REVIEWSrnReluctance atrnReveillernby John AttarianrnOne World, Ready or Not:rnThe Manic Logicrnof Global Capitalismrnby William GreiderrnNew York: Simon & Schuster;rn528pp.,$27.S0rnThe global industrial revolution beingrnengineered by multinationalrnfirms and the dismantling of internationalrntrade barriers have producedrnwrenching social changes and will unleashrnmore. Rolling Stone National EditorrnWilliam Greider, author of Secrets ofrnthe Temple (on the Federal Reserve) andrnWho Will Tell the People (on contemporaryrnpolitics), here surveys global capitalismrnand its “contradictions,” and offersrnreforms to rectify them.rnGreider’s central message is a “reasonedrnwarning”: global capitalism “appearsrnto be running out of control towardrnsome sort of abyss.” While technologicalrnprogress propels capitalism’s globalrnrevolution, its “dirty little secret” is itsrntendency to depress a firm’s rate of returnrnper unit of output. Driven thereforernto reduce costs, capitalism is shifting productionrnto low-wage countries—simultaneouslyrncreating excess capacity andrnsupply and suppressing demand. Hencernit is haunted by the possibility of a crisisrnof overproduction, and the more it cutsrncosts at labor’s expense, the more likelyrnthe crisis becomes. Finance capital, “thernRobespierre of this revolution,” churningrnfrom country to country, destabilizesrnthings further.rnThe cost-minimization drive is creatingrn”tax arbitrage,” whereby firms playrncities, states, and even nations off againstrneach other, locating where tax breaksrnare highest. Developing countries,rnmeanwhile, extract favors from firms—rnfor example, requiring Boeing to givernthem a share of input production, advancedrntechnology, and know-how in exchangernfor buying Boeing aircraft. Asianrncountries are emulating Japan’s developmentrnmodel: high-quality exports andrnheavily-protected domestic markets.rnThis only works, though, as long asrnAmerica serves as “buyer of last resort,”rnabsorbing the resulting trade surpluses.rnBut, Greider warns, America, her purchasingrnpower falling, is becoming unablernto prop up the global economy.rnGreider finds finance capital equallyrnirrational. Not only are governmentsrnassuming bad private debts, but financerncapital and currency speculators suchrnas George Soros are powerful enoughrnto overwhelm governments. Speculativerncapital’s entry into a country can sparkrnan unsustainable boom; its abrupt exitrncan inflict credit starvation and collapse.rnSuch was the ease with Mexico, whoserneconomic implosion, which Greider narratesrnin harrowing, eyewitness detail, hasrnabundantly justified NAFTA’s critics.rnFinance capital’s irrationality is epitomizedrnby the Third World countries’rnexternal debt, soaring beyond hope ofrnrepayment, to an estimated $1,945 billionrnby the eady 1990’s.rnA good journalist, Greider is highlyrninformative on globalization and itsrnproblems. His visits and interviews inrnGermany, Ghina, Malaysia, Mexico, andrnelsewhere greatly enhance his credibility.rnOne of this book’s great merits is itsrnexposure of the chasm between freemarketrnrhetoric and the realities of interfirmrncooperation to lessen competition,rnand of pervasive government involvementrnin managed trade, production decisions,rnand finance.rnMuch of Greider’s book is welcome.rnHis warnings about chronic trade imbalancesrnand destabilizing speculation-drivenrncapital movements are cogent. So isrnhis argument that America must haltrn”unbalanced trade that is draining nationalrnwealth,” and focus on “defendingrnthe U.S. industrial structure and employment,rnnot the U.S. multinationals themselves.”rnMany of his proposals—a smallrntransaction tax on international capitalrnflows; Third World debt forgiveness;rnemergency tariffs to rectify radical tradernimbalances; a constitutional amendmentrnforbidding tax favors for industrialrninvestment; abolition of the WorldrnBank, International Monetary Fund,rnand Export-Import Bank—are sensible.rnMoved by the “barbarity” of workingrnconditions in developing countries, Greiderrnargues eloquently for labor’s rights.rnUnfortunately, Greider’s economicsrnare badly muddled. Bemoaning excessrncapacity and oversupply, he demonstratesrnonly the former. His incessant assertionrnthat Western wages are decliningrnrests on confusion of displacement of laborrnto lower-paying jobs with “fallingrnwages”—a term which, used properly,rnmeans jobs paying lower wages thanrnbefore. He blames the Depression onrnoverproduction and underconsumption,rnfallacies which Murray Rothbard’srnAmerica’s Great Depression explodes,rnand calls Federal Reserve policy in thern1920’s “extremely restrictive,” when itrnwas actually inflationary. His proposalrnfor higher taxes on skilled labor wouldrnstupidly punish intelligence.rnGreider’s analytical perspective is essentiallyrnMarxist economic determinismrn—forces and relations of productionrndrive everything—and merely globalizesrnDas Kapital’s “crisis of overproduction.”rnHe would have done better to forsakernthis long-exploded rubbish and invokerninternational trade theory’s factor-pricernequalization theorem, which states thatrnfree trade will equalize factor prices, suchrnas wages, between countries, and showrnhow globalization promotes this. Therngrinding-down of American wages,rninduced by globalization, and livingrnstandards is a legitimate concern. UnlikernMarx’s “crisis of overproduction,” factorpricernequalization isn’t a handy peg forrndoomsaying, but it has the merit ofrnsoundness. Yet Greider ignores it.rnHe does show, unintentionally, thatrnglobalization and paleoconservatismrnare mortal enemies. But paleocons whornthink they have found an ally in Greiderrnshould think twice. Echoing The CommunistrnManifesto, he lauds the bourgeoisie’srnculturally revolutionary role,rndemolishing insularity, promoting multiculturalism.rnGlobalization, he rejoices,rn”is visibly dismantling enduring stereotypesrnof race and culture, ancient assumptionsrnof supremacy”—which, hernplausibly argues, is its “most radical dimension.”rnHence American politics’rn”preoccupation . . . with race and culturalrnsuperiority seemed ludicrous, out ofrntouch and perhaps dangerous.”rnDeriding “right-wingers who continuernto rant occasionally about ‘one-worlders’rnsubverting American sovereignty,” hernfears that capitalism’s crisis will provokernJUNE 1997/35rnrnrn