of London, the Channel Islands, etc.) offer a broader
range of individual and corporate services.
These islands of no or low regulation have both proliferated and
expanded. Today, the offshore financial market comprises several different
markets and deals in a variety of currencies. These include: Eurocurrency
deposits, Eurocurrency bank loans, Euronotes, Eurobonds, Euroequities
and the foreign exchange market as a particular infrastructure for all
cross-border transactions(Filipovic 1997, 21). Although by its very nature
it is hard to quantify offshore finance, it is estimated that nearly 80 per cent
of international banking transactions are now made in Eurocurrencies and
that up to 88 per cent of international loans are Euroloans. Estimates of the
amounts passing through the foreign exchange market (the market most
associated with the turbulence of the global financial markets) vary
between $1 trillion and $4 trillion daily. These figures are somewhat mis-
leading since the velocity of transactions, particularly with the increasing
automation of payments systems, means that the actual amount of capital
on the move is much smaller than the aggregate of transactions. None the less,
there has been a steady rise in daily trading on foreign exchange markets
during the 1990s, only slightly dented by the appearance of the Euro.
Export Processing Zones (EPZs)
The same principles of sovereign bifurcation that gave rise to the offshore
financial market and the offshore financial centres, also gave rise to other
offshore platforms such as export processing zones. EPZs are small areas of
national territory, usually in close proximity to major international trans-
port hubs, which are dedicated to manufacturing for export. Normally no
customs duties are charged for importing raw materials, components,
machinery, equipment and supplies used to produce manufactured goods,
provided these are then exported. EPZs also offer exporting firms
favourable investment, planning, labour legislation and trade conditions
compared with the remainder of the host country. Within EPZs all
the physical infrastructure and services necessary for manufacturing are
provided: roads, power supplies, transport facilities, low-rent buildings, etc.

In a number of cases, restrictions on foreign ownership which apply in the
country as a whole are waived for overseas firms locating in the zones.
Export processing zones can be seen, therefore, as the manufacturing equiv-
alent of tax havens.
In some countries, EPZs are indistinguishable from modern business
complexes, but in many others they take the form of ring-fenced enclaves
of industrial monoculture. But as a recent ILO study observes, no matter
what form EPZs take, the free trade, foreign-investment and export-driven
ethos of the modern economy has transformed them into vehicles of glob-
alization (ILO 1998).
Export processing zones evolved from two sources. One line can be
traced back to the establishment of the Shannon airport EPZ in the
Republic of Ireland in 1959, which evolved out of the conventional duty-
free areas common to most international airports. Another source were the
free trade zones established in the US by the Roosevelt administration in the
1930s which served as the model for Puerto Ricos export processing zone.
As late as 1966 there were only two export processing zones in developing
countries, one in India and one in Puerto Rico. As with tax havens, their
numbers began to grow rapidly in the 1970s and by 1986 there were
116 of them world-wide. It is estimated that globally some 1.3 million
workers were employed across 116 EPZs in 1988. The overwhelming
majority of these zones are now located in the Caribbean (48 per cent) and
East Asia (42 per cent). However, Asia accounts for over 60 per cent of
those employed in such areas, with the majority of EPZs concentrated
in Singapore and Hong Kong. Almost all of todays 845 EPZs were
established after 1971. The annual value of merchandise handled by EPZs
is in excess of $110 billion. The ILO (1998) estimates the total number of
people working in export processing zones at 27 million world-wide, 90 per
cent of whom are female.9
What is global about the offshore financial market?
Even the fairly cursory overview of the empirics of offshore given above
reveals a complex picture. It is complex both in that offshore is articulated
through a variety of institutional forms and practices that have developed
at different times and for different reasons, but also because of the various
ways in which these institutions and practices relate to the more conven-
tional economic geographies of the state. All are products of nation-state
policy programmes, but all relate to the state in different ways.
The confusion between offshore and globalization is easy to understand,
for offshore plays an important role in facilitating the type of globalization
that is associated with the theories of business globalization. The offshore
financial markets, for example, are said to be global in character. But the
term global is worth examining carefully because it goes to the very heart
of the elision we referred to in the introduction to this chapter. We will take
Carmichael and Pomerleanos definition of the financial system as our start-
ing point: The most fundamental contribution that any financial system
makes is to channel resources from individuals and companies with surplus
resources to those with resources deficits (Carmichael and Pomerleano
2002, 1). Financial systems can be classified as efficient or not according to
the quality of this channelling of resources that they provide.10 Nevertheless,
the concept of a global financial system suggests that the efficient chan-
nelling of resources from individuals and companies with surplus resources
to those with resource deficits takes place nowadays on a planetary scale.
That is, to use the words of Carmichael and Pomerleano, that the trading
in financial promises is now global in character (p. 1).
The problem for globalization theory, however, is that in one sense the
financial system can be said to have been global, or at least pan-European,
from about the twelfth century, and certainly from the sixteenth century, in
that it affected resource allocation on a planetary scale (Braudel 1979),
although it must be admitted that the range of participants in this European-
dominated financial system was rather restricted. Equally, a similarly global
financial system was highly developed towards the end of the nineteenth
century and up to the First World War. Again, while international lending
as a percentage of total lending, domestic and international, was high, the
range of participants remained restricted to Europe, North America and a
few outsiders. Many are asking, therefore, in what sense, the modern financial
system is either new or indeed global (Hirst and Thompson 1996). The
answer is compounded and, in fact, unscientific.
It appears that the term global financial market normally implies the
integration of national financial markets into a larger, global one. But that
in itself does not mark any fundamental change with the past. True, the
modern global offshore market can be distinguished from its predecessors
due to the sheer volume of activities and the real-time contemporaneous
character of financial transactions. These remove the sense of uniqueness
attached to a particular location, or financial centre, and create a sense of
an integrated contemporaneous market operating on a planetary scale. But
as we have seen, while the offshore financial market operates at real-time
speeds through different financial centres scattered all over the world, the
truly distinctive characteristic of the offshore market is not only its sheer
size, spatial extension and speed, but also, and perhaps primarily, its unique
legal status. The offshore financial markets are those most fully indepen-
dent of the state, as they occupy, or at least seem to occupy, an entirely non-
national or at least non-territorial legal space.
The unique juridical status of the Euromarket changes, however, the
meaning of the term global with reference to the financial system in a
subtle way. Global, in the case of the financial system, does not denote
simply the geographical dimension of activities, or the process of timespace
compression brought about by the use of advanced information and
communications technologies (Harvey 1990). These effects have been achieved
primarily not through the technology, but more specifically because the off-
shore financial markets are operating within unique juridical spaces which
are not territorial in nature. The offshore financial market is therefore nei-
ther national nor global in the conventional geographical meaning of the
terms, but inhabits an entirely different space which is not subject to terri-
torial boundaries. We must bear in mind, though, that the whole gamut of
regulation which the Euromarket manages to evade largely evolved from
the 1930s onward. In that sense, the unregulated financial market is a
resurrection of the earlier types of freer global financial market, only now
operating in entirely new circumstances (Helleiner 1994). In fact, as we
have seen, the special juridical status of the Euromarket as offshore is a
product not necessarily of changes in the nature of the financial market, but
of changes in the nature of the state and the creation of a more robust con-
cept of sovereign self-determination (Palan 2002, 2003).
The offshore character of finance, combined with the sheer volume of
activities, creates, therefore, a third meaning of global: global in the sense
that the potential for growth and participation in the financial market is
global because it is very hard to place political restrictions on participation.
But this is the result not of globalization undermining the state or of finance
evading state regulation, as it is normally understood, but rather, of the
state (or rather a good number of states) creating certain spaces that are not
subject to their regulation and hence to political boundaries. Within off-
shore there are consequently a considerable number of activities that may
be plausibly described as global in nature. However, if they are global this
is not because of any planetary-scaled spatial extension or the stretching of
space, but rather because in being in various ways off-shore, they do not
appear as circumscribed by state boundaries. In that sense the globality of
offshore is not simply transnational, as presented by the theory of
stretched space (Chapter 3), but rather, denotes a more restricted and neg-
ative meaning the partial evasion and/or exteriorization of conventional
legal spaces.
The confusion of globalization with offshore
The global financial market is, therefore, not global in the conventional
sense of the word. However, the confusion of offshore with globalization,
and the enduring notion of globalization as something that completely
evades political boundaries, articulated primarily using the imagery of off-
shore, shapes the thinking in policy circles about globalization.
To take one example, one of the key aspects of the functioning of

globalization in general and offshore in particular is the idea of the open
economy. As with most of the socio-economic terms we have encountered
in this book, this is another term that is often used rather carelessly and with
little thought to its implications. An open as differentiated from a closed
economy is a metaphor that acknowledges simultaneously the international
and/or global nature of economic activity, coupled with a recognition of the
continued centrality of the state in economic management. The creation of
offshore spaces is only possible in the context of open economies which
imply, if nothing else, that economic boundaries are reduced and/or are
even non-existent for certain sections of economic activity (for example,
borders are relatively open for capital and trade flows, but relatively closed
for labour flows). As this implies, openness is not an absolute attribute of
national economies any more than an economy could be absolutely closed.
However, the differentiation of these two states of economic being crucially
allows for the exteriorization of certain steering problems associated with
contemporary economic management. An open economy operating pri-
marily through the Euromarkets, for example, has far less scope for public
borrowing and investment management because of the volatility of the
international investment markets. It is now generally accepted that conven-
tional, Keynesian macro-management policies, particularly running large
and relatively long-term budget deficits, are impossible in circumstances
whereby other aspects of the economy such as interest rates cannot be con-
trolled effectively by the national government without driving investment
out of the economy.
All this is well understood. It was certainly understood by Keynes and
the other architects of the Bretton Woods agreement. Keynes, however,
clearly did not identify the cause of the problem with globalization, but
saw such deleterious effects on macro-economic policy as the conse-
quences of the free and unregulated international financial flows. Keynes
and Harry White concluded, therefore, that capital movement must be
restricted in the post-war arrangement (Helleiner 1994). However, if the
dynamics of an open economy, which are the direct effects of an unregu-
lated, transnational wholesale financial market, are presented as the effects
of globalization, as currently happens across the board, then two things
tend to happen. First, the externalized process of globalization rather than
specific institutions of the offshore wholesale financial markets is viewed
as the principal causal factor impacting on the state. Second, arguments
then logically follow about how globalization forces adjustments in
macro-economic policy (Held et al. 1999, 183). At the same time, however,
the precise nature of the pressure globalization exerts on the state becomes
blurred; it is no longer to do with the particular institutions of the offshore
financial market, but with a much bigger and less specific process called
globalization. Suddenly we find ourselves once again in the realm of
imprecise but powerful metaphors in lieu of analysis. This can have serious
consequences. Resisting globalization, the cartoon monster conflated
with offshore seen as all-pervasive and all-threatening, is a much more
heroic and/or futile project than, say, regulating the offshore financial
market. In this construction, the view has emerged that states are left without
any option but to adjust to globalization, because there is no alternative.
This essentialist view of globalization produces all sorts of misinter-
pretations. For example, considering that the Bretton Woods agreement
collapsed in the midst of great acrimony, and considering that the concept
of the open economy does not recognize the unique juridical status of the
Euromarket, it is easy to believe, as many apparently have done, that the
dynamics of offshore presented as globalization have somehow evolved
outside the framework of the state system and without their knowledge.
There is a measure of truth in this, in that for all that offshore has been pro-
duced and maintained by particular states, no one intended, let alone
planned, that it would take the form and scale that it has. Notwithstanding
this, the idea of offshore as wholly exterior has become firmly established,
helping to explain why globalization is often thought to have appeared out
of the blue on the day that states discovered that the traditional tools of
macro-economic policy were no longer available.11 Once again, the com-
plex but intimate relationship between offshore and the state is misunder-
stood. Contrary to appearances, offshore is sustained by the very principles
of sovereignty that it is claimed to have undermined: export processing
zones are territorial enclaves produced by the state; tax havens are taking
advantage of the right to write the law and grant legal title; the Euromarket
is a direct result of the decision of the UK government not to apply its sov-
ereignty over certain types of financial operations that take place in its ter-
ritory. The practice of sovereignty (if not the idea), this suggests, remains
unaffected by the non-territorial nature of the spaces of offshore. The fact
is that the association of sovereignty with territory has had only a relatively
brief and temporary history within particular narratives of the nation-state
that are now being very quickly forgotten.
Notwithstanding these and many other possible caveats, the equation
of offshore and globalization has proved both plausible and enduring. Of
course, those that have played some of the most prominent roles in the
development of global financial markets have contributed greatly to this
confusion essentially defining their own activities in terms of globaliza-
tion. Perhaps the most notable of these is the financier George Soros, who
is widely attributed with having orchestrated the campaign against sterling
which forced the UK out of the European exchange rate mechanism (ERM)
in 1987. Soros has since become a leading critic of globalization, arguing
precisely, from his own extensive experience, that it threatens macro-
economic sovereignty (Soros 1999). Of course, Soros account, like so many
others, is a retrospective one, discovering on looking back that what he and
many others were doing during the 1980s was articulating globalization.
That they were doing it through the specific institutional structures of off-
shore, organized by and through the very states he sought to undermine, is
therefore given a retroscriptive wash of globality.
Offshore and narrative
Once we are clear about the apparent confusion between offshore and glob-
alization, this allows us in turn to retrace the history of a particular narra-
tive of globalization, and show how it is underpinned by another narrative.
The elision of the narratives of offshore and globalization, the fact that
real offshore institutions and practices have never lived up to the imagery
they are used to convey in the sense that offshore was never able to
conquer the entire global economy does not really matter. In providing a
certain empirical basis for the narrative of business globalization, offshore
is arguably of more enduring importance than its concrete forms. This means,
of course, that we find ourselves in the apparently ludicrous situation
whereby the foundational story of globalization its most potent empirical
evidence can only act as such if we ignore so much that is known of its
past history and current practice. How are we to explain this?
Not surprisingly perhaps, we are arguing that what has been appro-
priated into the discourse of globalization as offshore bears only a rough
resemblance to the practices of offshore institutions. As this implies, the off-
shore that is employed within the discourse of business globalization is a
highly selective configural story in its own right it is used to tell a very
particular story about the spatial forms of economic globality. What, then,
is the spatial form claimed by offshore and how might the concept con-
tribute to the configural process outlined in Chapter 3?
The most obvious spatial claim articulated in the concept of offshore
is, clearly, that of the shore itself. The narrative of offshore borrows a con-
ventional spatial form (or, at least, one that carries an air of familiarity and
plausibility so long as it is not analysed too closely), and uses it to distin-
guish between economic spaces of which only one bears any resemblance to
conventional, territorial space.12 Importantly, it is this apparently conven-
tional space which is only rarely defined in accounts of offshore the
implied space of onshore. Running through the discourse of offshore
(globalization) is, therefore, a hidden message about onshore the state.
Paradoxically, business globalization can simultaneously declare the end of
the state by demanding certain policies of adaptation from the very state
that is about to wither away. The primary focus on offshore, which is
therefore presented as the new or different space that needs to be defined,
allows the spatiality of onshore the nation-state to be assumed, as we
saw in Chapter 3, to be the ordinary, territorial space of the state.
Of course, as a spatial narrative the past spatial form from which

offshore represents the departure cannot simply be assumed. Rather, off-
shore, like any other spatial narrative, entails a process of retroscription
and proscription in which both past and future spatial forms are written
with respect to each other. As far as the imagery of globalization is con-
cerned, the incorporation of the spatial narrative of offshore performs two
main functions. First, and most obviously, it creates a spatial distinction
between different economic and juridical spaces. However, the nature of
the spatiality of offshore is neither simple nor self-evident. Most signifi-
cantly, it does not draw a distinction between two different but essentially
similar spaces as though onshore and offshore were spatial equivalents
separated by a boundary in the same way as, say, France and Germany.
Rather, offshore serves to distinguish between spaces differentiated by
particular normative characteristics. Second, and chief amongst these
normative characteristics, offshore carries with it a narrative of speed the
differentiation between on-and offshore spaces is drawn in terms of socio-
economic velocities.
Space
As noted above, the spatial alternative opened up by offshore does not take
the form of a space equivalent to that of the territorial nation-state. It is,
rather, a different spatiality altogether, one which has a particular institu-
tional structure, which articulates a different set of normative characteris-
tics than those of other, older spatial forms. Offshore does not dispense
with ideas of citizenship, law, sovereignty, identity, belonging, and so on,
all of which have long been associated with the state. It does, however, pro-
foundly alter the meaning of these various characteristics of the state by
opening up a space in which they function differently and, in doing so, also
alters the meaning of these things with respect to the state itself.
We have examined the major institutional manifestations above, at
least in terms of their actual evolution and current functions. What is more
important here, however, are the normative characteristics with which these
institutions are imbued and, by extension, the narratives they contain about
the nature of contemporary socio-economic space. As suggested in our
mapping of the imagined economies of globalization (Introduction, p. 16),
offshore as globality is accorded a number of characteristics. Offshore is
presented as a primarily economic space. As such it is apolitical and imper-
sonal, dynamic and fluid; it is a site of disinterested and placeless economic
interaction. This image is, if anything, enhanced by another set of images
routinely associated with offshore those of criminality, money laundering
and tax evasion. The economic neutrality of offshore is such, this suggests,
that it does not distinguish on moral or political grounds between different
sources and types of funds. Offshore is presented, therefore, as the hard edge
of the world economy, a frontier-land that is simultaneously a site of oppor-
tunity and, because it is governed by purely economic rules, occasional
opportunism. Importantly, this space is presented as one that is both new
and inevitable. It is new, in that offshore is understood to be the key inno-
vation of globalization the new, defining spatial form of the global age. It
is inevitable because it is understood to have been produced by the pure
functioning of the market itself.
In one sense, the inevitability of the emergence of the space of off-
shore contains an element of truth. This is because the basic conceptual fea-
ture that allows offshore to exist in the first place has a much longer
heritage than the current institutions and practices of the offshore economy.
In fact, the possibility of offshore, far from being an innovation developed
after and in reaction to the overbearing regulations of the nation-state, is
immanent to the sovereign state form itself.
The possibility if not necessarily the practice of offshore was coeval
with the very idea of the sovereign state (Palan 2003) and, for all that its
use has proliferated and been attached to particular practices and institu-
tions in recent years, it has from the outset been an integral part of the func-
tioning of both national and world economies. The deliberate way in which
the fiction of the nation-state (and with it the correlative fiction of the exte-
rior space now called offshore) was created, suggests that far from being the
natural spiritual unity claimed by conventional state theory, the imagined
community (Anderson 1991) of the nation-state was every bit as much a
legal, social and political innovation as offshore is considered today. Seen
in this light, particularly as the latent spatiality of offshore can only be
understood as coeval with the state itself, the more recent manifestations of
offshore seem less revolutionary than its opponents seem to believe. The
innovation of offshore lies less, therefore, in the creation of fictive spaces
beyond the state than in the normative reorganization of the prevailing spa-
tial fiction of the state. The contemporary rise of offshore, in other words,
tells us a story about the relationship between the state and the economy
which, whilst not entirely new because it draws on pre-existing systems and
structures, appears to be new in that it differs from the conventions of state
sovereignty we have come to accept as truth.
Speed
Offshore introduces another important normative element into the imagery

of globalization, that of differential speeds. Written into the specific nar-
rative of offshore, and the more general one of globalization itself, is an
account of differing socio-economic velocities. As noted above and on the
cognitive map of globalization, a key feature of offshore is understood to
be its dynamism it is presented as a domain of change, fluidity and

innovation; it is the space of flows (Castells 1996). This dynamism does
not take the form of some absolute condition (though this is to some extent
how it is presented), but is a relative condition. Offshore (and by extension
globality) are dynamic relative to the state. As this implies, dynamism and
speed are features of the ideal-typical globality which offshore represents,
as though the coming borderless world will be one of pure speed, sheer
velocity and constant acceleration (Virilio 1986).
Just as no one seriously argues that the global system currently exists,
nor does anyone argue that such an utterly dynamic political economy is
likely or, indeed, possible.13 However, notwithstanding this, the discourse
of speed still performs a very important role, as we will see, in contempo-
rary policy discourses. Since the nation-state in some form or other clearly
coexists with this space of globality, this image of globalization introduces
simultaneously a two-speed globalization. As we will see in the next
chapter, lagging behind the dynamic space of offshore are laggard sectors
the onshore economy which have not, or have not yet come up to speed
with globalization.
This imagery is proscriptive, in that it attaches to the supposedly high
velocity globalization of the future key attributes of innovation and dynamism.
Global finance, then, is viewed not only as global and unregulated, but
also as intrinsically innovatory and dynamic. This highly innovative space
of flow is then considered as representative of future globality that which
lies spatially and temporally beyond the shores of the current state in more
ways than one. The image thus carries a strongly normative dimension:
innovation, intensity and energy are associated with globality, and those
people and places that have as yet failed to catch up, are considered deemed
to be literally behind the times. Although the empirics of offshore are pre-
sented in such a way that its future global spatiality is taken as self-evident
we can already see the form of the future in the present configuration of the
most dynamic aspects of the world economy this is, of course, a teleology.
The empirics of offshore are not, therefore, self-evident, but are selectively
compiled, as in all narratives, in such a way that they are, in Ricoeurs
terms, acceptable to a presumed conclusion.
Offshore/globalization is, therefore, also retroscriptive. It presents us
with an image of the future defined negatively in relation to an older, redun-
dant form of onshore socio-economic organization. Onshore is no longer
simply defined as those elements of the world economy in which states have
retained full regulation and taxation, but also those that have been less
innovative and dynamic. As in the case of globalization more generally,
the conventional nation-state surrounded by protective closed economic
borders is used here as the white wall against which change is to be
defined. That offshore is itself physically located within national territories and
is, moreover, defined by national authorities and preserved in their national
self-interest is written out of the story of offshore as globality. It might,

after all, contradict the unfolding plot.
As with globalization more generally, we can see within the discourse
of offshore an analogous configural process. The term comes equipped with
a similar spatial trajectory, similar dynamics (competition, technology, eco-
nomic efficiency and mobility) and a similarly constraining set of outcomes.
Offshore, presented as dynamic and innovative, suggests that onshore, that
is, areas and sectors still under state regulation and taxation, is not so
dynamic and innovative. The conclusion appears to be self-evident: there is
clearly a struggle going on between the modernizing tendencies of the world
economy, and the retarding tendencies of the state. A good section of the
anti-globalization Left only help cement this image by appearing nostalgic
about the good old days when the state or, worse, the community was in
control of its own destiny. Thus, offshore itself is a powerful metaphor pro-
viding a normative space beyond, which states have no choice but to
acknowledge and accommodate.
This is true even if we know the history of the development of offshore
and can identify a point in the past at which, as it were, the genie was let
out of the bottle. Even if, this is to say, offshore can be seen to have been a
product of more or less deliberate policy in the past, no one predicted or
intended its phenomenal rise in recent years, or could stop it or even rein it
in even if they wanted to now that it has been established.
Conclusion
The confusion between offshore and globalization is a key moment in the

development of globalization theory. It helps above all to configure the con-
ventional imagery of globalization by lending it both the appearance of
empirical validity and a set of attractive normative characteristics. The
crudity of business globalization, which reproduces the ideal-typical character-
istics of offshore, is not, therefore, simply venal or wrong. Without its
participants being aware of it, business globalization is, rather, an act of
narrative framing that seeks to legitimize certain desirable aspects of the
contemporary world economy as the products of external, offshore activi-
ties. As such, it borrows an imagery of horizontal spatial extension, in
which globalization is spatially larger than the state, to explain what is
more accurately a process of vertical dismemberment. As the particular
constructions of offshore spatiality and velocity are incorporated into the
coping strategies of states, so the logic of the common space of the nation
gives way to a fragmentary logic of separation and difference. The world is
not, therefore, becoming gradually more global in the simple sense that is
often understood. Rather, globality-as-offshore is a set of normative char-
acteristics either adopted by those individuals with sufficient wealth and/or
dynamism to escape into the world beyond the laggard state, or which are
ascribed legally to particular regions or industrial sectors considered by
states to be strategic employers and earners. As such, offshore is funda-
mentally and paradoxically an expression of the continued salience of the
sovereign state. Offshore does undermine a particular idea of the state, but
only in that it serves to rewrite, retroscriptively and proscriptively, the par-
ticular role of the state in its own narrative image. The chapter that follows
outlines what happens to those aspects of the state not amenable to being
fully absorbed into the normative domain of offshore.
5
The Private Economy of the Post-National State
The development of the space of offshore, crucial to the meaning of

globalization, does not in any sense, then, signal the death of the state.
True, certain dimensions of state activity long seen as quintessential aspects
of sovereignty seem to be undermined by the opening up of the new space
of offshore. But the very possibility of an offshore economy hinges upon the
existence of an onshore; the sovereign state. The type of globalization
described by business globalization, therefore, also hinges on the continuing
functioning of the state and sovereignty, albeit in significantly altered
forms. Inevitably, therefore, but contrary to common assumptions, business
globalization theory advances some very specific messages about the state
and about its role in the world economy, at the same time that it makes its
hyperbolic claims for globality. A careful examination of the way the
debates about globalization and the state have evolved with respect to each
other during the 1980s and the 1990s reveals the emergence of a subtle and
powerful discourse centring on narratives about the future role of the state.
Whilst, as we noted in Chapter 2, attention tends to be focused on that
which is considered new, that is, the global, these configural discourses also
narrate, advocate and in part bring about a fundamental transformation of
the relationship between state, economy and society.
A number of different analysts have sought to capture these processes
under a range of different titles, including the enabling state (Gilbert and
Gilbert 1989), the trading state (Rosencrance 1986), the market state
(Bobbitt 2002), the Schumpeterian workfare state (Jessop 1999) or the
competition state (Cerny 1990). In all cases, and despite very different
political and theoretical foundations, these various definitions are trying to
account for the same set of phenomena a shift in the orientation of state
activity, indeed a change in the very principle of statehood, away from
established functions associated with the nation the latter viewed as a
spiritual, political and cultural community towards a more outward-looking,
competitive and fundamentally economic principle. In all cases the state is
presented with a dilemma: it must reconcile the needs of the market with
the often conflicting demands of a national society that continues to
demand and expect social cohesion and economic prosperity (Offe 1984).
This dilemma was recognized during the 1970s as a crisis of the state
(OConnor 1973; Habermas 1975; Wolfe 1977), and it is no coincidence
that this debate takes place at the same time as the first oil crises and the
beginning of the period of very rapid expansion of offshore institutions.
The subsequent rise of the concept of globalization and, with it, the concept
of the competition state can be seen, therefore, as a process of re-narrating
the state in response to this crisis. In fact, as we will see in the next chapter,
all three components of the three-tiered imagery of globalization offshore,
the national-private economy and anti-economy have their origins in the
same set of circumstances and evolve at more or less the same time. How,
though, have events that seemed to threaten the very fabric of the state in
the 1970s come to strongly reassert the state at the beginning of the twenty-
first century? And what form does this reconfigured state take?
The purpose of this chapter and the next is to explore other socio-
spatial domains that have been coeval with the rise of the offshore, both as a
set of institutions and as a set of narratives about the proper location and
function of the state. Our argument here is that as the logic of fragmenta-
tion and differentiation has been progressively internalized by contempo-
rary states, so the nature of the state has changed. The nation-state persists
as an idea, but the content of that idea has fundamentally altered as differ-
ent organizing principles have come to the fore with the widespread accep-
tance and adoption of the narrative of globalization.1 Specifically, we argue
here, a new narrative of the state has emerged whereby conventional prin-
ciples of territorial unity and exception, social and (multi-) cultural holism
and common purpose have been replaced by privatism.2 By this we do not
simply mean that aspects of the national economy have been privatized
though this is certainly part of the process but, more fundamentally, that
the idea of state itself has moved from a public principle of universal
inclusion (implying an identification of and engagement with a single popu-
lation of citizens) to a private principle of competitiveness.3 It is for this
reason that we have characterized this cognitive space of the state as the
private economy a space of competitive engagement which distinguishes
between different populations across and within state territories, according
to their relationship to the norms of economic globality. As this implies, the
idea of the state is no longer based on territorial, cultural, social, linguistic,
or any other form of identity associated with the territory or demography of
the nation-state, but on particular types of economic participation associated
with the sovereignty of the competition state.
The rise of the competition state
The link between offshore and the competition state runs deep. One of the
primary dynamics behind the very rapid opening up of the space of offshore
since the 1970s has been the capacity and willingness of states to commer-
cialize significant aspects of their hitherto sacrosanct sovereign rights; most
The Private Economy 111
notably, the right of citizenship and/or abode. If we examine the motives of

states for doing so, from the UK to the Cayman Islands, we find that, what-
ever their ostensible purpose, they have at root been seeking to raise rent
from the world economy. They have discovered that the best way to do this
is to marketize some of their basic sovereign attributes, by de-regulating
their financial laws, enacting various bank secrecy laws and lowering taxes.
In doing so, these states have created a variety of different fiscal spaces
within and across their territories which enhance the profitability of certain
types of private sector activity (Palan 2002a, 2003). Where investment and
capital have been successfully lured in this way, the states in question have
gained considerable income and power. In fact, some aspects of offshore,
those that involve the legal delimitation of particular regions or industrial
sectors (most notably tax havens and EPZs) may be seen as specific
instances of competition state strategy (Palan and Abbott 1996). However,
for all the importance of these practical and expedient outcomes of the rise
of the competition state, it has a more fundamental importance. Aside from
its specific manifestations, we interpret the various discourses of the com-
petition state alluded to above both individually and collectively as impor-
tant components in the delineation of the contemporary fa-s.
That said, the fa-s as presented by de Certeau is an ambiguous entity,
constituting a spatial domain on the margins of reality and ideology. As a
normatively established ground for action and inclusion, the fa-s is essen-
tially a political concept elided with a geo-social description. It is both an
empirical domain and a normative discourse and, because these two func-
tions are mutually constitutive, they are also very difficult to disentangle
analytically. This, however, is precisely what we need to do to understand
the ways in which the nation state has come to be reconfigured through
globalization as the competition state or vice versa, how the reconfigu-
ration of state and politics leads to the inevitable conclusion that globaliza-
tion takes place.
At one level the competition state seems to have a very real, concrete
expression it is a concept used descriptively to encapsulate the actual
behaviour of contemporary state actors. This empiricist conception cer-
tainly underpins the more populist and politically realist end of the debate,
such as Bobbitts (2002) idea of the market state, which has been much dis-
cussed in media and policy circles in North America and Europe. However,
underpinning these apparently simple empirical arguments lies a much
more multivalent and complex conception of the development of state as a
competitive entity. Whilst appealing to apparently simple histories of state
evolution, such empirical accounts in fact draw selectively on a number of
existing debates and histories which are reconfigured into a complex
imagery of globalization. What emerges from these various histories is a
kind of meta-story, a conventional account of the evolution of the com-
petition state. This meta-story is roughly as follows.
Starting in the early 1970s as a consequence of oil shocks, the

realization of the military limits of US power in Vietnam and the ongoing
Cold War the world of nation-states discovered itself to be interdepen-
dent. States could no longer go it alone, autarky was dead, empires had
crumbled and the possibility of the highly regulated and closed economy
was fast evaporating. Rapid technological changes, particularly in the area
of telecommunications and transportation, combined with the successful
implementation of the multilateral trading regime, and the exponential rise
in the mobility of capital transformed the conditions under which economic
policy could be successfully implemented. In conditions of rapid capital
movement, governments could no longer afford to try to control economic
growth through the manipulation and management of demand, or the
direct ownership of mass-employment industries (Keynesian Fordism). At
best, governments could hope to steer their economies and shift attention
and resources to the production of the macro-economic or environmental
conditions supportive of private accumulation of capital. State direct inter-
vention in the economy had been considered harmful by economists at least
since the days of Adam Smith, but, it was argued, in conditions of open
economy the many failures of state intervention were brought into sharp
relief. State intervention in the economy was considered deleterious on a
number of counts. It was inevitable, therefore, that government economic
policy would be driven by a medley of considerations, not of all of which
were purely economic. Governments would tend to direct investments, and
offer other incentives such as subsidies, tax breaks and so on, not necessar-
ily where it was needed by economic rationality, but where it was politically
expedient. In pursuing the welfare of the state through the Welfare State,
so the argument goes, political intervention was inimical to the welfare of
capitalism.4
The legitimacy for change was presented in the following terms: capi-
talism operates through successive waves of destruction and renewal.
Todays successful industries are tomorrows dinosaurs. Failure in the
market, expressed by falling rates of profit, growing debt and/or declining
markets, forces companies to innovate by raising productivity, improving
efficiency, innovating new products and services, or by investing in new and
more productive businesses. Those who fail to innovate perish; those who
opt for the wrong technology or wrong product perish with them. Open
markets, where producers and consumers meet freely, are the best form of
legislature determining which technology, product or service is best, and
at what price. Economic failure is therefore an essential component of the
capitalist system and should ultimately be viewed as a positive force for
change.
The problem, however, is that the successful industries of the day tend
to generate vested interests in maintaining the status quo. This was parti-
cularly true of the main period of Fordism (roughly 193575), which was
characterized by huge concentrations of capital and the establishment of

large, labour-intensive industries. These subsidized and politically powerful
industries had no strong incentive to modernize, improve efficiency or
increase productivity. Indeed, given the importance of powerful industrial
trade unions as part of the overall governmentality of the state (and not, as
they have subsequently come to be considered, as its enemies), there was a
positive disincentive to reduce the labour content of production. Not sur-
prisingly, these industries and services were able to manipulate the state to
support them not least because the boundaries between state and industry
were permeable. This ended with the collapse of Fordism as expressed by a
general decline in the rate of profitability in the late 1960s, combined with
rising inflation and stagnation and, subsequently, a world-scale manufac-
turing recession.
This situation would have been difficult in the best of times, but in the
context of the opening economies that began to prevail in the early 1970s
and the reference here is clearly to the Euromarket and the export processing
zones dynamic but politically relatively weak sectors or companies simply
took advantage of the situation by relocating elsewhere. These pioneers
of transnational production were soon followed by traditional labour-
intensive industries, such as textiles, footwear, electronics and automotive
producers taking advantage of large pools of highly skilled, but relatively
cheap, labour in Third World countries. Although there were enormous
social and political upheavals as older industrial sectors disappeared from
advanced industrialized countries, producing mass unemployment on the
way, these effects were localized. The longer-term aggregate effect of the
loss of these industries and their employment base was in truth only mar-
ginal for national economies as a whole. Localized recessions and declines
were more than compensated for by the massive expansion of finance,
accountancy, consultancy, and so on. That said, the opening of capital
markets produced a rapid rise in government debts during the 1970s and
1980s, as OECD states fought to continue with their traditional welfare
programs and micro-economic management policies at times of declining
fiscal revenues. This was what Joseph OConnor (1973) famously described
as the fiscal crisis of the state.
To mitigate this impending crisis, many countries (for example, the UK
and France) began programmes of fiscal deregulation to encourage the
development of secondary financial institutions to help recycle govern-
ment debt. Following the debcle of the early 1980s (that is, Third World
debt), government debts were no longer considered safe. Until Mexico
defaulted on interest repayments to the IMF in 1982, it had been assumed
that, since a state could not technically go bankrupt, the risks involved,
even in huge unsecured loans to impoverished countries, were deemed
finite. After Mexico, governments were increasingly scrutinized for their
sound financial policies (Sinclair 1994), with those pursuing acceptable
policies being rewarded with lower premiums above the LIBOR5 rate. The
volatility and general risk aversion of foreign exchange markets greatly
exaggerated the penalties on states deemed by the markets to be unsuit-
able, risky or corrupt. Just as the corporate and banking sectors were able
to wield their increasingly sophisticated capacity to evade state regulation
and control through offshore to discipline states with wayward fiscal poli-
cies, so the public sector in the form of the IMF and World Bank sought to
instil market discipline on the developing world. Structural adjustment pro-
grammes, import-substitution policies and other heavy-handed economic
interventions were explicitly intended, in the parlance of the time, to make
these tardy states safe for capitalism. With the Cold War adding an even
harder edge to the need for closed economies to be opened to the market,
the logic of openness was imposed (literally in some cases) from all sides.
The idea, therefore, that an open economy is one that has somehow
responded naturally to the imperatives of a disinterested world market is
clearly nonsense. Openness was an economic and political strategy precisely
intended to enforce conformism to the ideals of US-led, neo-liberal capital.
For this reason, the equation of globalization with a conspiratorial neo-
liberal capitalism is an easy one to make. However, as in the case of the
development of offshore, whilst elements were clearly instigated by deliberate
policies, the shape of the international economy that emerged from these
processes cannot be reduced to these intentional policies they correspond
to the emerging of the modern fa-s.
The history of the competition state: the normative

function of trade theory
This common history of the rise of the competition state is a very plausible
one it certainly seems to fulfil all the criteria for a reality check and, as
a consequence, has become something of an article of faith for policy-
makers, economists and academics alike. Who, after all, could argue with
such a clearly articulated and empirically verifiable account of the evolution
of the state and the global market? Even a cursory glance at the recent
development of most of the worlds nation-states and the third way style
reconstitution of long-held political truths, particularly for Left-leaning
political parties, seems to support the veracity of it. But the new realism
that underpins the reinvention of the nation-state as the competition state
is not quite as simple as it at first appears. This is not to suggest that the
various empirics connected to the rise of the competition state did not happen.
However, it is to suggest that we are once again confronted with a configural,
directed story, as much as we are with a simple, unquestionable, historical
succession of events. If we examine critically the development of the narrative
of the competition state, we find another example of a set of sedimented
discourses, the development of which long predates their concrete manifestation

as the competition state. The competition state, this implies, was not simply
discovered as a natural response to an equally discovered globalization.
Rather, it is an idea with origins deeply embedded in particular Western
economic discourses that have had as much to do with the definition of
globalization, as they have with the narrative reconfiguration of the function
of the state within it. Specifically, theories of the competition state find
expression in the long history of Western trade theory as it has developed
since at least the eighteenth century.
The idea that the state competes for shares of a world market, whilst
it seems axiomatic to globalization, and therefore thoroughly new, can in
fact be dated at least as far back as Louis XIVs entrepreneurial minister
Jean Colbert, the father of French dirigisme (Cole 1964). The whole basis
of dirigisme was the mobilization of the national economy as a whole in the
pursuit of economic and political power in a world dominated by, at that
time, the rapidly developing imperial economy of the United Kingdom. As
trade theory and the concrete policies developed in response to it have
developed, so the role of the state with respect to the management of the
national economy has changed. Adam Smiths original conception of
international trade developed in the Wealth of Nations advocated a com-
plete withdrawal of the state from the active management of the economy,
in order that the invisible hand of the law of supply and demand could
work unhindered. David Ricardo added to this the concept of comparative
advantage to explain how the workings of the market would result in the
location of particular types of productive activity.
These theories, which are still routinely advocated, reversed the pre-
sumptions of mercantilism by demonstrating that the same goals of
national wealth were better served through free trade. Even if the theory no
longer comes close to describing the actual practice of trade, the normative
ideal that it is the natural tendency of economic activity to find efficiency
and equilibrium remains central to the thinking of economists and policy-
makers. Despite this, the massive complexity of the international economy
as it has developed means that states have in fact never left the functioning
of the market to its own devices. Rather, trade theory, and with it the trade-
management practices of the state, have undergone a series of significant
shifts.
Of these, the first and most decisive was the quite early realization that
the principle of comparative advantage developed with respect to the trade
in goods between discrete national economies did not work in an increas-
ingly complex international economy. Trade did not, as predicted, stem
from or naturally produce an efficient distribution of economic activity,
but was heavily influenced by national economic and military policies.
The British Empire, for example, and the system of imperial preference in
pricing which persisted until the demise of the Empire in the mid-twentieth
century, were specifically intended to control and exploit the natural and
human resources of parts of the world far beyond the putative boundaries
of the UK economy. Even before trade theory was revised by Heckscher
and Ohlin early in the twentieth century (to produce the oft-cited
HeckscherOhlin Model), it was clear that the distribution of economic
wealth and activity in the world was governed by competitive rather than
comparative advantage (Flam and Flanders 1991). Long before the term
competitive advantage had been coined, many governments, particularly in
Europe, were quite deliberately and self-consciously acting to create what
later were described as national political economies in competition with
their neighbours and rivals (cf. List [1844] 1885).6
The rise of the international trade in services (banking and finance,
accountancy, consultancy, telecommunications, digital media, software and
so on) has, therefore, simply exacerbated, albeit to a phenomenal extent,
pre-existing competitive principles of international trade management.7
These products are not amenable to the theory of comparative advantage
because they clearly are not dependent on the natural endowment of any
particular country. In addition, these products also tend to be of a higher
added-value at the point of export and are, in many cases, infinitely replic-
able (that is, they are not destroyed by consumption) and hence are coveted
by states seeking export earnings. The rigours of competitive advantage
require that the state engage directly to enhance its attractiveness to mobile
capital, its capacities to produce particular types of goods and services and
the overall strength and stability of the economic activity within its bound-
aries from which, through taxation, it ultimately derives its own strength.
As this suggests, the exponential rise of international trade (particularly its
rise relative to manufacturing, Dicken 2003) and the transformation of the
nature of the products traded, has shifted the perceived function of the state
with respect to the economy. The Fordist principle that the economic activ-
ity was subordinate to and controlled by the state has given way to the post-
Fordist principle that the state is effectively controlled by (or, at least,
powerless in the face of) the needs of economic actors (Jessop 2002). More
recent amendments of the theory of competitive advantage derive from the
need to explain, in order to exploit, this much more fluid, expansive and
deterritorialized economic geography.
Theorizing national competitiveness
If the principle of national competitiveness can be traced back to the origins

of trade theory, it is during the past century or so that it has come to be for-
mulated explicitly through the efforts of economists and trade theorists and
codified into the institutional structures of national economies. There have
been many contributions to this debate, starting, as we have already mentioned,
with the HeckscherOhlin revisions of classical political economy and we

cannot give a comprehensive account of them all here. However, we will
consider three of the more important elements of this debate, all of which
have contributed to the sedimentation of the idea that an open national
economy is a fundamental imperative within a globalized economy: New
Trade Theory, New (or Endogenous) Growth Theory and Strategic Trade
Theory.
It should be noted at the outset that these three theoretical contribu-
tions do not constitute a seamless or successive development of economic
theory and are, in some ways, quite distinct from each other. That said, our
interest here is less in their specific content, than in their contribution to the
more general reconfiguration of the role of the state with respect to eco-
nomic management and participation. Seen in this way, despite their differ-
ences, all three of these contributions have been significant in normalizing
the basic tenets of the competition state. Their effect is not, it should be
stressed, merely theoretical; rather all three have, in various ways and at
various times, been incorporated into national policy programmes and,
increasingly, into the principles of global economic management (for
example, through the World Bank and the World Trade Organization, of
which more below). We will examine each briefly in turn before consider-
ing their implications for the state.
New Trade Theory
New Trade Theory evolved during the late 1970s and effected an important
shift in thinking about the nature of international trade, from theories
based on the relative scarcity of resources, to theories based on the principle
of increasing returns on investment. As Paul Krugman (1980) argued,
Ohlins work in the 1930s had already contained the kernel of New Trade
Theory. According to Ohlin, factor endowments (land, labour, resources, etc.)
may provide the initial spur for trade, but it was the opening of markets
that would lead to agglomeration of productive capacity and, crucially, the
development of economies of scale. Once significant economies of scale
have been achieved by particular firms, they provide an important compet-
itive advantage in their own right and further stimulate trade. The causal
dynamic for trade is, therefore, no longer scarce resources, factor endowment
or even technological advances, but rather, increasing returns from the
competitive advantage provided by economies of scale.
The same basic theory could then be applied to the manipulation of
economic geography. It provides the theory to understand that the success
of certain regions is based on concentrations of factors such as skilled work-
forces, communications and transportation. For example, a number of
studies have demonstrated the competitive advantage of agglomeration in
such industrial regions as Silicon Valley, Silicon Glen and, more recently,
Silicon Fen, in the electronics and software industries (Krugman 1995;
Scott 1998; Blau 1999; Brand et al. 2000).
By shifting the emphasis to returns on investment and by showing that
national differences are not necessarily the cause of trade but rather the
result of trade, New Trade Theory has proved particularly significant from
our point of view. Specifically, it provides a clear theoretical justification for
the open market based on a modified form of the theory of competitive
advantage. Its central argument concerning the significance of increasing
returns suggests that a national economy open and attractive to investment
by private companies combined with free international trade could create a
sustainable employment base and boost the fiscal take of the state. Equally,
it contains the implicit suggestion that success in international trade was
strategically manufactured by active state policies, rather than being based
on natural endowments. All these points became central to the narrative of
globalization and the competition state.
New Growth Theory
New (or Endogenous) Growth Theory evolved out of a critique of neo-

classical development theory. Neo-classical development theory used the
principle of marginal utility to suggest that the freeing of international trade
and investment would lead to a convergence in economic performance
between advanced and developing countries, as capital shifted to the less
developed in search of higher marginal utility (Romer 1986; Lucas 1988).8 In
practice this did not happen; on the contrary, divergence greatly increased.
Endogenous Growth Theory explained this failure by arguing that the
economy-wide benefits of capital accumulation outweigh the eventual lim-
iting consequences of the increased capital invested per worker within a
given firm or industry. In a nutshell, the overall marginal productivity of
capital does not decline with increasing GDP per capita because of the par-
allel growth of positive externalities: primarily, social and political condi-
tions, including government policies. For example, Lucas (1988) argues
that externalities arise because investment in human capital enhances the
productivity of both the recipients of such capital and the society at large.
It follows that policies that enhance public and private investment in human
capital, in turn positively affect long-run economic growth. Indeed, follow-
ing the success of Endogenous Growth Theory, Walker has argued that it
is now generally recognized that human capital development enhances eco-
nomic growth (1996, 7).
More significantly for our purposes, and specifically with regard to the
inculcation of the principle of privatism into the function of state policy,
Paul Romer argued that the new theory
suggests that both the save-more and the spend-more macroeconomic

policy prescriptions miss the crux of the matter. Neither adjustments to
monetary and fiscal policy, nor increases in the rate of savings and capital
accumulation can by themselves generate persistent increases in standards
of living. This work suggests that the most important job for economic
policy is to create an institutional environment that supports technological
change. (1986, 1)
Although very different in origins from New Trade Theory, therefore,

the essential logic is much the same. Government is not removed from eco-
nomic policy altogether, but its role is neither to control nor direct the eco-
nomy, but to provide a suitable environment for private investment and
accumulation. Most importantly, as the quote from Romer strongly sug-
gests, private capital is here not simply adding to the overall functioning of
the national economy, but is in some ways replacing core functions of the
state itself. Romer rejects conventional top-down macro-economic policies
(which had been the traditional battle ground of Right versus Left political
parties in the corporatist state) in favour of a privatized form of social
engineering national cohesion through private growth, not state policy.
Strategic Trade Theory
The underlying messages of both New Trade Theory and New Growth
Theory about the role of the state in the economy spawned a more popular
version in Strategic Trade Theory. This made the idea of national govern-
ments becoming actively involved in promoting their international compet-
itiveness much more explicit. By the early 1980s despite, or perhaps because
of, the rise of neo-liberalism and the wholesale deregulation of financial
markets, the agenda was set in the US to seriously debate the merits of a
national industrial policy along similar lines to those of Japan or Germany.
Even prior to this in 1970, Richard Nixon had accepted the concept of
national planning and had then called in 1971 for what he described as a
National Growth Policy (Graham 1992, 20). However, it was only follow-
ing the 1981 recession, with the publication of Magaziner and Reichs
Minding Americas Business (1982), that the basic principles of Strategic
Trade Theory were codified.9
Although the debate that ensued in the early 1980s ended up in the
defeat of its proponents, two things became clear. First, it was recognized
that in practice all states adopted some form of industrial or sectoral
growth policy through their trade regulations, taxation, subsidies, work-
place controls, environmental standards, and so on. These various elements
may not have been consciously brought together as a single growth policy
initiative, but the practical effect was much the same if, less efficient. Second,
as this implies, this disparate array of micro-economic interventions could

play a key role in determining the economic performance of the country.
Strategic Trade Theory extended these arguments to advocate the formula-
tion of deliberate growth-oriented policies.
It begins from assumptions about the nature of oligopolistic markets,
where imperfect competition among a small number of large firms, espe-
cially in high technology industries, allows them to achieve profit rates in
excess of what might normally be expected; what economists call rent.
The idea is that by developing a strategic trade policy states can, at least in
theory, maximize the rent-raising potential of their domestic industries
operating in world markets. Rather than becoming actively involved in the
market in its own right as a competitive player, the state provides firms
themselves with the strategic advantage by developing, amongst other
things, pre-competitive subsidies, low-cost production facilities, low-tax
and low-regulation business zones (EPZs), flexible local labour markets,
transport and communication infrastructures, research and development
facilities (such as universities), and so on.
Although this was only formally theorized in the 1980s, examples of
strategic state industrial policy existed many years previously. In the 1950s
the Japanese government set up a committee to examine the nature of the
steel sector. The committee identified both new, efficient technologies as
well as the optimum factory sizes to garner the greatest economies of scale.
Through a judicious carrot-and-stick policy, the Japanese government man-
aged to persuade the fifty-odd existing steel companies to merge, producing
an oligopoly of three large firms. These optimally sized and technically
sophisticated firms were able to compete effectively with established steel
producers and went on to become a cornerstone of Japans post-war indus-
trial strength in secondary industrial sectors (such as automobiles and ship-
building). If Japans industrial dominance has waned in recent years, this is
in part attributable to the general acceptance by other advanced economies
of the need to provide high levels of strategic support to growth sectors. The
US computing hardware and software industries, whilst not supported by a
central planning regime such as MITI in Japan, have nevertheless been sup-
ported by the state indirectly by, for example, very high levels of defence
spending and the creation of advanced academic research facilities.10
Whilst Strategic Trade Theory was intended to be enacted on a
national scale, by national government, it has also led to the creation of
competitive industrial regions and the overall regionalization of certain
aspects of the world economy. As many economic geographers in particu-
lar have observed, the internalization of principles of open competition
have led not simply to the development of national economies as a whole,
but of those regions where specific workforces, infrastructures or invest-
ment policies have created industrial clusters (Dunford and Kafkalis 1992;
Amin and Thrift 1994; Scott 1998). This has also found expression in
recent urban geography with particular cities exploiting existing or developing

new capacities in certain service industries, to become major economic
regions in their own right (Sassen 1996; Amin and Thrift 2002).
Normalizing competitive governance
Strategic Trade Theory was controversial, not least because it seemed to

many to represent a retrograde step away from the fully open markets
sought by free-traders for centuries and into a form of protectionism.
Despite this, the competitive principle has been adopted by all advanced
industrial states in various forms to the extent that it has become a central
norm of economic governance.
The recessions of the 1980s brought about a second phase in both the
practical application and academic theorization of the principle of compet-
itive advantage. Whilst the major OECD economies were in turmoil and
were losing much of their traditional industrial and employment base to the
newly competitive economies of the Far East, it was recognized that their
redevelopment would have to be based on the development of new tech-
nologies aimed at mass-consumer markets. This would ultimately produce
the successful Alpine and Nordic models of Post-Fordist industrial develop-
ment (Amin 1994). Within these models, states were able to become highly
successful in particular niche markets, apparently almost from nothing (for
example, the Finnish mobile phone company Nokia). Explanations of this
kind of competitive success came from various sources, all of which have
served to further entrench the theoretical and practical configuration of the
competition state.
New-institutionalist Theory, for example, led by Michael Porter
(1990) at the Harvard Business School, drew attention to the broad insti-
tutional structures of accumulation within advanced industrial economies.
As such, this was similar to New Growth Theory, only dealing with much
more complex and multivalent economic environments than those of develop-
ing states. In a comprehensive study, Porter argued that some of the more
successful states had been able to convert features of their broad social
conditions into a competitive advantage. During the 1980s, for example, a
number of European companies responded to the threat posed by the
emerging economies of East Asia by competing on quality, kudos and
national sentiment, rather than price. In the car industry, for example,
BMW, Mercedes, Volvo, Saab, Volkswagen, Renault and others combined
the development of small, targeted niche markets whilst engaging in various
forms of merger, co-production and strategic alliance to force down costs.
The result was a wide range of products tailored to a highly diverse
lifestyle-driven market, but which were based on a number of common
product elements (chassis, engine, transmission, etc). built and/or assembled
in a small number of major production centres. In addition to this were the

small, craft-based manufacturers producing very high cost, specialist products
for exclusive, aspirational markets (TVR, for example).
The question that Porter posed about all this was whether there was
any connection between the performance of these companies and the
national environments in which they operated. He answered with a
resounding yes, emphasizing in particular the broader societal and institu-
tional conditions that gave certain sectors their advantage. Unhindered by
the model-mania of economists, Porters studies seem to give credence to
the idea of national industrial policy, indeed, extending the scope of com-
petitive advantage (a term that he probably coined) to the entire gamut of
social, political and topographical conditions. These various conditions
could be marshalled and exploited to provide both the necessary productive
conditions and the core markets to support export-led economic growth in
highly competitive conditions. Indeed, competition seemed to be the answer
to the problems of economic growth. As Dornbusch observed: competi-
tion, both within and across borders, is accepted as the basic rule of the
markets (1993, 4). Moreover, this did not lead, as was feared, to a new wave
of protectionism. Even Japan, as many economists observed, maintained an
extremely competitive market internally which served as a test-bed for
products subsequently exported to the rest of the world (consumer elec-
tronics, for example). Japanese firms that survived internal competition and
the high demands of the Japanese consumer had little difficulty exporting
to the world. The creation of the European Union, which is based precisely
on the principle of lowering barriers to competition within and between
member states, has also eliminated domestic monopolies that failed to inno-
vate.11 Similarly, the success of US corporations was attributed to their
domestic competitive market both within the US itself and subsequently
within NAFTA.
These various formulations of the competition state have, of course,
not been without their critics. In 1994, the leading proponent of New Trade
Theory, Paul Krugman, published an article in Foreign Affairs explicitly
rejecting the concept of the competition state. For Krugman (1994), draw-
ing a parallel between firm and state (that is, as though the state was adopt-
ing the same behavioural characteristics as the firm) was misdirected and
misplaced; it was simply a case of bad economics. To the extent that the
competition state does not exist anywhere in anything approaching a pure
form, Krugman may well have been right. But, as noted above and through-
out this book, ideas and concepts need not be empirically verifiable to gain
widespread currency and to be very effective and affective of policy
response. Indeed, notwithstanding its empirical problems, the concept of
the competition state has become a paradigmatic expression of the chang-
ing relationship between state and globalization.
The semblance of historical continuity in the development of the ideas

and practices of the competition state is important, particularly from the
perspective of the emerging fa-s. Its relationship to globalization is, however,
contradictory. On the one hand, it locates the many changes entailed in the
opening up of the domestic economy to the world market in the context
of the long evolution of thinking about state, governance and trade. In
that sense it can be seen as prior to or even unrelated to contemporary
globalization indeed globalization is one of its consequences. On the other
hand, the idea of the competition state reinforces the view that the rupture
produced by these new ideas was not internal to the state itself. Rather, the
transformation of the national state to the market state is presented as a
rational and necessary response to external changes in the world economy
out there; in other words, to globalization. In practice, these assumptions
coexist quite happily within the more general discourse of globalization
where, as we have seen already, the precise relationship between chicken
and egg is always ambiguous.
The disciplined state
Whichever is the case, the narrative of the open economy, combined with
the promise and/or threat of offshore, has had significant consequences for
the practice of statehood. Both the theorization and the practice of the com-
petition state are founded, as we have seen, on the general acceptance that
globalization represents a zero-option. Since it is external and cannot be
resisted, states have no choice but to adapt. Since the guiding principle of
globalization is (following the lead of offshore) that of openness, fluidity
and velocity, the only realistic response is to adapt by accelerating the
dynamics of the national economy. The narratives of openness and com-
petitiveness have been built, therefore, into the institutional structures of
the contemporary world system. States are, this implies, disciplined (and in
fact self-disciplining) by outside pressures should they fail to realize the
logic of transition.
This disciplining process comes in two main forms. The first comes
from capital itself, in the form of the constant threat that whatever invest-
ment, employment and income a particular state has managed to attract
into its open market, might be withdrawn at any time. Of course the threat
is plausible because of the nature of the offshore economy which, as we
have seen, is supported and sustained by the state system. Confronted with
this threat, a good number of states, and particular regions within them, are
under constant pressure to react to changes in the demands of the worlds
investors and to constantly (re)market themselves as both the places to be
and the places to stay. Such marketing exercises are incorporated, in turn,
into the domestic politics of the state, as competing political parties make
their case as the most business-friendly.
If that was not enough, another source of disciplining pressure
emanates from international economic organizations, the so-called institu-
tions of global governance, that have been established precisely to manage
and regulate the global economy. The three most prominent exponents of
this are the World Bank, the International Monetary Fund (IMF) and the
World Trade Organization (WTO). The World Bank and IMF have a long
track record of imposing neo-liberal disciplines on developing states.
Structural Adjustment Programmes, Import-Substitution Programmes and
the various welfare austerity measures imposed by both organizations have
a long and well-documented history of forcing open the markets of devel-
oping economies to the rigours of the world market. Notwithstanding the
controversial nature of these activities and the dearth of evidence that
development has been their result, principles which were once imposed
only on the poorest states have now been extended to the developed world.
Britain, for example, was forced to cut back elements of its Welfare State as
early as the 1970s under the conditions of IMF loans. The World Bank has,
more recently, published its vision of the proper role of the state in the
world economy, developing a model of statehood that makes quite explicit
the competitive principles upon which it ought to be based.
The World Trade Organization is perhaps the most significant institu-
tional manifestation of the trend. The WTO was explicitly established to
regulate the global trade in goods and services and has, from the outset,
stressed the competitive nature of the global system. Indeed, during the later
stages of the fraught negotiations to establish the WTO, its then Director
General Peter Sutherland specifically used the threat of being left behind by
globalization to bring recalcitrant states into line behind the new organiza-
tion. In fact, the purpose of the WTO as a whole is less to regulate trade per
se, than to regulate the behaviour of states engaging in trade. The idea of
the open economy is fundamental to the WTO, with the organization
having the power to discipline states breaking its rules by raising tariff
barriers above established limits. Those limits effectively reinforce the practi-
cal application of Strategic Trade Theory by limiting state actions to certain
types of pre-competitive subsidy and infrastructural development, while
prohibiting activities that might have been practised in the past (that is,
direct intervention in the economy by the state and the support of loss-making
industries for reasons of national interest), but which are now considered
inimical to competition.
The zero-option of the open economy is not, therefore, something that
is simply a logical outcome of market forces it has been firmly institu-
tionalized within and is enforced by both the private and public sector
regulators of the global economy. By these various routes, the narratives of
globalization have very quickly taken a concrete form in institutional structures
outside the state. It is clear, however, that the state is seen to survive, in
many ways rejuvenated but in a profoundly altered form, under the pressure
of globalization. As many authors have pointed out (cf. Mann 1997), the
state is showing no sign of withering away in response to globalization, but
if anything, globalization has in part been produced as a consequence of
complex competitive strategies pursued by states in recent decades to capi-
talize on and further develop globalization (Palan and Abbott 1996). It will
be clear by now that sovereign states can and do support globalization
and, second, that the type of deep market integration we associate with
globalization requires a robust transnational system of law rooted firmly in
the state system itself (Palan 2002b). As Sgard (2002) argues, the paradox
of globalization lies in the fact that today two of its main components,
money and the contract, are rooted even more in national economies than
ever. There can only ever be, he therefore argues, partial globalization.
However, the theory of partial globalization does not leave the state in
its former condition, but crucially serves as a catalyst for the reimagination of
the nature of the space of the state. The primary consequence has been, there-
fore, to alter the nature of the internal structure and meaning of the state.
The Schumpeterian workfare state
Not all aspects of the state can be globalized according to the emerging
prescriptions of the new order. This leaves states with the task of ensuring
that those parts of their national economies that cannot be removed
wholesale into the space of offshore itself labour, infrastructure, land,
political systems, wage structures, welfare systems, etc., all things, in other
words, which are still organized on territorial principles and which are too
inflexible or static to be offshore-ized are attuned to the demands of the
world market. States themselves, once they have accepted that they have no
choice, make a virtue of necessity and simply internalize the disciplining
function. The fraught history of labour relations in many of the advanced
industrial states during the 1980s, for example, was precisely a product of
older industrial forms, represented by Fordist trade unions, resisting
attempts to flexibilize their labour. Throughout the industrialized world
(except in those parts of the East Asian economy where private sector
oriented industrial discipline was already articulated at the level of the
individual) governments enacted legislation to curtail any and all non-
competitive labour practice, most notably the right to strike.
In doing so, they revealed just how completely they had swallowed the
line that offshore here in the guise of mobile investment capital was the
most profitable segment of the economy and the best source of investment
and income to generate sufficient private income and fiscal take to ensure
the pursuit of national goals. These goals, in turn, have been modified and
tempered wherever they are deemed to have impeded or, ironically enough,
competed with the private sector.12 Not surprisingly perhaps, the result of
this process has been characterized as involving the hollowing out of the
state to produce what Jessop (2002) has described as the Schumpeterian
Workfare Postnational Regime (SWPR).
Jessops analysis of the post-national state is one where the state does
not disappear, but transforms its internal structures and regulatory func-
tions radically. As he puts it:
[T]he national state is still the most significant site of struggle among com-
peting global triadic, supranational, national, regional and local forces.
This is the point behind the hollowing out metaphor, which is intention-
ally reminiscent of hollow corporations [T]he hollow state metaphor
indicates two trends: first that the national state retains many of its head-
quarters (or crucial political) functions including the trappings of
central executive authority and national sovereignty, as well as the dis-
courses that sustain them and the overall responsibility for maintaining
social cohesion; and, second, that its capacities to translate this authority
and sovereignty into effective control are becoming limited by a complex
displacement of powers upwards, downwards and outwards. (2002,
211212)
Jessops characterization of the contemporary state as post-national,

Schumpeterian and workfare-oriented is a sophisticated attempt to capture
the essence of state form (or, at least, the advanced industrial state form).
The invocation of Schumpeter, who advocated a crypto-socialist form of
competitive economics, comes close to the imagery of Cernys (1990) com-
petition state, but here the focus of attention is as much on the domestic
consequences of these changes as it is on the external. Jessops image of the
contemporary state is, therefore, one that pursues international competi-
tiveness by altering the distribution of responsibilities between itself and
significant aspects of the population. As the sobriquet post-national sug-
gests, the state no longer applies itself uniformly with respect to an homo-
geneous, naturally-constituted national population or territory, but applies
its regulatory, management and control functions unevenly differentiating
between areas of territory, economic sectors and population groups
(cf. Jones 1997). States have, of course, always done this to a greater or
lesser degree (along lines of class, gender and ethnicity in particular), but it
is only relatively recently that what are still referred to as nation-states have
fragmented socially and spatially with the active involvement of the state
itself (Rose 1996, 1998). The state does not simply stop intervening in
economic and social systems, but rescales its interventions with respect to
different actors and population groups (Brenner 1999; Jessop 2002). The
development of offshore is, clearly, an extreme example of this fragmentation,
with particular areas of territory being sectioned off to occupy a different

fiscal and legal environment altogether externalized from the space of the
nation-state in the classic sense.
However, as Jessop and a number of other writers have pointed out
over a number of years, the process of fragmentation and spatial redistrib-
ution has not been confined to processes of simple selective externalization
in the direction of global markets (Jessop 1991, 1993, 1999; Peck and Jones
1995, Tickell and Peck 1995; Jones 1997; Peck 1998). Rather, the state has
been forced, whether by the disciplining logic of globalization or the dis-
ciplining actions of firms and institutions of global governance, to restruc-
ture its internal organization to accommodate the sectoral needs of multiple
labour markets, investment trends and footloose capital.
The result has been the wholesale scaling back of the national
Keynesian welfarist solutions used by the industrial states to maintain
demand within domestic economies in the years of reconstruction after
1945 (Offe 1984; Pierson 1991; EspingAndersen 1996; Jessop 2002). The
function of the hollowed-out Schumpeterian state has shifted from one
where the primary function of government was to stimulate domestic pro-
duction for domestic consumption (with the state acting as both producer
and consumer of core strategic goods and services), to one where both
production and consumption operate beyond the managerial capacity and
competency of the state. As such, the strategies of the state itself have
shifted not only as regards what they do in concrete terms, but more sig-
nificantly in the long run, in terms of the basic goals they seek (Palan and
Abbott 1996).
As this implies, the normative dimensions of offshore as globalization
have become integral to the fabric of the capitalist state and, in the process,
certain structures and compromises particular to the nation-state have also
changed. This is to some extent a counter-intuitive presentation of the
dynamics of state form. After all, within the conventional fiction of the
nation-state, the law and the institutional forms it creates are generally con-
sidered to be the servants of the state. They may articulate the modes of
exception on behalf of the sovereign (Agamben 1998), but they are both
subordinate and reactive. We are arguing here that this has never been the
case other than within the conventional narrative of the state and, even if it
appeared to be so during the heyday of the nation-state form, certainly it is
no longer the case. Rather, we see the increasing predominance of particu-
lar legal formations specifically offshore as globalization being mobi-
lized to legitimize, enable, and in some cases force, changes in the nature
of the legal structure of the state. This in turn has the effect, often very sub-
tly, of altering the basic institutional fabric of the state with respect to its
social, economic and political functions and relationships. We should stress
that this is not an attempt to place the law above all else and develop
a crudely legalistic account of the contemporary state (albeit that the
prominence of lawyers in the current world order might seem to justify such
a view), but to identify the source of sovereign power in the more general
and fundamental sense (Agamben 1998).
Conclusion: the death of the social?
One of the primary consequences of the rise of the competition-state is clearly

the very concept of national social unity. This was, of course, always itself a
fiction, but one that nation-states have fought hard to maintain, sometimes
for laudable humanitarian reasons, and with generally positive outcomes in
terms of improvements in social welfare, education, health care and so on
the basic elements of the Welfare State. The shift of emphasis within the
competition state to the principles of the open, private economy over the
closed public society carries with it, therefore, significant risks for those sections
of national populations who continue to rely on the welfarist functions of the
state. Nikolas Rose eloquently sums up this epochal shift, both for its effects
on policy programmes and its implications for social theory:
shifts in policy appear to be paralleled in a shift within knowledge itself.

The approaches often unified under the term post-modernism, together
with a number of more local analyses, suggest that the object society, in
the sense that began to be accorded to it in the nineteenth century (the sum
of the bonds and relations between individuals and events economic,
moral, political within a more or less bounded territory governed by its
own laws) has also begun to lose its self-evidence, and sociology, as the
field of knowledge which ratified the existence of this territory, is under-
going something of a crisis of identity. (1996, 328)
Roses equation of the process of the fragmentation of conventional

social practices associated with the nation-state with the identity crisis of
sociology is important. What Rose is alluding to here is nothing less than
the disruption of the epistemological frame of the nineteenth-century state
(see also Palan 2003, ch. 6). It is notable that in Roses construction, not
only is the social fragmenting in an empirical sense, but equally importantly,
academic sociology (along with all the other less formal sociologies of the
press, politicians, economists and other keepers of the national flame) as
the ratifier (legitimator, configurer, narrator) of the social-as-national is
facing a crisis of identity. It is important to note that it is not the social
itself that is in crisis, albeit that it might be changing, but the formal narra-
tors and framers (the histors) of the social as national in the particular form
of the nation-state that are having problems. Again, we see the power of
framing and the contradictions that it throws up when confronted with
events that push back its own established boundaries of possibility. The
histors of the sovereign nation-state are currently in the unenviable position
of having to maintain a formal belief in the territorial state and faith in the
security and coherence of its boundaries, whilst at the same time accommo-
dating a praxis of sovereignty which is fractured, commercialized and
partial. Confusing times indeed for those still promoting the idea of one
nation under God!
So what is the state becoming in this process of fragmentation and rein-
scription? The concepts of the competition and Schumpeterian workfare
states provide us with a complex and sophisticated picture of certain
functional and theoretical aspects of the contemporary state. But what we
are after here are the normative dimensions of the state in the context of
globalization what the state ought properly to do in the context of the
stretched spatialities of globalization and exclusion. Seen in this light, the role
assigned to the territorial state is very clear it must act as the guarantor of
rights and the creator of infrastructure for the pursuit of private accumulation
on the part of firms and individuals. The fall of public man, famously
described by Richard Sennett (1986), has been accompanied, on this reading,
by a fall of the public state the domain of public engagement has been
atomized, individuated and commodified. This is not to say that the state
no longer performs a public role of any kind, rather that the goals of this
residual state are to act as guarantor of private ownership rights and to
maintain an adequate degree of social cohesion not as an end in itself, but
simply to enable competitive participation in flexible private labour markets.
The normative objects of the state are, therefore, those of the private economy
and, as such, the imagined community of the nation has increasingly been
supplanted by the imagined economy of the privatized state. The following
chapter considers the fate of those who no longer fit the new reality.
6
The Anti-Economy of Social Exclusion
Poverty, like beauty, lies in the eye of the beholder. Poverty is a value judgement;
it is not something one can verify or demonstrate, except by inference and
suggestion, even with a measure of error. To say who is poor is to use all sorts
of value judgements. The concept has to be limited by the purpose which is to
be served by the definition. (Mollie Orshansky, cited in Townsend 1979, 37)
In this world, shipmates, sin that pays its way can travel freely, and without a
passport; whereas Virtue, if a pauper, is stopped at all frontiers. (Herman
Melville, Moby Dick 1851)
There is a strong assumption in the debate on the competition state, an

assumption backed up by the various disciplining processes of the global
economy outlined above, that the whole of the national population will
somehow become competitive. It certainly ought to. For those advocating
the competition state, the transition from one state form to another appears
to be an easy one. Just as the whole population of the welfarist nation-state
were united in a common purpose, so the whole population of the market
state shares in the new common goal (Bobbitt 2002). So according to the
prophets of the competition state, the purpose of the state may have
changed somewhat, from notions of national unity and spiritual community
to individual and national competitiveness, but the basic role of members
of the national population is still to realize their individual responsibility
for the collective good. Indeed, for its advocates the move from somewhat
vague ideas of spiritual community to the much more immediate, individu-
ated and, therefore, realistic notion of competitiveness, represents a posi-
tive improvement.
But just as not all aspects of the national economy have been absorbed
into the realm of offshore, so the private economy of the state has its lim-
its. Despite the apparently easy logic of all this, which flows directly from
contemporary states willingness to internalize and normalize the narrative
of globalization-as-offshore, the practical consequences of turning the
nation-state into a competition state are more problematic. The reorienta-
tion of the state towards the norms of economic globality and domestic pri-
vatism have proved in practice incapable of accommodating all those whose
lives are still inextricably linked to an older state form and an older norm
of economic participation. Those that cannot or will not overcome the
The Anti-Economy 131
inertia of the past, those who cannot come up to speed with either the global
economy or the privatized state, find themselves consigned, in the new
language of globalization theory, to another realm; a place where the emergent
norms of the imagined economies of globalization do not, or do not yet,
apply. We call this space the anti-economy.
The anti-economy is an auxiliary imagined realm made largely of spa-
tial pockets located in the Third World, the countryside and the inner
cities, and inhabited by the poor and the unemployed. We call this space
the anti-economy, not because it is in any sense uneconomic or because it
lies beyond the physical boundaries of the national economy, or to suggest
that it is a marginal space on the contrary, it is part of the fabric of the
contemporary state. It is designated here as the anti-economy because the
emerging fa-s associated with globalization cannot accommodate these
people and places within the new global rules. On the contrary, such
people and places are consigned to a residual space as remnants of older,
obsolete norms of economic participation. They are, as Claus Offe puts it,
the non-integrable by-products of capitalist development having their
effects only as impediments, threats, and as ballast, without any longer
usefully contributing to the process of the creation of surplus value (1984,
41). However, these people and places are not simply poor, as they might
have been characterized in the past. Rather, they are now seen as excluded
to a largely independent and self-enclosed economy which can only be
explained with in the context of the three-tiered imagery of globalization we
describe in this book.
Despite being presented as a fundamentally economic phenomenon,
the most common way in which this space of archaic obsolescence is arti-
culated in the globalization debate is through the concept of social exclusion
that has emerged throughout the developed world and, increasingly, else-
where in recent years (Levitas 1996, 1998; Byrne 1999). The concept of
social exclusion represents a dimension of the contemporary fa-s which,
whilst immanent to constructions of globalization, offshore and the private
state, none the less tends to fall out of the overall picture. Social exclusion
is, therefore, often represented as a contingent and temporary condition a
problem to be overcome once the poor and the marginal come up to speed
with the new order.
This chapter describes those spatialities that are now considered to lie
outside the normative spaces of the offshore and private economies; spaces
which together comprise a putative domain of inclusion which Zygmunt
Bauman (1998b) labels, with deliberate irony, the universe of moral oblig-
ations. We trace the formation of a new form of social spatiality, the space
of social exclusion and/or underclass, wherein a fragmentary geography of
exception and marginalization is created within the territory of the state but
beyond the norms of the competitive society. Before going on to consider
the implications of this change, we consider the reasons why poverty and
the poor have been reclassified as the socially excluded in response to

narratives of globalization.
The necessity of social exclusion
If, as suggested above, the concept of social exclusion is an integral part of

the fa-s, what role does it play? How does it relate to the other imagined
economies? What, in Orshanskys terms, is the purpose it serves? There are,
of course, those who would argue that the purpose or function of social
exclusion (that is, the poor) is to provide for an endless supply of cheap,
exploitable labour for capitalist business (Byrne 1999). We doubt that. The
evolution of capitalism during the twentieth century placed an increasing
burden on the workers not simply as producers of manufactured goods, but
just as importantly, as consumers of goods and services. The willingness
and ability of national populations to engage in mass consumption, their
consumer confidence, is critical to the health of all contemporary capitalist
economies. Capital, this suggests, gains little from absolute poverty because
those utterly incapable of participating in the consumer society are by defini-
tion a burden on the state which, in turn through the tax and welfare
system, translates as a burden on profitability. Reducing or even eliminating
absolute poverty is, therefore, a logical capitalist goal.
Relative poverty, by contrast, is often seen as beneficial to the func-
tioning of capitalist economies all the more so as principles of inter- and
intra-regional competitiveness have been incorporated into the fabric of
national economies. Relative poverty is understood to create socio-
economic dynamics which encourage labour-market mobility and flexibility,
and to engender efficiency gains through productivity increases, lower costs
and enhanced profitability. Relative poverty, therefore, tells us little about
the actual consumption habits and capacities of the relatively poor, other
than that they are less compared to the relatively rich. Whilst measures of
relative poverty are significant with respect to developing norms of eco-
nomic participation and expectation within a given society (Townsend
1979), it has been strongly argued that they are of little use in determining
levels of basic need (Doyal and Gough 1991). It is against the backdrop of
the ongoing debate over the nature and meaning of poverty that we address
the process by which the poor have come to be rebranded as the socially
excluded. The purpose of social exclusion, in our view, is not simply mate-
rial in the narrow sense, but discursive. The development of the concept of
social exclusion, we argue, plays an important role in answering questions
concerning the centrality of people to the effective functioning of the com-
petition state.
Although the formal debate on the rise of the competition state
revolves around trade flows, rent-seeking, growth stimuli and so on, in fact
the entire edifice of the competition state, in theory and practice, is

concerned in a very fundamental way with human capital. This is true in
two senses. First, the automation of production, the increasing use of infor-
mation and communication technologies and so on, have not diminished
the world economys reliance on human workers, particularly in the high-
technology and service sectors. Consequently, without a properly competi-
tive domestic workforce to staff growth industries, the possibilities for
long-term investment sustainability are seriously weakened, if not impossi-
ble. Second, with respect to its own sustainability, the state itself needs
people. The rolling back of the Welfare State has not reduced the states role
either as its own major employer or as a major consumer of the national
product (Atkinson 1999). The internationalization of production has not
diminished the necessity of domestic consumption indeed the consumer
economy has replaced the producer economy in most advanced post-industrial
states (Bauman 1998b).
The central role of human capital in all this means that the fundamen-
tal task of the competition state is to attract the kind of jobs that raise over-
all standards of living, tax revenues and consumer spending. The primary
focus for the competition state is not, therefore, the management of territory,
but the management of people. It is, in the final analysis, individual citizens
who bear responsibility for the competitiveness of the national economy and
so, just as the state itself must submit to the logic and discipline of the open
economy, so must each member of the (working) population.
Human capital was, of course, important to the Keynesian welfare
state too indeed the whole point of the Welfare State was to maintain the
national workforce and to provide a safety net for those temporarily unem-
ployed due to transitional problems within the national economy. Full
employment was a central goal of Keynesian industrial policy, though less
for reasons of international competitiveness than in pursuit of the internal
market, social coherence and sustainability. Full employment, however,
recognized that a certain natural rate of unemployment was inevitable in
any economy, the rate being around 6 per cent of the population.1 The gen-
eral acceptance of this spare capacity in a production-based economy was
acceptable because the unemployed represented the reserve army of labour
(Byrne 1999). As such, the role of the state was to maintain this group in a
reasonable state of health and general well-being through a redistributive
welfare system, for the moment when their services would be required.2 As
such, the unemployed may have been temporarily outside of the labour
market, but were an integral part of the economy and society of the state
a degree of poverty was factored into the structure of the national state,
society and economy.
Within the competition state, by contrast, which is necessarily open
to the global labour market, surplus labour has become an expensive and
uncompetitive strain on the resources of the lean state. As the idea of the
open economy has taken hold, human capital has been examined more
carefully and discovered to consist of two separate groups: the included,
those contributing to the private economy of the state and, therefore, able
to reap the benefits of globalization, and the excluded, those who fail, for
one reason or another, to participate. Suddenly, it seems, the poor who
were always with us have become the poor we can no longer support.
The necessity of social exclusion, therefore, refers less to exclusion as
a condition than to exclusion as a narrative of social space: it is an exclu-
sion from the large body of human capital available to the competition
state a concept which in turn alludes to the probable solution to the
problem. The narrative of social exclusion lies, therefore, at an important
intersection between the politics of the Left and Right in the contemporary
world: to be on the Right today is to assume that a certain wastage of
human capital is absolutely necessary for the smooth functioning of a
modern economy. The Left, of the New Labour type at least, rejects such
characterization, insisting on viewing poverty and unemployment as an
unnecessary waste of human capital. Despite their contrasting standpoints,
both views are compatible with a contemporary fa-s based on the notion of
global competitiveness and are, therefore, an integral part of the internali-
zation of the logic of globalization into the social, economic and political
fabric of the state.
Here, however, we must be cautious because the concept of social
exclusion, like so many of the terms we have considered in this book, seems
to fare well when subjected to a reality check. The idea of exclusion in par-
ticular has been easily assimilated into the popular imagination (including,
of course, the policy imagination) as describing all too real experiences of
the contemporary world. We therefore need to examine the rise of the con-
cept carefully to understand the ways in which it has been incorporated into
the contemporary idea of the state.
The rise and rise of social exclusion
Social exclusion is a powerful concept which purports to encapsulate the

multiple, chronic and cumulative effects of social disadvantage
(Madanipour et al. 1998). Those advocating the concept, use it as a more
sophisticated way of describing poverty stressing its capacity to capture
the complex, dynamic and multiple characteristics of social marginalization
of which material poverty is only one (Silver 1994; Madanipour et al. 1998;
Levitas 1996, 1998; Byrne 1999; Hills et al. 2002). Unusually, the concept
of social exclusion has a remarkably well-documented history, its earliest
use being traced back to Max Weber, who saw exclusionary practices as
strategic actions used by different societal groups (Hills et al. 2002). The
more recent usage of the concept, however, is commonly dated from a
speech given in 1974 by Ren Lenoir, the French Minister for Social Action,
who referred to les exclus 10 per cent of the French population who he
claimed were existing beyond civil society because they were not at that
time covered by social insurance (Silver 1994). It is interesting to note how
social exclusion emerged more or less simultaneously with the concepts of
globalization and the competition state. At that point in time, in any case,
the excluded consisted of:
the mentally and the physically handicapped, suicidal people, aged

invalids, abused children, drug addicts, delinquents, single parents, multi-
problem households, marginal, asocial persons, and other social misfits.
(Silver 1994, 532)
Interestingly, given the subsequent history of the term, this list does not
refer to the unemployed or any other group whose exclusion might be
attributed primarily to economic deprivation. However, the broadening of
social exclusion to include economic deprivation happened very quickly in
response to rapid changes in the structure of the European economy and
society. The term was appropriated by the French Left to describe the ones
that economic growth forgot during periods of expansion (or, to use our
terms, the period of acceleration of the privatized-national economy), and
subsequently the growing numbers of the unemployed and the poor that
accompanied the recessions of the late 1970s and 1980s (Silver 1994,
5345; Hills et al. 2002).
The popularity of the concept of social exclusion developed through-
out mainland Europe alongside the massive social upheavals of the 1970s
and 1980s which transformed the social and economic structure of Europe
and, ultimately, the world as a whole. The oil shocks of the 1970s, succes-
sive recessions and the very rapid demise of much of the traditional
European employment base created pockets of severe deprivation and, for
the first time, permanent and intractable disemployment.3 For the worst-hit
of these areas, many of which were not strangers to difficulty in the past,
the elimination of the social and economic substructure brought about
unprecedented hardship.
As these problems spread throughout the industrialized world, so the
application of the concept of social exclusion proliferated rapidly. Already
part of mainstream national European policy debates, the term was expli-
citly adopted by the European Commission in the late 1980s (Room 1995;
Hills et al. 2002). Since then, it has become one of the major targets of social
and welfare policy at a European level. The first European Council of
Ministers resolution dealing directly with the problem of exclusion can be
dated back to 1989, followed by the 1994 White Paper on Growth,
Competitiveness, Employment: The Challenges and Ways Forward into the
21st Century (CEC 1994), which opened up the policy debate over how to
tackle what was seen as a growing problem. Since then, extensive research
programmes have been launched intended to better define the problem, to
identify best practice in resolving it and to shape policy.
In addition to being firmly established at a transnational level within
Europe, social exclusion has also been adopted by several international
organizations. UNESCO cites social exclusion as one of the main targets of
the Management of Social Transformation (MOST) programme and placed
the issue of social exclusion at the top of the agenda of the 1995 World
Development Summit (United Nations Research Institute for Social
Development 1995). The World Bank also joined in the fray, with its
President, James Wolfensohn, delivering a keynote speech outlining his
view of the challenge of inclusion at the Banks annual meeting in Hong
Kong in September 1997.
This very rapid proliferation of the concept of social exclusion has led,
unsurprisingly, to its application to an extraordinarily wide range of social
contexts and an equally diverse range of social problems. Notwithstanding
this diversity, in the course of this rapid proliferation the meaning of social
exclusion has tended to become increasingly consistent, coalescing around
three key themes: first, that social exclusion is primarily defined by eco-
nomic access; second and more specifically, that it is a consequence of
various aspects of economic globalization and is itself, therefore, a global
phenomenon; and third, that social exclusion is manifest globally at the
level of the local community. We will examine each of these in turn.
Social exclusion and the mainstream economy
The remarkable shift in the direction of the social exclusion debate from
broadly social problems to the primacy of economic deprivation was per-
haps inevitable. In the absence of more general quantitative social indicators
(social networks, family structures, civic participation, etc.), which are noto-
riously difficult to gather and do not necessarily provide sufficiently com-
parative data, it is hardly surprising that economic data should come to be
used as a cipher for social inclusion. Most states, after all, collate data
regarding income distribution, unemployment, prices, interest rates and so
on, giving them a readily available and apparently commonly understood
baseline measure for economic participation. This is all the more plausible
since there is an undoubted connection between material and social
well-being.
If that were not enough, the link between social exclusion and
economic inclusion is made explicit throughout the policy and academic
debates on the concept. The European White Paper on Growth,
Competitiveness, Employment, for example, expresses this point very
clearly:
Given the scale of the needs that have to be met, both in the European
Union and elsewhere in the world, recovery must be achieved by developing
work and employment and not by endorsing basically Malthusian solutions.
(CEC 1994, 3)
For Malthusian read welfare solutions. The White Paper goes on to

assert the EUs responsibility for remaining faithful to the ideals which
have come to characterize and represent Europe, of finding a new synthesis
of the aims pursued by society (work as a factor of social integration, equal-
ity of opportunity) and the requirements of the economy (competitiveness
and job creation) (CEC 1994, 3). The White Paper, therefore, explicitly
lays out a belief that the aims of society equate with the competitive needs
of the economy and, moreover, that traditional welfare solutions are not
appropriate to deal with the socially excluded.
In 1997 Michel Hansenne, the Director General of the International
Labour Organization (ILO), also laid out the connection between exclusion
and unemployment:
These phenomena [of social exclusion] are very often a reflection of exclusion
from the world of work (long-term unemployment, termination of unemploy-
ment benefits, poor level of training of young people and single women, etc.)
or precarious employment on the labour market (involuntary part-time work,
fixed-term employment, odd-jobbing). (1997, unpaginated)
Whilst Hansenne concedes that those in employment might also be subject

to the many pressures that can contribute to exclusion, his speech was almost
wholly oriented towards unemployment as the cause of, and re-employment
as the solution to, social exclusion.
To some extent, this development in theories of social exclusion is
entirely understandable. Unemployment is without doubt a very significant
factor in creating the conditions and processes collectively known as social
exclusion. It is also true that were many of those people described by the
concept to get paid work, the hardships they experience might be alleviated.
That said, to see employment as the only solution to social exclusion
represents a sweeping transformation in policy-making (Levitas 1996,
1998). Although other causes for exclusion are commonly acknowledged,
from around the mid-1990s unemployment is viewed as the single greatest
cause of social exclusion world-wide, to which the automatic solution is
assumed to be employment and that is where the link with the three-tiered
imagery of globalization is made.4
For all the empirical inaccuracy of this construction of social exclu-
sion (Levitas 1996), the equation of social inclusion with paid work and
economic activity is crucial to our understanding of the ways in which
a particular discourse of poverty is being integrated into the emerging
cartography of offshore and the competition state. Appeals to social exclusion

retain a residual conception of a coherent and solidaristic space of social
inclusion the space of citizenship in all its forms. However, the content of
that space, and by extension the defining quality of social citizenship within
it, is now defined in relation to the global economy. Civil society, therefore,
is no longer identified by a set of core values, rights and responsibilities but
by levels of access to, and participation in, opportunities in the mainstream
economy (Levitas 1996). As John Lovering has pointed out, the key dis-
tinction made in the mainstream debate over social exclusion is not between
exclusion and inclusion, but between exclusion and competitiveness
(1998, 35).
Social exclusion in the wake of economic globalization
Throughout the literature on social exclusion (and to a much lesser extent

that of globalization), the new problems and processes of exclusion are pre-
sented as consequences of globalization in general and economic globaliza-
tion in particular.5 This is not to suggest that the whole spectrum of social
problems and deprivations is claimed to have been created by globalization,
rather that the fragmentation of traditional social practices and structures
has added significant new dimensions to pre-existing problems. There are
several ways in which globalization is seen to have caused social exclusion.
The creation of transnationalized production networks has trans-
formed the relationship between workers and employers. One of the most
noted effects has been to bring local and regional workforces in the same
industrial sector into direct competition with each other for diminishing
employment opportunities in increasingly capital-intensive firms. This has
two main effects. First, those with jobs are in a considerably weaker posi-
tion with regard to their employers than in the past. Second, for those
people and places unable to compete for jobs and investment, the effects are
catastrophic. The closure of uncompetitive coal, steel and shipping indus-
tries in the higher cost countries of the developed world during the 1980s
created persistent mass unemployment in many areas, leading to extreme
poverty and rapidly declining populations (Beynon et al. 1994; Hudson and
Williams 1995; Dicken 2003). Whilst this process was originally manifest
mainly in the traditional industrial sectors, it is now also true of the most
advanced manufacturing plants. The North-East of England, for example,
which was devastated by the closure of coal, steel, ship-building and chemi-
cal plants during the 1980s, has experienced a renewed round of plant
closures during the 1990s in the high-technology industries that (partially)
replaced them (Beynon et al. 1994).
The dislocation of conventional political structures can also be seen as
a contributory factor in the development of social exclusion as a problem
distinct from poverty. The hollowing out of the state (Jessop 2002) in the
face of new structures of global governance and the increased salience of
localglobal interconnections (Amin and Thrift 1994) are widely interpreted
as having weakened conventional political structures and undermined
democratic accountability. Long a problem in the less developed world, the
issue of access to decision-making processes has become increasingly an
issue in the industrialized world as, on the one hand, political processes
have been privatized and, on the other, structures of conventional political
activity have been disrupted. So, for example, the capacity of national govern-
ments to legislate in favour of domestic markets has been limited by the
transfer of powers previously considered to be the remit of a sovereign
government, to transnational organizations, such as the European Union,
North American Free Trade Agreement (NAFTA), the World Trade
Organization and so on. The result is a democratic deficit between nationally
based systems of political representation and transnationally organized
structures of political authority.
The problem of cultural exclusion is seen in particular in relation to the
export by the industrial world of products associated with particular
lifestyles and values. The process of McDonaldization (Ritzer 1999) and
the development of other global products and media (Coca Cola, CNN,
Disney, etc.) have been accused of alienating people from traditional, indige-
nous cultural forms. This has also been identified in connection with the
changing pattern of labour employment brought about by the internation-
alization of production systems. As noted above (p. 98), over 90 per cent of
the 27 million people working in EPZ-based manufacturing plants are
women (International Labour Organization 1998). Women are preferred in
such plants because they usually command lower wage rates, are more pre-
pared to work part-time, are more flexible in terms of working hours and
conditions and are less unionized. The increasing feminization of local and
national workforces has obvious consequences for the nature of the family
in many parts of the world, since women generally retain responsibility for
child-rearing in addition to their paid work, but this has also been identi-
fied as the cause of a rise in domestic violence.
The greatly increased mobility of people as a result of lower cost and
quicker transport networks has greatly increased the intersection of cultures
through direct personal contact. The majority of such interactions comes
through the massive expansion of international tourism from countries of
the industrialized world increasingly to less developed parts of the world.
The tourist trade has been blamed for instances of social exclusion whereby
local people work for low wages and find their cultures commodified for
the consumption of holiday-makers (Urry 1990, 1992). There is also a
much more sinister side to this, with the rise of sex-tourism and the
exploitation of women and children by relatively wealthy men from the
industrialized world able to circumvent strict domestic laws (Castells 1998).
The importance of information technology in the workplace and more

generally in society in the north (and increasingly the south) has given rise to
intense forms of technological exclusion. The concentration of information-
intensive labour in the north has, as noted above, contributed to the cre-
ation of what Castells calls the newest international division of labour
(1996, 106) between the developed and underdeveloped worlds. Even
within the developed world, however, there are huge disparities between
different age groups, genders and geographical areas, in the level of access
to and skill in information and communications technology (ICT), hard-
ware and software.
There are, undoubtedly, other effects understood to have been caused
by globalization that are described as social exclusion in one form or
another. Our purpose here is not to be exhaustive. What we do want to
draw attention to, however, is the particular way that the link being drawn
between globalization and exclusion is made. Exclusion is generally seen to
be a consequence of economic globalization, but this is not presented as evi-
dence of any defect with globalization itself. On the contrary, as is so often
the case, globalization is presented as an externalized economic force to
which adaptation must be made. It cannot, therefore, bear responsibility for
its consequences. We have already explained that the image of externality
derives from the confusion of offshore for globalization. That sort of nar-
rative is now brought home, as the status of exclusion is accorded to those
who fail to keep up with the demands of globalization. It is, in other
words, presented as though their marginalization from a globalizing world
economy is their own fault! The more global you are, this implies, the less
excluded you are. This, in turn, has very important consequences for the
ways in which social exclusion are to be resolved, consequences that are
even more pronounced when we consider the local spatial scale to which
they are also routinely consigned.
Social exclusion and the local scale
Although the labour market and other circuits from which the poor are
understood to be excluded are national and, by extension, global, the point
of (re-)entry is almost without exception understood to be local. This is
in large part a result of the standard imagery of social exclusion
which ascribes to it a specific spatial scale: that of the local community or
neighbourhood.
At an empirical level, where the concept of exclusion is used in its
descriptive and analytic mode in relation to incidences of poverty and mar-
ginalization, this is quite understandable. The acute and compounded forms
of social and material deprivation that the term is used to describe tend to
be concentrated in particular geographical areas. Statistics produced from
analysis of the 1991 census for England and Wales, for example, support
the idea that the various processes considered as evidence of social exclu-
sion are indeed concentrated in specific areas (Dorling 1995). The figures
reveal specific concentrations of poor housing, unemployment and ill-
health. They also reveal that certain causes of premature death tend to be
concentrated in the same geographical areas, revealing both a very clear
northsouth divide in terms of life expectancy and a clear association
between poverty and illness (Dorling 1995: 160; Hudson and Williams
1995; Hills et al., 2002). As Madanipour et al. argue, various forms of
exclusion when combined, they create acute forms of exclusion that find
spatial manifestation in particular neighbourhoods (1988, 22).
As a consequence of this all too real geography of poverty and
marginalization, the word community has almost become a synonym for
social exclusion. As Hoggett notes,
For policy-makers and street-level bureaucrats within the state, the idea of
community has nearly always been used as a form of shorthand for the
socially excluded. (1997, 11)
As a result, and despite the widespread acknowledgement of the many

different aspects of social exclusion and the spatial complexity of its mani-
festation, the mainstream discourse of social exclusion tends to concentrate
solely upon the local scale as the most salient for its identification. Whilst
this is in part a consequence of the empirical evidence outlined above, the
localization of exclusion is also, and perhaps more powerfully, a product
of the particular way in which the term is couched. It is not possible, for
example, to consider an entire country or transnational region to be
socially excluded, since the term carries with it a particular spatial refer-
ence point society. Social exclusion, although presented as a problem
that is manifest globally and as a product of globalization, none the less
ends at the border of the nation-state. As the Czech gypsies who landed at
Dover in 1997, or the Moroccan emigrants who brave the crossing to Spain
have discovered (Khalaf 1999), one states socially excluded person is
another states economic migrant (Money 1997, 1999). This has the effect
of consigning the meaning of social exclusion to specific, sub-national areas
which in practice and discourse have come to be devolved down to the
lowest spatial unit. Hence, the entire debate about the causes and locations of
social exclusion, as well as proposed solutions to it, refers to local, ostensi-
bly geographically-defined, communities and/or neighbourhoods (CEC
1998a; Gittell and Vidal 1998; Levitas 1998; Madanipour et al. 1998;
Social Exclusion Unit 1998; Byrne 1999).
Perhaps the clearest expression of this comes with the way in which the
solutions to social exclusion have come to be presented both by grassroots
development agencies and non-governmental organizations (NGOs) and,
increasingly, by the institutions of national and international governance.

The identification of the local scale as an, if not the, appropriate starting
point for development and regeneration activities is far from new. As
Friedman (1992) notes with reference to the Third System proposals made
by the International Foundation for Development Alternatives (IFDA) in
the late 1970s,
Development is lived by people where they are, where they live, learn,
work, love, play and die. The primary community, whether geographical
or organizational, is the immediate space open to most people. It is the
village, the neighbourhood, the town, the factory, the office, the school,
the unions local, the partys branch, the parish, the sports club, the
association whatever its purpose that personal and societal development
first and best interact. (Friedman 1992, 34, emphasis in original)
Despite the stress laid by the IFDA documents on the multiplicity of scales
of intervention in development activity, of which the local was a very
important one, as time has gone on the development orthodoxy has come
to privilege the local scale above all others (Levitas 1998). As David Byrne
notes,
Community matters not just because it is the key collective identity consti-
tuted through space, but also because community development has been
just about the only strategy of empowerment attempted, however half-
heartedly and sometime [sic] with a view to disempowerment rather than
empowerment in the whole repertoire of anti-exclusion policy. (1999, 111)
The effect of this can be clearly seen in various established databases con-
taining details of anti-exclusion projects around the world. UNESCO, for
example, launched a database in 1994 as part of its Management of Social
Transformation (MOST) programme. The database consists of details of
more than 650 projects addressing the problem of social exclusion in such
disparate parts of the world as Germany, the UK, Brazil, the US, Finland,
South Africa, Belgium, Norway, Philippines, Venezuela, Colombia,
Argentina, Morocco, Australia and Turkey (UNESCO 1999). In 1999, the
European Commission established a similar database, Local Initiatives to
Combat Social Exclusion in Europe,6 containing best practice information
on over 600 individual projects drawn from all the member states of the EU
and covering a similar range of issues.
Despite the enormous range of different places, peoples and problems
included in these databases, their one constant feature is that social exclu-
sion is assumed to be manifest at a local level. Furthermore, by suggesting
that the local scale is also the most salient and, in practice, the only scale at
which social exclusion ought to be tackled, the possibilities for intervention
in poverty are similarly restricted. In the UK, for example, which established
a Social Exclusion Unit in 1997 to find ways to tackle this new problem,
the main policy statements are a National Strategy for Neighbourhood
Renewal (SEU 1998; emphasis added) and a New Deal for Communities
(DETR 1998; emphasis added). The result is that the policy discourse of
social exclusion has developed alongside a new localism (Goetz and
Clarke 1993) in which community rules (Levitas 1998).
As in the case of globalization, therefore, a primary outcome of the
rise of the discourse of social exclusion, itself constructed as a consequence
of globalization and manifest on a global scale, is a specific narrative of
localness. As Giovanna Procacci has put it:
Social exclusion describes a dual society (insouts), and in doing so con-

firms the break of social relations The kind of policies that social exclu-
sion has implemented are mainly characterized by turning social problems
into urban problems, where they take on a specific feature of urban struc-
ture, that is the replacement of inequality by segregation. Therefore, the
unique meaning of citizenship at work in such policies is local integration.
From this vantage point citizenship, or the lack of it, becomes a question
of sociability, at most a question of active animation, a culture, an iden-
tity, a set of behaviours whose frame is the urban location where the exclu-
sion takes place. (1999, p 245; emphasis in original)
The localness of social exclusion has tended to be accepted as a logical con-

sequence of the breakdown of conventional, national spatial forms. And
yet, in spite of all this interest in and promotion of the local, its meaning
and content tend to be left unexplored and undefined.7 Despite its routine
invocation with respect to social exclusion, the local is an elusive concept
that escapes precise definition (Sengenberger 1993, 314). Although the
local scale continues to be articulated in the language of conventional geo-
graphical categories as though its meaning were self-evident and trans-
historical in practice, localness has come to be identified in terms of relative
proximity of poor people in poor places to an ideal-typical construction of
the mainstream economy and the mainstream labour market. In this
manner, a particular narrative of local social exclusion has been configured
into the fa-s of globalization. There is therefore an important disjuncture
between the way in which locality is represented, which remains essentially
based on topographical, cultural and political features, and the content of
locality-as-exclusion, which is increasingly based on relative levels of
access to and participation in the global economy.
The presentation of the local and, above all, the community (used as
synonyms) as standardized units by, amongst many others, the European
Commission, World Bank, UNESCO and so on, is in fact only made possi-
ble by the institutionalization of this disjuncture. If locality is identified
according to its specific content as a place, with all its particularities, histories
and traditions, then it cannot be a standardized subject and object of policy.
If, on the other hand, locality and community are defined less in relation to
each other but against a universal and universalizing norm in this case the
global economy then they can be presented as disembodied socio-spatial
units which conform more or less to the norms of economic development,
regeneration, reinsertion, and so on (Amin et al. 2002).
Anthony Giddens version of the Third Way, for example, reproduces
precisely this kind of evacuated and standardized community, linked
directly to the process of globalization, and which he advocates as the prime
site for the creation of the new politics of his post-traditional society:
The theme of community is fundamental to the new politics, but not just an
abstract slogan. The advance of globalization makes a community focus both
necessary and possible, because of the downward pressure it exerts.
Community doesnt imply trying to recapture lost forms of local solidarity;
it refers to practical means of furthering the social and material refurbish-
ment of neighbourhoods, towns and larger local areas. (Giddens 1998, 79)
Again, we find globalization marshalled as an externalized fact, in response

to which a reorientation of political activity to the community is a neces-
sary adaptation on the part of the state. Although Giddens presents this as
a practical matter, regenerating real communities rather than using com-
munity as an abstract slogan, he none the less imports a normative abstrac-
tion all the same. Rather than seeking to recapture lost forms of social
solidarity (in other words, the specific character of places however much
they have been disrupted and/or destroyed), Giddens is seeking to reinvent
community precisely in relation to the exigencies of the normative hierarchy of
the global economy. Community in this context is not an abstract slogan,
it is an abstraction a normative prescription for what local places ought
to be like, indeed must be like, in the aftermath of the creation of a global
economy.
An intriguing aspect of the quite explicitly stated spatiality of the dis-
course of social exclusion is that while, as we have seen, the phenomenon
of exclusion is routinely ascribed to a particular spatial scale, social inclu-
sion is not. The normal state of belonging, conformity, citizenship, eco-
nomic participation and so on, is not described in territorial terms the
spatial articulation of social inclusion is assumed but never articulated
explicitly. Spaces of social inclusion, we must presume, consist of all those
other localities and spaces that are not characterized by exclusion.
As our tripartite scheme suggests, the spatial content of the anti-
economy, of social exclusion, is contrasted not with other territorial spatial
scales, but with the normative economic space of the global system the
placeless but none the less pervasive mainstream economies of offshore
and the Schumpeterian state. The locality of exclusion is thus of a very

particular kind. Excluded communities are rooted to redundant places that
have been abandoned by the economic mainstream, which operates not just
at a different territorial scale within the same national space (as the con-
ventional imagery of the nation-state would suggest), but as a different
form of socio-economic spatiality altogether.
Normative social exclusion
Through the increasing use of the concept of social exclusion by interna-

tional organizations, politicians and academics alike refer to extremely
different articulations of civil society and the result can be the erosion of the
concept as a description of particularity. As the concept of social exclusion
has been applied to an evermore diverse range of situations, it has lost its
precision. As Michael Katz (1989) noted some time ago in relation to the
discourse of poverty in the US, the relationship between the language of
difference used to describe the poor by academics and policy-makers, does
not necessarily stem from any close analysis of its real conditions.
In the case of social exclusion, its meaning within mainstream political
discourse has tended to become increasingly convergent, generalized and
reified as it has become more commonly applied. Although social exclusion
retains its potential as a descriptor of particular processes of poverty and
marginalization, this is not the way the term is now most commonly used.
As it has become increasingly dislocated from specific contexts by being
incorporated into national and international policy programmes, so it has
become a normative category of social existence social exclusion is not
presented as an evolving and complex process as it is in the academic
debate, but as a common problem requiring a common solution. Social
exclusion, therefore, is a debate wherein various empirical phenomena are
brought together as though they constituted a coherent problem.
In his analysis of the new poor, Zygmunt Bauman traces a process of
exclusion that emerges from explicit connections made between poverty
and criminality in the literature of the political Right and in the context of
the rise of consumerist lifestyles in the West. Criminality in this context
refers both to those literally criminalized by poverty in other words, those
with little choice but to turn to crime either to make ends meet, or to par-
ticipate at whatever low level in the consumerist dream but also the ways
in which poverty itself has come to be equated with criminality to be
poor is criminal (Bauman 1998b, 72), irrespective of the morality of the
individual.
By being discursively cast out of the normal life of the global economy,
the socially excluded have, in Baumans terminology, been subject to
expulsion from the universe of moral obligation (1998, 77). The poor and
the uneconomic have not, however, simply been expelled into an amorphous
void, and nor have the majority been imprisoned, at least not in the formal
sense.8 Rather, they have been consigned to a particular social category
social exclusion and processes of rehabilitation (retraining, etc.) which are
themselves confined to particular spatial scales the local, the neighbour-
hood, the community. These spatial categories are, in turn, constructed as
the spatial and historical opposites of globality. Since the all-pervasiveness
claimed for the global system allows for no territorial exception in conven-
tional terms, some other way must be found to express difference from an
emerging set of norms. The result is the deployment of the language of con-
ventional territorial spatiality, to differentiate between social groups accord-
ing to a set of normative, economic criteria of exclusion and inclusion.
Social exclusion as configural narrative
The idea of exclusion, whilst not always explicit, is a necessary aspect of any
definition of society (Johnson 1991; Madanipour 1998). Every society
involves an exercise in delimitation, the creation of an in and an out based
on complex combinations of institutions, traditions, languages, iconographies,
identities, religions, ethnicities, territories, laws, and so on. For that reason, the
pairing of social and exclusion might seem a little paradoxical, even tauto-
logical, at first glance. In fact, the rather curious nature of this pairing suits its
function very well since social exclusion seeks to identify a phenomenon that
is itself paradoxical. It denotes a space of exclusion within a society, a norma-
tive separation that places certain individuals and communities into a discrete
space that is simultaneously in the state but beyond the society as Lash
(1994, 133) puts it, not in but of civil society. What is at issue in terms of the
meaning of social exclusion, therefore, is not the existence or not of forms of
exclusion, but the particular ways they are articulated, the nature of their defi-
nition in relation to those deemed to be included and, if necessary, the nature
of any solutions. All of these are necessarily formulated within the parameters
of a particular image of civil society the fa-s.
Social exclusion is, therefore, first and foremost the signifier of a new
cartography: of the inner separation of something we used to think was
necessarily one. It therefore contributes to the vertical reconfiguration of
the spatial imagery of state we describe in this book, in a similar way to that
of offshore. In a parallel spatial shift, therefore, the competition state has
created two distinctly different spaces of exclusion. On the one hand, it
pretends that offshore is outside of it, as an external force of change over
which it has no control and to which it must adapt itself. On the other, the
peculiar localist discourse of social exclusion tells us that the state itself is
no longer a unity but contains spaces of radical difference all citizens may
be equal, but some are more equal than others!
That is not all. The popularized and globalized version of social exclusion
has managed to neatly conflate issues of social citizenship and economic
class. It incorporates the normative conception of the solidarist social whole
(even if not presented as a society as such), with an understanding that it is
defined in terms of differential access to material wealth. Civil society, in
other words, is redefined as a normative economic space. Despite the explicit
appeal to a goal of social integration, the debate has come, as we have seen
above, to be centred on levels of economic participation (Levitas 1996,
1998). The corollary of social exclusion, of course, is social inclusion, but
inclusion in what? In the competitive national economy.
Poverty as pathology the deserving and the undeserving poor
Just as the discourse of social exclusion can be interpreted as delineating the

boundary between the normative spatialities of exclusion and inclusion, it
also, as part of the same process, differentiates between the socially
excluded themselves. The shift from systems of welfare based on universal
provision to those based on localized, contingent and, ideally, temporary
provision makes this kind of differentiation inevitable. Some means must be
established to decide who remains eligible for welfare and those for whom
the only option will be some form of reintegration into the labour market.
Adopting the slogan, Work for those who can, security for those who
cannot (DSS 1998a, iii), as the New Labour government has done in the
UK, necessitates some means of distinguishing between the two.
The way that this differentiation is being achieved in practice is con-
troversial and complex. Although the details vary from country to country,
it inevitably involves some form of sorting mechanism whereby abilities and
resources are assessed, training is provided and advice is given. In the case
of the UK, for example, participation in the New Deal workfare pro-
gramme involves a preliminary gateway stage during which the particular
needs of the individual are assessed and a path through the various
programme choices is mapped (Peck 1998). The two elements of the pro-
gramme that are not negotiable are participation, which is compulsory on
pain of loss of all benefits, and destination, hence, in the case of the UK, the
programme is designated Welfare-to-work.
Whilst such programmes are intended to draw people out of the
welfare system who have no need to be within it, they also serve to redefine the
nature of poverty. As a number of commentators have noted, the primary
effect of such schemes is to recast poverty and unemployment as a pathology
of the poor themselves. As Byrne notes,
Social exclusion programmes predominantly centre on the rectification of

personal deficits through training. They are founded on a supply side notion:
if only these people could acquire the skills which the higher levels of the
labour market want of them, then everything would be fine. (1999, 128)
The idea that poverty and marginality are personal deficits implies
that those unable or unwilling to live up to the emergent norms of the
global labour market are in some way pathologically deviant. It also implies
that responsibility for becoming more employable lies in the first instance with
the unemployed themselves and not with the institutions of the mainstream
labour market from which they are excluded.
The wide range of organizations that seek to provide training and
other intermediary services between welfare and the labour market, thus act
as conduits through which the unemployed pass in the process of acquiring
the social and professional skills deemed appropriate for participation in
the new moral economy. Workfare schemes, therefore, contribute to the val-
orization and reification of the boundary between the anti-economy and the
mainstream and to the normative differentiation between the flexible and
potentially employable poor and the rest. The effect of the introduction of
workfare strategies in Canada, Brodie suggests, has been to reintroduce
into political discourse concepts such as the deserving and undeserving
poor and genuine versus non-genuine poverty (1996, 391). Strategies
of recasting welfare in this way, she continues,
signal a shift in the philosophy of welfare provision away from the protec-
tion of people who are either temporarily or permanently displaced by the
wage economy, to a new regime where retraining or participation in the
job market are conditions for social assistance. (1996, 391)
This is indeed the case but needs to be drawn out further. Retraining
and participation in the labour market are preconditions for temporary
social assistance. To qualify for long-term or permanent social assistance,
one must increasingly be able to demonstrate an absolute inability to work
either because of some form of severe disability or illness. Simply being
unemployed, whether or not there are jobs available in the area where you
live, no longer carries eligibility for social security benefits. Part of the pack-
age of incentives for the unemployed to adapt themselves to the emerging
moral order is thus the stigmatization of poverty as either criminality
(Bauman 1998b) or as disability.9
In the imagined economies of globalization, therefore, the unemployed
shoulder the blame for the failures of the labour market. Indeed, for some
economists there is no such thing as labour-market failure. Rather, it is
the failure of the unemployed, the inflexible and the static, to keep up with
the demands of the global labour market that causes unemployment. The
task of the localized, fragmented and intermediary welfare system is thus
stood on its head the purpose of the Welfare State moves from being one
of general social protection to being a highly selective combination of social

adaptation of the capable, minimal maintenance of the incapable and the
elimination of the criminal (Bauman 1998a and b).
Social exclusion as a new mode of poverty
The way in which discourses of social exclusion and globalization rearticu-

late the cognitive map of the contemporary state is to create a normative
distinction between a normal mode of economic participation and an
abnormal, deviant and/or criminal mode of economic barbarity.
Normality is associated with modern mobile capitalism which is suppos-
edly perfectly capable of providing for the good life. Abnormality is associ-
ated with pockets of poverty and any resistance to this image of the happy
consumer. As such, the bounds of existing society have been extended and
rearticulated. Through the increasing equivalence between social citizenship
and economic participation, we are forced to differentiate less between
different socio-economic classes, or even people and nations of different
societies; the distinctions are increasingly blurred and obscured by the new
international division of labour. We are encouraged, however, to make a
distinction between those able to join the mainstream economy at any level,
and those who cannot.
By the same token, we can also see in this re-articulation of the dis-
course of globalization a cynical reformist programme, aimed at lessening
the fiscal and administrative burden on the state without altering the basic
relations of production. Just as we have witnessed the progressive margin-
alization of traditional political radicalism, most recently in the rise of
New Labour in the UK but also throughout the past century in the US (Lasch
1970), so we have seen social change reconstituted as change in material
conditions and the progressive withdrawal of the state for reasons of fiscal
prudence and efficiency (Atkinson 1999).
In the age of globalization, the poor who were always with us, have
become the poor we can no longer tolerate except in extremis. The poor are
presented as inhabiting a series of local places across the globe that, marked
by the label social exclusion, lie outside of normal civil society. Their route
back into the amorphous space of inclusion that the rest of us inhabit is through
the willing and active transformation of themselves to conform to the dis-
ciplines of the market, since it is that which they are ultimately rejoining.
The competition state has been able to harness a mass of self-disciplining
individuals, who have managed to reorient their own sense of success and
self-worth towards competition: this is the world of the winners in busi-
ness, in the office, in politics, who definitely do not want to be associated
with losers (Lasch 1979). The poor, the excluded, the losers, can ulti-
mately extricate themselves only by themselves. In the new policy language
of empowerment, responsibility for that process of inner transformation

lies with the poor themselves who need to adapt, flexibilize, retrain and reskill;
they need to open up to the new reality, to raise their heads and understand
the values of the new society. This is not merely an economic programme, it
is, as Tony Blair has claimed, an ethic of responsibility (Blair 1997).
Of course, reality comes knocking. In the absence of the unsustainable and
uncompetitive Welfare State, the route through which the excluded are to
better themselves is increasingly confined to local and community-based
projects organized outside of and instead of state-funded and supported welfare
systems. Such projects, which in most instances are semi-privatized adjuncts to
the public sector (Amin et al. 2002) serve a number of different functions.
They serve as the conduit for those adaptable enough to escape this imaginary
realm of the anti-economy. But they also, crucially, serve to contain those who
cannot, those who fail to meet the standards of the new ethic of responsibility.
Their role as an alternative to the mainstream public and private sector
economies is all too often a means of providing a limited degree of local
poverty relief in a manner that reduces the political and fiscal risk to the state
and the mainstream economy, whilst at the same time relieving the private
sector of any responsibility at all, other than through the entirely voluntary
exercise of enlightened self-interest (Byrne 1999; Amin et al. 2002, 2003).
The ways in which localism and social exclusion are constructed, the
way they are written into the fs of the competition state and by whom,
affects their meaning, content and function. Far from being emancipatory
which was the original purpose behind the concept of social exclusion as a
more holistic descriptor of chronic poverty the way in which these con-
cepts have come to be configured, in theory and practice, can aid the
creation of localized socio-economic ghettos. The locally excluded are,
therefore, discursively confined to limited circuits of local social and finance
capital that maintain the appearance of growth, change and integration,
whilst at the same time reinforcing the boundaries of exclusion. More
importantly, perhaps, the spatiality of exclusion contained within contem-
porary policy narratives is contrasted to globality, presenting an image of
globalization not simply as an economic fact, but as a moral imperative.
It is a contingent after-effect of such discourses that the active globalizers of
offshore and the competition state need not bother themselves with the
socially excluded; it is simply not their responsibility.
The consequence of these complex processes is, as suggested above, the
production in the language and imageries of policy-oriented analysis of a
new mode of poverty. Just as the poor have always been with us, so the
means by which we, the non-poor and the non-excluded, define and con-
tain them, have changed. The discourse of social exclusion produces a par-
ticular normative geography of exclusion and poverty that, in casting the
poor out of the new moral order, the civil society of the global economy,
normalizes and reifies them.
This is perhaps best illustrated by a consideration of the explicit objectives

of the majority of anti- exclusion policies of the new social democratic
parties of the New Labour ilk. Although there are occasional references to
inclusion as the desired outcome (Wolfensohn 1997, for example), by far
the most common objective is not social inclusion, but social cohesion
(Leonardi 1995; CEC 1994; Hooghe 1996, 1998; Gibb and Wise 1998).
The pursuit of social cohesion falls far short of the goals of equity that char-
acterized the objectives of the post-war Welfare State. Rather than being an
attempt to resolve poverty in any absolute sense, the policy goal of social
cohesion is an attempt to achieve what amounts to an acceptable level
of poverty a level of poverty that does not pose a serious threat to the
privatized-national economy.
As suggested above, the way that social exclusion has come to be arti-
culated creates a division more invidious still than that between the deserv-
ing and undeserving poor. Rather, it divides the employable from the
unemployable, the undeserving from the pathological, the curable from the
terminal. The consequence of this is to transform poverty from being a func-
tion of the failure of national, let alone international, economies or polities,
to a function of the poor themselves. As such, a level and type of poverty is
achieved that cannot threaten the cohesion of the state. Not only are the
residual welfare recipients in the care of local community-based voluntary
organizations or social enterprises, and therefore unlikely to appear as an
excluded class with any form of common interest, but they are also inca-
pable, because of their personal deficits, of rejoining the labour market.
Poverty constructed in this way cannot threaten the legitimacy of the com-
petition state, since it is not a product of either the state or the economy.
The localization of poverty, therefore, is a process by which the poor
are disciplined, defined and contained. They are disciplined and diminished
by the new moral order of the global, which demands their incorporation
into the placeless spatiality of the mainstream economy. They are defined
by the articulation of the normative boundary between the anti-economy
and the mainstream. They are contained, since the localities they inhabit are
excluded from mainstream national and global circuits.
7
Conclusion
The names of such things as affect us, that is, which please, and displease us,
because all men be not alike affected with the same thing, nor the same man at
all times, are in the common discourses of men, of inconstant signification. For
seeing all names are imposed to signifie our conceptions; and all our affections
are but conceptions; when we conceive the same thing differently, we can hardly
avoid different naming of them. (Thomas Hobbes, Leviathan [1651] 1951, 109;
emphasis in original)
Drenched in data, fantasy becomes reality, because at one level, it is real.

(William H. Gass 1998, xiii)
Politics is, on some readings at least, the art of the possible. The problem
is, of course, that what is possible at any given time and place is limited.
There are, first and foremost, the familiar practical constraints on political
possibility the availability of resources, appropriate institutional struc-
tures, democratic mandates, issues of moral legitimacy, and so on and
these are real enough. However, these are the practical limits particular to
the internal functioning of existing political systems. Beyond these there are
other, more subtle if equally powerful limits, and they have to do with what
is taken to be common sense, normal, even thinkable, at a given time
and place. This is what we have described in this book, after de Certeau, as
the fa-s: a constitutive bounded discursive space defining the political field.
There is, therefore, an important difference between two forms of power,
constituting and constituted:
if one really means to give the distinction between constituting power and
constituted power its true meaning, it is necessary to place constituting and
constituted power on two different levels. Constituted powers exist only in
the State: inseparable from a pre-established constitutional order, they need
the State frame, whose reality they manifest. Constituting power, on the
other hand, is situated outside the State; it owes nothing to the State, it
exists without it, it is the spring that no current use can ever exhaust.
(Georges Burdeau, quoted in Agamben 1998, 39)
Constituting power appears as if it springs from nowhere and is produced

and controlled by no one in particular this is what Burdeau means by
Conclusion 153
outside the State. But, as we have tried to demonstrate in this book,

constituting power is not some mysterious or mythical force that exists
wholly outside of our influence. On the contrary, it is a power palpably felt
and familiar to anyone seeking a change in the status quo.
The first hurdle faced by a radical political programme of any sort is to
try to reframe the debate, to change the very nature and boundaries of what
is taken to be common sense and it is always the biggest hurdle because it
involves the rewriting of foundational narratives. Yet it can be done. This
was, for example, the hurdle faced by the bourgeoisie in the seventeenth
century, by feminists in the late nineteenth century, by environmentalists,
anti-racists and gay liberation movements in the twentieth century, and so on.
To effect changes in the constituted power of the state, all of these various
movements were aware, however liminally, of the need to alter the dimen-
sions of the prevailing constituting power expressed as common sense. At
one time common sense decreed, for instance, on the basis of what appeared
as ample historical and empirical evidence, that the place of women was in
the home and in the kitchen. The feminist movement had to challenge the
existing fa-s of their days; that dimension of social space that, opens a space
and provides a foundation for the operations of the military men, diplomats
or merchants who dare to cross the frontiers (1974, 124). Indeed, even after
more than a century of feminist activism and its many successes, women con-
tinue to be confronted by the invisible yet tangible barriers of common sense
gender constructions. Our collective narratives, for all their partiality and
empirical fragility, their inconstancy as Hobbes puts it, nevertheless constrain
us and we all willingly accept that constraint to a greater or lesser degree.
But how has a common sense understanding of globalization been
framed, configured? And how does this shape policy and institutional
change? As we noted at the outset, these questions tend to be overlooked
by the vast majority of studies of globalization, most of which are essen-
tially prescriptive. They seek to answer undoubtedly important, practical
questions concerning what is feasible and desirable under conditions of
globalization, but globalization itself as a particular narrative of constitut-
ing power does not come under close critical scrutiny. Globalization is still
understood as something that is taking place out there (or by them which
amounts to the same thing) and the task of the theorist is to report its history
and form as faithfully as possible. The fact that this reporting on globaliza-
tion induces action and institutional change, and that it is, therefore, nar-
ratives about globalization and not the abstraction of globalization itself
which provide the empirical foundations of the debate, seems to have been
lost. The result is inevitably limited to the conceptual and empirical bound-
aries of globalization itself globalization is treated, in other words, as
though it were a domain of constituted power.
This book is different, in that it develops a theory of the particular
manner by which the cognitive space of common sense which contains
what is considered possible and desirable in the age of globalization is

articulated. We have demonstrated how, within a series of evolving config-
ural narratives, all of which have histories of their own, globalization and
social exclusion combine to form a meta-narrative about the contemporary
state, producing a new distribution of socio-economic spaces and velocities.
We have also demonstrated how these imagined economies have to a cer-
tain extent become self-fulfilling prophecies they have been written in
ways acceptable to their own prescribed conclusions. It is therefore, we
argue, impossible to account fully for the development of the socio-spatial
concepts of globalization and social exclusion and their associated practices
and institutions, without paying attention to the relationship between
processes and narratives.
Few would argue that the perspective that presents globalization as a
homogenous planetary force, a force external to state and politics, a force
of market integration driven by technology, is factually wrong. However,
what is of far greater importance, from our perspective, is the extent to
which any attempt to understand globalization (or any other complex
social concept) in purely phenomenological terms fails to account for the
powerful narratives at work. Indeed, such approaches generally fail to realize
that phenomenology itself is a narrative a claim that we can somehow
know the world without any form of reflexive glance. Such approaches
cannot, therefore, account for the power of the narratives of globalization
and social exclusion in shaping perspectives on what is possible, desirable or
thinkable. Precisely because of their constraining power, however, the crude
images of business globalization cannot be ignored in spite of their many
inaccuracies. They cannot be ignored because they contain an extraordinarily
subtle and powerful narrative about what is to be desired, striven and fought
for in the contemporary world, and what is to be forgotten, condemned and
contained. This, in turn, has a more or less direct impact on what is actually
done in a world governed by inconstant names.
As we have seen in the context of Michael Bonsignores observation
that all bets are off (p. 2), the difference between fantasy and reality is a
matter of degree of drenching the former in data to produce the latter.
The narrative of globalization as an homogenous, planetary force, is sup-
ported by data from the offshore economy which, notwithstanding that
it is largely misappropriated and misinterpreted (in other words, is
a narrative in its own right), provides ample plausibility for the political
programme of no alternative constructions of global inevitability. The
elision of offshore and globalization has thus helped to reconfigure (or
emplot, to use the language of configural narratives) the reorientation of
state policies away from goals of full employment and national unity to
goals of global competitiveness.
The empirical data of globalization (offshore) has, therefore, only
served superficially as an argument about the decline of the state. Examined
Conclusion 155
as a configural narrative, as we have argued, it can be seen to have

reinscribed the state as the competition state. Under the terms of the emerg-
ing fa-s, the competition state must discipline itself and, more specifically, its
human populations, to accommodate the new principles of competitiveness.
Far from withering away, therefore, the meaning and function of the state
runs throughout globalization as a narrative of socio-spatial difference
because it is primarily upon the terrain of the state that this narrative is
understood to impinge. Moreover, however much it has been eroded, the
state still provides security, legal infrastructures for example, the law
of contract, the granting of title education, health and all other pre-
competitive support required for the smooth functioning of todays economy.
But as it does so, it reduces its un- or, worse, anti-competitive interventions
in the functioning of the market. Despite appearances and common
assumptions, this covert narrative accepts that the state is not inimical
even to the more extreme ends of the business globalization debate, but is
in fact written into them. The very fact that offshore is elided with globali-
zation to lend it plausibility and legitimacy means that the very strong
theory of the state already implicit in the idea of the shore is an integral
part of the foundational narratives of globalization. This is why debates
on national industrial policies and the competition state are, in our view,
concomitant with and not, as many assume, subsequent to the globalization
debate and the rise of the offshore economy.
This central focus on the unequal relationship between state and globali-
zation, however, left a gaping hole in its wake a gap noticed and soon
filled by the new common sense. It is no accident of history that, just as
the concept of globalization began to be articulated in the 1970s, primarily
among business and cultural theorists, ideas about the nature of poverty
and poverty eradication as social exclusion also started to emerge. The
crisis of the state very rapidly became a crisis of the Welfare State, which,
in due course, became a crisis of welfare itself. The crisis of welfare has, in
turn, become a crisis of and for the poor. Since the logic of the competition
state demands that (a) inclusion in the imagined economy of the (national)
private economy is a prerequisite for success and (b) that this simultane-
ously precludes the resolution of poverty by the public purse, the only
course left open the common sense political possibility is the radical
redefinition of poverty itself to neutralize its demands and dilute the threat
it poses to competitiveness. The new Durkheimian hegemony (Levitas
1996) ushered in by the narrative of social exclusion has achieved this,
drenched as it is by the local data about poor people in poor places.
Narratives of social exclusion have been bolstered by empirical evidence
used to lend credibility to the assertion that the poor are no longer merely
poor, but are different (Byrne 1999). The conception of cultures of
poverty, which was common in the 1980s, has been deepened by a narrative
of poverty as individual pathology or criminality. This further marginalizes
people and places already on the edge of survival and creates invidious
distinctions between the deserving and undeserving poor.
Not, of course, that any of this was laid overtly at the door of globali-
zation. With one or two notable exceptions, the narratives of globalization
and social exclusion have existed in splendid isolation. There may be an
argument that certain aspects of social exclusion are after-effects of globali-
zation (for example, in exacerbating the gap between rich and poor in and
across national boundaries), but strongly localist theories of social exclusion,
for all that they posit exclusion as a global phenomenon, do not really
implicate globalization itself. By the same token, the formal globalization
debate has never factored in a concept of poverty. Although coeval, the two
narratives have, it seems, developed quite independently of each other
they tell different stories about different worlds.1
But far from being a contingent afterthought, the question of poverty
as a form of exclusion is integral to the new grid of meaning; the contem-
porary fa-s. At the same time that the state has been re-inscribed in the
image of globalization, so the poor have been re-inscribed within the new
imagery of the competition state. From being the poorest participants in
the great national journey, and therefore the responsibility of the state, the
poor have increasingly become a retarded element in the great journey of
globalization. Globalization is a dynamic, modern, forward-looking and
cheerful dimension of contemporary society, while social exclusion is static,
archaically local, pathological and generally miserable.
In these circumstances, it is difficult to expect the likes of Tony Blair
or Gerhard Shrder to contemplate any other solutions to the problem of
social exclusion, other than programmes of inclusion into the private
national economy itself understood as the rational and inevitable response
to globalization or offshore. A radical departure from that sort of paradigm
is, at the moment, practically inconceivable. And yet, and this is the para-
dox of political fa-s, very few, particularly among the experts on poverty
and social exclusion, truly believe in the efficacy or long-term benefits of
their programs.2 No one truly believes that poverty and marginalization,
north or south, will be eradicated by some process of local social inclu-
sion. Far from it.
So we are pushing for programmes we do not believe in, not because we
do not care about the poor, nor simply because of a lack of sufficient will
to provide the enormous sustained resources required to make even a dent
in the lives of the poor on earth. Rather, we are pushing for them because
the true cost of not attempting these programmes would be to admit to seri-
ous doubts about the entire image of the global economy. Policies towards
poverty and social exclusion, therefore, cannot be understood in isolation;
they are part and parcel of the fa-s of the day. It is not the case, as some have
argued passionately, that the poor are the victims of globalization, but it is
the case that social programmes for dealing with poverty and, indeed, the
Conclusion 157
very idea of a society that supports such programmes, are the victims of
globalization. They are now increasingly articulated and pursued to the
extent, and only to the extent, that they offer support for neo-liberal
globalization. That is the power of narrative.
Paradoxically, then, the modern fa-s inverts one of the dominant
metaphors of globalization, that of the archipelago economy of offshore. This
image of offshore which parades its peculiar geography as one of its great
innovations has been joined by another parallel archipelago economy; that
of the socially excluded. The rise of the concepts of both offshore and social
exclusion has relied crucially on narratives of spatial difference. However,
both have ended up employing the language of conventional topography to
describe social spaces at opposite ends of the normative spectrum of economic
globalization. Offshore describes different places both in territorial terms
(EPZs) and in juridical terms (Euromarkets) which are diametrically opposed
to the local places of poverty inner-city estates, shanty towns, rural villages,
etc. The crucial difference between these two discourses of place, of course, is
that one is understood to represent the future and is to be embraced, while the
other, in representing an obsolete past, is to be eradicated.
And that eradication is not only to be pursued in the interests of globali-
zation so as not to compromise the competitiveness of its active and
dynamic participants but through the extension of globalization. The
growing gap between rich and poor world-wide is, it seems, no reason to
pause to reflect on the uneven effects of globalization world-wide. Rather,
since exclusion is a state of insufficient globality, the answer to poverty is
the further expansion of the offshore and private economies, in the certain
hope of eradicating the anti-economy.
If this seems far-fetched, listen to a tale of inclusion told by one of the
chief histors of globalization, World Bank President James D. Wolfensohn.
In 1997, Wolfensohn gave a major policy speech in which he highlighted a
new theme for the Bank: The Challenge of Inclusion. Wolfensohn began
his address by describing a visit he had made to a Brazilian favela to see
first hand how the poverty and squalor of the area was being tackled
through the provision of running water and sanitation. Not surprisingly, the
speech describes the important positive effects of the provision of clean
water for some of the worlds poorest and most marginalized people. This
was not, however, the main point of Wolfensohns story. More important
than the direct benefit of sanitation, was the vigour with which the women
living in the favela were waving their water bills at Wolfensohn as he toured
the area. The reason that they were displaying these bills with such enthu-
siasm, at least according to the vice-governor of Rio de Janiero who accom-
panied Wolfensohn on his tour, was because this is the first time they have
been included in society. With that receipt they can get credit to purchase
goods, with that receipt they have recognition and hope (Wolfensohn
1997). Wolfensohn concludes from this encounter,
As I walked back down the hill from that favela, I realized that this is what
the challenge of development is all about inclusion. Bringing people into
society who have never been part of it before.
The way the word inclusion is used here is important. First, it is used
without definition as a self-sufficient descriptive noun. As such, the ultimate
goal of inclusion is apparently so well known and understood that it
requires no name or specification: the excluded will simply be included into
it. The second striking thing about Wolfensohns story is that what counts
as inclusion in society is less the alleviation of the immediate problem of a
poor water supply, that is, improved relative access to social goods, or any
significant change in the structure of the relationships between people
living in the favela themselves, or between them and their local or national
authorities. What counts is access to the global credit economy secured
on the back of payment for basic amenities. As a place, the favela remains
the favela a marginal and impoverished locality, albeit now with the
undoubted benefit of running water. But the major spatial shift here is that
the occupants of the favela have been brought to the threshold of the for-
mal private sector economy and therefore, according to Wolfensohn, within
reach of the space of social inclusion. What will give the favela spatial
meaning and social inclusion, therefore, will be its (necessary) ultimate
absorption into the private sector economy of Brazil and, simultaneously,
the global (offshore) economy of credit and banking.
The favela as presented by Wolfensohn in many ways represents the
fundamental change that is taking place as the fa-s of globalization becomes
ever more fully integrated and normalized in the contemporary state.
Favelas, shanty-towns, refugee camps and all the many other impromptu
and temporary settlements housing the poor and the marginal throughout
the world are, at root, conventional horizontal spatial responses to hard-
ship. They are formed when the established spatial relations and structures
of peoples lives are disrupted or destroyed. To that extent, they are entirely
rational and, in many cases, life-saving spatial shifts. But moving in territo-
rial space in pursuit of a better life is no longer enough if, indeed, it ever
was. Simply moving closer to a site of wealth and the promise of prosperity
and peace does not make it happen. As the women of the favela seem to
have discovered, courtesy of the World Bank, a simultaneous vertical shift
is required that has nothing to do with the ground on which they stand. They
have not been brought nearer wealth just because they can get physically
closer to it. They must accept, it seems, the reality of economic globality
and with that reality the disciplines of competitiveness that it demands.
There is simply no other choice.
But is there? As we have argued at various points throughout this book
globalization, and by extension social exclusion, are empirically dubious
propositions. Their significance seems to lie less in their proveability than
Conclusion 159
in their plausibility, their normalization. This is because their concrete

existence cannot be established in any conventional empirical way that is,
as demonstrable, observable, replicable facts. Their only existence, there-
fore, comes in the form of common configural narratives, stories produced
and consumed about the world which allow us to live our lives. These nar-
ratives are not complete, or true, or real, in any absolute sense, but are
fragmentary and fluid accounts of daily life which nevertheless conform
closely enough to a reality check to be taken as though they were. What
Wolfensohn unwittingly narrates in his account of the favela is precisely the
moment at which the configural narratives of the lives of one group of
socially excluded people are altered. They were probably unaware that they
were excluded until this point (they probably thought they were just poor
and exploited), but their tickets to the global credit economy, their water
bills, change all that. Written into their bills is the narrative of inclusion and
with it the narrative of offshore, the competition state and exclusion.
What, then, does this say about contemporary political possibilities?
Does it mean that now that we are aware of and can be reflexive about the
nature of narrative configuration, we can simply re-imagine a different way
of life construct at will a different geography of power to that represented
by the imagined economies of globalization? Unlikely. As argued through-
out this book, the fa-s is not merely a product of narratives and performances
to the extent that they can be easily rewritten. Rather, it consists of those
narratives people are willing and able to invest time and resources in, which
of course presumes that they have those resources in the first place. All bets
may be off for the CEO of a transnational corporation who can reflexively
indulge his (and his shareholders) fantasies, but this is not the case for the
women of the favela above, or indeed, for the vast majority of the worlds
population. As Scott Lash asked with some exasperation, in response to argu-
ments by Beck and Giddens about the self-construction of life narratives,
outside of the sphere of immediate production, just how reflexive is it

possible for a single mother in an urban ghetto to be? [J]ust how much
freedom from the necessity of structure and structural poverty does this
ghetto mother have to self-construct her own life narratives? (1994, 120)
The answer, of course, is very little indeed. Despite this, the many propo-
nents of local solutions to local exclusion continue to argue, more in
hope than expectation, that local empowerment and/or the creation of
local social capital will somehow resolve problems of global poverty
(Amin et al. 2002).
Does this mean, then, that these imagined economies are so firmly
embedded in our collective consciousness as well as in our institutions and
daily performances, that we are trapped? Has the discourse of no alterna-
tive finally come true?
Within the dominant discourse it is certainly very difficult to see any

other possible solution being contemplated. Not because, ironically,
poverty is a contingent after-effect of globalization and therefore not its
(our) responsibility but because narratives of globalization already contain
the theory of social exclusion. Globalization, as we have seen, relies for its
meaning on an acceptance of an image of the world economy operating at
different speeds. Since social exclusion is written into this imagery since it
is immanent to the narrative it becomes difficult to articulate a plausible
theory of poverty and poverty reduction without challenging the entire off-
shore and private economy matrix upon which the discourse of globali-
zation is built.
Given the pervasive nature of the contemporary fa-s we would seem to
have very little room for manoeuvre. The realm of the political seems to be
tightly confined within the parameters of that which is acceptable to the
narrative of globalization. It is perhaps nave, therefore, to expect our
politicians (even those nominally on the political Left), industrialists,
financiers, economists, academics, and all the other power-brokers of con-
temporary globalization to be able to argue their way out of the dense
thicket of configural narratives they have done so much to help create.
Much the same is also true, however, of those who, in Bourdieus words,
perform the bulk of the labour of representation of globalization. As
argued in Chapter 3, perhaps the greatest strength of the contemporary fa-s
is derived from the fact that its normalcy its plausibility is reproduced
by countless small, incidental performances on a daily basis by the man in
the street. It is those of us who are already one step ahead of the women
of the favela those of us, in other words, who are already locked into
national and global credit and banking networks in almost every aspect of
our daily lives who do most to reproduce the fa-s.
But does this also open up new political possibilities? At the time of
writing, the members of one of the United States most powerful pension
funds, the California Public Employees Retirement System (CalPERS), are
attempting to use their power as an institutional investor to force the Tyco
Corporation and other expatriated firms to relocate their finances to the
US. Tyco, a Cayman Islands-registered TNC with manufacturing and com-
munications operations throughout the world, is effectively being called to
account by its shareholders. At stake is the very meaning of corporate gov-
ernance, since the CalPERS fund is insisting that Tyco management do their
bidding in the interests of current and future pension-holders. Specifically,
they are demanding that Tyco abandon its offshore fiscal location and repa-
triate itself, its profits, and its regulatory and social responsibilities to the US.
Whatever the outcome of this particular battle, it illustrates that there
are at least cracks in the edifice of globalism even if for the present only
open to the wealthier of the Wests pension funds. Small comfort, perhaps,
for the socially excluded. However, it does at least indicate the possibility
Conclusion 161
of collective action and with it an effective collectivist narrative that runs

against the grain of the imagined economies of globalization. As we, along
with many others, have argued in this book, we cannot return to older
forms of social organization older stories and older narratives. But we can
perhaps see the possibility of alternative narratives even within what seems
to be an all-embracing and all-consuming meta-narrative of globality.
Perhaps the most important lesson to be learned from the immense power
of the narrative of globalization, therefore, is not that it is entirely theoreti-
cally and empirically secure, but that it is partial, fragmentary and fluid and
that those who currently benefit most from it have little or no idea of how
it actually functions.
Notes
Introduction
1. In fact, one of the important functions of academic analysis has long been to tell
us how to establish this reality check by distinguishing which methodologies
are useful in describing social reality.
2. It is not, of course, without its problems and dangers. The scandals concerning
Enron, Worldcom, Quest, Andersen and other corporate failures reveal both
how prevalent and how fragile a system based on discounting the future can be.
In these cases, creative accounting practices were fraudulently used to convince
investors and shareholders that future earnings would cover current capital
deficits.
3. There are, of course, nations without states and multi-national states: both
types are defined, however, as exceptions to the rule, discovered in the very
practice of normal nation-states.
4. As Hegel puts it: The nations are the concepts which the spirit has formed itself
(1975, 51). On the concept of the nation as an epic journey see Fichte (1981)
and Schnapper (1998).
5. The worth of individuals is measured by the extent to which they reflect and
represent the national spirit, and have adopted a particular station within the
affairs of the state as a whole the individuals morality will then consist in
fulfilling the duties imposed upon him by his social station (Hegel 1975, 80).
This sentiment is most famously enunciated in John F. Kennedys oft-quoted
exhortation to the US nation, And so, my fellow Americans: ask not what
your country can do for you ask what you can do for your country (Inaugural
Address, Washington DC, 20 January 1961).
6. Though it should be stressed that the largely exogenous processes by which, for
example, post-colonial fiscal states were created was very different from the
slower endogenous processes at work in Europe. That the fiscal state form
informed the creation of these national economies does not mean that it was
fully replicated.
7. Such debates have not, of course, entirely disappeared but still echo loudly
through, for example, deliberations on the wisdom of membership of the
European Union and the single currency.
8. However defined, globalization is not entirely global, by which we mean that
the processes associated with globalization do not present themselves in equal
measure throughout the world. A good proportion of humanity is touched by
globalization only in a mediated and indirect way. See Palan and Abbott (1996,
ch. 7).
Notes 163
Chapter 1
1. For a sophisticated account of the epistemological pitfalls see MacLean (1999).

2. As Marx and Engels put it in the Communist Manifesto, The ruling ideas of
each age have ever been the ideas of the ruling class (1998, 59).
3. Mainstream approaches draw heavily on the hypothetico-deductive methods of
the natural sciences. These are characterized by Pierre Bourdieu as objectivism:
set out to establish objective regularities (structures, laws, systems of relation-
ships, etc.) independent of individual consciousness and will (Bourdieu 1990).
4. At the time of writing (March 2003), for example, HSBC is advertising itself as
The Worlds Local Bank deliberately exploiting the idea of a global pres-
ence backed up by local knowledge. Without the common acceptance of the
existence of the global economy, and by extension of a process of globalization
to which even individual bank customers must adapt, this kind of representa-
tion would be meaningless.
5. See also the highly critical discussion of the localist and communitarian agen-
das of the anti-globalization movement developed by Hardt and Negri (2000,
426) and again in Bauman (2002, 19). See also Peck and Tickell (2002).
6. See also the chapter Mixed Constitution in Hardt and Negri (2000 ch. 3.5
pp. 30424).
7. Negri, for example, wrote his contribution from a Roman jail, where he is serv-
ing a sentence for alleged Leftist political terrorism in Italy during the 1970s.
Chapter 2
1. For an excellent summary of this tradition see Colebrook (1997).

2. Bourdieu develops a similar argument in his account of Language and Symbolic
Power, in particular in the capacity of the possessor of authorized language to
effect what he calls the social magic of being able to create social realities
through particular modes of institutionalized enunciation (1991).
3. In making this argument, Ricoeur makes much of the etymology of history in
both French and German as the narration of a story.
4. This is, of course, the charge levelled at the Cambridge school contextualists like
Skinner and Pocock (1975).
5. For a similar view see Hayden Whites (1999) defence against the charge of nave
relativism and, especially, Clifford Geertzs account of anti-anti-relativism (2000).
6. Here we can see a clear and unambiguous link between evolutionary institu-
tionalisms concept of path-dependency and post-structuralism. For discussion
see Palan (2000).
7. Whether these are Marxist or not is another matter. To our mind, they are in
fact all too often no more than a parody of Marxs thought.
8. For an extended analysis of what makes certain political ideas powerful and
others not see Debray (1981).
9. A given policy response may be claimed to be a reaction to an external and

objective stimulus, but the path then followed by the policy-maker in question
is one determined internally, based on his or her subjective determination of
the reaction to that stimulus which best suits their expectations, interpretations
and aspirations of and for their own future. But even in this highly simplified
and artificial model of a single external stimulus leading to a direct policy out-
come, the apparently rational calculation made by the policy-maker falls far
short, as the more sophisticated observers of rational choice have understood,
of the expected separation of theory from reality. Even in the case of a stimu-
lus wholly external to the policy-maker, his or her consumption, interpretation
and reactions to it are mediated through pre-existing structures of knowledge.
In the case of much more complex and subjective stimuli, and the pro-
nouncements around globalization and social exclusion fall firmly into this
category, we must take into account at least two sets of bodies of knowledge.
On the one hand, those producing the stimulus in our case those describing
the facts associated with the concepts do so through the filters of their own
perceptions, experiences and interpretations and within the social and sym-
bolic constraints of language. On the other hand, our policy-maker must then
receive and interpret material that has already been interpreted prior to its
consumption. In other words, instead of assuming a simple linear process:
Data Theory Interpretation
We are in fact in a recursive loop:
Interpretation Data Theory Interpretation
Even this is a simplified model since it presumes a significant, if not complete,

separation between the producer and consumer of social knowledge. In prac-
tice, and certainly in the case of the bear-pits of debate on globalization and
exclusion, academic and policy dialogues take place at many levels and on
many scales simultaneously, with no clear separation between the producers
and consumers of social knowledge.
10. Paul Feyerabend develops similar arguments with respect to earlier debates
between Aristotelians, Galileo and Copernicus concerning the rotation of the
earth, its relationship to the other planets of the solar system and particular
constructions of reason in Against Method (1974). See also Motooka (1998)
for the construction of the rationalist narrative, and Dodd (1994) for the
relationship between money, reason and the state.
11. A critical analysis of the discourse within which the would-be critic is wholly
implicated is problematic to say the least. As Bourdieu notes with regard to the
power of what he called authorized language, breaking through the bound-
aries framing debates, particularly if they become accepted as common sense,
is a momentous task:
Heretical discourse must not only help to sever the adherence to the world of com-
mon sense by publicly proclaiming a break with the ordinary order, it must also
produce a new common sense and integrate within it the previously tacit
or repressed practices and experience of an entire group, investing them with the
Notes 165
legitimacy conferred by public expression and collective recognition.

(1991, 129)
12. For an extended and extraordinary discussion of the issues surrounding repre-
sentation, resemblance and mimesis, see Goodman (1976) and White (1999).
13. For a useful collection of essays on the analysis of space by a number of social
theorists see Crang and Thrift (2000).
14. It is, moreover, a spatial category which, as Foucault demonstrated, is a rela-
tively recent arrival in history, despite the prevalent assumption that modern
conceptions of individuality are and always have been fundamental and
immutable.
15. See above p. 423.
16. From the outset, therefore, we can make a firm prediction: any clear and univer-
sally acceptable definition of the global and globalization will prove to be every
bit as clear and universally acceptable as those of the nation and nationalism!
Chapter 3
1. In fact this diagram could be rendered more generally to describe the process of
the production of any form or objectified social reality.
2. This is not to deny an empirical base to the spatial forms of both the national
state and the putative global system. We have no problem with the argument
that prior to the development and consolidation of the processes that are now
understood to constitute globalization, social, cultural and economic life, par-
ticularly for industrialized states, had been organized on the basis of a national
territory. Within such a territory the state, in the form of the legislature, execu-
tive and judiciary, held sovereign power over the entire population extending to
clearly delineated boundaries. The nature of historical narrative construction, as
we saw in the previous chapter, requires empirical and archival evidence. We
are saying, however, that the conception of the national-economy is in many
subtle ways more modern than suspected. The concept of the nation-state that
we discover in the globalization debate is a new modern conception overlaid
by the emerging conception of globalization and vice versa.
3. This time period, tellingly, is never specified too clearly in the literature. Does the
process of globalization last ten years? Twenty? Or a hundred? The failure of the
mainstream debate to find an agreed start date for globalization, despite strenu-
ous efforts to trace various processes back in time, is in part a consequence of the
pervasive misunderstanding of the constructed nature of the narrative.
4. This is not to suggest that globalization is merely a matter of disembodied dis-
course a figment of the collective imagination with no real substance.
Whatever their causes, there are clearly changes taking place in the contempo-
rary world which, whilst not necessarily creating a global system in any absolute
sense, are clearly making the world take on, at the very least, a more global
character. However, we cannot make sense of this global character by reducing
it to the empirics of globalization (24 hour markets, dispersed production
systems, etc.) any more than we can by reducing it to text. We therefore need
some system by which we can embrace both the empirical claims made about
globalization and at the same time set them in the context of developing
processes of discursive epistemological framing.
5. Wood does not herself necessarily buy into this seductive imagery. But she
summarizes well, in our view, a particular set of contentions.
6. At the time he wrote this, Petrella was both a Professor of Political Economy
and Director-General of the Forecasting and Assessment in Science and
Technology (FAST) Programme for the European Commission. In short, his
views on globalization mattered!
7. The sign, as Ernst Cassirer argued, is no mere accidental cloak to the idea
(1955, 86).
8. For example, writing about Italys economic and political weakness compared to
England in the early nineteenth century, Friedrich List ([1844] 1885) noted that:
She supplied all nations with manufactures, with articles of luxury, and with trop-
ical products, and was supplied by them with raw materials. One thing alone was
wanting to Italy to enable her to become what England has become in our days,
and because that one thing was wanting to her, every other element of prosperity
passed away from her; she lacked national union and the power which springs
from it. (p. 5; emphasis added)
9. The famous TINA of Margaret Thatcher: there is no alternative.

10. Claus Offe (1996) developed a very similar argument with respect to the mobiliza-
tion of modernity to create, in his terms, The Utopia of the Zero Option.
11. A more developed critique of the nave localism of the Third Way and other
communitarian theory can be found in Amin et al. (2002). See also Frazer
(1999); Hardt and Negri (2000); Levitas (1999) and, especially, Rose (1998).
12. As Hardt and Negri put it, This [localist] view can easily devolve into a kind
of primordialism that fixes and romanticizes social relations and identities.
What needs to be addressed, instead, is precisely the production of locality,
that is, the social machines that create and recreate the identities and differ-
ences that are understood as the local (2000, 45; emphasis in original).
13. They are also from suspiciously restricted gender, class, national, ethnic and
cultural groups (us two again!)
14. We recognize, of course, that the protesters in question are by no means an
homogeneous group and that many of them would utterly reject each others
readings of globalization. This, if anything, however, strengthens the point that
a common sense of opposition has developed to such a degree that such dis-
parate groups can appear to be talking with one voice.
15. See also Dicken et al.s (1997) very useful discussion of the roles played by the
boosters and hypercritics of globalization.
Chapter 4
1. As expressed, for instance, so well by a Susan Strange article Wake Up Krasner!

The World Has Changed (1994).
Notes 167
2. By narratives here, we are of course referring as much to narratives embodied

in institutions and practices as to those articulated in formal debates.
3. For a much fuller and more detailed account of the various dimensions of the
offshore economy see Palan (2003).
4. The Bank of England used English common law to argue that it could not
extend regulation over the new market. Unlike Continental law, in English law
any prohibition must be clearly specified. Except where such prohibitions are
spelled out, the government takes no view on whether a particular activity is
against the law or not. Since financial operators are particularly innovative,
they are able to push back the boundaries of the legal by developing new
practices not specifically prohibited under existing UK law. Law is made
through test cases in which the government takes particular operators to
court essentially to establish the nature of the law. For discussion see Burn
(2000).
5. The Interest Equalization Tax Act was formally signed by President Johnson
on 2 September 1964, and was made retroactive to 18 July 1963. The IET did
not apply to bank loans generally but was extended in 1965 to cover such
transactions. In 1966 Congress enacted the Foreign Investors Tax Act which
allowed certain important tax benefits to foreigners making portfolio invest-
ments in the US.
6. This rather controversial interpretation is found in Helleiner (1994) and
Kapstein (1994).
7. The other best known example is Hong Kong.
8. Although the term the British State must be approached with care. The British
government as represented through the Treasury knew little about the
Euromarket. The Bank of England apparently knew more, but kept that away
from the British State. For discussion see Burn (1999, 2000).
9. Other forms of offshore include Flags of Convenience states who offer easy
registration, low or non-existent taxes, and no restrictions on the nationality
of crews. By transferring a ship from a genuine national register to a Flag of
Convenience, ship-owners can escape taxation, health and safety regulations
and interference from trade union organizations. There are also e-commerce
forms of offshore (Palan 2003).
10. Financial systems provide other contributions, including, allegedly, resolving
the risk preferences of individuals and companies (Carmichael and Pomerleano
2002, 1). But this aspect does not occupy us here.
11. We are referring to the apparent sudden emergence of the debate of globaliza-
tion in different disciplines in the late 1980s and 1990s, giving the impression
that globalization is some new, fashionable concept.
12. There are particular historical reasons for the adoption of this discourse of
shores, not least the practice starting in the 1960s of locating pirate radio
stations on boats in international waters to evade national broadcasting
restrictions. For a fuller account of the origins of this imagery see Palan (2003).
13. Baudrillard gets closer than most, however, with his conception of the
mediascape.
Chapter 5
1. The concept of the idea of the nation-state is developed in the work of

Dominique Schnapper: it is the internal logic, or the idea in the Kantian
sense of the term of the nation that I will attempt to analyse here (Schnapper
1998, 1). She quotes Raymond Aron, who says: : The nation holds as its prin-
ciple and final end the participation of all the governed in the State. It is in
order to participate in the state that all minorities demand the recognition of
their language to deny the modern nation is to reject the political advent of
the eternal claims of equality (Schnapper 1998, 3).
2. This is by no means a new or novel theory. Schnapper, like many others, has
noted that we are witnessing today a weakening of public spirit and political
bonds (1998, 1). We seek, however, to place this debate on the changing
nature of politics within the context of global political economy and the puta-
tive imagery of globalization.
3. Cf. also Lovering 1998.
4. These ideas originated prior to Adam Smith, with John Locke and mercan-
tilist economists who distinguished between the sort of industries that con-
tributed to the commonwealth and monopolies that added nothing. The
commonwealth was the sum of individual product, hence contribution to the
wealth of the commonwealth was the measure of required societal support.
The distinction turned on the means by which a person becomes rich. If he gets
riches by virtue of special or exclusive privileges of manufacture or merchan-
dising granted by the sovereign, then his riches are a deduction from the com-
monwealth without a corresponding contribution on his part. But if he became
rich by the activity of manufacturing, merchandising, retailing, importing com-
modities from abroad, or producing crops on his land, then his private wealth
was equal to his contribution to the commonwealth (Commons 1961, 27). In
later writing, the commonwealth was replaced by capitalism, and government
intervention in the economy was viewed with suspicion.
5. London International Bank Offer Rate the generally agreed international
standard lending rate.
6. One of the clearest expressions of this was the desire on the part of the more
powerful states in Europe to create overseas colonies and empires. The stimu-
lus behind European imperialism was as much one of economic, as political or
ideological competition.
7. Dickens Global Shift (2003) contains probably the best overall account of the
changing structure of trade in the context of globalization. See also Castells
(1996).
8. For discussion see Fagerberg (1994).
9. Other influential texts include Prestowitz (1988), Reich (1991), Thurow
(1992) and Tyson (1992).
10. For example, the Internet started life as DARPANET, a communications tool
designed for the US Department of Defense to survive nuclear attack. The role
of Stanford University at the heart of Silicon Valley is well documented.
Notes 169
11. The EU operates both as a competitive environment for its member states and
as a competitive actor in its own right. The attractiveness of gaining access to
the entire EU market by locating in a member state has been a considerable
draw for investment from both the US and East Asia. As many have pointed
out, however, the EU has failed to open up all of its markets, most notably
agriculture, to the rigours of the world market. To that extent, therefore, and
this can also be seen with recent efforts on the part of the US to protect its steel
industry, there are still considerable political limits to the competition state.
12. Third and voluntary sector organizations in the UK, which are increasingly
being looked to as sources of competitive, growth-oriented activity for pur-
poses of regeneration, are specifically prevented by their funders from engag-
ing in any activity that might be deemed proper to the private sector (Amin
et al. 2002).
Chapter 6
1. Economists in fact introduced a theory to support the image of friction: the

NAIRU, the non-accelerating rate of unemployment. The NAIRU is a derivation
of the Phillips curve, itself a central component of modern macro-economics. The
Phillips Curve (Phillips 1958) represents the relationship between the rate of
inflation and the unemployment rate. A.W. Phillips argued that there was an
inverse relationship between the rate of wage inflation and the rate of
unemployment in the United Kingdom from 1861 to 1957. When unemployment
was high, wages increased slowly; when unemployment was low, they rose
rapidly. His ideas were then used in policy-making to demonstrate a trade-off
between unemployment and government stimulation of the economy. The more
a government would try to stimulate the economy, the tighter the labour market
is likely to be, which in turn would lead to inflation. Governments therefore had
to balance out the goal of a low rate of unemployment with the goals of low infla-
tion. That theory was than criticized by Milton Friedman and Ned Phelps, both
of whom argued that labour anticipates government policy and hence inflation
and government stimuli of the economy are discounted. There was, therefore, no
inverse relationship between inflation and unemployment, but in fact, with some
time lag (debated by economists) inflation always ends up contributing to higher
unemployment. Friedman made a distinction between a short- and-long-term
Phillips curve, arguing instead that there was something like a natural rate of
unemployment in the economy. These ideas were then modified and instead of
the notion of natural rate, economists accepted that the exact natural rate would
tend to vary over time and under different circumstances. They argued instead
for the non-accelerating inflation rate of unemployment, or the NAIRU.
Under the guise of a sophisticated theory allegedly constructed from economic
history, economists advance, therefore, a theory that maintains that a certain
degree of unemployment is absolutely necessary for the smooth functioning of
a competitive national economy.
2. As was the case, for example, when the building up of the war economies in
Europe and North America in the late 1930s finally soaked up the persistent
unemployment that had been produced by the Depression.
3. That is, the permanent withdrawal of employment from certain areas with little
or no prospect of renewed investment.
4. See, for example, several of the essays in Gual (1996), particularly those by
Gual, Drze and Layard, all of which are predicated on the assumption that the
only solution to unemployment is job creation.
5. Although the policy and academic debates over globalization and social exclu-
sion have developed largely independently of each other (not least because they
tend to be ascribed to different academic disciplines and/or government depart-
ments), they are widely understood to have a one-dimensional, contingent
relationship.
6. See http://locin.jrc.it.
7. Of the ten essays that appear in Goetz and Clarkes analysis of The New
Localism (1993), for example, none feels it necessary to venture any analysis of
the meaning of locality itself the nature of the local as a spatial category is
simply assumed.
8. Though see Wacquants (2002) account of the massive incarceration of young
black men in the US, for an example of the degree to which real prisons are inte-
grated into the general spatialization of social exclusion.
9. In the UK, the long-established practice of transferring the long-term unem-
ployed from employment to disability registers is one manifestation of this.
Initially used to mask high levels of unemployment in older industrial areas, it
quickly became established as a means of delivering long-term, low-level wel-
fare in a manner that would not undermine the competitive appearance of par-
ticular places. New Labour has, more recently, begun to chip away even at this,
however, by insisting on medical evidence to support long-term disability
claims.
Conclusion
1. The degree to which this is the case comes close to home. Our original title for
this book included the phrase social exclusion. This, we were told, was unac-
ceptable because it would severely limit the market for the book. Globalization,
we were informed, is marketable, social exclusion is not. Apparently it belongs
to a different story that no one wants to hear. Our apologies, therefore, if,
having thought you were buying a book simply about globalization, you are
offended by our insistence on discussing poverty!
2. Witness, for example, the massive gulf between development spending tar-
geted at social exclusion throughout the world and defence spending targeted
at maintaining the security of Western capital. In the case of Iraq, for example,
Notes 171
the West generously allows it to trade oil for food in other words to use its
own resources to deal with hunger but happily supplies unimaginable quanti-
ties of munitions, soldiers and other military material in the name of regime
change.
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Index
accumulation, 17 de Certeau, M., 11, 46, 66, 72, 834, 878, 111
advertising, 34 Debray, R., 4
Altvater, E., 27 denationalization, 8
Americanization, 39, 80 deterritorialization, 8
Anderson, B., 64, 66 dirigisme, 115
anthropology, 59 disemployment, 135
anti-capitalism, 3, 30, 81 Durkheim, E., 65
anti-economy, 16, 17, 19, 13051
anti-globalization, 17, 21, 30, 356, 81, 107 Easton, D., 14
anti-poverty programmes, 156 economic migrant, 141
Archibugi, D., 32, 33 economists, 84
Asian Currency Union (ACU), 94 Empire, 412
emplotment, 61, 71
Bank of England, 94 environmentalism, 153
Banking Act, 94 Euromarket, 913, 95, 101, 113;
banking, 34, 158 British Government and, 92
Bauman, Z., 12, 145 European Commission, 135, 142, 143
Blair, T., 52, 150, 156 European Union, 139
Bobbitt, P., 111 everyday life, 22
Bonsignore, M., 2, 154 Exchange Control Act, 94
borderless world, 17, 27, 73 excluded, the, 20, 135
Bougnoux, D., 44 export processing zones (EPZs), 18,
boundaries, 80; conceptual, 11 978, 113, 139
Bourdieu, P., 8, 44, 46
bourgeoisie, 153 fa-s, 658, 111, 114, 123, 131, 134,
Braudel, F., 74
143, 146, 150, 15660 passim
Bretton Woods, 14
favela, 1578, 160
Brodie, J., 148
feminism, 153
Burdeau, G., 152
fiscal state, 13
Bush, G.W., 523
Fordism, 11213
business globalization, 2730, 41, 154
Foreign Exchange Market, 94
Byrne, D., 142
forgetting, 11, 20, 834, 102
Foucault, M., 46
California Public Employees Retirement
Freud, S., 8
System (CalPERS), 160
Friedman, J., 44
Canada, 148
future, 9
capitalization of future earnings, 9, 10
Cassirer, E., 65
Garten, J., 1
Castells, M., 149
gay liberation movement, 153
Castoriadis, C., 46, 86
geographies, 20; critical, 59; of economies,
Channel Islands, 97
societies and polities, 21, end of, 27;
chronology, 61, 71
of exclusion, 141, 150; literary, 64;
City of London, 94, 97
regional, 120; scales, 55
cognitive map, 15, 16
Germany, 119
Colbert, J., 115
Giddens, A., 81, 144
Colebrook, C., 489
Gill, S., 38
Commons, J., 9
Gills, B., 35
communitarianism, 37, 79; and the
global constitutionalism, 38
Third Way, 81
global political economy, 7
community, 37, 81, 107, 140, 1434
globality, 17
competition state, 17, 10916, 126, 130,
globalization, 1, 6, 8, 10, 17, 21, 26,
146, 155; and civil society, 149
3245, 46, 51, 547, 74, 80, 1235;
constructivism, 30, 34
conflated with capitalism, 36; conflated
consumption, 20, 132
with offshore, 98103, 154; conspiracy
corporations, 1; and globalization, 2
theory, 35, 82, 90; culturalist
cosmopolitan democracy, 32, 33
approaches to, 26, 29, 402;
Cox, R., 48
discourses of, 20; as external, 80, 100;
credit, 34, 158
as false consciousness, 34; as fa-s, 658;
Index 185
globalization, cont. Lake, D., 31, 35, 37

and global culture, 76; Gramscian language, 39; authorised, 44, 49, 84
approaches to, 26, 29, 3740; histories Lash, S., 19, 27, 159
of, 10; mainstream approaches to, 26, Law of the Sea, 93
2934, 89; Marxist approaches to, 26, Lefebvre, H., 46, 601
29, 347; methodological individualist Lenoir, R., 135
approaches, 31; as myth, 27; narratives Levitas, R., 19
of, 19, 29, 34, 72; no alternative, 36, literary theory, 59
81, 102, 159; normality of, 22, 857; localization, 21, 81
wave theory, 2530; as objective fact, 2, Lovering, J., 138
86; politics of, 21; as practice, 41;
predicted, 10; and social science, 65; Mann, M., 27
as story, 3; techno-economic, 7677; maps, 63, 83
and time, 579; time-space Marginalists, 14
compression, 34, 100 market state, 109, 111, 123, 130
glocalization, 82 Marsden, R., 38
Goodman, N., 47, 58, 65, 86 Marsh, D., 26
governance, 18, 142; deficit, 31; global, 21, 76 McDonaldization, 39, 139
government, 18 metaphor, 8, 21, 73, 75, 80, 102;
governmentality, 41 naturalist, 77; physical, 78
Gramsci, A., 37 Mexico, 113
Greenblatt, S., 46 Michalet, C.-A., 26
Milan, 21
Hankiss, E., 434, 66 Mink, L., 58
Hansenne, M., 137 modernization theorists, 14
Hardt, M., 42 Morretti, F., 64
Harvey, D., 46 myth, 3, 43, 657; of identity, 8
Hay, C., 26
Hegel, G.W.F., 6 narrative, 9, 11, 21, 29, 32, 43, 4651, 79,
hegemony, 37 83, 1534, 157; construction, 4, 6, 8,
Held, D., 33, 756 10; as empirics, 29; framing, 5165,
hermeneutics, 59; and space, 60 76, 80, 107; and institutional change,
Hines, C., 21 25; narrative function, 48, 61, overt
Hirst, P., 27, 90 and covert, 10; plausibility, 50; social
histor, 47, 85, 157 exclusion as, 146; spatio-temporal, 6988
historiography, 8, 43 narrativity, 848
Hobbes, T., 5, 6, 153 nation, the, 12, 14; building, 13, 72;
human capital, 133 population, 130
national economy, 12, 14, 72, 79
identity, 20, 33 nationalism, 13, 37
imagination, 86 nation-state, 8, 74, 769; borders of, 62;
imagined community, 15, 64, 77, 105 contemporary, 68; crisis of, 10, end of,
imagined economies, 8, 15 27; idea of, 12, 15, 56, 108; myth of
Interest Equalization Act, 93 15; origins of, 13; reflexive, 12;
International Banking Facilities, 935 regulatory spatiality of, 18
International Criminal Court, 21, 32 Negri, A., 42
International Foundation for Development neighbourhood, 140
Alternatives (IFDA), 142 New Growth Theory, 11819
International Labour Organization (ILO), 137 new social movements, 3
International Monetary Fund (IMF), 96, 114, 124 New Trade Theory, 11718
international relations, 5, 48 Newton, I., 53
international trade, 14; theories of, 11423 Nixon, R., 119
internationalization, 80 non-governmental organizations
Islam, 10, 52 (NGOs), 141
isolationists, 15 North American Free Trade
Association (NAFTA), 139
Japan, 119, 122; steel industry, 120
Jessop, B., 22, 1267 Offe, C., 131
Johannesburg, 21 offshore, 1619, 89108, 110, 126, 146,
journalists, 34 157; and narrative, 1037; and
sovereignty, 1003, 108
Keynes, J.M., 14, 101 Orshansky, M., 132
Kirby, K., 62
Krugman, P., 117, 122 Parsons, T., 14
Kuhn, T., 68 Peck, J., 81
performance, 29, 46
labour market failure, 148 performativity, 848
Laing, R.D., 7 Petrella, R., 738 passim
Plato, 46 society, 7, 19; normal, 19

plausibility, 4, 8, 29, 50, 72 sociology, 59
policy analysts, 34 Soja, E., 60
policy-makers, 9, 34 Soros, G., 102
political economy, 40 sovereignty, 14, 15, 74, 79, 105;
politics, 1523 commercialization of, 11011;
Porter, M., 121 end of, 27
Post-Fordism, 121 space, 56; cognitive, 20; of exclusion and
postmodernism, 43 inclusion, 131; framing of, 5963;
Poulantzas, N., 12, 46 imaginary, 7, 23, 74; literary, 64;
poverty, 20, 80, 13051; as criminality, metaphor, 62; normative, 18, 54; and
148, 1556; as pathology, 1479 offshore, 99, 1045; planetary, 79;
power, 31, 35, 48; constituted and production of, 60; proliferation of, 75;
constituting, 152 and the self, 33, shores, 1034
practice, 8, 856; and credibility, 87 socio-economic, 15, 1467; sovereign
private economy, 1619 territorial, 8, 55; spatiality, 7, 20, 55,
privatization, 18, 39, 110, 119 60, 106; and trajectory, 71
Procacci, G., 143 speech, 5
profit, 9 speed, 1057, 160
proscription, 23, 704, 104 Starchild, A., 95
psychoanalysis, 43 state, the, 17, 62, 103, 107; crisis of, 109,
113; disciplined, 123125; Fordist, 35;
racists, 37 hollowing out of, 139; institutional
rationality, 9 adaptation to globalization, 18, 31,
reflexivity, 6, 7, 49, 84; as instrumental 1269; post-national, 10914; spaces
resource, 19, 159; and state, 12 of, 72; spatial fiction of, 105;
relativism, 43, 47 trifurcation of, 1520
religion, 66 story-telling, 9, 10; communal, 25
retroscription, 23, 704, 103, 104, 106 Strategic Trade Theory, 11921, 124
rhetoric, 25, 69 surveillance, 17
Ricardo, D., 115 Sutherland, P., 124
Ricoeur, P., 4, 4751, 71, 85, 88, 106 symbolism, 34, 44
Rio de Janeiro, 157
Rose, N., 128 tax havens, 958
Rosenberg, J., 55, 79 teleology, 57
territoriality, 61, 65, 71
Sahlins, M., 46 theory, 25
Sayer, A., 3 Thompson, G., 27, 90
Schnapper, D., 12 time, 57; compression of historical, 10;
Schumpeterian Workfare State, experiential, 71; framing of, 579;
109, 1258 social, 58
Schutz, A., 6 Tul Karem, 513
Seattle, 21, 41 Tyco Corporation, 160
semisphere, 434
Sennett, R., 129 unemployment, 131, 137, 148
Shaw, M., 32 UNESCO, 136, 142, 143
Shrder, G., 156 United States, 31; federal government, 92;
simultaneity, 61 September 11th 2001, 52
Singapore, 94 universalists, 15
Smith, A., 112, 115
social cohesion, 151 Veblen, T., 9
Social Exclusion Unit, 143 velocity, 15, 104, 1057
social exclusion, 8, 19, 21, 46, 51, 547, Virilio, P., 60
13051, 154; and competitiveness, 138;
cultural, 139; as economic, 136, Weber, M., 134
13740; and globalization, 13840; Welfare State, 112, 1269, 130, 1334, 148
literary, 64; local spatiality of, 1719, Westernization, 39
1405, 157; normality of, 22; White, H.D., 101
normative, 145; political, 1389; and Wolfensohn, J., 2, 136, 1578
technology, 140; and time, 579; Wood, E. M., 27, 73, 75, 78
tourism related, 139 World Bank, 2, 114, 124, 136, 143
social inclusion, 17, 1579; as mode of world economy, 12, 14, 20
poverty, space of 18, 56, 144, 146, World Trade Organization (WTO), 21,
155; social, the 19; death of, 19; 81, 124
framing, 635; reality, 51

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the imagined

angus cameron & ronen palan

Angus Cameron and Ronen Palan 2004

First published 2004

Apart from any fair dealing for the purposes of research or

SAGE Publications Ltd

SAGE Publications Inc.

SAGE Publications India Pvt Ltd

British Library Cataloguing in Publication data

A catalogue record for this book is available

ISBN 0 7619 7210 2

Library of Congress Control Number available

Typeset by C&M Digitals (P) Ltd., Chennai, India

1 Perception, Representation, Theory Construction

2 Performative Discourse and Social Form 46

3 Configuring the Global: Globalization as

4 Business Globalization and the Offshore Economy 89

5 The Private Economy of the Post-National State 109

6 The Anti-Economy of Social Exclusion 130

What, if anything, is the relationship between the facts and fictions of

held by corporate managers. He recalls, for instance, the words of Michael

True to his words, a year after this interview Bonsignore launched a

not a simple and unmediated process that can be described objectively.

produced will enter international trade flows, then it is incumbent on them

parts of the production of social reality itself. In the case of globalization,

For Hobbes, society itself is a function of speech and of naming because it

Speech, therefore, consists of common social narratives, what Hobbes calls

Hobbes, the alleged realist, was obviously perfectly aware of the

to invalidate approaches to globalization as an analytic or descriptive

Narratives and practice

or empiricist criteria of truth in order to be plausible.1 There is a complex

conception of progression through time intelligible. Globalization is such a

The present intelligibility of globalization and with it the contem-

The lost national economy

But why should the redrawing of conceptual boundaries be so significant?

Palan 2003). The representation of economic closure, of an homogenized

conception of a bounded political economy is, for example, a prerequisite

choose instead a varying degree of protectionist policies. Economists have

The trifurcation of the state

Private sector Third sector/ Public sector

Offshore Private Anti-

Institutions: Institutions: Institutions:

Normative Normative Normative

Mainstream Economy (Social inclusion) Welfare and/or informal

Change in status only available through:

FIGURE 1 COGNITIVE MAP OF THE IMAGINED ECONOMIES OF GLOBALIZATION AND

on globalization) are rendered multiple, complex and dynamic. For the

as a competitive entity operating in a globalized world which means, as

social exclusion entails a subtle (and occasionally not so subtle) respatialization

The curious spatiality of social exclusion alluded to by Levitas is a

spatial categories, but rather combine to form an overlapping hierarchy of

The global politics of poverty and the poverty of global politics

In the course of its growing plausibility and acceptance, a concept with

spatiality of the contemporary world. It is our contention that the political

Structure of the book

In arguing for the veracity of the respatialization of the contemporary state

explore the significance of narrative forms and structures in negotiating

This book analyses the concrete processes of globalization through a study

The wave thesis

One of the favoured devices among academics in analysing globalization is

phases or waves coming in a roughly chronological sequence. The first

This second wavehas pointed to a number of factors, each of which,

Second wave theorists such as Elmar Altvater (1993), Scott Lash