The invisible hand looms large

Notwithstanding the risk of sounding cliched, one can safely say that this is a book that never ceases to surprise. Beginning with a compact analysis of the Chinese development that liberally uses Robert Brenner, Kenneth Pomeranz and Andre Gunder Frank's thoughts on global division of labour and productivity, the discourse revisits Adam Smith, Marx and Schumpeter in diagnosing the dynamics of capitalist development. Much of what Giovanni Arrighi "" a professor of sociology at Johns Hopkins University "" narrates early on is known and discussed. But he contextualises familiar arguments in altogether different perspectives. As a result, at the end of Part 1, the reader is left grappling with several questions that arise from the known turning into the unknown. Needless to say, such a predilection encourages one to judge history in a more circumspect manner.

The second part deals with the last century. A sense of dejà vu almost immediately gives way to excitement as Arrighi squeezes conventional explanations to yield radical conclusions. Indeed, while studying the economic and social aspects of world development in the late 19th and 20th centuries, one can sense the purposeful manner in which the author builds up evidence for what eventually is his conclusion. Supporting Brenner and underpinning lower leverage of US labour during the later decades of the last century as a decisive factor that initially boosted the nation's productivity and profitability and later precipitated a crisis of hegemony, Arrighi tears apart the tenets of neo-conservatism with consummate ease.

In the third and fourth parts, Arrighi continues to demolish popular perceptions. He first examines the backdrop that led the current US administration to conceive what he calls 'The Project of a New American Century' following 9/11. Arguing that the project met its nemesis in the Iraqi misadventure, Arrighi puts Vietnam and Iraq back-to-back for driving home the limitation of Western "force". Indeed, he feels that Vietnam and Iraq actually complement each other. He links both to two distinct phases of China's growing importance in world affairs. While Vietnam, according to him, forced the US to ensure China's entry into the mainstream of global politics, the outcome in Iraq, he feels, has benefited China the most.

But where does Adam Smith figure in all these? The "invisible hand" looms large throughout the discourse as Arrighi attempts to establish one of the central prophecies of The Wealth of Nations. In his seminal treatise, Smith had visualised a world market society comprising "equal" civilisations. Arrighi contends that the current global landscape is very close to what Smith had foreseen. On the one hand, the futile onslaught in Iraq has exposed that "the Western superiority of force has reached its limits". On the other hand, the spectacular emergence of China and the fact that Chinese and East Asian investors hold the bulk of US securities and finance its trade deficit point to an almost even balance of authority and resources between the North and the South "" something which, according to Arrighi, is very similar to what Smith wrote two and a half centuries ago!

The book's capacity to surprise repeatedly stems from the illuminating insights that Arrighi keeps on feeding the reader with. Right at the beginning, for example, he refers to Tronti's less-known Marx in Detroit, an essay written in 1968 that claimed that labour-capital relations in the US were objectively "Marxian", given the accommodation that US capital has to make for higher wages. Such unconventional vignettes of wisdom set the tone for many more surprises to follow. Indeed, while comparing the US now and the UK a century ago, Arrighi employs a rarely used yardstick: the currency. While the US is facing a run on the dollar and has probably become the largest debtor, Arrighi observes that during its heyday, hegemony in Britain also meant "hegemoney" and didn't indicate a financial imbalance as it does for the US.

It is easy to dub the book as a piece of virulent criticism of the Bush administration. But Adam Smith in Beijing deserves much more than such hasty and contemptuous dismissal. It is a wonderful blend of matured perspectives on world history, politics and development. What it succeeds in doing is drawing the reader's attention to a different prism through which familiar events and issues take on a different hue. Last, but not the least, it also arouses considerable interest in revisiting Adam Smith and the purely classical economists of his genre, who have been somewhat marginalised in modern times by the "neo" and "new" brands of classics.

The author is a Visiting Fellow at the Indian Council for Research on International Economic Relations, Delhi. The views expressed are entirely personal

ADAM SMITH IN BEIJING
LINEAGES OF THE 21ST CENTURY

Giovanni Arrighi
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£25.00