Capitalist Globalization

Capitalist Globalization:
Fatal Flaws and Necessity for Alternatives
Leslie Sklair
Emeritus Professor of Sociology and Political Science
London School of Economics

In order to assess the extent to which capitalism can provide the conditions for most
people to have satisfying lives it is first necessary to investigate how modern capitalism
works and what claims it makes. To this end, a distinction is drawn between globaliza­
tion in the generic sense and capitalist globalization, the form dominant in our era.
This paper elaborates a specific application of global system theory to describe capital­
ist globalization. Global system theory bases its analysis in transnational practices that
occur across borders and do not originate with state actors or agencies.
Transnational practices (TNP) operate in three spheres: the economic, usually in 29
the institutional form of the transnational corporation; the political, through the trans­
national capitalist class; and the cultural, through the ideology of consumerism. The
transnational capitalist class (TCC) promotes the culture–ideology of consumerism as
the path to happiness in the capitalist global system and excludes any alternatives that
would threaten the power of the capitalist class. The electronic revolution has trans­
formed the mass media, and by increasingly seizing control of the media, the TCC has
extended the scale and scope of the commodification process globally. The dominant
capitalist discourses of globalization, competitiveness, and sustainable development
serve to conceal the severity of the central crises of capitalist globalization.
The inescapable conclusion of this analysis is that capitalism cannot provide the
conditions for most people on the planet to have satisfying lives and that alternatives to
capitalist globalization are urgently required. I suggest that the most fruitful alternative
will be the globalization of human rights, economic and social. To accomplish this form
of globalization, humanity will have to move on from capitalist globalization.
Leslie Sklair is Emeritus Professor of Sociology and Political Science at the London School of Economics.
He has been a visiting professor at New York, Sydney, and Hong Kong Universities, and has lectured on
globalization all over the world. He is on the editorial boards of Review of International Political Economy,
Global Networks, and Social Forces, and is president of the Global Studies Association (U.K.). He is author
of several books including Sociology of the Global System and The Transnational Capitalist Class.
Copyright © 2006 by the Brown Journal of World Affairs

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 Leslie Sklair
Globalization and Capitalist Globalization

In recent years debates about the positives and negatives of capitalism have been over­
taken by debates about the positives and negatives of globalization. Globalization is a
relatively new term in the social sciences, and scholars continue to debate its definition.
This debate is confused by the identification of globalization in general with capital­
ist globalization, to the exclusion of other types. It is thus important to first define
globalization in generic terms and to clarify the forms it has taken historically, and can
take in the future, without losing sight of the fact that the dominant form of globaliza­
tion today is unthinkable without capitalism. Generic globalization is a relatively new
Characteristics of generic globaliza- (post-1960) phenomenon defined by
three fundamental characteristics. First,
tion are irreversible in the long run, generic globalization is a consequence
but this does not mean that capital- of a technological transformation in
the means of communication, the
ist globalization is irreversible. The widely discussed electronic revolution
confusion of the current “anti-glo- integral to what Castells famously
balization” movement stems from dubbed “the information age.” Second,
1

this technological transformation has

30 a failure to grasp this distinction. made possible qualitatively new forms
of cosmopolitanism, where relations between the national and the international are
increasingly conceptualized as relations between the local and the global. Third, the
widespread technological transformation has also enabled the creation of transnational
social spaces.
While the electronic revolution, embryonic new cosmopolitanism, and trans­
national social spaces all emerged in a time of rapidly globalizing capitalism, none is
necessarily a capitalist institution and all could exist and prosper—albeit in different
ways—in a non-capitalist world. These characteristics of generic globalization are, in
my view, irreversible in the long run, but this does not mean that capitalist globalization
is irreversible. The confusion of the current “anti-globalization” movement stems from
a failure to grasp this distinction. But this is not the only source of confusion about
globalization. The use of differing, even contradictory, approaches to globalization has
created a situation where the term is widely used but little understood.
The global system at the beginning of the twenty-first century is not synonymous
with global capitalism, but the dominant forces of global capitalism have become the
dominant forces in the global system. Examining the level of nation-states is inadequate
to explain how capitalism has dominated globalization; instead, this question needs to
be theorized in terms of transnational practices. The concept of transnational practices,

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 Capitalist Globalization
which cross state boundaries and do not originate with state agencies or actors, offers
a working hypothesis for the claim that the nation-state is in decline.2 Transnational
practices operate in three spheres: the economic, the political, and the cultural–ideo­
logical. These three spheres together compose the global system.
Global capitalism has come to dominate all three spheres through the economics
of the transnational corporation, the politics of the still‑evolving transnational capital­
ist class, and the culture–ideology of consumerism. Major transnational corporations
(TNCs), as the most powerful globalizing institutions in the world today, have a cen­
tral role in making capitalist globalization the dominant form of globalization.. These
corporations are run by the TCC, which has shown itself to be an increasingly similar
group with cohesive interests. The most central of these interests is spreading the claim
that capitalism will provide for “happiness” on a global scale through consumerism.3
Capitalist globalizers argue that the TNCs, owned and controlled by the TCC, are the
best means to achieve happiness through consumption.
More specifically, globalization researchers have focused on two phenomena, cen­
tral to capitalist globalization, that have become significant in recent decades: the rise of
major TNCs and their domination of processes of globalization of capital, production,
and marketing; and transformations in the technological base and subsequent global
scope of the electronic mass media—increasingly orchestrated through conglomerate
TNCs—in embedding consumerism as the dominant culture–ideology of our time.4 31

Capitalism and TCC in the Economic, Political, and Cultural–Ideological Spheres

Capitalist globalization relies on a political force that balances economic exclusion with
cultural–ideological inclusion. In the economic sphere, the global capitalist system of­
fers a limited place to the wage-earning masses in most countries. Workers, the direct
producers of goods and services, have occupational choices that are generally free only
within the range offered by the class structures in national capitalisms. The inclusion
of the subordinate classes in the political sphere is even more limited because the
global capitalist system has very little political need for these classes. In parliamentary
democracies, successful parties must be able to mobilize the masses to vote every so
often, but in most countries voting is not compulsory and mass political participation
is usually discouraged. In non-democratic or quasi-democratic capitalist polities, even
these minimal conditions are absent.
The culture–ideology sphere is, however, entirely different. Here, the aim of global
capitalists is total inclusion of all classes. They focus especially on the subordinate classes
insofar as the bourgeoisie can be considered already included. The cultural–ideological
project of global capitalism is to persuade people to consume above their biological

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 Leslie Sklair
needs in order to perpetuate the accumulation of capital for private profit; in other
words, to ensure that the global capitalist system endures. The culture–ideology of
consumerism proclaims, literally, that the meaning of life is to be found in the things
that we possess.5 To consume, therefore, is to be fully alive, and to remain fully alive we
must continuously consume. The notion of men and women as economic or political
beings is discarded by global capitalism, as the system does not even pretend to satisfy
The culture–ideology of consum- everyone in the economic or political spheres.
The point of economic activity in the global
erism proclaims, literally, that capitalist system is to provide the resources
the meaning of life is to be found for consumption, and the point of political
activity is to ensure that the conditions for
in the things that we possess. consuming are maintained. The importance of
the TNCs and of consumerism are now widely recognized by proponents, opponents,
and those who claim to be neutral about globalization, but the idea of the TCC, the
driving political force behind the economic and cultural–ideological forces, is less
familiar and much more controversial.
The TCC comprises corporate executives, bureaucrats and politicians, globaliz­
ing professionals, and media, among other entities. Together, these groups constitute
a global power elite or ruling class.6 While various entities have different functions for
32 the global capitalist system, the people in them often move from one category to an­
other, creating a revolving door between, for example, government and business.7 This
class seeks to create ideal global and local conditions not only for their own interests,
but also for the interests of the capitalist system as a whole. Under this concept, the
TCC makes system-wide decisions and connects with members in each locality, city,
region, country, etc.
The TCC is transnational in several respects. The economic interests of its mem­
bers are increasingly globally linked rather than exclusively local and national in origin.
Their property and shares and the corporations they are tied to are becoming more
globalized. Members of the TCC tend to share similar lifestyles, particularly patterns of
higher education (increasingly in business schools) and consumption of luxury goods
and services. Integral to this process are exclusive clubs and restaurants, ultra-expensive
resorts in all continents, private as opposed to mass forms of travel and entertainment,
and, ominously, increasing residential segregation of the very rich secured by armed
guards and electronic surveillance, from Los Angeles to Moscow, Manila to Beijing,
Mumbai to Sao Paulo. Finally, members of the TCC seek to project images of them­
selves as citizens of the world as well as of their places of birth. Leading exemplars of
this phenomenon include French-born Jacques Maisonrouge, who became in the 1960s
the chief executive of IBM World Trade; the Swede Percy Barnevik who created Asea

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 Capitalist Globalization
Brown Boverei (ABB), often portrayed as spending most of his life in his corporate
jet; the German Helmut Maucher, former CEO of Nestle’s far-flung global empire;
David Rockefeller, one of the most powerful men in the United States and founder of
the Trilateral Commission; the legendary Akio Morita, the founder of Sony; Rupert
Murdoch, who actually changed his nationality to pursue his global media interests;
and George Soros and Bill Gates, billionaires and global philanthropists.
Members of the TCC have outward-oriented and global rather than inward-ori­
ented and local perspectives on most economic, political, and culture–ideology issues.
The growing TNC and international institutional emphasis on free trade and the shift
from import substitution to export promotion strategies in most developing countries
since the 1980s have been driven by alliances between indigenous and foreign members
of the TCC.
The TCC is opposed not only by those who reject capitalism as a way of life or an
economic system, but also by those capitalists who reject globalization. Some localized,
domestically oriented businesses can share the interests of the global corporations and
prosper, but many cannot, and perish. Influential business strategists and management
theorists commonly argue that to survive, local businesses must globalize. Though most
national and local state managers fight for the interests of their constituents, there are
government bureaucrats, politicians, and professionals who entirely reject globalization
and espouse extreme nationalist ideologies. However, such individuals are comparatively 33
rare, despite the recent rash of civil wars in economically marginal parts of the world.
Moreover, while there are anti-consumerist elements in most societies, there are few cases
of a serious anti-consumerist party winning political power anywhere in the world.
The TCC seeks to exert economic control in the workplace, political control
in domestic and international politics, and culture–ideology control in everyday life
through specific forms of global competitive and consumerist rhetoric and practice. The
focus of workplace control is the threat that jobs will be lost or even that the economy
will collapse unless workers are prepared to work longer and for less in order to meet
foreign competition. This is reflected in local electoral politics in most countries, where
the major parties have few substantial ideological differences, particularly in the sphere
of culture–ideology, where consumerism is rarely challenged.
The inner circle of the TCC unifies the diverse economic interests, political
organizations, and cultural–ideological formations of those who make up the class as
a whole. As in any social class, fundamental long-term unity of interests and purpose
does not preclude shorter-term local conflicts, both within each of the four factions
and between them. The culture–ideology of consumerism is the fundamental value
system that keeps the system intact, but it permits a relatively wide variety of choices.
One example is what I term “emergent global nationalisms,” a way of satisfying the

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 Leslie Sklair
needs of the different actors and their constituencies within the global system. The
four factions of the TCC in any geographical and social area or community perform
complementary functions to integrate the whole. The achievement of these goals is
facilitated by the activities of local and national agents and organizations connected in
a complex network of global interlocks.
A crucial component of this integration of the TCC as a global class is that virtu­
ally all senior members of the TCC will occupy a variety of interlocking positions—not
only the oft studied interlocking directorates, but also connections outside the direct
ambit of the corporate sector. These members can drive civil society as it were to service
the state-like structures of the corporations. Leading corporate executives serve on and
chair the boards of think tanks; charities; scientific, sports, arts, and cultural bodies;
universities; and medical foundations.8 It is in this sense that the claims “the business
of society is business” and “the business of our society is global business” become
legitimated in the global capitalist system. Business, particularly in the TNC sector,
begins to monopolize symbols of modernity and post-modernity like free enterprise,
international competitiveness, and the good life and to transform most, if not all, social
spheres in its own image.
It is hardly a controversial proposition that global capitalism, driven by the
TNCs, organized politically through the TCC, and fuelled by the culture–ideology of
34 consumerism, is the most potent force for change in the world today. Its capacity to
deliver happiness on a global scale is more problematic. Attitudes to capitalist globali­
zation range from happy fatalism (things are getting better all the time) to optimistic
fatalism (things will surely get better for those who are hurting) to depressed fatalism
(things will get worse for those who are hurting and may never get much better but
there is nothing anyone can do about it). Marx-inspired crisis theory suggests that the
problems with capitalism are a consequence of contradictions within the capitalist mode
of production itself. Global system theory complements this argument by globalizing
it—as capitalism globalizes, its crises intensify.

Conclusion

Space permits a very brief conclusion to a very large series of problems. Global capi­
talism, through the unceasing public pronouncements of members of the TCC, ac­
knowledges many of these issues, but as problems to be solved rather than crises. For
example, corporate executives, world leaders, heads of major international institutions,
globalizing professionals, and the mainstream mass media all accept that the rich are
getting richer, some of the poor are getting poorer, and the gaps between the rich and
the poor are widening in our globalizing world. However, this is rarely seen as the class

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 Capitalist Globalization
polarization crisis that it really is. Summits and conferences are held, expert commis­
sions are established, targets are set, plans are put into practice, some targets are missed
and some are achieved, and the process grinds on. Similarly, public representatives of
the TCC accept that there are environmental problems and that something has to be
done about them. However, even as the TCC accommodates some mild criticism of
consumerism and globalization, the fatal connection between the capitalist mode of
production and the holistic ecological crisis is almost entirely suppressed.
Addiction research might help us to understand the psychological processes
involved in burying what most of us know to be true about class polarization and
ecological unsustainability to the deepest reaches of the unconscious. These are not
signs of a happy world.
It is clear, therefore, that if capitalist globalization cannot resolve its crises, then its
promises of prosperity and happiness for all cannot be honored. This makes the search
for alternatives urgent. In my view, a focus on the globalization of human rights and
responsibilities will provide one fruitful path forward.9 To take the issue of economic
and social human rights seriously, however, will almost certainly mean rejecting capital­
ist globalization in favor of other more humane and communal forms of globalization.
Time is running out, but it is not too late. W A

Notes 35

1. Manuel Castells,The Rise of the Network Society (London: Blackwell, 2000).

2. Robert Holton, Globalization and the Nation-State (Hampshire: Macmillan Press, 1998); Susan
Strange, The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge: Cambridge
University Press, 1996).
3. I shall leave it to others to deconstruct “happiness,” and there are many interesting ways to do this as
discussed, for example, in the new scholarly Journal of Happiness Studies (published by Kluwer of Rotterdam
since 2000). Here it is used in the sense of satisfaction of people’s basic material and emotional needs.
4. Edward S. Herman and Robert W. McChesney, The Global Media: The New Missionaries of Corporate
Capitalism (London: Cassell, 1997).
5. Leslie Sklair, Globalization: Capitalism and Its Alternatives (Oxford: Oxford University Press, 2002),
ch. 7.
6. Alan Scott, Ideology and the New Social Movements (London: Unwin Hyman, 1990); M. Useem, The
Inner Circle: Large Corporations and the Rise of Business Political Activity in the U.S. and U.K. (New York:
Oxford University Press, 1984).
7. For an extended discussion of these issues, based on empirical research on the Fortune Global 500,
see Leslie Sklair, The Transnational Capitalist Class (Oxford: Blackwell, 2001).
8. Sharon Beder, Global Spin: The Corporate Assault on Environmentalism (Totnes, Devon: Green Books,
1997); William G. Domhoff, State Autonomy or Class Dominance? : Case Studies on Policy-making in America
(New York: Aldine de Gruyter, 1996).
9. Sklair, “Globalization,” ch. 11.

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 Leslie Sklair
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