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International Conference

In Celebration of the 31st Anniversary of the UN International Day of Peace

Humanity, Politics and Civilizations

17(Monday) ~ 18(Tuesday) and 21(Friday), September 2012

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2012 Peace BAR Festival

In Celebration of the 31st Anniversary of

the UN International Day of Peace

17(Monday) ~ 18(Tuesday) and 21(Friday), September 2012

Kyung Hee University

Date Events Venue

Sep. 17

(Mon)

18:30~18:50

Opening Ceremony

Peace Bar Festival In Brief

Welcoming Remarks,

President Inwon Choue, Kyung Hee University

Grand Peace Hall18:50~19:20

Commemorative Dance Performance

The Station of Water

19:30~21:10

Special Lecture

The Politics of a Civilizational Transformation

Immanuel Wallerstein, Professor Emeritus, Yale University

Sep. 18

(Tue)

14:00~16:30

Round Table

Structures of Knowledge : Epistemological

Reconvergence of Science and the Humanities?

CheongWoongwan

(B117)

18:30~19:40 Global Service Corps Festival

Grand Peace Hall

20:00~20:40 Concert dedicated to the UN International Day of Peace

Sep. 21

(Fri) 15:30~21:30 UNAI ASPIRE Kyung Hee Forum

Global campus

College of Management &International Relations

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International Conference

Humanity, Politics and Civilizations

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Contents

Special Lecture

The Politics of a Civilizational Transformation

SpeakerImmanuel Wallerstein

(Professor Emeritus, Yale University)

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Special Lecture

The Politics of a Civilizational Transformation

Special Lecture

The Politics of a Civilizational Transformation

Immanuel Wallerstein

Professor Emeritus

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Yale University

We are not living in normal times. We are living in the midst of a structural crisis of our historical

system, the kind of crisis that comes only once every 500 years. Current economic, social, and political

difficulties cannot be analyzed as resulting from a mere cyclical downturn in the parameters of our

structures, one that can be remedied by some kind of adjustment to our collective policies.

We are living in a particular historical social system that I call the "modern world-system," whose form

is that of a capitalist world-economy. It came into existence in the long sixteenth century in a geographic

zone that encompassed large parts of Europe and some parts of the Americas. The process by which this

historical system came into existence and survived is not relevant to our present discussion.

This historical system, as a result of its internal drive for constant geographical expansion, managed by

the late nineteenth century to encompass the entire earth and thereby create for the first time in human

history a single global system. In order to discuss the contemporary crisis of this system, it is necessary to

review briefly the essential mechanisms by which this system has operated for some five centuries.1

In my view, the defining characteristic of a capitalist system is not one of those of its features that

can be found in many other systems, such as the existence of wage labor or the operation of markets or the

activities of entrepreneurs in search of profit. It is rather a very special characteristic that is true of it alone

- the persistent search for the endless accumulation of capital, the accumulation of capital in order to

accumulate more capital.

Ensuring the primacy of this search requires that there be mechanisms that seriously penalize any

actors who seek to operate on the basis of other values or other objectives. If the penalties are real, these

non-conforming actors are sooner or later eliminated from the scene, or at least severely hampered in their

ability to accumulate significant amounts of capital. All the many institutions of the modern world-system

operate to promote, or at least are constrained by the pressure to promote, the endless accumulation of

1 I give a more detailed, but still brief, exposition of these mechanisms and processes in World-Systems

Analysis: An Introduction, Durham, NC: Duke University Press, 2004, as well as a much longer andcomprehensive exposition of its historical evolution in The Modern World-System, 4 vol., revised editions with newPrologues, Berkeley, CA: University of California Press, 2011.

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capital.

This priority of accumulating capital in order to accumulate still more capital is a quite irrational

objective in terms of what is called in English substantive rationality (a misleading translation of Max

Weber's materielle Rationalitt). It can of course be quite rational in terms of what Weber called formal

rationality, in the sense of being a system that has the capacity to function as a system for a considerable

length of time. Our modern world-system has lasted some 500 years, and has been extremely successful in

terms of its guiding principle of the endless accumulation of capital. However, the ability to operate on this

basis has now come to an end. Capitalism is no longer even formally rational.

How has capitalism worked in practice? All systems fluctuate, that is, constantly deviate from their

point of equilibrium. But there are mechanisms within all systems to push them back to (a moving)

equilibrium. The system can be said to be operating normally and successfully as long as the pressure to

return to equilibrium is greater than any pressure to move away from equilibrium.

There are many such mechanisms in the modern world-system. But two in particular are the most

important - the Kondratieff cycles and the hegemonic cycles. These two cycles have served effectively to

maintain equilibrium and to make possible the historical development of the system.

Kondratieff cycles are required to permit serious amounts of accumulation. The key feature that

permits this is giving some producers a quasi-monopoly. Only a quasi-monopoly enables producers to sell

at prices far above the costs of production. When particular products are truly competitive, a buyer can

always find some sellers who will sell the products for a penny above cost, or even below cost. Real profit

therefore requires limits on the free market.

There are two conditions to creating such quasi-monopolies. First, the product must be an

innovation that meets the needs, real or socially created, of a reasonably large number of willing buyers.

And, secondly, the quasi-monopoly needs guarantors. At least one powerful state must be willing to use its

power to limit the entry of other producers into the world market. By definition then, if there are quasi-

monopolies, the market cannot be free from state involvement.

Quasi-monopolized products are "leading products," meaning that they encompass a reasonably

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large percentage of the world-system's economic activity, including their forward and backward linkages.

Quasi-monopolies promote "growth" throughout the world-economy, and tend to generate high levels of

global employment, given the personnel needs not only of the producers of the quasi-monopoly but of their

forward and backward linkages as well. Of course, some parts of the world-system and some groups within

it do better than others. Nonetheless, for most persons and groups this period seems to be one in which a

"rising tide lifts all boats" and the times are perceived as times of "prosperity."

The state fulfills its guarantor role in multiple ways. It can take legal measures to ensure the

monopoly, via the protection of intellectual property, of which the simplest and most classical method is the

awarding of patents. In addition, the state can offer direct financial assistance, especially in research and

development. It can itself be a major purchaser, often at inflated prices. And not least, it can use its

geopolitical strength to try to prevent infringements of such quasi-monopolies by producers in other

countries.

The Kondratieff cycle is however a cycle. Quasi-monopolies cannot last forever. Over time, all

quasi-monopolies are self-liquidating for one simple reason. Quasi-monopolies are very profitable and

therefore other producers will try very hard to enter the world market in order to share in the benefits.

There are many ways to do this. They can try to steal or duplicate technological secrets. They can try to

use the geopolitical strength of other states to counter or undermine that of the guarantor state. They can

mobilize anti-monopolistic sentiments inside the enforcing country.

There is an additional problem for the controllers of a quasi-monopoly. Work stoppages are very

costly, given the high demand. And the controllers of a quasi-monopoly are therefore ready to consider

wage concessions to their employees as a less costly alternative, at least in the short run. This is especially

true if the other producers in an oligopoly do not suffer simultaneously from the work stoppages. In the

longer run, however, these concessions result in a creeping increase in the costs of labor, thereby reducing

the overall margin of profit.

Sooner or later, then, other potential producers succeed in undermining the quasi-monopoly. It has

generally taken about 25-30 years to do this. With greater competition, sales prices go down - a plus for

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purchasers but of course negative for sellers. What can the producers of the erstwhile quasi-monopoly then

do? One alternative is to shift primary production locations from one or more "core" locations to other

parts of the world-system where "historic" labor costs are lower. These enterprises are in effect trading the

advantage of low transaction costs for lower production costs. In the zones into which production has been

shifted, this is perceived and hailed as national "development." It is in reality the transfer to them of

industrial production that is no longer super-profitable - a plus but not a super-plus.

There are other ways in which the erstwhile quasi-monopolists can try to minimize their losses.

They can maintain some part of this production in countries where they were historically located by using

the latter location for niche subproducts, ones that are more difficult quickly to reproduce elsewhere. They

can also pressure their work force to accept lowered wages and benefits by threatening further relocation of

industry, with accompanying unemployment in the previous location. The work force finds it hard to limit

their losses.

In their continuing search for capital accumulation, they can also shift their investments from the

spheres of production and commerce to the financial sphere, what we today label "financialization" as

though it were a recent invention rather than a very long-standing practice in all Kondratieff B-phases. As

Fernand Braudel has argued, truly successful capitalists are precisely those who are not specialists in either

industry, commerce, or finance but generalists who move between these processes as opportunities dictate.

The principal way to accumulate in the financial sphere is to lend money, to be repaid with interest.

The lender profits most from those debtors who overborrow and who therefore repay annually only the

interest and not the capital. The debt to the lender thereupon constantly increases until the debtor is

overwhelmed and declares bankruptcy.

Loan mechanisms of this kind essentially reallocate existing capital without creating new capital.

Given the relative rapidity of the bankruptcies, accumulation via financial loans requires ever new sets of

debtors. Although these loans are very profitable to the lenders, they have a down side from the point of

view of the global capitalist system. They vastly reduce effective demand for all production by draining

ever larger amounts of income to repay debts rather than to purchase products. The larger the financial

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loans, the greater the reduction of effective demand, increasing the difficulty of returning to equilibrium.

Joseph Schumpeter explained how the return to equilibrium (and therefore growth) has occurred

historically. At some low point in the profit cycle an "invention" is turned into an "innovation," which

permits the creation of a new leading product that is quasi-monopolized, which in turn is the basis of the

renewed expansion of the world-economy.

The politics of ensuring a new upturn have been a matter of much debate. One element has been

the strengthening of the bargaining position of the working classes in the class struggle, which results in

enlarged world effective demand. Another is the willingness of some part of the producing classes to accede

to this stronger position of the working strata - a sacrifice of short-run individual profits in the interests of

the longer-run collective profits of the producing classes.

This pattern of repeated expansion and contraction of capitalist production of surplus-value is only

possible because capitalism is not a system that is located within a single state, but is ensconced in a world-

system, larger by definition than any single state. If these processes were occurring within a single state,

there would be nothing to prevent the holders of state power from appropriating the surplus-value, which

would remove (or at least considerably reduce) the incentive of entrepreneurs to develop new products. But

were there no states whatsoever within the geographic range of the market, there would be no one to

guarantee quasi-monopolies. It is only when capitalists are located in a "world-economy" - a structure

including a multiplicity of states - that entrepreneurs can pursue successfully the endless accumulation of

capital.

It is this ambivalent relationship of entrepreneurs to the states that explains the utility in a capitalist

system of so-called hegemonic cycles, cycles that have been considerably longer than the Kondratieff

cycles.

Hegemony in the interstate system refers to the situation in which one state is able to impose on the

others a set of system-wide rules that favor relative order in the world-system. Disorders - whether they are

interstate wars, civil wars, mafiosi protection rackets, extensive governmental and institutional corruption,

or rampant petty crime - no doubt yield considerable income to particular groups or individuals. But from

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the perspective of the system as a whole, they are a hindrance to maximizing the accumulation of capital,

primarily because such disruption destroys infrastructure (crucial in expanding capitalist accumulation)

and interferes with the free movement of commodities and capital.

Hegemony offers in addition an important side benefit to the hegemonic power itself - its state, its

entrepreneurs, its ordinary citizens. The policies of the hegemonic state have the result that an outsized

portion of the benefits from global accumulation go to them. Looked at from the point of view of other

states, the benefits of a hegemonic order often elude them, which accounts for the difficulty the hegemonic

power has to maintain this quasi-monopoly of geopolitical power.

I shall not elaborate here the cyclical pattern of the hegemonic cycles. I will note only that, as in the

case of the quasi-monopolies of leading industries, quasi-monopolies of geopolitical power are self-

liquidating. It is, however, a complicated and arduous process, which explains why hegemonic cycles are so

much longer than Kondratieff cycles.2

Both Kondratieff cycles and hegemonic cycles are cycles. But they are imperfect cycles. At the end

of either cycle, the system does not return to the starting-point. One cannot simply eradicate the growth of

the A-periods in real value, in geographic scope, and in depth of commodification. There is too much

resistance from those who have benefited from the growth of the A-period. The result is a diminution, but

only a partial diminution, of the benefits. The system may be described as stagnating rather than regressing.

We can think of this as a process of two steps forward and one step backwards. There is a return

to equilibrium, but the equilibrium has moved upward on its principal curves, creating secular trends. If we

measure on the ordinate percentages of some phenomenon and time on the abscissa, the curves are slowly

moving towards asymptotes.

But the nearer the system is to these asymptotes, the further it is from equilibrium, since one can

never cross the asymptote. It seems that, once these curves reach about the 80% point, the system starts to

oscillate wildly, becoming "chaotic." What happens then is that the curves bifurcate. We can call this the

moment of structural crisis of the system. A structural crisis is defined as one in which there is only one

2 I explain this process in "The Concept of Hegemony in a World-Economy" in Prologue to the 2011

Edition ofThe Modern World-System, II: Mercantilism and the Consolidation of the European World-Economy,1600-1750, Berkeley: Univ. of California Press, 2011, xxii-xxvii.

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certainty - that the existing system cannot be brought back to equilibrium and therefore cannot survive. In

effect, there exists at this point a collective "choice" between two alternative (and indeed quite opposite)

new stable systems. It is intrinsically impossible to predict which of the two will be collectively chosen.

And it takes some time to complete the process. But eventually, there is a definitive tilt towards one of the

new alternatives.

What accounts for the fact that it is only now that the modern world-system has moved so far from

equilibrium that it has reached the point of bifurcation? It has resulted from the way in which capital

accumulation works in a capitalist system. The basic method is via production, in which the entrepreneur-

producer receives as profit the difference between the sales prices and the costs of production.

We have already noted that the way to maximize sales price is by creating a quasi-monopoly. We

now have to explain how to minimize the three generic costs of production - personnel costs, the costs of

inputs, and taxation.

Costs of personnel differ for three groups - the unskilled and semiskilled workforce; the skilled

workers and supervisory cadres; and the top managers.

In the case of unskilled and semiskilled workers, their rising costs due to syndical action have been

contained primarily by the operation of the runaway factory, that is, by the relocation of production

processes to areas with "historically" lower wages during the B-period. The wages are historically lower

because the workers are being recruited from rural zones where their real income has been even lower than

the transplanted urban production process offers - seemingly a classic win-win situation. Once, however,

the transplanted workers have adjusted to their new life situation and become aware of the low level of their

wages in worldwide (as opposed to local) terms, they begin to seek better conditions via some syndical

action. Sooner or later the costs again become too high, and lead to a further move by the owners of the

production process.

Worldwide, there thus occurs the ratchet effect, the reductions never eliminating totally the

increases. The key problem is that over 500 years, this "runaway" technique has more or less exhausted its

possibilities. It is running out of new zones into which to move, a phenomenon that can be measured by the

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deruralization of the world-system - quite dramatic in the last fifty years.

Meanwhile, the cost of cadres has also risen for two reasons. One, the ever larger scale of

productive units requires more intermediate personnel. And two, more cadres are needed to counter the

syndical organization of the low-skilled personnel. Such cadres are not only workplace allies of the top

managers but can serve also as models of the possibility of upward mobility, thereby blunting the political

mobilization of the unskilled workers.

The rise in overall payments to the top managers has also been spectacular, particularly recently. It

has been justified by the increased complexity of entrepreneurial structures. But the basic reason is the

famous separation of ownership and control3, which has made it possible for the top managers to

appropriate rent from the firm's receipts, thereby denying income to the owner-shareholders.

The costs of inputs have also been going up. Capitalists externalize as many costs as they can.

That is, they seek not to pay fully for the inputs they use. In particular, they externalize to the extent they

can three processes - the disposal of toxic waste; the renewal of raw materials; and the (re)construction of

the infrastructure they need for their operations. Until recently, such externalization was considered normal

practice, and almost never became an issue for political authorities.

However, the political atmosphere has now changed radically. We debate climate change and

demand "green" and "organic" products. The idea that externalization is normal practice has become a

distant memory. The simple explanation for the origin of this debate about toxic disposal is that the world

has exhausted most vacant public domains for the waste, such that the impact on public health has become

much more obvious. Strong new social movements have emerged, calling for environmental clean-up.

In addition, the large increase in global population has led to a worry about the exhaustion or

shortage of natural resources - energy sources, water, forests, fish and meat. We fight about their allocation

and debate who should pay the bill for their renewal.

Finally, products produced for sale on the world market require both transport and communication,

which are today far more efficient and much, much faster. Since however the costs have risen considerably,

3 Adolf A. Berle & Gardner Means, The Modern Corporation and Private Property, New York:

Macmillan, 1932.

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we discuss who should pay the bill - the producers who use the infrastructure or the general public.

Governments are thus faced with the demand that they assume a new and much larger role in

detoxification, resource renewal, and infrastructure repair and expansion. To do this, however, they would

have to increase taxes significantly. And to contain these costs in the future, governments are insisting on

more internalization of costs by entrepreneurs. However, both measures - increasing taxes and requiring

more internalization of costs - reduce significantly the margins of profit of enterprises.

Finally, there is the rising level of taxation, the result of the expansion of government size and

functions, which everyone wants but for which no one wants to pay. There is equally an expansion of

private taxation - that is, corruption of officials and the demands of organized mafias. There are ever more

people to bribe and ever more room for mafiosi protection rackets.

The biggest source of increased taxation, however, has been the result of the democratization of

world politics. Popular social movements have fought to get the governments to provide education, health

services, and life-long revenue flows the combination of which we call the "welfare state." Over time, the

demands for each have steadily expanded in two ways - the levels of services demanded, and the increased

geographical locales in which the demands have been made.

In short, the three basic costs of production - personnel, inputs, and taxation - have all risen

constantly and have moved so close to the asymptotes that the system cannot be brought back to

equilibrium via all the standard mechanisms it has used for 500 years. Worse still, this profit squeeze has

occasioned a major cultural change caused by the world-revolution of 1968 - the end of the dominance of

centrist liberalism in the geoculture.

A central part of the world-revolution of 1968 was the rebellion of its participants against what is

called the Old Left - essentially the two varieties of world social movements (the Communists and the

Social-Democrats) plus the national liberation movements. These movements emerged slowly during the

last third of the nineteenth century and the first half of the twentieth century, and for most of this time they

were weak and marginal. Then suddenly in the period 1945 to 1968, those Old Left movements that had

advocated the so-called two-step strategy - first take state power, then change the world4 - rather rapidly

4 It is true that the Marxist social movements divided into two camps as of the Russian Revolution - the

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became extremely strong in almost all parts of the world-system.

The growth in strength of these movements, exactly during the period of the extraordinary

Kondratieff A-phase expansion and the height of U.S. hegemony, was not fortuitous. Just as a Kondratieff

A-period leads capitalists to make concessions to labor in order to avoid strikes, so the hegemonic power

during this period thought that concessions to the Old Left helped to maintain a relative stability in the

geopolitical arena. Where it could, the United States favored a negotiated decolonization. The combination

of decolonization of the so-called Third World and the expanded welfare state in the pan-European world

was expected to encourage a more "moderate" structure in world politics, as indeed it did for a while.

As a result, by the middle of the 1960s, it seemed that the Old Left movements had achieved their

historic goal of state power almost everywhere (that is, step one of the two-step process). Communist

parties ruled one-third of the world, called at the time the socialist bloc. Social-democratic parties were in

alternating power in most of another third of the world - the pan-European world.5 And by 1968, in almost

all of the colonial countries, the nationalist and national liberation movements had come to power.6

However "moderate" many of these movements seemed when in power, the world-system was

pervaded at the time by a significant triumphalism that all these movements affected. The future was theirs,

they felt and loudly proclaimed. And the powerful in the modern world-system were afraid these

proclamations were accurate. They feared the worst. Those, however, who participated in the world-

revolution of 1968 did not agree. They did not see the coming to power of the Old Left movements as a

triumph, but rather as a betrayal. They said in essence. You may be in power (step one) but you haven't

changed the world at all (step two).

Social-Democrats (or IInd International) and the Communists (or IIIrd International). However, their differenceswere not about the state-oriented strategy, but about how to take state power. For the young persons who made upthe bulk of the participants in the world-revolution of 1968, this debate between the two Internationals seemedalmost irrelevant.

5 One has to remember that, at that time, the principal policy objective of the Social-Democratic parties

- the welfare state - was accepted by their conservative alternating parties, which merely quibbled about the details.As for the United States, the New Deal liberals were really a variety of Social-Democrats who simply declined toutilize the label.

6 Most Latin American countries had already become formally independent in the first half of the

nineteenth century. But populist movements there showed analogous strength to national liberation movements inthe still formally colonial world.

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If one listened carefully to the rhetoric of participants in the world-revolution of 1968, and one

ignored the local references (which were of course different from one country to another), there were three

themes that seemed to pervade the analyses of those who engaged in the multiple uprisings, whether they

were located in the socialist bloc, the pan-European world, or the Third World.

The first theme was about U.S. hegemony. It was not viewed as the guarantor of world order.

Rather, it was seen as an imperialist overlord, but one that had overstretched and was now vulnerable. The

Vietnam war was at its height, and the Tet offensive of February 1968 was widely thought to be the death

knell of the U.S. military operation. Nor was this all. The revolutionaries accused the Soviet Union of being

a collusive partner in U.S. hegemony. The Cold War was, they believed, a phony facade. The Yalta deal of

a de facto status quo was the major geopolitical reality. This deep suspicion had been growing since at least

1956, the year of Suez and Hungary - in which two situations neither superpower acted in ways that that of

their Cold War rhetoric had seemed to dictate. 1956 was also the year of Khrushchev's "secret" talk at the

20th Congress of the Communist Party of the Soviet Union, a talk that rejected Stalinist rhetoric and many

of the policies. While Khrushchev's speech reflected the needs of the Soviet Nomenklatura, it led to

widespread "disillusionment" among the erstwhile faithful, both in the Soviet Union and throughout the

world.

The second theme concerned the Old Left movements, which were attacked everywhere for having

failed to fulfill their promise to change the world (the second step) when they came to power. The militants

said in effect that we must rethink a failed strategy and replace you with new movements. For many, it was

the Chinese Cultural Revolution that served as a model - the stunning call to purge the "capitalist roaders"

said to be located in the very top positions of the party and government.

The third theme concerned the "forgotten" peoples - those oppressed because of race, gender,

ethnicity, sexuality, that is, otherness in all its possible forms. The Old Left was seen as just as guilty of

this as the powerful of the world. This was the inevitable result of the fact that the Old Left movements had

all been hierarchical movements, insisting that only one movement in any country could be "the"

revolutionary movement. This movement gave priority to a particular class of struggle - the class struggle

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in the industrialized countries (the North), the national struggle in the rest of the world (the South).

Up to 1968, the Old Left position had been that any "group" that sought to pursue an autonomous

strategy undermined thereby the priority struggle and therefore was objectively counter-revolutionary.

Groups representing persons other than those belonging to the priority struggle could only be legitimate if

they were organized within the hierarchical party structure and subordinate to its topdown tactical

decisions.

The 1968 militants insisted that the demands of all these other groups could no longer be

deferred, yielding priority to the so-called main struggle. The oppression these groups were combating was

as urgent and as important as that of the priority group. The groups organized by forgotten peoples

included notably women; socially-defined minorities (racial, ethnic, religious); persons of diverse sexual

tendencies; and persons devoting themselves to ecological or peace struggles. There is of course no end to

the possible list of forgotten peoples, a list that has continued to expand ever since. Many of these

movements have indeed become more militant. The Black Panthers in the United States were at the time a

very prominent and widely discussed example of this kind of group.

The world-revolution of 1968 (actually it went on between 1966 and 1970) did not lead to a

political transformation of the world-system. On the contrary, in most countries, the movement was

successfully repressed, and many of its participants abandoned their youthful enthusiasm as the years went

by. But it did leave a lasting geocultural legacy. The ability of centrist liberals to insist that their

ideological approach was the only legitimate one was destroyed in the process of the world-revolution of

1968. The truly conservative and truly radical ideologies, which had long been muted, found their voice,

and pursued once again an autonomous organizational and political existence.

The consequences of this geocultural change for the geopolitics of the modern world-system were

enormous. At the very moment that the ability of capitalists to pursue the endless accumulation of capital

was unraveling, the political stability of the modern world-system was no longer being reinforced by the

acceptance of centrist liberalism's assurances of an ever-better future for everyone, to be accomplished

through the wise actions of the "specialists" who were able to bring about this ever-better future,

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eventually.

Centrist liberalism had now been dethroned as the governing ideology of the world-system. It was

reduced to being simply one alternative among three. And the Old Left movements were destroyed as

mobilizers of any kind of fundamental change.

The initial result was a massive offensive of the world right, which we call "neoliberalism" and the

"Washington consensus." This essentially involved a call for the rollback of all the benefits lower strata and

weaker countries had obtained in the 1945-1970 period. Personnel costs were to be reduced, except for the

top managers. Pressures to internalize costs of inputs were to be abandoned. Taxes were to be lowered

radically. Expenditures on "welfare state" demands were to be diminished if not abolished. The size of

government bureaucracies was to be cut. State enterprises were to be privatized. Weaker states were no

longer to espouse "developmentalism" and "import-substitution" but to produce primarily for export. And

all these rules were to be enforced by the United States, the International Monetary Fund, and allied

institutions. The governing slogan was that of Mrs. Thatcher: There is no alternative (TINA).

This program was remarkably successful for about 15-20 years - until it ran out of steam. All

around the world, the turn to the market as the sole guiding principle resulted in increased economic and

social polarization, both within countries and between countries. The political balances began to move

away from the neoliberals. There were three turning-points in this political shift: the neo-Zapatista uprising

in Chiapas in 1994; the demonstrations at the Seattle meetings of the World Trade Organization in 1999;

and the first World Social Forum at Porto Alegre in 2001.

The importance of Chiapas was that, in one of the poorest regions of the world, there occurred an

uprising that combined two messages. The first was that the neo-Zapatistas did not seek state power in

Mexico but rather championed the rights of the indigenous people to lead an autonomous existence. The

second was that the neo-Zapatistas reached out worldwide to all oppressed groups (of every conceivable

variety) in what they called "intergalactic" solidarity.

The significance of Seattle was in exposing the potential global effectiveness of mass

demonstrations. An unlikely coalition of trade-unionists, environmentalists, and anarchists - most of whom

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were from the United States, furthermore - succeeded in bringing an intergovernmental meeting of

considerable importance to a halt. The meeting of the World Trade Organization had been intended to agree

on a treaty that would highly constrain any national legislation that would interfere with the so-called rights

of intellectual property. Not only was this treaty not adopted at Seattle but all attempts since then to revive

this proposition have failed miserably.

The significance of Porto Alegre was that a world coalition of diverse social movements convened

successfully an international meeting based on horizontalist principles, one that has been repeated regularly

ever since. They chose the name World Social Forum to indicate their opposition to one of the key

institutions of the Washington Consensus, the World Economic Forum at Davos.

What was now occurring was the framing of the active worldwide political struggle about which of

the poles of the bifurcation was to prevail. The question before both sides was not in what way the

capitalist system can be reformed such that it can renew its ability to function adequately. The question had

become what would replace this system. And this is a question both for the 1% and the 99%, in the

language coined in 2011 by the Occupy movement in North America. Of course, not everyone agrees, or

phrases it this way. Indeed, most people still assume that the system is continuing more or less. This is not

wrong. But in the present situations, continuing to use the old rules in fact intensifies the structural crisis.

For those on both sides who see clearly the nature of the struggle, the question becomes what is the

strategy by which they can win. And on this question, there is division in both camps. To be sure, as

complexity studies insist, the outcome is inherently unpredictable, but the options between which we shall

choose can be sketched in broad terms. One choice is a system that reproduces in a non-capitalist form the

three defining characteristics of the present system - hierarchy, exploitation, and polarization. The other

choice is a system that is relatively democratic and relatively egalitarian, a kind of system that has never

yet existed anywhere. We cannot design now the actual institutions either alternative would construct. The

institutions will evolve as the new system begins to function.

If we use symbolic names for the two possibilities - "the spirit of Davos" and "the spirit of Porto

Alegre" - we can try to discern the internal debates in both camps as to the desirable and most effective

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strategy.

The camp of the "spirit of Davos" is deeply divided. One group favors the strategy of harsh

repression, and has no doubt been organizing the network of armed enforcers to crush opposition. But there

is another group who do not believe that repression is effective over the long term. They favor the di

Lampedusa strategy of changing everything in order that nothing changes. They use the language of

meritocracy, green capitalism, more equity, more diversity, and the open hand to the rebellious. They do

this in the hope that such proposed reforms would head off support for a system that would be based on

relative democracy and relative equality.

The camp of the "spirit of Porto Alegre" is split as well.

The "horizontalists" argue that the strategy employed in the transition will determine the outcome. They

wish to maximize debate and search for relative consensus among the whole range of persons who seek the

"better world" as they define it. They emphasize what is called a "civilizational crisis," and reject growth as

the collective objective. Rather they favor achieving some rational balance of social objectives, which they

believe would result in a system based on relative democracy and relative egalitarianism.

But there are those in this camp who argue that one cannot win political battles other than by

organized strength, and this requires some kind of "vertical" organization. Furthermore, this group also

emphasizes the importance of achieving significant immediate economic growth in the South in order to

have the wherewithal to redistribute benefits. They see those who talk of a priority for civilizational

change as obstructing the possibility of improving the welfare of those who presently constitute the South.

The resulting picture is therefore not one of a simple two-sided struggle but rather of a political

field with four groups. And that is of course very confusing to everyone. The confusion is at one and the

same time intellectual, moral, and political. And this reinforces the uncertainty of the outcome.

Making this kind of intellectual analysis of the complicated battlefield is the first step we all must

take. Once that is done, our analysis presents us with a moral choice that each of us has to make. There is

no apolitical, technocratic answer to the road ahead. There is not even a purely intellectual answer. Each of

us necessarily turns here to the values we have internalized. And, once we have determined our moral

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choice, we then must locate the political strategy that will optimize our ability to achieve our objectives.

Put another way, we are trying to push the choice in the bifurcation, until it tilts definitively towards the

end we prefer.

What we can say is that "history" is on nobody's side in this struggle. We all may fail to choose the

best political tactics to pursue our values. Looking back in the future, we may regret errors in how we

acted politically. Since the outcome is inherently, and not extrinsically, unpredictable, we have at the very

best a 50-50 chance of getting the kind of world-system we prefer. But this is as much a reason for

optimism as for pessimism.