The Global Economic Governance (GEG) Africa programme is a policy research and stakeholder engagement programme to strengthen the influence of pro-poor African coalitions at global economic governance fora.
Wednesday, 17 September 2014 16:54

Global Economic Governance: Radical transformation or incremental reform?

Written by Gunter Bender

In a recent interview with BBC Hardtalk, the economist and futurologist Jeremy Rifkin propounded a radical new vision of capitalism, or rather the end of capitalism, one where people produce their own energy, produce and share what they need and build an economy based on collaboration not competition.

The objective of this short piece is simply to explore how the global economy and global society might change in the coming decades, and the implications of this change for global economic governance. Over the last few decades we have undoubtedly witnessed remarkable transformation in the way the global economy operates, from the globalisation of supply chains and the distribution of production sites to emerging and developing countries, to the exponential growth of trade and the emergence of global financial capital. While International Political Economy (IPE) theory has given significant focus to the implications of transformations in the global economy, it has not seriously considered the ways in which the global economy might evolve in the future.     

This blog forms part of a special series of student articles on global governance.

According to Rifkin, new patterns of exchange among people closely related to the information and communications revolution will have a dramatic impact on the way that people interact and engage with one another in the future. What we are witnessing today is only the beginning of a new template for economic and social interaction, where the economic dimension of human interaction is not isolated from or dominates the social and political dimensions. In short, the future will be dominated by economic interaction that is more collaborative than witnessed ever before, and more importantly it will cease to have profit as its main objective.

So how will this work for Africa will and how are we already witnessing this kind of behaviour today? According to the Rifkin the new revolution towards the production of things at zero-marginal costs is already being witnessed in the sharing of information - think Wikipedia, or the sharing of music for free over internet platforms. Furthermore, people are already sharing patent software for the production of green technologies through the use of 3-D printers. People are sharing photos, ideas and research online at zero-marginal cost and for free. Case in point with regard to research is the blog project, Project EGA, a Wits Masters student’s project whereby topical issues and information related to global economic governance is shared online at zero-marginal cost and without a profit motive.

While Rifkin’s view of the future sounds compelling, the question might well be raised whether Rifkin is underestimating the competitive and combative part of human nature that has certainly seemed to be dominant for centuries of human existence. Realists might well raise the issue of why humans have suddenly discovered the importance of cooperation over collaboration, of peace over war. Recent events in the Middle East and the continued incidence of conflict seem to contradict Rifkin’s view of human nature.

Rifkin’s thesis, however farfetched or problematic, nevertheless connects to a larger and more important debate around the future of global economic governance that has become pertinent in the aftermath of the global financial crisis; i.e., whether in the aftermath of the global financial crisis global capitalism can sustain is itself on its current trajectory, and whether reform of the system should occur in an incremental fashion or through a more radical transformation.

In a speech held in London in 2009 on the theme of ‘what it means to be a Marxist in the Twenty First century’, the Slovenian philosopher Slavoj Zizek (a Lacanian-Marxist philosopher and godfather to the Wallstreet Occupy Movement) said many Western Liberals today think that the idea of returning central command economic systems have become implausible in the wake of the end of the Cold War and the triumph of Western Liberal democracy. While these Western Liberals bemoan the inequality and ecological destruction caused by unfettered global financial capitalism and rampant Multinational Corporations (MNC’s), they nevertheless argue that the more realistic option is to call for the reform of global governance institutions to make them more inclusive and for MNC’s to be more responsible and responsive the impact of their activities.

According to Zizek, this is a fantasy, expressed as the idea that while globalisation is not perfect, we can nevertheless reform the current system to render it more humane and sensitive to ecological concerns. The only realistic option is to envision radical alternatives that subvert the flow of financial capitalism, in the words of Diane Elson, to “put sands in the wheels of markets” and to make finance flow according to human pace and needs.

What implications for Africa? How will this new post-capitalist economy impact African societies and how are African societies to respond collectively?
The key element of Rifkin’s model is that it eliminates the profit motive driving unceasing capitalist expansion. The continent, while bolstered by increased commodity prices since the beginning of the century, nevertheless remains locked within negative terms of trade and its trade structure can be described broadly as exploitative. Capitalist expansion on the continent fits the traditional exploitative model of capitalist expansion first described by Marx. Most African countries still have considerable numbers of people living below the poverty line, multinational corporations active in the energy sector have caused wide scale ecological damage and African countries remain marginalised within the global capitalist system’s trade, finance, knowledge and technology structures.

Rifkin’s model also holds the promise of a more participatory and inclusive economy, where communities will be enabled to empower themselves through self-production. In light of the experience of the continent of the last fifty years of capitalist development, African societies should welcome new economic models that will give them more power to decide their own futures and provide them with the necessary tools to effectively resist and subvert the continuing dominance of an exploitative and ecologically myopic global economic system.

What is clear from studying existing literature on global economic governance is the need to connect economic interaction to the other dimensions of human interaction, such as the social, ecological and political dimensions. On the last analysis Rifkin’s thesis might not be that far-fetched, as it might simply represent a return to earlier patterns of human interaction, which have re-emerged as a natural extension of human behaviour, facilitated by new technological developments.

What is certain is that increased human interaction in the twenty-first century has radically changed established views on international relations, and will continue to change views in the foreseeable future. These changes will hold profound implications for future global economic governance and hold the promise of governance being impacted by more collaborative and responsive patterns of human interaction.


Gunter Bender is an MA student at the Department of International Relations at the University of the Witwatersrand (#WitsIR). This blog forms part of a special series of student articles.

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