of the Middle East except Israel.and large parts of Asia. globalization,even within its zone,is not a statement Moreover,for many countries.the degree of participa- about the present.but a prediction about the futurc. tion in the global economy varies by region.Northern Many globalizers underestimate the extent to which Italy,for example,is in;southern Italy is out.In fact, the new looks like the old.In any competitive system the globalization is not global but is mainly limited to north- winners are imitated by the losers,or they continue to ern latitudes.Linda Weiss points out that,as of 1991, lose.In political as in 81%of the world stock of foreign direct investment was economic develop- in high-wage countries of the north:mainly the United Many globalizers un- ment,latecomers imi- States,followed by the United Kingdom,Germany,and tate the practices and Canada.She adds that the extent of concentration has derestimate the ex- adopt the institution grown by 12 points since 1967 (Weiss 1998;cf..Hirst and tent to which the of the countries who Thompson 1996,72). have shown the way. Second,we should compare the interdependence of new looks like the Occasionally,someone nations now with interdependence earlier.The first para- finds a way to out- graph of this paper suggests that in most ways we have old.In any competi- flank.to invent a new not exceeded levels reached in 1910.The rapid growth of tive system the win- way,or to ingeniously international trade and investment from the middle 1850s into the 1910s preceded a prolonged period of ners are imitated by modify an old way to gain an advantage; war,internal revolution,and national insularity.After the losers,or they and then the process World War II,protectionist policies lingered as the of imitation begins United States opened it borders to trade while taking a continue to lose. anew.That competi- relaxed attitude toward countries that protected their tors begin to look like markets during the years of recovery from war's devasta- one another if the competition is close and continuous is tion.One might say that from 1914 into the 1960s an a familiar story.Competition among states has always interdependence deficit developed,which helps to ex- led some of them to imitate others politically,militarily. plain the steady growth of interdependence thereafter. and economically:but the apostles of globalization argue Among the richest 24 industrial economies (the OECD that the process has now sped up immensely and that countries),exports grew at about twice the rate of GDP the straitjacket allows little room to wiggle.In the old after 1960.In 1960,exports were 9.5%of their GDPs;in political era.the strong vanquished the weak;in the new 1900.20.5%(Wade1996.62:cf,Weiss1998.171).Find- economic era."the fast eat the slow"(Klaus Schwab ing that 1999 approximately equals 1910 in extent of in- quoted in Friedman 1999,171).No longer is it "Do what terdependence is hardly surprising.What is true of trade the strong party says or risk physical punishment";but also holds for capital flows.again as a percentage of instead "Do what the electronic herd requires or remain GDP(Hirst and Thompson 1996.36). impoverished."But then,in a competitive system there Third.money markets may be the only economic sec- are always winners and losers.A few do exceptionally tor one can say has become truly global.Finance capital well.some get along,and many bring up the rear. moves freely across the frontiers of OECD countries and States have to conform to the ways of the more suc- quite freely elsewhere (Weiss 1998.xii).Robert Wade cessful among them or pay a stiff price for not doing so. notes that real interest rates within northern countries We then have to ask what is the state of the state?What and between northern and southern countries vary by no becomes of politics within the coils of encompassing eco- more than 5%.This seems quite large until one notices nomic processes?The message of globalizers is that eco- variations across countries of 10 to 50 times in real nomic and technological forces impose near uniformity wages,years of schooling,and numbers of working scien- of political and economic forms and functions on states tists.Still,with the movement of financial assets as with They do so because the herd is attracted only to coun- commodities,the present remains like the past.Despite tries with reliable,stable,and open governments-that today's ease of communication,financial markets at the is,to liberal democratic ones. turn of the previous century were at least as integrated Yet a glance at just the past 75 years reveals that a as they are now (Wade 1996,73-75). variety of political-economic systems have produced im- Obviously,the world is not one.Sadly,the disparities pressive results and were admired in their day for doing of the North and South remain wide.Perhaps surpris- so.In the 1930s and again in the 1950s,the Soviet ingly,among the countries that are thought of as being Union's economic growth rates were among the world's in the zone of globalization,differences are considerable highest,so impressive in the '50s that America feared and persistent.To take just one example,financial pat- being overtaken and passed by.In the 1960s President terns differ markedly across countries.The United States Kennedy got "the country moving again,"and America's depends on capital imports.Western Europe does not, radically different system gained world respect.In the and Japan is a major capital exporter.The more closely 70s,Western European welfare states with managed and one looks.the more one finds variations.That is hardly directed economics were highly regarded.In the late'70s surprising.What looks smooth,uniform,and simple from and through much of the '80s.the Japanese brand of a distance.on closer inspection proves to be pock neomercantilism was thought to be the wave of the fu- marked,variegated,and complex.Yet here,the varia- ture;and Western Europe and the United States worried tions are large enough to sustain the conclusion that about being able to keep up.Imitate or perish was the PSOnline www.apsanet.org 695 Reproduced with permission of the copyright owner.Further reproduction prohibited without permission.Reproduced with permission of the copyright owner. Further reproduction prohibited without permission