constitutionalizing inequality and the clash of globalizations

Constitutionalizing Inequality and theClash of Globalizations

Stephen GillYork University

Intensified inequalities, social dislocations and human insecu-rity have coincided with a redefinition of the political in theemerging world order. Part of this redefinition involves the emer-gence of new constitutionalism. New constitutionalism limitsdemocratic control over central elements of economic policy andregulation by locking in future governments to liberal frame-works of accumulation premised on freedom of enterprise. Newpolitical “limits of the possible” are also redefined by a “clash ofglobalizations” as new constitutionalism and more generally“globalization from above” is contested from below by nation-alists, populists and fundamentalists as well as diverse progres-sive movements in innovative forms of global political agency.

The central argument of this article is that intensified global inequalitieshave coincided with a redefinition of the political on a world scale involv-ing restructuring of political constraints and opportunities and reshaping

of long-term frameworks designed, constitutionally, to lock in commitmentsto a neoliberal path of development. However, this process is increasingly con-tested in a new global politics I call the “clash of globalizations.” In thiscontext, an aim of this essay is to introduce the central concept of “new con-stitutionalism” and link it to emergent forms of global political agency. Newconstitutionalism is the political-juridical counterpart to “disciplinary neolib-eralism”. The latter is a discourse of political economy that promotes the powerof capital through extension and deepening of market values and disciplines insocial life, under a regime of free enterprise.1 Disciplinary neo-liberalism is

1Stephen Gill, “Globalisation, Market Civilization, and Disciplinary Neoliberal-ism,” Millennium23, No. 3 (1995), pp. 399–423.

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commensurate with interests of big corporate capital and dominant social forcesin the G7, especially in the U.S. It involves political and legal reforms to redefinethe political via a series of precommitment mechanisms. These include consti-tutions, laws, property rights and various institutional arrangements, designedto have quasi-permanent status. A central objective of new constitutionalism isto prevent future governmentsfrom undoing commitments to a disciplinaryneoliberal pattern of accumulation. Thus a central purpose of new constitution-alism is to redefine the relationship between the “political” and the “economic”and thus reconstruct the terms through which political action is possible in acapitalist society. New constitutionalism redefines political limits of the possi-ble now and in the future. And it entails efforts to politically contain challengesto the disciplinary neoliberalism project through co-optation, domestication,neutralization and depoliticization of opposition. In sum, new constitutionalismis thepolitical/juridical form specific to neoliberal processes of accumulationand to market civilization. It is in fact a combination of old and new and has alineage stretching back to the bourgeois revolutions of the seventeenth andeighteenth centuries, that is, a process where effective representation was unequaland that depends upon property.

So what follows is a series of sketches and propositions, rather than a fullyjustified and worked-out thesis.2 So with thelongue duréeof bourgeois politicsin mind we raise the following questions: how does neoliberal constitutional-ism serve to lock in tendencies toward greater social and political inequalities?What forms of institutionalization secure these commitments? And how arethese inequalities justified—for example, as commensurate with the conceptsof justice and efficiency? And what are some of the political responses to dis-ciplinary neoliberalism and new constitutionalism?

The Redefinition of the Politicaland the End of History

My earlier work on this topic has explored how disciplinary neoliberalism ispart of apolitical projecton behalf of large-scale corporate capital. This involvedinitiatives, by what I have termed the globalizing élites,3 to redefine the terrainof normal politics so as to “lock in” the power gains of capital and to “lock out”or depoliticize forces challenging these gains (e.g., nationalists; democratic

2This article is based on extracts from a long book MS, now nearing completion,The Constitution of Global Capitalism.

3Stephen Gill, “Structural Change and Global Political Economy: Globalising Elitesand the Emerging World Order,” in Y. Sakamoto, ed.,Global Transformation: Chal-lenges to the State System(Tokyo: United Nations University Press, 1994).

48 Stephen Gill

forces) across a range of jurisdictions. Where oppositional forces were notresigned to accept that there was no alternative to disciplinary neoliberalism,other tactics were used to attempt to domesticate, co-opt or render ineffectivediverse forms of opposition.

A key motto for the global hegemonic politics of the early 1990s was “theend of history.” The political economy framework of this effort to reconstitutehegemony was disciplinary neoliberalism. In addition, the constitutional po-litical economy of Nobel Prize winners such as F. A. von Hayek and JamesBuchanan formed part of the frameworks of thought associated with the projectof the globalizing élites. Many endorsed Buchanan’s distinction between “con-stitutional politics” and “ordinary” or “normal politics.”4 Constitutional poli-tics was concerned with overarching frameworks of “quasi-permanent” rules todefine parameters of “ordinary politics” in the long term. Ordinary politicsinvolved struggle and debatewithin these rules, rules that defined the limits ofwhat was possible. So, in the case of European economic and monetary union,the first task was to create a new constitutional framework to separate eco-nomic institutions, such as a European central bank, from political influence ofelected politicians and more generally the wider public, and so “depoliticize”the question of money. This, it was argued, was the best means to provide the“public goods” of sound money and macroeconomic stability. Once these hadbeen achieved confidence of the “markets” could be won, leading to the con-struction of credible single “sound” money for Europe.

As I conducted research, I realized the scale of the historical experiment un-der way, particularly in the former East bloc and the former Soviet Union, and howthis was associated with the new constitutionalism. It also was linked to the “greattransformation” in the Third World, where, following the debt crisis, in many na-tions there was a shift away from state-mercantilist economic development to-ward what Latin Americans callneoliberalismo. Worldwide, new constitutionswere being enacted and old constitutions were being amended. Often, under theguidance of the International Monetary Fund (IMF), the World Bank and otheragencies of capitalist world economy, new institutional arrangements werebeing devised in ways similar to the European architecture of economicgovernance—to separate politics from economics. What was occurring was thegradual institutionalization of a framework of constitutional constraints theoret-ically designed to maximize the efficiency of a now potentially global capital-ism. In other words, what was being constructed in a range of contexts—national,regional and international (e.g. through the IMF, the World Bank, and the WorldTrade Organization (WTO))—was ade factoconstitution for global capitalism.

4James M. Buchanan,Post-Socialist Political Economy: Selected Essays(Chelten-ham, U.K.: Edward Elgar, 1997).

Constitutionalizing Inequality and the Clash of Globalizations 49

As is amply documented,5 this process was accompanied by a significantand, at least in peacetime, unprecedented dislocation in the lives of ordinarypeople in the former East bloc. The forms of social protection were replacedwith a more individualist, self-help system in which people stood naked in thecontext of the harsh new marketplace. The new society—and the eradication ofthe former “collectivist” order—was premised on a more commercial sense ofthe world and its motivations. To a greater or lesser extent, new forms of pos-sessive individualism re-emerged worldwide and social institutions wereredefined to create an emergent market civilization—a monoculture of bothsocial development and the mind that is associated with a new political econ-omy of disciplinary neoliberalism (rather than a clash of civilizations as such—see below). The structure of this emerging civilizational form relies on thedisciplinary power of market forces (rather than public authority as such) toshape social choice and social stratification. However, limits of market civili-zation soon became apparent as social atomization and inequality intensified,and as contradictions of a more crisis-prone form of global economic develop-ment became manifest. In turn, forms of political agency began to challengeglobalization-from-above of the élites.

This social process accelerated after 1997, following the worst global eco-nomic crisis since the 1930s which worsened already obscene levels of eco-nomic inequality—a crisis that impoverished millions while enriching the few.The crisis called into question the brave new world of footloose capital andstewardship of the G7 in the world economy.6 However, new constraints onpolitical agency appeared effective insofar as neoliberalism served to disciplineand to redefine many traditional forms of political action and the programmesof mainstream political parties, for example, Social Democracy and other par-ties of the Left. For example, the bulk of the former Italian Communist Party(the part that became the Party of Democratic Socialism), the French and Span-ish Socialist Parties, and important elements of the German Social DemocraticParty (SPD) increasingly began to embrace, either willingly or otherwise, dis-ciplinary neoliberalism. The Labour Party in the U.K. under Tony Blair con-summated this process. Blair, with President Clinton, sought to redefineneoliberalism as a Third Way involving market discipline and free enterprise, incombination with a new system of political rights and obligations premised onwork fare for the recalcitrant and real citizenship rights for the prospering uppermiddle and wealthy classes. Writing from a fascist prison in the 1930s, Gramsci

5E.g., United Nations Development Programme,Human Development Report, 1997(New York: Oxford University Press, 1997).

6Stephen Gill, “The Geopolitics of the Asian Crisis,”Monthly Review50, No. 10(1999), pp. 1–10.

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called such co-optation of opposition into dominant definitions of the political,trasformismo.

On the other hand, “end of history” constraints appeared much less effec-tive in preventing the rise of new forms of political agency, especially in theSouth. Here workers’ movements, feminists, environmentalists and others com-bined to construct a relatively common framework of analysis of problemsassociated with neoliberal globalization. More to the point, they engaged innew discourses of politics. These forces operate locally and globally, and useinnovative techniques of local and transnational political organization. Theyinvolve a combination of the old and the new, of premodern (e.g., peasantmovements), modern and postmodern political agents, and they seem to becreating different senses of the political. Such forces can be considered as anew fluid form of transnational political party—but not one that is either insti-tutionalized or under centralized control. They are a movement and a processthat has a multiple and capillary form that combines Foucauldian and Grams-cian understandings of power and hegemony. As an ethical and political move-ment they form a “postmodern Prince,” that is, a new global form of collectivepolitical agency.7

Some readers of this essay will recall the way that the conservative theorist ofAmerican power, Samuel P. Huntington, characterized the global politics in thepost–ColdWar world as a “clash of civilizations.” Specifically suggested is a com-ing struggle between “the West” and “the rest” as each “civilization” battles forsupremacy in a new age of the crusades.8 Huntington is correct that in many re-spects world political strugglesare about the nature and meaning of civiliza-tions. However, the struggle is not about Islam versus Christendom as such, despitethe effects of September 11th, 2001 on the Western, and especially American,political psyche.As Braudel has demonstrated,9 civilizations are more fluid, morecomplex and less singular than Huntington’s rigid Cold War style of realistthinking allows. In my view the central political struggles of the twenty-first cen-tury are taking place both within and across complexes of civilizations, strugglesmediated by the processes and mechanisms of globalization, and particularly bythe intensified disciplines of capital. The power of capital and its institutional-ization serves to both unite and divide the world in a deepening politics of in-equality along lines of class, race and gender. So what is fundamentally at issuein the clash of globalizations at the start of the twenty-first century is what it means

7Stephen Gill, “Toward a Postmodern Prince? The Battle in Seattle as a Moment inthe New Politics of Globalisation,”Millennium29, No. 1 (2000), pp. 131–141.

8Samuel P. Huntington, “The Clash of Civilizations,”Foreign Affairs72, No. 3(1993), pp. 22–49.

9Fernand Braudel,A History of Civilizations(New York: A. Lane, 1994).


to be civilized. From the viewpoint of the new social forces, this depends on whatform(s) of political economy allows for a diversity of civilizations to flourish.The forces of globalization from below ask whether a purely materialist andsingular monoculture of the market is a civilizational oxymoron.

Of course there are also answers to this question from the political Right,not only in the form of antimodernist, often fundamentalist groups in the ThirdWorld, but also from the new populist xenophobic Right in Western Europe,which exploits anxieties about law and order, immigration and globalization.Beyond this question there are worldwide concerns about the social disloca-tions and wider ecological consequences of intensified globalization. On theLeft, new progressive forces became more self-conscious, sought to challengethe constraints and disciplines and began to politicize redefined domains withinwhich “ordinary politics” now took place.

So today’s “clash of globalizations” reflects a growing recognition by sub-ordinate groups—including those on the Right—that ordinary politics is nowlimited by not only national, but also global constraints. Forces from through-out the world have demonstrated (literally, in the case of protests in Seattle in1999 at the WTO meetings) that these constraints need to be challenged anddealt with. Perhaps this explains why the new movements, especially on theLeft, increasingly focus on international financial institutions and organiza-tions connected to the governance of the global political economy; they gowell beyond the politics of identity since they focus on specific materialaspects of disciplinary neoliberalism as well as the practices of new consti-tutionalism, which they perceive to be configured by structures of unequalrepresentation.

New Constitutionalism: Justice andthe “Economic Problem”

In this and the following sections we show how neoliberals argue for the redef-inition of the political to construct a “protected domain” to secure individualfreedom against encroachments of the power of the state and pressures of the“tyranny of the majority” in democratic systems. In this context, neoliberalsargue that justice is secured to all on an equal basis through an effective Rule ofLaw. Neoliberals oppose notions of “social justice” in the sense of positivecommitments to social redistribution to compensate for the inherent tendencytoward inequality of wealth and condition under market-based disciplines. Inthis view, the Rule of Law provides not only the most effective framework ofjustice, but also the basis for a productive solution to the “economic problem.”

According to liberals, fundamental to liberty is a protected domain of indi-vidual rights and freedoms, including a set of private property rights secured by

52 Stephen Gill

the Constitution and protected by the coercive capacity of the state. In this way,classic liberal precommitment mechanisms are not only Bills of Rights but alsofiscal and monetary constitutions to avoid debasement of the currency and tofinance a minimalist state. However, neoliberals such as Hayek and Buchanango even further than this since the constitutional constraints they advocate areseen as a positive factor of efficient production in a thriving capitalist system ofpossessive individuals. In this context for liberals, justice is more than simply avalue: it is a framework that regulates competing values, ends and, indeed,social forces. Thus liberals argue against theories of justice (and equality) thatare based on particular conceptions of human purposes or ends, for example, asfound in the writings of Aristotle (“the good society”), utilitarians (“the greatesthappiness of the greatest number”) or socialists (“social justice”). Michael Sandelshows how this perspective is based on Kant’s position, that is, that the basis ofright is conceived as prior to the empirical world and outside of actual humannature.10

Moreover, in the liberal lexicon, democracy is not aprimary political con-cept. For example, like Kant and Rawls, Hayek has argued, “Injustice is reallythe primary concept and the aim of rules of just conduct is to prevent unjustaction [where] the injustice to be prevented is the infringement of the protecteddomain of one’s fellow men.”11 These rules of just conduct need to be sub-jected to the Kantian tests of consistency and universal applicability. Hayek,inspired by the constitutional ideas of the Whigs and by James Madison, takesthis argument further and applies it to social institutions. He specifically arguesthat “[l]iberalism is therefore inseparable from the institution of private prop-erty which is the name usually given to the material part of this protectedindividual domain.”12 The notion of protected domain is drawn from JohnLocke who defined property in the widest sense as “[t]he life, liberty, and

10For Kant the basis of right resides in the possibility of a transcendental subjectcapable of an autonomous will and the capacity to be a free moral agent, as a subjectprior to its ends. Thus for Kant, right is prior to the good, since any other arrangementswould not recognize the capacity for individual choice and would make the activerational subject an object of someone or something else. Thus Kant’s notion of thesubject is bound up with the claim for the priority of right. A similar claim is made byJohn Rawls when he posits the “original position,” i.e., sets of arrangements we wouldchoose if we were prior to society and empirical experience. Rawls suggests we wouldchoose rules of just conduct since we would not know what we would become and wewould rationally prefer rules that treat us with equal impartiality and fairness (MichaelSandel, “The Procedural Republic and the Unencumbered Self,”Political Theory12,No. 1 (1986), pp. 81–96).

11Friedrich A. von Hayek,Studies in Philosophy, Politics and Economics(Chicago:University of Chicago Press, 1967), p. 166.

12Ibid., p. 165.


possessions of man”. In this way, Hayek argues that the law, in the sense ofrules of justice, and the institution of private property are inseparable and bothare necessary conditions for liberty.

This illustrates how liberal ethics assert the priority of rights, and howliberals seek principles of justice which do not assume any specific conceptionof good. As Michael Sandel has put it, “This is what Immanuel Kant means bythe supremacy of moral law, and what John Rawls means when he writes ‘Jus-tice is the first virtue of social institutions.’ ”13

In the same vein, main neoliberal intellectuals associate the key “economicproblem” not with the problem of scarcity and choice within the context ofexternalities, as does most of orthodox economic theory, but with the identifi-cation of the sets of binding rules and procedures—that is, constitutions—thatcan facilitate market exchange and thus liberate the spontaneous potential ofindividuals to develop. As Buchanan puts it: “In ordinary or orthodox econom-ics . . . analysis is concentrated on choices madewithin constraints . . . imposedexogenously . . . by nature, by history, by a sequence of past choices, by otherpersons, by laws and institutional arrangements, or even by custom and con-vention. . . . Constitutional economics directs analytical attention to thechoiceamong constraints” (emphasis in the original).14

To some extent, neoliberals follow Adam Smith in their conception of eco-nomics. As Buchanan puts it, “the principle of spontaneous coordination of themarket istheprinciple of economics” (his emphasis).15 However, for those as-sociatedwith the thinkingof the influentialMontPélèrinSociety, foundedbyHayekin the 1940s, the economy “has no purpose, function or intent” since it is definedby structures, rules and institutions. These constrain choices of individuals in aninterlinked chain, as a set of gamelike interactions. Thus Buchanan argues for ashift in the paradigm of economics toward an emphasis on structure “as the ex-clusive and only appropriate object for reform,” based generally along principlesof laissez-faire.16 Buchanan and Hayek argue for a redefinition of political econ-omy away from teleological purpose toward an open-ended process premised uponmethodological individualism and rational action (homo economicus).

Insofar as there has been a change in dominant ideas and institutions asso-ciated with the constitution of economic policy decisions since the 1970s, thischange is partly linked to a redefinition of the economic paradigm toward whatHayek called “catallaxy,” that is, the facilitation of spontaneous exchange pro-

13Sandel, “The Procedural Republic,” p. 82.14James M. Buchanan,The Economics and Ethics of Constitutional Order(Ann

Arbor: Michigan University Press, 1991), pp. 4–5.15Ibid., p. 28.16Ibid.

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cesses and the effort to create what Polanyi called a self-regulating marketorder on a world scale. For Buchanan this is the key to the creation of “efficientsocial order” that is premised on individual choice.17 In this way, neoliberalapproaches—based on Constitutional Political Economy and Public Choice—advocate a form of structuralism founded upon methodological individualismas the basis for this “efficient social order.” Such an order requires constitu-tional constraints and binding rules on democratic life as a condition of itspossibility. Catallaxy is thus the “economic” component of what Hayek calls,following Oakeshott, anomocratic(law-governed) society.18

Liberty, Private Property Rights and Fiscaland Monetary Constitutions

Buchanan’s and Hayek’s understanding of liberty is generally negative—it meansfreedom from the arbitrary wills of others, and from arbitrary government inter-ference in the private activities of individuals, who provide the basis for socialinnovation and the evolution of customary laws that help to sustain as well as todefine a civilization. Hayek in effect argues for the Rule of Law understood asuniversal, but abstract rules of conduct.

Indeed, for Hayek, democracy is only acceptable insofar as it is coupledwith strictly limited government.The Constitution of Liberty, therefore, arguesthat the powers of any temporary majority must be limited by long-term prin-ciples, constrained by a constitution that limits the powers of government.19

The key condition of freedom, for Hayek, is the preservation of a private domainof action. In turn, this presupposes the institution of private property, as well asfreedom of contract and freedom of choice of employment: “To the extent thata person genuinely owns property, in the legally protected sense, such a personis independent from the control of other persons, separately or collectively.”20

17James M. Buchanan,Constitutional Economics(Oxford and Cambridge, Mass.:Blackwell, 1991).

18Hayek,Studies in Philosophy, Politics and Economics.19Friedrich A. von Hayek,The Constitution of Liberty(Chicago: University of

Chicago Press, 1972).20Buchanan,Post-Socialist Political Economy, p. 190. Buchanan’s justification for

private property draws metaphysical support from a papal encyclical issued under theauspices of Pope Leo XIII in 1893,Rerum Novarum. It argued socialists’ endeavor todestroy private property was a way to preach the poor man’s envy of the rich and denythe liberty and economic interest of every wage earner in bettering his condition inlife. According to Leo XIII: “And to say that God has given the earth to the use andenjoyment of the universal human race is not to deny that there can be private property.”


Thus what is crucial for neoliberals is the strong protection of liberty andproperty rights, with particular emphasis on the power of the state to protectcapital from expropriation and seizure, or what is called in American jurispru-dence “takings,” through nationalization or socialization of the means of pro-duction. For example, “supraconstitutionalism” associated with trade andinvestment agreements serves to protect capital from expropriation—througheither nationalization or regulation. Thus much of the public regulation oftrade and investment, for example, bilateral investment treaties and regionalassociations such as the North American Free Trade Agreement (NAFTA) andthe European Union, as well as aspects of the Uruguay Round in trade, servessuch purposes. Laws and regulations made by democratically elected parlia-ments made to promote the public interest (e.g., in health or environment)may be challenged in administrative tribunals by private corporations as a“taking” if they can demonstrate that such laws/regulationsmight impactfutureexpectations of profit, for example, in the disputes resolution mechanisms ofNAFTA.21

Protection of property also includes protection of the value of capital throughmacroeconomic policies that will contain inflation—hence the argument madeby neoliberals for “fiscal and monetary constitutions.” By fiscal constitutionBuchanan means specific measures to prevent deficit financing by government,such as balanced budget amendments or precise stipulations as to the size ofbudget deficits as in the Maastricht agreements of the European Union, sincesuch deficits may be linked to inflation and erode the value of capital and assetsof creditors. Buchanan argues that if only one of the former communist-rulednations could achieve the reforms required for a leap into genuine constitu-tional democracy, “the exemplar offered to other countries in this age of instan-taneous communication would almost guarantee generalization to othersettings.”22 With regard to money and inflation, Buchanan argues that individ-uals can be made more secure and independent with a regime that “embodiespredictability in the money-good exchange regime.” Thus during the 1990smany nations have moved not only to fully independent central banks but also

21David Schneiderman, “NAFTA’s Takings Rule: American Constitutionalism Comesto Canada,”University of Toronto Law Journal46, No. 3 (1996), pp. 499–537. Inaddition, there is a tendency of a widening and deepening of the scope of trade agree-ments to encroach on many aspects of social life and government activity, tradition-ally considered to be of national jurisdiction and concern, a fact that helps explainmany of the anti-WTO protests (Scott Sinclair,GATS: How the WTO’s New “Ser-vices” Negotiations Threaten Democracy(Ottawa: Canadian Centre for Policy Alter-natives, 2000)).

22James M. Buchanan, “Politicized Economies in Limbo: America, Europe and theWorld, 1994,” inPost-Socialist Political Economy, p. 189.

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to publicly specified inflation targeting as the centerpiece of monetary policy(as opposed to promotion of full employment), in many cases locking in theanti-inflation bias by statute.

As we have noted, to support this argument Buchanan distinguishes between“constitutional politics” and the interplay of forces within a constitutional frame-work that defines the terrain of “ordinary politics.” The first involves strategy:the design, construction, implementation and maintenance of the fundamentalrules that define the parameters of ordinary politics. These are seen as impor-tant for ensuring the stability of expectations. Buchanan states that “explicitconstitutional limits on the intrusion of politics into the market have the furtheradvantage of providing stability of expectations for persons and groups, inter-nal and external, who might make long-term investments.” Thus “normal pol-itics” is strictly a politicswithin rules, and for Buchanan constitutions shouldbe consideredquasi-permanentin order to become elements of “genuine polit-ical capital” (my emphasis).23 While these rules can be either created throughdemocratic procedures or imposed from above, Buchanan stresses how theremust be limits to the democratization of constitutional politics imposed by thenecessary quasi-permanence of the rules.

In this context, both Hayek and public choice theorists use a procedural asopposed to an outcome or substantive criterion of justice and legitimacy, that is,it assumes that a process can be constructed to assure fairness and impartialityin the rules of the game that emerge in really existing societies. Buchanan noteshow his position contrasts with that of critical theorists such as Habermas. ForHabermas, legitimate norms of politics are those that are intersubjectivelyacknowledged because they embody some common interest that can be exam-ined in practical discourse as equally good for each person.24

It is thus entirely consistent for neoliberals to have a narrow and proceduralconception of the Rule of Law and to link this to a notion of equality—understood as equal right and protection under the law for life and privateproperty—the protected domain.

Unequal Representation andPossessive Individualism

Insofar as we can demonstrate that these neoliberal liberal notions of justice,equality, democracy and political economy are connected to the ideas, institu-tions and material potentials of the dominant elements in civil society (large

23Ibid., pp. 184, 186.24Buchanan,The Economics and Ethics of Constitutional Order, p. 60.


holders of property) we can sustain part of our thesis: new constitutionalismlocks in systems’ unequal representation both within the state and in inter-national organizations. In addition, we can also demonstrate that this rests onthe lineage of the concept ofde jureunequal representation of the propertiedwhich emerged, for example, during the sixteenth century in revolutionaryEngland.

Struggles among the Crown, the gentry and the smaller propertied classesfinally resulted in a Restoration that subordinated the Crown to Parliament.The nation was ruled by a new alliance of the aristocracy and the emergingbourgeoisie but those without property were disenfranchised. This GloriousRevolution was reflected in Locke’sSecond Treatise on Governmentwherethe right of representation was linked to the possession of private propertyunderstood as a protected domain.25 As such “new” constitutionalism harksback to the forms of representation associated with the predemocratic age, thatis, to the three great bourgeois revolutions—England of 1688, and the French andAmerican Revolutions at the end of the eighteenth century. However, the worldwe live in is not the same as that of the eighteenth century. Its political economyis dominated by concentrations of capital in the form of giant monopolistic or oli-gopolistic corporations and institutional investors. In this context, the liberal con-stitutional separation of state and civil society seems to correspond to Locke’stheory of the self-perpetuating sovereign (that is, the supremacy of the proper-tied in civil society and the state).As we have noted, Locke (and James Madison)is a primary inspiration for Hayek and Buchanan. As C. B. Macpherson has ar-gued persuasively, Locke’s individualism was exemplary of the political theoryof the emerging bourgeois society in the late eighteenth century. His possessiveindividualism consists in “making the individual the natural proprietor of his ownperson and capacities, owing nothing to society for them.”

Despite Hayekian arguments to the contrary, this type of individualism isnecessarily also a form of collectivism.26 This is because it asserts the suprem-acy of civil society over every individual, at the same time asserting that indi-viduality is only fully realized in the accumulation of property. Such accumulationis, of course, a possibility open only to some and it takes place “at the expenseof the individuality of the others.” In other words, these individuals becomewhat Marx called “world-historical” individuals inscribed socially and inter-pellated by a complex division of labor. In a situation ofde factoinequalitysanctioned by laws of property, those individuals

25John Locke,Two Treatises of Government, ed. P. Lasslet (NewYork: Mentor, 1965).26As Hayek freely admits, he draws much of his philosophical and historical in-

spiration from the seventeenth-century Whigs in England. Locke, and Adam Smith,heavily influence his theoretical stance.

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who have the means to realize their personalities (that is, the propertied) donot need to reserve any rights as against civil society, since civil society isconstructed by and for them, and run by and for them. All they need to do is toinsist that civil society, that is, the majority of themselves, is supreme over anygovernment [as such it demands the supremacy of the state over the individ-ual]. . . .Locke’s constitutionalism is thus “essentially a defense of the suprem-acy of property . . . especially that of the man of substance to whom the securityof unlimited accumulation was of the first importance.27

Thus new constitutionalism does involve the “retreat of the state”; indeed, somemight call it a regression—from the idea of equal representation of the citizenin the state and equality of subjects before the law in modern liberal democracyto a predemocratic, seventeenth-century conception of politics and civil soci-ety. At the same time, its political economy corresponds to the effort to con-struct politically what Karl Polanyi called the “stark utopia” of nineteenth-century liberalism: a market society on a world scale,28 a universal systemunder the discipline of capital.

Law as a Productive and ConstitutiveAspect of Bourgeois Society

The final point to emphasize is not only should law be understood as a set ofconstraints connected to the constitutional or rule-based limits on the exerciseof the authority of the state in the political economy, but also, law is fundamen-tally aproductiveaspect of bourgeois society. It is central to the constitution ofthe power of capital, the nature of the state and its separation from civil society.This is because the liberal legal form serves to constitute the commodificationof labor and of things, or more precisely the power to control the disposition ofpeople relative to things, since private property rights are more accurately setsof rights connected to the behavior of people relative to things.29

Since legal discourse confers legal personality on abstract subjects, corpo-rations become legal subjects and they have rights and duties under the law.

27C. B. Macpherson,The Political Theory of Possessive Individualism(Oxford:Oxford University Press, 1962), pp. 255–258.

28Karl Polanyi,The Great Transformation: Political and Economic Origins of OurTimes(New York: Octagon Books, 1975), p. 3.

29Property is a broad set of legalrelations—a subset of social relations that encom-passes a range of rights and freedoms, as well as certain limitations therein. Propertyrights are in fact aggregates of different sorts of rights, rights-correlatives and obliga-tions (James L. Oakes, “ ‘Property Rights’ in Constitutional Analysis Today,”Wash-ington Law Review56, No. 3 (1981), pp. 583–626).


Moreover, power is decentralized in a liberal society through the protection ofprivate property rights under the Constitution. What this means is that largeprivate property holders have a great deal of autonomy relative to the state andthe rest of civil society, that is, to make decisions concerning their privateproperty rights based on their foundations in contracts. This gives private cor-porations a number of powers: authority over workers because of the latterfreely entering into the employment contract, and in effect, the right to makewhat Robé calls special “private” laws, the existence of which is accepted bythe state since they derive from the overriding legal principles that guaranteeprivate property rights. As such, the enterprise forms part of the liberal struc-ture of the exercise of constitutional power. In this way, private firms are formsof private government since some of the legal rules they create are final andmay not be reviewed by any public body.30

Thus, insofar as there is a shift toward liberal constitutional models of theLockean or Hayekian type, it constitutes a significant amplification of the powerof capital on a world scale. This is why we need to look not only at domesticlaws and changes to constitutional structures, but also to the quasi-constitutionaleffects of international agreements and other mechanisms of neoliberalglobalization.31

In sum, new constitutionalism legitimates and locks in the power gains ofthe propertied (capital) by constitutional amendment, international agreementsor other juridical-political means. Public policy is thus made subordinate todominant elements in civil society, particularly to corporations’ and investors’freedoms. In this project, we suggest that the dominant political subject—or theeffective sovereign—of the new constitutionalism is the investor, or the holderof large private property rights (capital).

Indeed, constitutional protection of private property rights is central to theConstitution of the United States, described by Karl Marx as the first fullybourgeois republic. Marx was not the first to note this aspect of American

30Jean-Phillipe Robé, “Multinational Enterprises: The Constitution of a PluralisticLegal Order,” in G. Teubner, ed.,Global Law Without a State(Aldershot, U.K.: Dart-mouth Publishing, 1996), p. 60. Corporations thus exercise economicand politicaldecisions, including where to locate investments and decisions concerning the internalgovernance of the firm, including voting rights and systems of representation, thehierarchy of authority and chains of command, whether to change management, andultimately rights over hiring and firing. This type of private governance cannot be fullycontrolled in a liberal capitalist system because of constitutional constraints imposedupon the state itself.

31For example, by narrowing the descriptions of excluded subsectors where gov-ernments have made fewest commitments, and broadening descriptions where govern-ments have taken the greatest commitments.

60 Stephen Gill

constitutionalism. Indeed, as Adam Smith noted in 1776 at the birth of theAmerican Republic, “civil government, so far as it is instituted for the securityof property, is in reality instituted for the defense of the rich against the poor, orof those who have some property against those who have none at all,”32 asentiment shared by Polanyi.33

Conclusion: Reflections on the Clashof GlobalizationsDisciplinary neoliberalism presupposes the constitutionalizing of inequality insystems and institutions ofde factoandde jureunequal representation definedby concentrations of capital. Various mechanisms of precommitment (includ-ing constitutions) serve to protect this domain of the propertied on a worldscale. Nevertheless, new constitutionalism is a strategic political project, ratherthan a completed historical process. As such it has a contingent and contestedcharacter. Of course, it may appear to be the case that the future configurationof world order will be an American-led hegemonic system of liberalizing cap-italism. However, as Giovanni Arrighi and Beverly Silver have pointed out intheir recent book, world hegemony involves both material expansion and socialpeace consolidated as “historic compromises”: political accommodation betweenestablished powers and newly empowered social groups struggling to expandtheir rights. However, as they point out, in periods of growing financializationof capital accumulation (e.g., the last twenty-five years) there are growinginequalities and this tends to intensify social conflict. They note that socialpolarization and “middle-class” political alienation has characterized all declin-ing hegemonic powers. In the late twentieth century the increasing polarizationof wealth is producing similar effects on a world scale, creating greater turbu-lence in world politics; in particular, the American middle classes are “squeezedand soured.”34 A new phase of systemic chaos attendant on hegemonic declineis anticipated (in both senses: in interstate relations and in social relations).What they mean is as a situation of breakdown in the dominant forms of socialorganization develops, a political demand for “order” arises. Some forces seeka return to the old order, some struggle for a new order, but nonetheless, thedemands for “order” tend to become more and more universal among rulers, oramong subjects, or both. As the history of the twentieth century shows, the

32Christoper Hill,The Century of Revolution—1603–1714(London: W. W. Norton,1980), p. 287.

33Polanyi,The Great Transformation, p. 129.34Giovanni Arrighi and Beverly J. Silver,Chaos and Governance in the Modern

World System(Minneapolis: Minnesota University Press, 1999), p. 212.


political demands for order can lead to reaction as well as progressive politicalprojects.

With respect to the social basis of hegemony it seems clear that there is agreat deal of middle-class alienation throughout the world today, but in theUSA at least, this seems to have been the case for much of the postwar period;however, some of this alienation is also accompanied by what J. K. Galbraithhas called the emergence of a “culture of contentment” and the development ofself-protective strategies on the part of the “haves” of global society in an ageof possessive individualism and self-help.35

Moreover, in an important sense we are in a new world social order inwhich there is increasingly both social and spatial concentration of affluence(for example, gated communities) and poverty (growing ghettoization). Accord-ing to demographic research there is a new global politics of inequality whereclass lines are growing more socially and spatially rigid—a process in the pastattributed mainly to race, obscuring its class dimensions.36

The affluent are protected worldwide by private security services and theinstitutional practices of enclavisation. As this process continues, the tax basesof poorer communities are eroded, and a vicious circle ensues—the poor getworse and worse services, while the rich pay a smaller proportion of taxes andget much better services on a per capita basis than was the case when they livedin communities where rich and poor both lived. Increasingly, the rich never seeor indeed ever meet or confront the poor. These developments in the USA havebeen connected to a new form of increasingly nihilistic, violent “social ecol-ogy” in many cities.37

We can link this analysis to our general theme of the clash of globalizationsby noting that (a) the issues just noted cut across borders; they are local, nationaland global, and (b) the issues are social and cultural, partly linked to the urban-ization of the world and to ecological issues of long-term significance.

The point of this excursus into demographics and the social question is toargue for us to broaden the scope of analysis in political economy, not only totake into account juridical-political issues of globalization, but also to redefineits methodological postulate to both encompass and go beyond “power” and“production”—that is, the traditional matrix of understanding and explainingpolitical economy. As feminist political economists such as Diane Elson, Brig-

35John Kenneth Galbraith,The Culture of Contentment(Boston: Houghton Mifflin,1992).

36Douglas S. Massey, “The Age of Extremes: Concentrated Affluence and Povertyin the Twenty-First Century,”Demography33, No. 4 (1996), pp. 403–404.

37Ibid.

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itte Young and Isabella Bakker have demonstrated, we also need to add thedimension of social reproduction into our analysis.

Indeed, this is vital to understanding what I call the emerging clash of glo-balizations and the politics of inequality today. Disciplinary neoliberalisminvolves a new and more extensive stage in the exertion of the discipline ofcapital over greater aspects of social life as well as a new level of the social-ization of capital (its institutionalization in laws, regulations, forms of plan-ning) on a world scale. So, while disciplinary neoliberalism goes with greateralienation and commodification it also calls into being ever more extensiveforms of regulation and planning partly for reasons of social order and control,and partly to try to manage the contradictions and dislocations of the new formsof capital accumulation. These contradictions are bound up with a new politicsof globalization “from below” that is now moving from local resistance to amore global form of consciousness and action. The discipline of capital oper-ates unevenly and hierarchically, crudely speaking, on at least three levels ofsociety, and to a greater or lesser extent depending on the political jurisdiction.In each case it meets resistance, in ways that are commensurate with the fol-lowing proposition: “the neo-liberal concept enshrines a stage of penetration ofcapital into its social and natural substratum which in the current period has ledto exhaustion and new forms of resistance.”38

Elsewhere I have tried to describe the emerging forms of political agencyassociated with struggles over the nature and direction of globalization as the“postmodern Prince.”39 This concept refers to a set of “postmodern” condi-tions, which, like the concept of new constitutionalism, involve the old and theradically new. Political, material and ecological conditions are now giving riseto new forms of political agency whose defining myths are associated with thequest to ensure human and intergenerational security on and for the planet, aswell as democratic human development and human rights. For example, whenI studied the protests that surrounded the 1999 World Trade Organization min-isterial meeting in Seattle I noted how a series of contradictions were raised bythe protest movements.40 The first was that between big capital and democracyas we have defined the issue above in relation to new constitutionalism. Asecond set of contradictions are linked to intensification of discipline on laborand a rising rate of exploitation, in the context of cascading crises that haveimpoverished many millions; thus protests increasingly involve more radical-

38Kees van der Pijl,Transnational Classes and International Relations(Londonand New York: Routledge, 1998), p. 132.

39Gill, “Toward a Postmodern Prince?”40Ibid.


ized organized labor, for example, the United States Teamsters and the Brazil-ian Workers Party.

Third, as feminist political economy has demonstrated, the new disciplineof capital intensifies a crisis of social reproduction, particularly since in an eraof fiscal stringency, in many states social welfare, health and educational pro-visions have been reduced or privatized and the socialization of risk has beenreduced for a growing proportion of the world’s population as an ideology ofself-help and work fare reconfigures social provisions.41 A final set of contra-dictions are linked to how sociocultural and biological diversity are being replacedby a social and biological monoculture under corporate domination, and howthis is linked to a loss of food security and new forms of generalized healthrisks.42 Indeed, since Seattle this critique of the monoculture has been linked topolitics and the mainstream media as the keepers of “official reality.” Thesecontradictions seem to be increasingly linked to the idea of a transnationalsense of a shared community of fate. They help explain why there is a newmoment in the dialectic between capital and the social. In this context the WorldEconomic Forum is a means of mobilization for the globalizing élites and cap-italist classes. Indeed, while the World Economic Forum of Davos may consti-tute a new International of Capital, the recent protests in Seattle and the meetingsin Porto Alegre have begun to demonstrate a counterhegemonic and planetarychallenge to capital.

At issue in this clash of globalizations are the mechanisms and conse-quences of neoliberal globalization and in particular the roles of internationalorganizations, the G7, and globalizing élites. The latter are perceived as part ofthe solution to the problem of global inequality by Davos Man. By contrastthey are seen as orchestrating policies and initiatives associated with the inter-ests of dominant corporate capital by the people at Porto Alegre: that is, theyare part of the problem.

Thus, while the resistance to capital may have reactionary and regressivedimensions, there is a new form of progressive politics emerging on a worldscale that is broader than proletarian vanguardism and that unites a wide rangeof popular forces around some of the issues that relate to the following propo-sition: “The issue is no longer that capitalism is showing signs of collapse andsocialism is around the corner. What is failing today is not capital but the capac-ity of society and nature to support its discipline.”43 Together, these contradic-

41Isabella Bakker, “Neoliberal Governance and the New Gender Order,”WorkingPapers1, No. 1 (1999), pp. 49–59.

42Paul Hawken, “The WTO: Inside, Outside, All Around the World,”^http://www.co-intelligence.org/WTOHawken.html&, accessed April 26, 2000.

43van der Pijl,Transnational Classes and International Relations, p. 49.

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tions contribute to what might be called a global or “organic” crisis which linkstogether diverse forces across and within nations, specifically to oppose theideas, institutions and material power of disciplinary neoliberalism.

The lack of legitimacy associated with neoliberal globalization explainswhy the global struggle is now increasingly mediated bytrasformismo—attempts by ruling classes and élites to co-opt and incorporate opposed politicalforces and their intellectual leaders in order to make their power more legiti-mate and sustain the prestige of their regimes. Whether these strategies oftras-formismocan succeed against a growing critical mass of forces mobilizingagainst new constitutionalism and disciplinary neoliberalism is now an openquestion.44 However, it would be unwise to underestimate the scope and depthof the problem for the forces challenging the G7 nexus and disciplinary neolib-eralism: a wide series of “productive constraints” have been institutionalized.

44On trasformismoand the World Bank’s approaches to governance and gender toincorporate women’s movements see Stephen Gill, “New constitutionalism, Democra-tisation and Global Political Economy,”Pacifica Review10, No. 1 (1998), pp. 23–38.


constitutionalizing inequality and the clash of globalizations

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