introduction to transnational integration project

Mon, 17 Feb 1997 17:59:46 +0100 (MET)

Transnational integration and national disintegration.

all copyrights: Arno Tausch, Warsaw/Salzburg/Innsbruck

by Arno Tausch, Attaché for Labour and Migration, Austrian Embassy Warsaw .
Opinions expressed in this paper, are exclusively those of the author and not
necessarily those of the Austrian Government
‘For upward of a thousand years the tendency of the economic centre of the
world has been to move westward, and the Spanish War has only been the shock
caused by its passing the Atlantic. Probably, within two generations, the United
States will have faced about, and its great interests will cover the Pacific,
which it will hold like an island sea (...)’ Brooks Adams (1900) ‘America’s
Economic Supremacy’, as quoted in David and Wheelwright, 1989

‘The Ten Duties of Kings are: liberality, morality, self-sacrifice, integrity,
kindness, austerity, non-anger, non-violence, forbearance, and non-opposition to
the will of the people’ (Daw Aung San Suu Kyi, the Buddhist view of responsible

‘Although famines can kill millions of people, they do not kill rulers. Kings
and presidents, bureaucrats and bosses, generals and police chiefs - these
people never starve’ (Amartya Sen)

Table of Contents:

List of abbreviations (functional terms)

List of Tables

List of Graphs

1) Introduction

2) The theoretical framework: what can policy-makers know about the ascent and
decline in the world economy?

3) The international environment is basically unstable. A survey of the
contemporary research methods for the study of changes in the world system since

4) Problem number 1: Europe is characterised by the typical ‘mix’ of conditions
that lead to stagnation

5) Problem number 2: Europe must come to terms with the ‘new’ social problems
arising from the contradictions of the process of the global environmental
destruction, to which Europe as one of the main regions of world industry and
traffic, disproportionately contributes, and Europe must find a proper way for
gender empowerment

6) Problem number 3: Europe must come to terms with the contradictions of world
cultures and world cultural conflict, global anarchy and global decay

7) Problem number 4: Europe must come to terms with the contradictions between
Europe, the developed centre, and its Eastern European periphery, and the
problems of political instability, nationalism, and unequal development, that
the present form of interaction between the centre and the periphery bring about

8) Problem number 5: Europe must come to terms with the contradictions of the
process of the ageing of democracies, especially phenomena which one might term
sclerosis bruxelliana and sclerosis Europea

9) Transnational Integration and National Disintegration - A Synthesis




List of Tables

Table 2.1: Global patterns of foreign direct investments, 1975-1995, in billions
of $:
Table 4.1a: MNC penetration by international comparison
Table 4.1b: The share of inward FDI stock in the gross domestic product of
European Union countries by international comparison, 1980-1994
Table 4.1c: The re-iteration of the dependency and neo-classical model of growth
and development in the capitalist world economy, 1980 - 1992
Table 4.1d: The effects of dependency (FDI stock per total GDP in the host
countries) and world development - data for the 1980s and beyond
Table 4.2: International dependency and its effects on growth and adjustment,
allowing for the influence of the migration process
Table 5.1: environmental quality in Eastern Europe and the former USSR in
comparison to the US, the UK, France, (West) Germany, Sweden and Austria
Table 5.2: the marginalisation of women, social devastation and decay in former
communist countries of Central and Eastern Europe in comparison to the European
Union countries
Table 5.3: gender empowerment
Table 6.1: the influence of Huntington's index on development performance at the
level of world society
Table 6.2: The determination of the Gurr-Index of ethno-political conflict in
the periphery and semi-periphery
Table 6.3: Money-laundering and its destructive effects on the national economy:
Table 7.1: Poverty and peripherisation in (Eastern) Europe
Table 7.2: Poverty on a world scale
Table 7.3: the position of the East and the (former) 'de-linking' South in the
new world system
Table 7.4a: The 1993 elections in Poland
Table 7.4b: The 5th of November 1995 elections in Poland
Table 7.4c: The 19th of November 1995 elections in Poland
Table 7.5: the political ecology of foreign capital attraction to the different
regions in Poland, 1993
Table 7.6: The transformation success or failure 1989-95
Table 7.7: The determinants of economic growth in the transformation countries
Table 7.8a: Inequality, savings, taxes, and social expenditure. Evidence from
Eastern Europe by cross-national comparison
Table 7.8b: Gini-Index of income inequality in the formerly socialist or
quasi-socialist countries
Table 7.9: foreign aid, aggregate resource flows per GNP and economic growth in
the transformation countries
Table 7.10: The external conditions of the transformation and the World Bank’s
liberalisation index:
Table 7.11: EU-eastward expansion - a synopsis of the conditions, prevailing in
the European periphery:
Table 8.1: trade balances in Eastern Europe
Table 8.2: The extractive economy on a world scale. Poland by international
List of Graphs

Graph 1.1: Structural dependence of the European East
Graph 1.2: The debt crisis of the world periphery
Graph 1.3: The 11 - 19 main crisis points in the world system
Graph 1.4: The demand side of the distribution of gross domestic product in a
Tiger economy and in a successful transformation country - Singapore and Poland
Graph 2.1: Capital flows, projected from outflow and inflow data 1984 - 1995
from major economic regions. North America will become the major source of
capital outflows over the coming years
Graph 2.2: national origin of the foreign population of 16.9 million people,
living in the European Union countries
Graph 3.1: the tendencies of the capitalist world economy towards Kondratieff
Graph 3.2: The war cycles since 1495
Graph 3.3: Kuznets-cycles in the world system, 1756 - 1975
Graph 3.4a: New evidence regarding the Kondratieff cycles, 1740-1975, based on
5-year moving averages
Graph 3.4b: Kondratieff cycles, based on 10 year moving averages
Graph 3.5a: the Human Development Index as a function of the level of
development (real purchasing power)
Graph 3.5b: capability poverty as a function of real purchasing power - the
results at the level of the semi-periphery and periphery countries
Graph 3.5c: capability poverty as a function of real purchasing power - the
results at the level of the semi-periphery and periphery countries with a real
GDP per capita between 4000 $ and 8500 $
Graph 3.6: critical values of the t-test
Graph 4.1: inward and outward FDI stock as a percentage of gross domestic
product over time in 1980, 1985, 1990 and 1994 in major regions of the world
Graph 5.1 Charles D. Keeling’s data series from Mauna Loa - atmospheric
concentrations of greenhouse and ozone-depleting gases, 1959-90, and the trend
for the next 60 years
Graph 5.2: CO2 emissions and their growth rates from 1950 onwards
Graph 6.1: War victims and victims of mass murder after 1945
Graph 7.1: unemployment in Poland - total outflows and outflows to work,
Graph 7.2: human development and poverty
Graph 7.3: MNC investments in the Polish economy
Graph 7.4: unemployment in Poland - regional aspects
Graph 7.5: unemployment in Poland - the time series
Graph 7.6: inequality and economic transformation on a world level and in the
transformation countries
Graph 7.7a: foreign aid and economic growth in the transformation countries
Graph 7.7.b: foreign aid per capita and economic growth on a world level
Graph 7.7.c: resource flows and economic growth in the transition countries
Graph 7.8: the weighted averages of the economic and political indicators of
European periphery countries
Graph 8.1: the world-wide recipients of transnational investment, 1984 - 1995
Graph 8.2: Triad fortresses? The share of intra-regional trade, trade with the
other parts of the triad and with the rest of the world in a time-perspective

1) Introduction

The aim of this work is mainly to serve as an invitation to the research
community to further develop our insights into the dynamics of world development
in the post 1989-world. Walking in the fog of a world order, that seems to be
characterized by instability and low-intensity conflict, by the shifting of the
centres of gravity of the world economy, by the increase in the contradictions
of the process of globalization, by environmental decay, refugee crises, by
violations of human rights on a scale unthinkable since the end of the Second
World War. The liberal paradigm, that shaped politics and economics of the
post-1989 world, seems to have reached its limits, while the predictions of
world society paradigms - starting with Karl Polanyi - gain in relevance for the
analysis of the post-1989 world. Our book - limited in aim and in scope - and
well aware of our limitations both in terms of the possible sophistication of
mathematical-statistical models used as well as in terms of the data at our
disposal - we nevertheless think that our modest aim to write an honest
cross-national analysis of the post-1989 tendencies of world development is
justified, timely and above all politically relevant.
The advantage of the body of 'critical' thinking about the world economy and
world politics, that again and again achieved to catch the imagination of a
scholarly public even in a country, where the values of the free market economy
are as firmly entrenched as they are in the USA - has always been, that it
hinted at the darker, possible outcomes of events to come, and that it showed to
the world the continued relevance of the mechanisms of great power rivalry,
conflict, and the continued relevance of dependence, cyclical ups and downs of
the world economy, and finally, both the 'outer' i.e., environmental, and the
'inner', i.e. gender frontiers of the existing social order. It is no
coincidence, that precisely now, after years of silence in Europe, a book,
written by two German speaking journalists - Martin/Schumann, 1996, has become a
best-seller. Globalization. As if the issue had not existed before. All of a
sudden, Europeans especially begin to discover that their societies and
economies are being exposed as well in an almost ruthless fashion to the
pressures of the globalization process. For many years, such arguments were the
hobby of a small minority of development re-searchers. With the fall of the
Berlin Wall and the so-called End of the Cold War, the capitalist world economy
found opportunities, qualitatively and quantitatively unheard of only a decade
ago. Suffice to re-read today the still relevant volume edited by Christopher K.
Chase Dunn (1982) to see what today has become possible in terms of
transnational capitalist expansion and penetration into the world of former
'real socialism’. Even in the most populous former or still
communist-party-ruled countries of the world, the central state as an economic
actor (in the sense of activity) is out, while transnational investment is in.
Let us compare here China, Vietnam, Myanmar, Ethiopia, Poland, Russia, and the
Ukraine, whose population each will exceed 35 million inhabitants by the year
2000. All governed by different elites in the 1980s, whose common denominator
was an official rejection of 'Western' capitalism, often associated in the
official propaganda with decay, rottenness and what more, it can be safely
assumed today that their central governments withdraw from the economy or have
already done so, and are actively engaged in promoting foreign direct
investments from the very same transnational companies which once were
bedevilled in the propaganda in the 1980s and earlier on. The average Eastern
European former communist country now has FDIs, which amount to 7.4 of their
respective national products, in former Soviet Central Asia this percentage is
at 3.3%; while in China the ratio is even now at 17.9% (UNCTAD, 1996).