FedericoFaleschini(ID10902214) ModuleConvenor:AdrianPabst Module: PO817 (Resistance and Alternatives to Capitalism and Democracy) 4April2011 CriticalReview(wordlimit:1500;actualwords:1576)

GiovanniArrighi AdamSmithinBeijingLineagesofthe TwentyFirstCentury

The purpose of this article is to provide a critical review of the book Adam Smith in Beijing by Giovanni Arrighi. The book spans history, economics and politics in the aim of identifying the deep-rooted causes of the passage of hegemony from the USA to China and trying to predict how such a passage will unfold and what consequences will have for the world order. Arrighi's main aims can be summarized as follows: Demonstrate that Adam Smith, far from being an hawkish supporter of unregulated capitalism, was instead advocating a model of market-based economic development far closer to the East Asian one (chapters 1 and 2); Describe characteristics and evolution over the last two centuries of the East Asian/Smithian/Natural path of development and the Western/Capitalist/Unnatural one; in particular, Arrighi investigates into the causes of The Great Divergence between the two regions at the eve of the 19 th century and the reasons for the contemporary rise of East Asia (Part I, chapter 11); Analyse the evolution of post-WWII global economy, above all the process of financialization and globalization of the last 30 years (the starting point being the shift to extremely tight monetary policy of '79-'82). Arrighi shows how the financialization engendered the USA's belle poque of the '90s but also increased the Global Turbulence which has undermined the very foundations of US hegemony; he underpins this view with a comparison between the UK and US as hegemonic powers, again referring to his previous work The Long Twentieth Century and taking issue with Brenner (part II and chapter 9); Conceptualize the Neo-Conservative Project for a New American Century as an attempt to turn the USA into the ultimate world State by military means, in order to: 1) ensure US control over West Asia's huge oil reserves and 2) getting over the Vietnam Syndrome. Such an attempt is said to have utterly failed, strongly damaging US's legitimacy and public finances thus accelerating the passage of hegemony from the US to China (which is anyway considered inevitable). In addition, Arrighi considers NeoConservative policies as a return to the territorial [i.e. imperial] logic of historic capitalism, which points to the mutually reinforcing relation between capitalism, militarism and imperialism (part III);

 Finally, the most ambitious claim is that China's ascent is bound to be beneficial to the world order, provided that it will be able to steer the global and its own economic system towards the East Asian development path. The claim is based 1) on historical evidence of the structurally more peaceful character of international relations in the East Asian international system, and 2) on the greater income equality and better welfare that the East Asian path has produced when comparing East Asia with other regions, above all because of its characteristic of accumulation without dispossession. However, Arrighi says, it is not clear yet if China will be able to restructure in order to decrease reliance on scarce resources, which due to China's huge population and strong economic growth is putting under strain the global environment (part IV). I shall now assess whether the aims have been met and if yes, how successful was the author in doing so: The exegesis of Adam Smith is well grounded in Smith's work, with timely quotations and references. The image of Smith that emerges is that of a prudent advisor to the government, which seeks the best way to promote the general interest. The structure of the chapter helps in understanding the link between market regulation and public tranquillity (p. 44) and between the former and the kind of economic development: the concept of market as an instrument of government is linked first to the law of falling profits and to the issue of the social division of labour, and then to the choice between Alternative Paths to Opulence (p. 57). In this way the implications of choosing a specific path can be fully appreciated, having understood how the action of government can mitigate the negative effects of unregulated economic activity; In the analysis of both the East Asian and the Western paths of economic development, Arrighi scarcely provides any hard evidence (economic data), instead choosing a broader outlook which encompasses also the social and political sphere. In part I, the analysis is based above all on classical authors (Smith, Marx, Schumpeter, Weber): on the one hand, this approach helps in emphasizing the long time frame (Braudel's longue dure) in which paths to economic maturity unfold (since such a long time frame was already perceived by those classical authors); on the other, by providing a new (and convincing) interpretation of classical authors, it has a deep impact on the discipline because it challenges many commonly held assumptions about these authors, whose works are the foundation of economic theory and, according to Arrighi,

are often misinterpreted and ill-quoted. The analysis of post-WWII global economy and especially of the Global Turbulence may again be criticized for the absence of hard evidence, but the focus is more on the link between the economic system on the one hand and US Hegemony and the world economy on the other. The strength of Arrighi's conceptualization of the Global Turbulence is that it is embedded into the historical evolution of capitalism in the long run (with references to his previous works, Braudel's ones and the analysis of Part I). It is also convincing in affirming the ephemeral nature of the US's blle epoque, by pointing to the structural weakness of US economy as highlighted by the striking worsening of the US current- account balance from 1980 onwards (see Figure 5.2 p. 146) The conceptualization of the Neo-Conservative agenda as an imperialist agenda and above all as the final blow to American Hegemony is compelling. Again, the references to history add depth to the explanation: see e.g. the comparison between Pearl Harbour, the Korean War and 9/11 as events which scare[d] hell out of American People (p.176) and were exploited by US administration to prevent a shift of the domestic public opinion to isolationism. Admittedly, the failure of the Project for a New American Century was already evident: what Arrighi does is to recast Bush's strategies in the analytical framework of Imperialism (by drawing from Harvey's New Imperialism) and link it to the passage of Hegemony to China (Harvey's concept of spatio-temporal fix is useful in this respect). This overall coherence with the general aim of the book helps in acknowledging the true historical significance of the neo-liberal era, especially in light of the financial crisis; The claim that China's ascent is bound to be beneficial, although highly qualified, may appear too enthusiastic. In particular, the assessment of Mao's heritage, although certainly positive in comparative terms with other low income countries in respect to basic welfare (see figure 12.1 and 12.2, pp. 371-2), seems to skirt over the terrible legacy of environmental devastation and famines, consequence of the divergence from the East Asian path and the imitation instead of Soviet policies 1. Also the point of the importance of the mass line in the Chinese Communist Party (CCP) ideology seems comparatively less well referenced than the rest of the book (pp. 373-5). Arrighi is confident that the CCP is able to reorganize to meet the new challenges and satisfy the
1 See Gray J. (2001), False Dawn (pp.175-83) on Mao's legacy.

increasing number of grievances which are being voiced by the Chinese people: the stability of Chinese society even after the financial crisis seems to prove his contention right so far. Overall, the optimism Arrighi shows about China's ascent is well grounded in the analysis of historical, systemic and economic factors and is not absolute but conditional on the success of China to re-align to the East Asian path. In conclusion, I think that this book represents a stunning piece of work. It encompasses politics, economics and sociology to provide an impressively coherent picture of the evolution of the world system over the last three centuries. The most striking feature of Arrighi's work is the profound knowledge of historical dynamics and the seemingly effortless ease in putting together many different arguments in a coherent fashion; moreover, Arrighi confronts and takes issue with an impressive number of scholars, therefore making a significant contribution to the field in this sense too. I think that the great historical depth of Arrighi's work is a major and up-to-date contribution both to the field of economic history 2 and to International Relations theory3, making it a must-read for anyone interested in the past and (even more important) present history of the international system.

2 See e.g. the difference with Friedman J. (ed.) (2010), What Caused the Financial Crisis. Although that book contains excellent articles, I think it fails to convey the full picture of the financial crisis by not questioning the links between capitalism and State power, as Arrighi and other radical thinkers do. 3 See e.g. marxist IR theory works such as Gill S. (2003), Power and Resistance in the New World Order or Bieler A., Morton A.D. (eds.) (2006), Images of Gramsci . Although they certainly provide valuable insights, IR theory works seem to miss the historical specificity of the East Asian experience, portraying anti-systemic and anti-globalization movements almost only as reactions to the expansion of Western capitalism. Moreover, they suffer from an excessive rigidity due to the more formal and (supposedly) scientific approach.