April 23, 02 Stephen Bunker
Sociology, University of Wisconsin, Madison
Space matter and technology in globalization past and future
In this chapter, we apply the materio-spatial logic we discovered in extractive economies in the Amazon--an extreme periphery--to analysis of the technological, financial, political, ideological, and social organizational innovations that sustained the successful campaigns of five nations--Portugal, Holland, Great Britain, the U.S., and Japan--to dominate world trade. We use this logic to explain how the ascent of each national economy has moved the world economy further toward globalization by increasing its material intensity and the spatial expanse.
While technological innovations must conform to the naturally produced materio-spatial features of the particular raw materials that they use, the economic, political, ideological, and financial institutions that generate the strategies to create these innovations are fundamentally social. This means that in order to explain how matter, space, and technology shape globalization, we must discover regularities in the ways that the interactions between the materio-spatial opportunities and constraints each ascendant nation confronted and the social and cultural organizations and institutions that nation mobilized to create the technologies, markets, financial instruments, and skills necessary to its ascent.
Much of the literature on globalization implies that the phenomenon is recent, unique, and relatively “dematerialized” and “deterritorialized”. This view seems to emerge from the novelty of information technology and its capacity to move capital and to coordinate production cheaply and rapidly across national borders. Our analysis of the ways that increasingly efficient transport systems incorporated the Amazonian extractive exports of greater volume of lower value materials over ever greater distances opens all three of these characterizations to doubt.[1]
The notions of recency and uniqueness are subject to disproof by any persuasive account of historical trends to progressive spatial expansion of the world economy. There are numerous such accounts in a diverse set of studies focused on three broad questions: 1) the dynamics driving the material intensification and spatial expansion of production and trade in the world economy; 2) the successive ascents of particular nations to dominance within the world hierarchy of economies; and 3) the causes and consequences of inequality between national economies. These three have long been core questions in a wide range of fields concerned with economic change and development, and with international relations. We examine the material and spatial history of globalization’s causes and consequences by searching for links between and mechanisms common to explanations for all three of these questions.
Particularly robust arguments indicating long-term trends to material intensification and spatial expansion of capitalist economies have emerged from world-systems theory. Arrighi (1994), for example, shows that each successive hegemonic cycle, or systemic cycle of accumulation, over the past 800 years, has significantly intensified material production across expanded commercial space. Each cycle has built upon, and thus expanded, the material and spatial scale of previous cycles. In this view, what is today seen as globalization, far from being unique, recent, and dematerialized, is better described as the latest, materially most intensive, and spatially most expansive in a centuries-long, cumulative series of cycles.
Arrighi, however, tends to emphasize finance and politics, acknowledging the importance of but neglecting to analyze or explain the ways that each cycle expanded production and thus heightened national dependence on and consumption of raw materials that occur in limited and exhaustible quantities in specific places. He thus acknowledges, but does not problematize, the need of ascendant national economies to transport vastly increased volumes of more different types of raw materials across ever larger distances and to maintain and coordinate stable exchange and cargo relations with the sources of these raw materials.
He considers each systemic cycle of accumulation as an intensification of material production driven by a dominant national economy. He posits that each cycle surpasses and supercedes the production, productivity, spatial expansion, and capital accumulation of the preceding cycle. He claims that capitalists invest in newly developing economies in order to overcome the falling rates of profit that result from accumulating excess investment in the mature hegemonic economy. He invokes this mechanism to explain the spatial expansion of integrated commerce. In other words, he sees expansion as a response to over-accumulation of capital in the mature, or trade-dominant, hegemon. In this regard, he follows David Harvey’s (1983) explanation of “the spatial fix” or the geographic expansion of capital investment as a response to the “internal dialectic of capital”. For Harvey, capitalists compete with each other by investing increasingly large capitals in increasingly productive but site- specific infrastructure, machines, and plants that over time saturate product markets and are themselves made obsolete by even more productive, and more capital-intensive, new technologies. Capital tends to install these costly new technologies in new frontiers with markets adequate to absorb their expanded output. Harvey explains the expansion of capitalist commerce exclusively as the spatial fix for the site-specific devaluation of capital, so does not consider the expanded material requirements of increasing economies of scale. Arrighi pushes this partial explanation even further. He assigns explanatory primacy to finance and politics, which he claims function autonomously from material production. He thus neglects systematic theorization of the material, spatial and technological components of particular national economies’ rise to trade dominance.
Arrighi does connect the questions of trade dominance, global expansion, and growing international inequality, but he does not explicitly theorize the connection or propose a single mechanism or dynamic driving all three phenomena. Arrighi, like most theorists of hegemony, explains transitions from one systemic cycle to the next in terms of devaluation, maturity, senescence, and decay . He explicitly invokes Braudel’s image of autumn as the time when capital has reached its fullest growth, beginning to decline at the same time it harvests its mature fruits.
In contrast, the materio-spatial analysis we propose enables explanation of causal dynamics in spring and summer, when the expansion of production requires expanded sources of raw material. Capital’s financial power increases as it draws on accumulating profits from expanded production to meet the heavy investments required for this spatial expansion. The world economy expands toward globalization not only as a spatial fix for capital over-accumulated in a mature dominant economy searching for financial investments at the higher rates of profit available in less mature economies (cf. Arrighi, 1994), but earlier, and even more decisively, as a material fix for the expanded consumption driven by economies of scale. In other words, economic expansion toward global economies comprises three separate but integrally linked nodes of growth. Expanded production expands financial capabilities. Expanded finance makes possible investments in the expanded scale of technology and infrastructure needed to import the increased volumes of material consumed across expanded commercial space.
Peter Hugill (1994), in World Trade since 1431, takes as his point of departure a different affirmation that Harvey elaborates from Marx--that technology mediates between human society and nature-- to analyze the history of technical innovations that have intensified material process and expanded the spatial extent of the world economy. Hugill thus explicitly embraces the historical material aspects of political economy, but does not systematically explore the financial and political innovations and collaborations that have undergirded particular nations’ development and use of these innovations in each successive rise to world trade dominance. Nor does he relate his stories of technological advance in particular nations to progressive increases in inter-national inequality. We use a material historical analysis combining Arrighi’s focus on finance and politics with Hugill’s focus on technology and space to explain how secular increases in the scale of production drive the spatial expansion of integrated commerce. This approach allows us to explain the links between trade dominance, globalization, and international inequalities.
By integrating material history—including a search for physical, chemical, biology, geological, and technico-mechanical regularities that affect economic processes—with political and financial processes in a comparative history of national trade dominance, we hope to explicate the materio-spatial expansions and intensifications that constitute globalization. We ground our explanation by specifying the geographically differentiated materialization of space into the hydrographic, topographic, geological, climatogical, and atmospheric attributes that determine how different parts of the world participate in the world division of production. We then integrate these materio-spatial components of globalization into a fuller analysis of how capital’s material processes sustain the financial logic of its internal dialectic.
To construct a common ground that allows coherent comparison of national economies whose ascent to world trade dominance occurred at very different moments in the technological, financial, and geo-political, 600 year long trajectories of the world-system , we develop a synthethic model of how financial and political interact with the technological, spatial, and material mechanisms and processes. We use this model to examine a set of questions nested within our central query: 1) Did similar dynamics drive each nation’s ascent to hegemonic dominance? 2) If they did, did the same dynamics exacerbate inequality between national economies? 3) If so, did they simultaneously drive globalization?
We focus first on transformation and intensification of material processes in the ascendant economy at the beginning of each systemic cycle of accumulation, starting with Amsterdam in the 16th and 17th centuries, then Britain from the 17th through the 19th, the U.S. from its colonial beginnings through the 20th century, and Japan's rise and subsequent troubles in the late 20th century. We next consider how social processes and attributes intersect with spatial and material features both of the ascendant nations and of the raw material peripheries they depend on.
Topographic, hydrological, and locational advantages in access to the raw materials most voluminously used in the dominant technologies of production and transport at the time contributed crucially to the economic and geopolitical ascent of each of these nations. Each succeeded, however, by devising social, political, economic, and financial institutions adapted to the opportunities that their materio-spatial configuration offered domestically and to the technological and trade opportunities the world system offered internationally. Each ascendant economy enhanced its natural advantages in access to raw materials with socially produced innovations in technology and infrastructure for transport that further reduced the cost of its raw materials and thus made it more competitive in other branches of production and trade. In all cases, these innovations—in ships and shipbuilding and in locomotives and railroads, in ports and docks, in loading systems and in warehouses--entailed increases in the size, motive power, and carrying strength of vehicles and of the environment built to enable their transit and carriage across space.
The capital costs and politico-legal complexities of developing and building such large-scale technologies and infrastructure exceeded the capacities of existing firms and institutions. These nations therefore could only turn their physical advantages into world-dominant economic power by creating new forms of productive, financial, and political organization. The expanded production and trade that supported the dominant position of each successive hegemon depended on effective integration of physical conditions and social organization both at home domestically and in the ever wider peripheral sources of raw materials. The transport systems devised to organize and cheapen their movement across space had to articulate material, spatial, socio-economic, political, and demographic features of both periphery and core.
The national societies that achieved trade dominance first succeeded in integrating their naturally produced material and spatial advantages with technological and organizational forms sufficiently adapted to these natural conditions to enable production, finance, and trade strategies that would transform world raw material markets and transport systems to their own advantage. Securing the cheapest access to critical raw materials enabled them to create the expanded economies of scale that marked each transition between systemic cycles of accumulation. The resulting material intensification and spatial expansion finally appears as global, but globalization is best understood as a continuation of historical processes at least as old as capitalism.
Our logic is as follows: Globalization has emerged as the culminating, or at least most recent, manifestation of the expanded reproduction of capital and the long-term increase in the productivity of labor. The expanded reproduction of capital and increased productivity of labor require new technologies that generate economies of scale. Economies of scale reduce the amount of capital and of labor in each unit of production, but only by increasing the total volume of production. They thus depend on greater total amounts of capital and labor. They also require increased volumes of raw material, even though some of the technological innovations may reduce raw material consumption in each unit produced.
The raw materials most voluminously used in industrial production occur naturally in fixed locations, volumes, and quantities around the globe and are subject to depletion (e.g. iron, coal, oil). Known deposits exploited under one technological regime may be inadequate in size or quality for subsequent, larger-scale, technologies. In earlier times, the most voluminously used raw materials needed lengthy production times (e.g. oak or pine). Depletion, delayed replacement, and technically driven increases in quality and volume required for competitive extraction and transport all mean that the increased volume of matter consumed in expanded economies of scale must be brought across greater distances. The economy of scale thus creates a diseconomy of space. National economies can compete successfully only if they resolve this contradiction between economies of scale and diseconomies of space. This resolution depends on technical innovations in transport.
The radical improvements in technology and vast extensions in built environment that initiated each national ascent to trade dominance had a series of self-reinforcing consequences. First, they reduced the cost of transporting raw materials to that nation, thus making its production more competitive in international trade. Second, the reduced cost of raw materials lowered the cost of constructing the ships, trains, ports, rail lines, and loading and unloading equipment. This saving further lowered the cost of transporting raw materials. The national economy that pioneered these innovations came to dominate world trade in ship or train building and in port construction. Third, the capital costs and social requirements of devising and implementing these technological improvements and the infrastructure on which they depended fostered new organizational forms, knowledge, and powers in states, firms, financial institutions, and sectoral associations. These phenomena, socially produced in the nation that rises to trade dominance, simultaneously maintain and transform the hierarchical, or inequalities that characterize the world system and the global economy.
Raw material costs and quality determine the productivity of labor and the organic composition of capital. The physical and thermodynamic constraints on supplies of the most voluminously used raw material raise costs and reduce revenues for most economic actors. Firms, sectors, and states tend, therefore, to collaborate in their search for cheap, stable supplies. Successful solutions to the contradiction between economies of scale and diseconomies of space require innovations in transport technology and massive investments in transport infrastructure. These innovations and investments can only occur if the benefits to be realized attract enough different political and economic actors to generate the kinds of political and economic organization, knowledge, skill, and collaboration that an ascendant national economy needs to transform world raw materials markets and transport systems in its own favor. Such transformation necessarily intensifies and expands production, trade, and finance. Comparative analysis of these transformations shows that the sequentially cumulative effects of this intensification and expansion have resulted in what we now call globalization.
Matter, Space, Technology, and Finance in Successive Stages of Globalization: A Comparative History
In this section, we compare the ways that each ascendant nation expanded the then prevailing mode of heavy industry. In each case, this expansion involved: a) technical and organizational innovation in raw materials procurement, transport, and processing; b) rebuilding the environment on an expanded scale of infrastructure for material transport, handling, processing, and manufacture; c) new forms of finance to deal with the expanded volume of these investments to coordinate the multiple capitals involved in this scale and volume; d) new and more closely coupled relations-- collaborative and regulatory-- between the state and firms involved in these investments and the formation of political and economic institutions appropriate to these relations.