What have Afghani boat people, Third World debt, and the ageing sewers of Calcutta got in common? They all represent obstructions to the global flow of either labour or capital. Such obstructions are inherent in the individual nation-state system that continues to dominate the way economists and politicians think about the world.
Globalisation might be happening. Or at least globalising forces are at work. Yet we continue to fall back on the pretence that the world is made up of a large number (ie around 200) of individual (and substantially autonomous) national 'economies'. The many-nation system of thought continues to monopolise the thinking of our politicians, public servants and Knowledge Wave conference delegates. The reason is that the western liberal lure of individualism is so strong that the international economy can only be understood by modern neoliberals as a kind of marketplace in which individual nations buy and sell from each other. This "perfect competition" (polypoly; many sellers) model works best when all 200 nations are small relative to the market.
For neoliberals, the only fly in the ointment is the existence of national economies - especially the USA - that are large relative to the international whole. To make their model work better, each of the 50 states of the US should go it alone, much as the unapologetically neoliberal Fran O'Sullivan suggests Auckland should proceed, abandoning any responsibility to or concern for the rest of Aotearoa.
Globalisation represents the other extreme. Globalisation means that the world is effectively one nation; at least, that is, one economic nation. Whereas the individual nation system is global polypoly, globalisation is global monopoly. We can understand globalisation by just removing the last two chapters of any American economics textbooks. The open international economy ceases to exit. Welcome to the closed economy in which all issues are domestic.
The only intellectual challenge arising from globalisation is a small one. Each economy has a government. So the challenge is to imagine a global government that is much like any of the familiar national governments.
Under globalisation, there is only one economy. Labour and capital are free to flow where they will. Riding a leaky boat from Afghanistan to Western Australia would be no different from driving a clapped out car from Oklahoma to Los Angeles. (Yes, The Grapes of Wrath is on TV [Prime] this weekend. And yes, the Okies were turned away too.) Economic migration represents a substantial proportion of the economic history of the world, whether trans-oceanic, trans-continental, or from a village like Bunnythorpe to a nearby city like Palmerston North. (Yes that was the first journey of Glaxo, the London-based company that was the world's largest pharmaceutical supplier in the 1990s. Capital migrates and accumulates much as labour does.)
Economic migration is only a crime to neoliberals. It destroys the integrity of their polypoly model of national economies interacting only through the buying and selling of goods and services.
Globalisation may solve, at the stroke of a textbook, many of the intransigent problems of global polypoly. But it creates another set of problems, perhaps more political than economic. Global monopoly is scary. Power becomes concentrated. And the total lack of barriers to movement causes the world economy to lose much of its structure. People and capital adopt a gold-rush mentality.
The alternative to both polypoly and monopoly is oligopoly. Global oligopoly means a world containing a few large economies, rather than many individual economies. A global economic order made up of around four to six commonwealths can resolve all of the problems that the "small individual economy" competitive model has left us with, but without creating a single global jurisdiction.
In a global oligopoly, every 'nation' (except, probably, China and India) becomes a (usually small) province of a potentially self-sufficient commonwealth. Within each commonwealth, there would be substantial opportunities for people and capital to migrate. The debt of, say, Argentina becomes more like the debt of Wanganui; ie just a part of the internal debt of a greater whole. And that greater whole would take the responsibility for ensuring that each part has at least a minimally adequate sewerage system. Infrastructural projects once undertaken throughout the empire by imperial Britain, would be undertaken by commonwealth institutions, rather than being left for insolvent nations to finance.
By turning all of the world's "Third World" economies into provinces, the problem of the Third World disappears. Each national economy - including the USA - becomes a part of a larger whole; a larger whole which then becomes responsible for all its provincial parts. The commonwealth principle is one of inclusion; no individual economy falls between the cracks. The contrast with the neoliberal principle is sharp. Neoliberalism is the political economy of exclusion; of individuals (or individual economies) turning their backs to their neighbours.
Such oligopoly needs to be able to work - and to be understood - in both theory and practice. I believe that NAFTA and the European Union (EU) are the most important vehicles that will lead to the creation of American-Pacific and Eurafrican commonwealths.
The economic emigrants from Afghanistan of course cannot wait for NAFTA and the EU to take their meandering courses. Further, it is unlikely that Australia and Afghanistan (despite a shared history of camels, camel-drivers and a train called the Ghan) would end up as provinces of the same commonwealth. (Auckland and Afghanistan also have something in common: Khyber Pass.)
The point is that if Afghanistan were to become a province of a greater Asian commonwealth, then life in Afghanistan would be much closer to the Asian mainstream, and Afghanistan would not be so bereft of the capital it lacks today. And there would be plenty of worthy places other than Australia that disenchanted Afghanis could move to without having to resort to leaky boats and hunger strikes.