Network Power And Globalization

Reprinted from Ethics & International Affairs 17, no. 2. © 2003 Carnegie Council on Ethics and International Affairs.

Network Power and Globalization David Singh Grewal

lobalization is often celebrated as an advance of human freedom in which individuals are ever freer to lead lives of their own choosing. Transnational flows of money, goods, and ideas, it is argued, will accompany an increasingly liberal international order in which individuals can participate in a global economy and culture. At the same time, however, critics of globalization claim that it involves the imposition of a set of common global standards. These standards involve the exercise of power, and can even be said to constitute a kind of “empire.” How should we understand this claim that globalization represents a kind of empire? After all, the choices of people to learn English or of nations to join the World Trade Organization (WTO) are voluntary, free choices—and reflect the reasoned assessment of those doing the choosing. I advance a concept of “network power” to explain how the dynamic operating in globalization nevertheless reflects a kind of domination. It is the awareness of this kind of domination that breeds the resentment that is articulated in accusations of empire. The idea of network power captures the ways in which the systematic features of our social world emerge from human action and remain intelligible in light of it, even while they constrain us in ways that do not reduce straightforwardly to the power of command. It explains how the convergence on a set of common global standards is driven by the accretion of individual choices that are free and forced at the same time.

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FORMAL AND INFORMAL EMPIRE The characterization of globalization as imperial is no longer the exclusive province of anti-globalization activists but has become the subject of mainstream discussion.1 Generally, the term “empire” is invoked to describe a situation in which one political society controls another. The most obvious examples of this control are the outright conquest and domination of foreign societies, as in the modern empires of Western Europe. However, the control of one society by another need not be so direct. The term “empire” originally comes from the Latin “imperium,” which means the mixture of territorial conquest, informal commercial domination, and cultural hegemony that characterized the Roman rule of the Mediterranean in the early phase of its expansion. The contrast between formal and informal empires is now a familiar one, serving to distinguish the situations in which direct control is needed to secure benefits from a subordinated society from those in which it is not. In the latter, the subordinated society acts in a way that serves the interests of the controlling society, whether through relations of economic dependency, military 1

For a review of contemporary works on empire and American hegemony, see Anatol Lieven, “The Empire Strikes Back,” Nation, July 7, 2003; available at www.thenation.com/doc.mhtml?i=20030707&s= lieven. The most interesting of these is Michael Hardt and Antonio Negri, Empire (Cambridge: Harvard University Press, 2000).

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cooperation, or some other form of indirect control.2 In either case, the subordinate society is coerced, but the means by which such control is maintained may vary. Certainly, as many studies of imperial history conclude, formal and informal imperial strategies are not an opposing pair of strategies. When pursued simultaneously in different contexts, they can be mutually reinforcing. If contemporary globalization represents a kind of empire, then it must be an informal empire, since direct imperial control is absent in most of the world. But the idea of informal empire—however intuitive and apt it may seem—is empty unless the mechanism of informal control can be identified. Part of the problem is conceptual. To each idea of empire is necessarily tied a model of the power underlying the control of the subordinate society. Formal domination assumes a Weberian model of power, operating as the command of a political superior and backed up by outright force.3 In certain regions of the world, this kind of analysis will seem more plausible than in others. As an account of globalization, however, it will fall short, failing to offer insight into the economic, cultural, and institutional aspects of globalization that are often the most interesting. Analyses of globalization as empire that aim to address more than military force and outright occupation will necessarily confront the problems in theorizing power that does not resemble the command of a political superior.4 In fact, any plausible characterization of globalization as empire must rely upon heterodox understandings of power. NETWORK POWER To develop an adequate account of the power underlying globalization, we must explain how the collective structures and 90

processes with which globalization is prominently associated can at once be the products of choice and the outcomes of power. In a globalized world, certain practices, institutions, or cooperative regimes at the transnational level play a role in coordinating social exchange and their coordination has an effect upon those who participate in them. Philosophical studies of coordination games or social conventions can offer insights into these processes of globalization, in which the coordination solutions and conventions are scaled at the transnational level.5 Consider any system of coordination, such as a language, measurement system, currency, or even a rendezvous point in a city, like the clock in the middle of Grand 2

The distinction between formal and informal empire was developed in the mid-twentieth century historical studies of the British Empire. See, e.g., John Gallagher and Ronald Robinson, “The Imperialism of Free Trade,” Economic History Review 6, no. 1 (1953), pp. 1–15. 3 Weber is famously associated with the argument that domination takes the form of a command by a political superior, the “authoritarian power of command.” He recognized other forms of power, however, and his views on the subject are more nuanced than is often recognized. See Max Weber, Economy and Society, ed. Guenther Roth and Claus Wittich (Totowa, N.J.: Bedminster Press, 1968 [1921]). 4 The social theories of Antonio Gramsci and Michel Foucault rely on such heterodox accounts of power. Michel Foucault, Power/Knowledge: Selected Interviews and Other Writings, 1972–1977, ed. Colin Gordon (New York: Pantheon Books, 1980); Michel Foucault, Power, ed. James Faubion (New York: New Press, 2000); Antonio Gramsci, Selections from the Prison Notebooks of Antonio Gramsci, ed. and trans. Quintin Hoare and Geoffrey Nowell Smith (New York: International Publishers, 1971); and Joseph V. Femia, Gramsci’s Political Thought: Hegemony, Consciousness, and the Revolutionary Process (Oxford: Clarendon Press, 1981). See also Steven Lukes, Power: A Radical View (London: Macmillan, 1974). 5 For foundational works in the study of coordination games and the analytic philosophy of conventions, see Thomas C. Schelling, The Strategy of Conflict (Cambridge: Harvard University Press, 1960); and David Lewis, Convention: A Philosophical Study (Cambridge: Harvard University Press, 1969).

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Central Station. When we speak a language or use a measurement system or go to meet up with a lost friend in Grand Central, we do so because we know that others will behave in this way, and will be counting on us to do the same. We choose to do these things for the sake of connecting with others, not because these activities are uniquely valuable in themselves. When such isolated conventions and systems of coordination are considered as multiple, competing systems of coordination, and the reasons for which we choose among them are analyzed, they can help us to make sense of the power in globalization. I refer to the power in globalization as “network power.”6 A network is a group of people united in a particular way that makes them capable of mutual recognition and exchange, whether of goods or ideas. It is united via a standard, the particular shared norm or practice that its members use to gain access to one another. For example, the global network of English speakers all use the English language to communicate. Many forms of contemporary globalization can be understood as involving the rise to dominance of shared standards in trade, media, legal procedures, and technology. These forms of social coordination are difficult to alter once in place because they manage interdependent expectations. Standards have power because they provide the convention by which people can jointly coordinate their activities and expectations. The notion of network power consists in the joining of two ideas. First, the coordinating standards are more valuable when greater numbers of people use them. Second, an effect of this coordination is that it progressively eliminates the alternatives over which free choice among standards can effectively be exercised. network power and globalization

Importantly, we should distinguish two kinds of standards: mediating standards inherent in an activity, like a language or measurement system, and standards for membership that serve as the criteria by which a group governs access to an activity, as in the rules for joining a club or the trade treaties overseen by the WTO. Either kind of standards can possess network power if it becomes the privileged point of access to forms of cooperation. Since the reason we use standards is to benefit from cooperation with others, the more people who adopt a given standard, the more valuable it would be for others to adopt the same standard. For example, a language is more valuable for us to learn if many others speak it. The reasons for the adoption of a standard are subject to what political economists call network externalities, which cause the increase in the value of a standard such as a language when more people use it, unlike the case of simple goods such as a hamburger or a road. If we can adopt only one standard—one language or measurement system—we will choose the standard with the greatest number of other users because we can then coordinate with the most people. (Of course, we care about the greatest number of people who are relevant to us, and not the number in the abstract.) The effects of this increasing benefit are clear if we focus on the case in which multiple, competing standards come into contact. Network power can induce people to “switch” networks—by learning new languages or adopting different technical standards, or through joining organizations that require adherence to new rules of conduct. In the context of two networks in competition, any individual member of one of the net6 Network power is explored in greater detail in my forthcoming book, Globalization and Network Power.

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works will want to use the standards of each network where it is possible to gain access to both of them. Where this is not possible, she will want to use the dominant standard in order to be part of the dominant network. Further, the real push in network power comes when we consider that the networks do not stay static but grow and decline over time with the addition or loss of members—and that this change, too, affects the value of network membership. As one network gains an advantage over another, the value of that network will increase at an increasing rate. All things being equal, a small network in competition with a larger one will lose members, becoming increasingly less viable as an alternative to the dominant one. Network power progressively eliminates the exercise of effectively free choice among networks. The adoption of a new standard will prove varyingly difficult for different people, depending on a whole host of factors, including the ease of switching and the strength of their attachment to the original network. Those who can switch networks at least cost will presumably do so first in order to gain the benefits of joining the larger network. The value of the dominant network will increase as its size increases. With each lost member, the smaller network becomes smaller in comparison to the dominant one, and hence less attractive. The costs will mount for the remaining holdouts, increasing—perhaps even at an increasing rate—as the successive departures increase the likelihood of yet further departures. For an individual in one network, the availability of another network changes the choices he or she faces because of the possibility that others in her network may leave, making her own membership less valuable. In the case of a great inequality in the rela92

tive size of two networks, the pull to join the larger network—the network power—can lead to the abandonment of the smaller network, which becomes increasingly unviable. In fact, many examples of linguistic decline and extinction in the contemporary world work in just this way.7 Network power pushes agents to converge on a single, dominant standard. POWER FROM CONSTRAINED ALTERNATIVES The mechanism of network power consists in the role that standards play in coordinating human action. A successful standard can rise to dominance by eclipsing others and compelling nonusers to choose to adopt it. Members of a small network may be subject to the network power of a dominant network, even when there is no individual within the dominant network who directly exercises this power. A member of a small network would prefer to retain the local standard, except under conditions in which a larger network has substantial network power. In that case, the small network will become less and less viable, and the member of the small network will eventually be forced to switch to the dominant network. Importantly, network power always operates through formal consent or choice, not by direct force. The choices to switch to a dominant network are formally free choices, even when the disparity in network size is so great that the alternative is, effectively, social isolation. This unviable alternative, however, challenges the understanding—given by the equation of power and command— that power only operates where it com7

See Daniel Nettle and Suzanne Romaine, Vanishing Voices: The Extinction of the World’s Languages (New York: Oxford University Press, 2000), especially ch. 5.

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mands, and therefore always denies free choice. Network power changes the outcomes of our choices, and therefore the choices that we will want to make. It can do so, particularly in the case of mediating standards, independently of any direct influence that an individual person or group exerts. (Of course, some individuals or groups may have been instrumental in catapulting a standard to prominence in the first instance and may remain instrumental in maintaining it, particularly when the standards govern access by serving as criteria for membership.) Network power characterizes people as more or less rational agents who choose based on good reasons and are nevertheless trapped by structural conditions into making decisions they would not make if their collective arrangements were different. It can explain how structural conditions can be both the cause and result of our individual choices. We should distinguish the intrinsic reasons for adopting a standard, the inherent advantages that it offers, from the extrinsic reasons, the value derived from a great number of other users. Importantly, people may be led to adopt a standard before it underlies a large network because of intrinsic reasons, outright force, or even simple happenstance. But once a standard possesses great network power, none of these causes are as important as the extrinsic reason, the fact that others already use a certain standard. Indeed, a standard that may have been intrinsically less preferable may nevertheless be foisted on us—while formally chosen by us— because of this extrinsic reason, since the point of standards is ultimately to gain access to others. At the point at which a given standard is adopted by nearly everyone, despite possible good intrinsic reasons to do so, the “choice” to adopt that standard becomes more or less coerced. network power and globalization

The distinction between the “freedom to choose”—the freedom of choice without an acceptable alternative—from the “freedom to choose freely”—the freedom of choice over viable alternatives—reveals the poverty of simplistic doctrines that identify freedom with consent without regard to the domain of choice.8 According to this account, choice in the absence of acceptable alternatives is equivalent to coerced choice: the mere act of choosing the only option on offer counts for little. The network power of a dominant standard converts the freedom to choose freely into the freedom to choose by eliminating the viability of alternative standards. It is this dynamic of choice that makes the emergence of global networks not a largescale act of international voluntarism or the free enactment of a global social contract, but instead a situation in which systematic power can lead to unfree choices. NETWORK POWER AND THE WTO To illustrate how the idea of network power can help us better to understand specific instances of globalization, consider the paradox of force and freedom in the ascendance of the WTO. The objective of the WTO is to help trade “flow smoothly, freely, fairly, and predictably.” The organization has 144 member states and currently governs 97 percent of (legal) global trade. It does so by overseeing more than thirty international agreements, consisting of thirty thousand pages of rules, to which its member states are signatories. The most important of these 8

See G. A. Cohen, “Are Disadvantaged Workers Who Take Hazardous Jobs Forced to Take Hazardous Jobs?” in G. A. Cohen, History, Labour, and Freedom: Themes from Marx (New York: Clarendon Press, 1988), pp. 239–54. This idea is interestingly developed in Sanjay G. Reddy, “The Freedom to Choose Freely” (Harvard University, 1997, unpublished).

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agreements regulate the international trade in goods, services, and intellectual property.9 The WTO also acts as a forum for further negotiations about current and proposed agreements, settles trade disputes, and reviews national policies to judge their compliance with WTO obligations. The WTO is a focus of the globalization debate. It has been a prominent target for anti-globalization protests since the Seattle Ministerial Conference in 2000. And yet, as its defenders point out, it is the result of voluntarily adopted treaties that any country is free to accept or decline. How should we understand this controversy? The WTO is often considered a free trade organization, and certainly its main purpose, and the major change that it has so far accomplished, has been a liberalization of trade by lowering the tariff barriers between countries. But the WTO is not merely a negative instrument, designed to eliminate the barriers to trade. It promotes a specific kind of trade regime, governed by formal rules encoded in the agreements, some of which, but not all, promote free trade, which the organization administers and which are applicable only to certain parts of the global economy, with the notable absence of such sectors as agriculture. It does not just call for the elimination of trade barriers, but serves to coordinate the kind of trade—and the kinds of trade-related policy measures— that its member states pursue. Taken together, the WTO agreements can be considered a kind of standard—albeit a complex and multifaceted one—and the WTO exerts network power as the coordinator of the multilateral trading system.10 Membership in the WTO is predicated on accepting all of its agreements, which together guarantee broad principles in the governance of multilateral trade as, for example, nondiscrimination. The WTO is both a 94

set of trade standards and the organization that administers them—it is a standard for membership that can possess network power as it regulates valuable exchange. The drive to join the WTO comes of the desire to enjoy freer trade with other countries, as such membership provides nondiscriminatory access to lucrative overseas markets. With the backing of all the world’s powerful economies—including, since 2001, the People’s Republic of China—it should come as no surprise that the WTO now governs virtually all international trade. Any party wanting special access to the world’s major economies can get it—but only through membership in the WTO and conformity to its standards. (The acceptance of these standards is often linked with other bilateral and regional trade agreements that offer further inducement to join.) Of course, as in any instance of network power, the standard promises benefits but involves potential costs: it offers the benefit of access and the threat of its costly denial, determined by the standard criteria for membership. Trade is a difficult subject in which to argue that force is at work since it is the exemplary voluntary act, in which two parties exchange goods or services to mutual benefit. But if we focus away from any individual instance of trade to the trading system itself, we begin to see how network power is at work in the WTO. A system of coordinating international trade might have many different objectives and designs, any one of which, if accepted by the world’s 9

These agreements are the General Agreement on Tariffs and Trade, the General Agreement on Trade in Services, and the Agreement on Trade-Related Aspects of Intellectual Property Rights; available at www.wto.org/english/docs_e/legal_e/final_e.htm. 10 It is appropriate to consider all the WTO agreements as constituting a single, albeit complex, standard, since for any member state these agreements must all be accepted together for admission to the organization.

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powerful economies, would quickly become the trading standard to use. For example, the economist Dani Rodrik has argued that the WTO rules might have been made more development-friendly, focusing not on maximizing the volume of trade but on maximizing the economic development that such trade brings. Such a system would build in opt-out clauses to protect the longterm interests of developing countries in certain strategic areas, such as intellectual property. If we accept that a number of free trading systems might have been created to manage trade and coordinate the expectations of the traders, we see that the rise to ascendance of any particular one of them necessarily entails a specific set of costs and benefits to various parties. Importantly, as a standard for membership is institutionally designed and sustained, it is possible to revise it deliberately, unlike the case of mediating standards. Thus, the complaint against the WTO—or against any successful standard—is not that parties do not want to adopt a dominant standard, once it is dominant, but that other standards under which they might have fared better were not adopted in the first instance. This argument also holds true for the developmentfriendly alternative that Rodrik proposes: if it became dominant and exerted network power, the developed nations might similarly complain that their interests would have been better served in a different institutional structure. When developed countries advance such a complaint, however, it may seem less plausible since they enjoy many other advantages in the trading system and in international negotiations more generally. The network power of the WTO produces, simultaneously, freer international trade and an increasing loss of the freedom to trade in a manner apart from that pronetwork power and globalization

scribed by WTO rules. (Whether this is beneficial is a complex, empirical question.) Certainly, a country could refuse to join the WTO and attempt individually to negotiate bilateral trade pacts with its current and potential trading partners. But given the difficulty of doing so, and the position of the WTO, membership is the easiest option, perhaps even the only credible option for almost every country. WTO advocates often fail to acknowledge—or at least claim not to see—that membership in the organization cannot be reduced to the simple matter of choosing whether or not to take part in its agreements, given its dominance in the world trading system. The globalization of standards of economic governance, with trade chief among them, can lead to branding local experiments as unacceptable heresies insofar as they deviate from the neoliberal order. It is this exercise of power that generates much of the resentment against globalization since it entails a loss of local autonomy, even though this loss is voluntarily accepted, given the lack of viable alternative ways of gaining access to international markets. Inherent in the use of any standard is a tension between the cooperation that it allows users to enjoy and the suppression of innovation, which requires a break in the established routine. Standards such as the WTO’s enable us to cooperate with each other but also bind us, thus creating a tension between experimentation and cooperation. Critical to managing this tension is the recognition that the benefits from international cooperation must be fairly distributed. Again, the relevant question is not whether any member of the WTO is “better off ” as a member. Given conventional equilibria, everyone is in some absolute sense better off—particularly when the alternative is isolation—so the focus must be on 95

the size of the relative advantage that any member takes from the cooperation compared to another system, including noncooperation. Without a fair distribution of the advantages and disadvantages of membership, we should expect to see continuing trouble between developing and industrialized countries of the sort that defeated the addition of any new agreements at the Seattle and Doha ministerial conferences. BALANCING NETWORK POWER Describing the rise of global standards as involving a form of power does not itself recommend any normative conclusions, since power, per se, is neither avoidable nor necessarily bad. But it does demand that we focus our attention on the entrapping aspects of these global social relations, and with an eye to judging and possibly reforming them. In evaluating the impact of network power, we should consider the distribution of two sets of costs: of transition and the loss of identity. The transition from one standard to another will impose various costs of adapting to a new standard, which will be borne by those switching. These costs can be of different kinds. Some simply involve the difficulty of adopting a new standard. The second set of costs involves the loss of a standard that plays an important role in people’s identities or culture. Linguistic loss is an obvious example: abandoning one’s native language involves much more than the costs of learning a new one. These costs will generally be borne by those who are far from the centers that network power privileges: people from minority cultures and underdeveloped regions. Often, the rise to dominance of a shared standard will irremediably eclipse local standards and impose costs unfairly. In particular, where local standards support val96

ued forms of shared association and distinct ways of life, their loss can prove devastating, the burdens heaped precisely on those least able to bear them. The idea of network power offers no solution for such misery, nor any consolation for the fact that history can be tragic. However, not all network power is necessarily inevitable or incontestable. We must resist a totalizing impulse that sees network power as pervasive and systematically incontestable, as we find in some heterodox theories of power. Instead, the actual evaluation of network power requires a close look at the institutional conditions of any given network and standard. Finding ways to offset the unacceptable burdens imposed by network power can be difficult since, unlike straightforward coercion, this kind of power is driven through forms of consent. Thus, a strategy based on negative rights that carve out a zone of individual autonomy is of limited use since network power is driven by formally free choice over unviable alternatives. A strategy based on positive rights—on the opening up of new possibilities for choice—requires a nuanced institutional examination of the “boundary properties” of networks. Since we are clamoring for access to one another, the only way to defuse network power is to provide alternative and multiple channels for such access, thereby refusing to privilege just one. Whether this is possible depends on the particular configuration of boundary properties in any instance. The analysis of boundary properties is particularly relevant in the design and reform of standards for membership, which can be directly and deliberately altered, than for mediating standards such as languages. ACCESS TO NETWORKS In discussions of the architecture of organizations or systems some commentators have David Singh Grewal

distinguished between open and closed architectures. While the distinction is evocative, it does not fully capture the idea of boundary properties. My analysis of the boundary properties of standards subdivides this general idea of openness into openness to new entrants, to parallel systems, and to revision. I call these characteristics openness, compatibility, and malleability. The first property, openness, indicates the ease with which a network accepts new entrants desiring to adopt its standard. Obviously, all things being equal, greater openness should translate into greater network power, since potential entrants face lower costs of adopting a new standard and switching into a new network. The second property, compatibility, indicates the ease with which a standard allows translation from other standards, or adoption of parallel standards, facilitating access to its network without requiring its adoption. Compatibility can be seen as openness to the use of either parallel or simultaneous standards, and therefore, all else being equal, compatibility defuses the network power of any given standard, allowing nonusers the access they desire without the need to switch standards. The third property, malleability, indicates the extent to which a standard underlying a given network is available for revision, however piecemeal. A network is only malleable if the underlying standard—the institution by which members gain access to one another—can be revised without disrupting the ongoing social relations it supports. Revisability can augment the network power of smaller networks—for example, by increasing a standard’s similarity to other standards, hence easing the transition to a dominant standard. It can defuse the network power of larger networks by increasing their compatibility with other standards. network power and globalization

Examining boundary properties can reveal different ways of defusing network power by setting up multiple modes of access to a network. For example, where forms of compatibility can be introduced or enhanced, the rise of a dominant standard will prove less destructive to smaller standards, for users of these standards will be able to maintain connection to the dominant network without losing their local affiliations. Support for such compatibility is a question both of institutional design and of the provision of resources necessary when compatibility requires developing multiple competencies. Institutional design can enhance or suppress compatibility. For example, the WTO could offer developing countries access to global markets but strengthen opt-out clauses allowing them exemptions in critical areas of cultural protection and human development. Resources are also often needed to ensure real compatibility, as in the case of multilingual nations. State support for the development of minority-language media, schooling, and community development may be required to achieve a fairer distribution of the costs of asymmetric bilingualism within and between countries. Ensuring compatibility does not eliminate the desire for greater access to greater numbers of people, but it does allow this movement to proceed on terms more compatible with established histories and social relations. It does not dissolve the network power driving globalization, but it could tilt the process in the direction of more freedom and less force. GLOBALIZATION AS EMPIRE The claim that globalization is imperial rests on two counts: first, the fact that many important choices—and perhaps even national des97

tinies—seem already decided because of globalization; and second, that certain privileged countries benefit from (or at least experience no loss of freedom from) these same processes of globalization. Both of these elements are comprehensible in light of the network power of dominant global standards. Coordination is both freeing and entrapping: freeing because it offers access to others on new scales, and entrapping because it does so—often necessarily—in a way that privileges one mode of access rather than another. The insight that the relations that free us also bind us is not new to those theorists of modernity, like Max Weber, who understood

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the loss of freedom accompanying the progress of the age. But unlike the forms of unfreedom associated with an internally generated modernity, global standards often come from the outside. They also impose their costs unevenly, privileging the already dominant. Therefore globalization appears not to be the iron cage of modernity manifest on a newly global scale, but foreign imposition in the familiar mould of empire. Given these dynamics, we should not expect the accusation of empire to disappear anytime soon. But neither should we pretend that these accusations consist of nothing more than confusion and bad faith in a moment of global advance.

David Singh Grewal