AntePodium

An Antipodean electronic journal of world affairs published by The School of Political Science and International Relations at Victoria University of Wellington [III/99]

God’s Invisible Fist: power and knowledge of the Asian Crisis

Kosuke Shimizu, Kansai Gaidai University, Japan

When we talk about the Asian Crisis, we hear many saying that “we” are ready to help “them” (Asians) recover from the state of chaos. When we talk about India and Pakistan’s nuclear testing, then it is often said that “we” are deeply concerned with “their” behaviour which is against the “international consensus” of non-proliferation of nuclear weapons. It is clear here that the term “we” does not include “them” simply because the issues above are not “our” problems. What strikes me here is the strict separation of “Self” and “Others”. Then the questions we have to ask ourselves are how are “we” or “Self” constructed. How are “they” made to represent “Others”? After investigation, the meaning of the term “we” becomes apparent. The term “we” represents the “international community”, a community which does not include “them”. Thus, “international” is a signifier of the people who hold the dominative power in world affairs. Here, “we” are in the ‘gentleman’s club’ while “they” stay outside and will never be permitted entry into this elite, thus “excluding”, circle. Feminists have been well aware of this unquestioned acceptance of the universal identity. They continue to criticise the deeply biased dichotomy of “we”/ “they”, and “men”/ “women” which has often been used to exclude women from “our world”. Masculinist exclusivist practices, which enforce androcentric value to IR students, are, they say, coloured with value-neutral narratives including realist, behaviouralist, and positivist accounts of world affairs. As a result,

masculinist world affairs appear to be “natural” and to have nothing to do with gender differences. Similar aspects are also perceivable in the narrative of other dimensions to world affairs. The issue of the “Asian Crisis”, for example, is articulated with ethnocentric accounts. Many “Western” economists as well as theorists of international political economy (IPE) show their “concern” about this regional crisis, and attempt to provide a resolution of the issue. However, what is made invisible by these narratives are those who are actually living in the area, and suffering from deteriorating living conditions. This of course includes the invisibility and potential for intra-nation conflict, social instability, attacks on ethnic Chinese, for example. The issue of invisibility of particular lives is far from trivial in the study of world affairs because there are a significant number of similar events perceivable around the world. These include environmental degradation in some South East Asian areas, deforestation of rain forests, deprivation of control over their own lives often perceived in indigenous peoples’ cases, the issues of female “cheap” labour and the IPE of sex1. These issues have been often neglected and made invisible by particular narratives of malecentric ethnocentrism. In this article, I will mainly attempt to analyse the established narratives of IPE, their application to the “Asian Crisis”, and to reveal the extent to which their supposedly value-neutral objectivist views are biased in terms of race and gender. My main aim is not to simply describe the neglect. It is to analyse the causes of this neglect and its effect on the lives neglected. In other words, my analysis is about the assumptions and premises underlying the traditional narratives of IPE. To achieve this goal, I will firstly provide a general over view of the relationship between the “Third Debate” and IPE. Secondly, I will explain some post-positivist reading of IPE, and introduce the Foucauldian argument as my standpoint which sees power and knowledge as the central concern. Thirdly, I will try to give a detailed discussion of how the issue of “Asian Crisis” can be positioned within this debate. And fourthly, I will critically assess the consequence of the application of modernist knowledge to the “Asian Crisis”.

1 Jan Jindy Pettman (1996), Worlding Women: a feminist international relations, Allen & Unwin, St. Leonards, NSW.

Placing the Third Debate in IPE The Third Debate has been commonly regarded as one between positivism and post-positivism. By positivism here, I mean, an epistemological position whereby research approaches rest on a mental technique of objectification (objectivism). Their research programmes are extremely influential. They are powerful enough to embrace the majority of IR/IPE students within their influence. On the other hand, post-positivism represents critiques of positivist approaches. Although it is very difficult to encompass the variety of critiques of this sort under one heading, for the purpose of this paper I define post-positivism as an ideology which criticises objectivism and its unquestioned acceptance of value-neutral scientific approaches. Thus it inevitably includes critical international theory and postmodernism. Despite the intensified debates between positivism and post-positivism in IR, not many of these are documented in IPE2. This is, I presume, because IPE has long been defined as a combination of international politics and international economy. Both of them, particularly the latter, has been developed as a science. In the case of international politics, behaviouralism provides a good example of the scientific objectivist approach. In international economics, the theory of markets and comparative advantage theory have been sophisticated by the quantification of the fundamental essences of international economic activities. The separation between international politics and international economy is only one interpretation of IPE, however. There are others, namely mercantilism and Marxism. Including liberalism, these three approaches are called the grand narratives of IPE. In commonly used textbooks, mercantilism is explained as a state-centric ideology, while Marxism is class-centric3. In this sense, the latter two narratives of IPE do not accept the separation of international politics and international economy. If one takes a mercantilist view, the economy is an important device used to accumulate capital within a border. If one takes a

2 Of course, there are some exceptions. For example, Ralph Pettman (1996) “The Limits of Rationalist Understanding of IPE”, a paper presented at ISA annual conference, San Diego; Roger Tooze and Craig N. Murphy (1996), “The Epistemology of Poverty and the Poverty of Epistemology” in IPE: mystery, blindness, and invisibility”, Millennium, vol.25, no.3. 3 See for examples, Ralph Pettman (1996), Understanding International Political Economy: with readings for the fatigued, Lynne Rienner, Boulder: Robert Gilpin (1987), Political Economy of International Relations, Princeton University Press, Princeton: and Stephen Gill and David Law (1988), The Global Political Economy: perspectives, problems, and policies, Harvester Wheatsheaf, New York and London.

Marxist view, then she/he sees politics as determined by the law of capitalism and mode of production. However, in the context of the Third Debate, the differences among the grand narratives of IPE are not as significant as their commonality. What characterises the commonality are their concentration on positivist techniques of objectification and their contempt of what this objectivist attitude regards as trivial. All the narratives introduced above are based upon the concept of a “Self” who looks at the world in an objective manner. This “Self” stands back to look at the world, using logic and experiment, and creates models of that world which she/he can manipulate in her/his mind and test empirically in terms of how well they fit the substantive world. This is typical of scientific rationalistic objectification which expands his/her cognitive potential. This has led to a civilisation with a much greater command of technology, and a science “whose reliability and practical utility far surpass those of any previous (pre-modern) culture”4. However, objectification also individuates, that means, it can only be achieved by moving the sense of the “Self” away from that of the society of which the “Self” is a part. Of course, it is theoretically impossible to grow up as a human being completely outside of human society. However, it is possible to foster a sense of mental distance between the “Self” and the rest of the members of a society, and, to be modernist is to do just that; to make of the “Self” “just such an ‘individuated’ individual”5. Objectification has had profound consequences for contemporary world affairs. Ralph Pettman states:

The modernist mind-set has profound consequences for whole cultures. It renders the existence of gods and the magic use of language seemingly irrelevant ... It consigns such irrational activities as festivals to the socio-cultural background. And it makes of community itself a much more make shift affair6.

4 Ralph Pettman (1996), “Asian Globalism”, a paper presented at the ISA/JAIR joint conference, Makuhari, September 20-22, p.5. 5 Ralph Pettman (1996), “Asian Globalism”, ibid, p.5. 6 Ralph Pettman (1996), ibid, p.5.

Modernist narratives in general, and the grand narratives of IPE in particular, do not pay sufficient attention to this phenomenon. Why the neglect, then? Is that an inevitable consequence of modernism? Is it a mere coincidence? It does not seem to be so. The answer lies in the methodology of modernism itself. As George states, the modernist way of knowing results in extreme reductionism 7 . Modernists frequently reduce “a complex, ambiguous, and heterogeneous matrix of existence” to a “simplistic, universalized image of the ‘real’ world”. They detach it “fundamentally” from the “everyday experience” of that world 8 . As a result, although reality is always characterised by ambiguity, contradiction, difference, and diversity, modernism is only able to create partial representations of reality9. For example, mercantilists see the world only in terms of inter-state relations. They contend that all markets should be controlled and regulated by states, and that human interactions become important for the world only if they are something to do with the state system. Liberalists regard the world in terms of marketeering. In the logic of the liberal political economy, individual desire for profit causes human interactions. These human interactions, in turn, profit everyone if there is no or at least limited state intervention. The world works efficiently only in this way, and no other way. For Marxists, what determines the future world is the mode of production. Superstructures such as politics, culture, and religion, are all determined by the laws of production relations. Thus, when one mode of production is overtaken by another, the world changes. This kind of reductionism makes modernist IPE narratives far from comprehensive. This is because the reductionism limits their theoretical scope. Those human actions outside their main concerns are not be taken up because they are regarded as trivial, or unimportant, or meaningless. Events occurring in the context of everyday human existence, for example, are not given sufficient attention by modernist narratives. Mercantilism has never taken racism seriously, for example. Liberalism has never been concerned itself with the way business practices discriminate against women, for example. And Marxists have not elaborated a way of adequately accounting for gender imbalance in a post capitalist society.

7 Jim George (1994), Discourses of Global Politics: a critical (re)introduction to international relations, Lynne Rienner, Boulder, p.11 8 Jim George (1994), ibid, p.11; Ralph Pettman (1996), “The Limits of Rationalist Understanding of IPE”, p.10 9 Jim George (1994), ibid, p.11.

The rationalist objectification practices on which the grand narratives rely also result in linear histories. As I explained above, each narrative has its own theory of development. The term development immediately reminds liberals, for example, of the Rostow’s five stage “take-off” theory. For Marxists, it denotes the transition from capitalism to communism. For mercantilists, the movement towards state autonomy. For all of them, history is linear, straight, and not reversible. Of course, a history of this kind becomes problematic when planted on a society with a different cultural and historical background. Acute confrontations can then occur between such grand stories of history and everyday human behaviour. Post-positivist reading of world political economy Among the three narratives I introduced above, liberalism, specifically neo-liberalism, is now enjoying hegemonic status in world affairs. The formation of this neo-liberalist domination perpetuates the interests of not only the developed world but it also perpetuates the plight of the Third World and the former communist countries. For example, countries that have massive foreign debt are “guided” by neo-liberal economic theory when determining how to pay off their debts. These theories prescribe politics that minimise government expenditure, and enhance foreign direct investment opportunities for transnational agencies10. As we will see later in this article, this is the case in the Asian Crisis. Post-positivist scholars in IPE show in detail the way in which the globalization of capital came to dominate the contemporary world political economy. In the 1980s, states were expected to cultivate an appropriate “business climate”11 in order to attract transnational capital. Neglecting to do so would result in a loss of cash flow from direct foreign investment, confronting them with a financial crisis. The appropriate business climate was secured by the implementation of a theory called “supply-side economics”12. This economic theory provided a justification for tax-cuts and the implementation of economic policies favouring business societies. Thatcherism in Britain and Reaganomics in the US are 10 Stephen Gill (1994), “Knowledge, Politics, and Neo-Liberal Political Economy”, in Richard Stubbs and Geoffrey R.D.Underhill, eds., Political Economy and the Changing Global Order, Macmillan, Hampshire, p.82. 11 Stephen Gill and David Law (1993), op.cit., p.100. 12 See for example, Bruce R. Barlett, ed., (1983),The Supply Side Solution, Chatham House, Chatham, NJ.; and Lawrence Robert Klein (1983), The Economics of Supply and Demand, Johns Hopkins University Press, Baltimore.

distinctive examples of this approach. Many of the Asian countries concerned in the Asian Crisis have also subscribed to this theory. For example, APEC has set a target for liberalisation of financial services by 201013. What is basic to post-positivist scholars is not its assessment of these political orientations. Rather it is its scrutiny of the changes in “ideas, norms and expectations about the appropriate role of government, the importance of private enterprise, and the virtues of markets”14 these political orientations entail. In the modern capitalism, the dominant ideology serves particular interests of large capital rather than those of individuals. What is important here is that ideas of deregulation and free capital inflow and outflow get to be taken for granted. The reasoning underlying this is that without the private sector, economic power of the state is in jeopardy. This is particularly notable in the particular form neo-liberalism took in the 1970s and the 1980s, namely, monetarism15. Under the influence of monetarist ideology, strict control of the money supply was chosen as the best way to deal with inflation. This became widely accepted as the best way to implement deflationary policies, despite its tendency to widen the gap between rich and poor. In the process of globalisation, ideas and knowledge construction perform an integral role. Positivist academics, such as neo-classical economic theorists, who regard themselves as sitting outside the changing social structure because of their belief in the neutrality of objectification, are revealed as actually sitting at the core of the process they are observing. Their standpoints are constructed inside the making of the history they analyse. They are not detached from this process as long as they exist in the world. As post-positivist scholars argue, the knowledge systems these intellectuals create are the core of contemporary capitalism, constituting and confirming the capitalist world, and enforcing the individual to be an agent of international political economic life. How does this knowledge construction work? To quote Cox: The ontologies that people work with derive from their historical

experience and in turn become embedded in the world they construct.

13 http://www.apecsec.org.sg/econlead/bogor.html 14 Stephen Gill and David Law (1993), ibid, p.101. 15 See for example, Milton Friedman (1962), Capitalism and Freedom, Chicago University Press, Chicago; Milton Friedman and Rose Friedman (1989), Free to Choose, Pelican, Harmondsworth.

What is subjective in understanding becomes objective through action. This is the only way, for instance, in which we can understand the state as an objective reality. The state has no physical existence, like a building or a lamp-post; but it is nevertheless a real entity. It is a real entity because everyone acts as though it were; because we know that real people with guns and batons will enforce decisions attributed to this non-physical reality16.

Following Cox, post-positivist scholars emphasise the same process of knowledge constitution. To posit the absence of a philosophical dimension to the global political economy, as positivists do, is anathema. Indeed, they seek to develop Cox’s account by concentrating directly on arguments of epistemology and ontology. They cast doubt on positivist IPE discourses by questioning the philosophical presumption that a knowledge structure is something which stands outside the process of social change. They emphasise that it is actually in the process of constructing the global political economy. But how do knowledge systems create reality? This question is not well answered by IPE specialists. However, when we shift our focus to philosophy there is an answer. Regarding modern power and knowledge relations, Foucault notes that the chief function of domination is to “train” people. This type of power does not use physical coercion. It is not oppressive in the traditional sense. It does not force the masses to form a single, uniform, totalised figure. Rather it; separates, analyzes, differentiates ... It “trains” the moving, confused,

useless multitudes of bodies and forces into a multiplicity of individual elements - small, separate cells; organic autonomies; generic identities and continuities; combinatory segments. Discipline “makes” individuals; it is the specific technic of power that regards individuals both as objects and instruments of its exercise. It is not a triumphant power, which because of its own excess can pride itself on its omnipotence; it is a modest, suspicious power, which functions as a calculated but permanent economy17.

16 Robert Cox (1992), op.cit., p.133. 17 Michel Foucault (1984), “The Means of Correct Training”, in Rabinow, ed., The Foucault reader: an introduction to Foucault’s Thought, Penguin, London, p.188.

This power can be distinguished from the “majestic rituals of sovereignty” or the “great apparatus of the state”18. This power is what he calls “disciplinary power” which connotes that a particular knowledge system becomes its core such as liberalism has become the core of current world political economic affairs. Disciplinary power is subtle, ambiguous, and ubiquitous, and its success has three aspects: “hierarchical observation”, “normalising judgement”, and the combination of these two, namely, “examination” (or “subjectification”). Hierarchical observation “...make[s] it possible to see ...[the] effects of power [while] ... the means of coercion make those on whom they are applied clearly visible”19. Modern architecture, for example, exercises “disciplinary power”. It can be seen expressed in working class housing estates, hospitals, asylums, prisons, and schools. These institutions are no longer built simply to be seen, or to create specific spaces, but “to permit an internal articulated and detailed control - to render visible those who are inside [them]”. As “... an architecture ... [it] operate[s] to transform individuals: to act on those it shelters, to provide a hold on their conduct, to carry the effects of power right to them, to make it possible to know them, to alter them”20. The international financial structure provides a good example in this sense. All economic activities are made visible through the system of audit. The second aspect of modern disciplinary power, according to Foucault, is “normalisation”. This term he uses to refer to the micropenalties of time (latenesses, absences, the interruptions of tasks), of activity (inattention, negligence, lack of zeal), of behaviour (impoliteness, disobedience), of speech (idle chatter, insolence), of body (“incorrect” attitudes, irregular gestures, lack of cleanliness), and of sexuality (impurity, indecency)21. Normalisation; ... refers individual actions to a whole that is at once a field of

comparison, a space of differentiation, and the principle of a rule to be followed. It differentiates individuals from one another ... It measures in quantitative terms and hierarchies ... the abilities, the level, the “nature” of individuals. It introduces, through this value-giving measure, the constraint of a conformity that must be achieved. Lastly, it traces the

18 Michel Foucault (1984), ibid. 19 Michel Foucault (1984), ibid, p.189. 20 Michel Foucault (1984), ibid, p.190. 21 Michel Foucault (1984), ibid, p.194.

limit that will define difference in relation to all other differences, the external frontier of the abnormal ... In short, it normalizes22.

The third aspect of modern disciplinary power, Foucault says, is “examination” or “subjectification”. This combines the technique of observing hierarchy with that of normalisation. It entails a particular normalising “gaze”, or “surveillance”, which makes possible in turn the classification and punishment of individuals. Examination, Foucault says, is highly ritualised. In it, he finds the “deployment of force” and the “establishment of truth” combined23 in such a way as to allow knowledge to exercise power24. Disciplinary power is the process, in sum, of exercising a knowledge system. It objectifies individuals in relation to each other. It articulates the contemporary social system and the values that define that system. It designates what is abnormal and deviant. It forces normalisation on those who are defined as abnormal, and it enters them into processes of reformulation and rehabilitation. And as long as a difference between normal and abnormal can be said to exist, so does disciplinary power. What is the consequence of the exercise of modern power? The construction of knowledge dominates world affairs. Therefore, so too does the mind-making process of world affairs. This validates in turn the postmodern reading of the relationship between power regimes and modern politico-economic thought, whether this reading be of Machiavellian realism and the state-centric view, Smithian liberalism and the expansion of capitalism, Karl Marx’s rage against capitalism and the emergence of communist states, the popular acceptance of welfare states and Keynesianism, or neo-liberal (neo-classical) economics and monetarism. Asian Economic Crisis When we look at the issue called the “Asian Crisis”, the relationship between knowledge and power becomes visible. There are many concerns about this issue expressed by economists, state officials, and executive managers of international organisations including the IMF and the World Bank. Underlying

22 Michel Foucault (1984), ibid, p.195. 23 Michel Foucault (1984), ibid, p.197. 24 Michel Foucault (1984), ibid, p.199.

these “concerns”, one can see several knowledge systems which look different but which eventually support the dominant liberalist regime. These knowledge systems include neo-mercantilist, neo-liberal, and reformist liberal narratives. The neo-mercantilist argument The neo-mercantilists’ argument in the context of the “Asian Crisis” is not about Asian countries such as Indonesia, Thailand, Malaysia, Japan, or South Korea. The mercantilist argument I focus on here is an American one. American neo-mercantilism has been particularly interesting as it did not appear to be mercantilist at all. It rather looked like a humanitarian approach to the crisis that would “help” the countries concerned stabilise their economies. As such, it deserves closer scrutiny. In his article, John J. Lafalce, a member of the US House of Representatives, expressed his deep concern about the Crisis25. He stated that there had been two approaches the US could take regarding the Crisis. The first was “to use our central role in the international economic community to restore economic stability in Asia and safeguard the potential for economic growth there and at home”26. This was apparently an interventionist position. However, what he was concerned with here was basically the US economy. His use of “home” demonstrate where his loyalties lie. The main goal here was to stabilise the economies of the region in order to prevent the US economy from becoming affected by the Crisis out “there”. This also becomes obvious when he said that “[i]nevitably, that pain [of the Asian Crisis] will spread to our own economy, in the form of lost export sales and investments, market turmoil, and increased unemployment”27, if “we” do not act. The second option he gave was to neglect the problem. In this option, he said, “we can stand by as regional financial crisis blights the economic prospects of affected countries and their people, and simply hope it will not spread”28. However, he did not think this was feasible. This was because, other than the abovementioned points, US inaction contained the risk of spreading economic

25 John J. Lafalce (1998), “The Role of the United States and the IMF in the Asian Financial Crisis”, a paper presented at the Institute for International Economics, 27/January/1998, http://www.iie.com/lafalce.html 26 ibid, p2. 27 ibid, emphasis added. 28 ibid.

upheaval to other regions such as Latin America, Russia, and Eastern Europe where many countries had initiated reforms with IMF assistance, and were making “serious progress”. The penetration of the Asian Crisis to these area would “prove enormously costly to them as well”29. In retrospect, his argument was correct that the crisis has actually spread to the above areas. Of course, what he was actually talking about was not the peoples living in these areas, but the international financial system. In fact, in all the comments he made, “we” exclusively represented those who identified themselves with the international financial system. To avoid the collapse of the financial system, he advocates the first option. In advocating the interventionist option, he demands the US cooperate with the IMF. This is simply because “[t]he IMF may not be a perfect tool, but it is the only tool we have”30. This is a typical mercantilist remark in the sense that he assumes the state-centred view of the world where international organisations are “tools” of particular states. By assuming the IMF as a tool for US policy, he lists some objectives of his interventionist approach including currency stabilisation in the area and the further opening of local economies. What lies behind his deep concern about the Crisis was apparently his fear of the spread of financial crisis. What is remarkable here is not the fact that he was frightened with it, but his attempts to use the IMF, the leading institution of neo-liberal ideology, in order to protect the US economy. When we assume liberalist institutions are working for promotion of the liberal free market economy, then its cooperation with mercantilist countries is not feasible. However, as I have explained here, it is possible in practice. This was made possible through their use of the “international financial system” or “we’. As this system has much to do with American economic welfare, there is a logic in Lafalce’s argument that what benefits the international economy will also benefits the US. In fact, he states “the US and its citizens have a great deal to lose if we permit regional economic problems to reverberate around the globe unaddressed. It is incumbent upon this country’s political, business and labor leadership to do everything possible to ensure the situation does not deteriorate to that point”31. He creates and reinforces, in this context, a ground

29 ibid. 30 ibid, p3. 31 ibid, p7.

where the US mercantilists and the IMF neo-liberal officials can fight together against “them” and “their” problem. But what about the IMF? How do they react to this Crisis? The neo-liberal argument The IMF has been widely regarded as the most appropriate example of the institutionalisation of neo-liberal thought. However, this reading of the institution is one-dimensional. Susan George described the IMF as “messenger, watchdog, international alibi and Gendarme for those who do hold financial power”32. The IMF, she maintains, works for “the private banks, with states (including their central banks and treasuries)” which are “the bedrock of the world monetary system”33. There are many critical observers concerned with the IMF’s actual functions. Some argue that, in the event of the Mexican Currency Crisis 1994-5, the IMF “successfully mobilised finance to ensure that external creditors were repaid, thus insulating fund managers from risk” by transferring the cost of repayment to the ordinary people living in the country34. Since the “Debt Crisis” of some Latin American economies, the IMF’s function to enforce liberal economy upon the “Others” in order to secure the international financial system or “our” system does not seem to have changed. In the event of the Asian Crisis, the unchangeable nature of the IMF was once again confirmed. Michel Camdessus, the Managing Director of the IMF and the most powerful figure in Asia at the moment35, stated, for example, regarding the Crisis that “the task before us is very simple: to keep this crisis from becoming a catastrophe of global proportions”36.

32 Susan George (1990), A Fate Worse Than Debt: a radical new analysis of the Third World debt crisis, Penguin, London, p47. 33 ibid. 34 Stephen Gill (1995), “Globalisation, Market Civilisation and Neoliberal Discipline”, Millennium, vol.24, no.3, p407. See also, Robert Deuchars (1998), “Rights, Risk, and the Politics of Resistance: the Multilateral Agreement on Investment”, a paper presented at Second Wellington Conference on World Affairs, March, p10. 35 Asiaweek, 36 Michel Camdessus (1998), “Reflections on the Crisis in Asia”, a paper addressed at the Extraordinary Ministerial Meeting of the Group of 24, Caracas, Venezuela 7/2/1998, http://www.imf.org/external/np/speeches/1998/020798.HTM

This parallels with the Lafalce’s logic that the main concern of the US officials is to prevent their economy from being affected by the external turmoil. Although their standpoints are clearly different, Lafalce is a mercantilist while Camdessus is a neo-liberal, they find prevention of penetration of the Crisis to be the common ground where they can cooperate with each other. Once the cooperation of the two traditional economic thoughts is established, then the IMF’s logic of neo-liberalism will be reinforced. Camdessus provides some proposals to cure these economies in bad shape. He contends that there are some points requiring changes in these areas. They include fighting against corruption, making the world’s surveillance of developing economies more effective, strengthening financial and banking systems, regional surveillance, and liberalisation of international capital flows. As we can see, most of these points are about “their” economies. This means that the Asian Crisis is “their” problem for which “we” can give support. Then, who are “we”? Let me take a closer look at these points. The first point, “fight against corruption” requires no lengthy explanation. As the international system of state-sovereignty tells us, the issue of corruption is a domestic matter. This means that “their” crisis was partly caused by “their” undemocratic political practices and their “inabilities” to manage their own affairs. Otherwise how else would “we” know and be able to comprehend “their” corrupt practices. The Crisis which is frightening “us” happened because of “their” problem. This describes the first stage of Foucault’s disciplinary power - hierarchical observation. The second and the third points correspond to the Foucault’s second aspect of disciplinary power related to surveillance and training - normalisation. The second point Camdessus makes is particularly about surveillance. To strengthen the international financial system, he contends that we have to “look for ways to make our surveillance more effective and to enhance transparency.....Among other things, we need to know more about the structure of countries’ external debt, their reserve levels, how highly leveraged their corporate sector is”37. As this paper was written for a presentation at the G 24 meeting where many Ministers in developed countries were present, it is apparent that “we” means those who are not involved in the Crisis, and “they” refers to those who are involved. Then “our” surveillance should be conducted in order to not let 37 ibid, p3.

“them” make the same mistakes again, and make them fully aware that they are under constant surveillance - thus they will “learn” how to behave. Thirdly, Camdessus insists on strengthening financial and banking systems by training the deviant economies. In this context, he argues that “the Fund has been working to help develop and disseminate a set of ‘best practices’ in the banking area, so that standards and practices that have worked well in some countries can be adapted and applied in others”38. Here what he implies is that “best practices” which are perceivable in some sound economies should be adapted in other stagnating economies. It is again apparent that he dichotomises “our” sound economies” from “their” economies in the Crisis. Fourthly, he advocates “regional surveillance”. Although he does not directly mention it, it seems to me that he is referring to regional development banks such as the Asian Development Bank. As these Banks are associated with the IMF and are part of the World Bank Group, “regional surveillance” simply means “our” closer look at “their” economies. This parallels with Foucault’s third stage of power - subjectification. In fact, he states “there is considerable scope for improving policies when neighboring countries get together on a regular basis to encourage one another to pursue sound policies”39. Here “they” are expected not only to fully internalise the presupposed international norm - deregulation and free market economy - but also to police each other. Lastly, “liberalisation of international capital flows” comes under Camdessus’ scrutiny. This is apparently a liberalist cliche, but very strong one, despite many critiques of the liberalisation and deregulation for being the central cause of the Crisis40. This last point shows precisely what the international norms are. The “good” practice and “sound” policies in the abovementioned points are, after all, simply liberal political economic norms. In sum, what characterises Camdessus’s argument is his modernist tendency to segregate and dichotomise “our” sound economic practices and “their” defective economies. As a result, the crisis of international financial system is unconditionally re-named a crisis of Asia.

38 ibid. 39 ibid. 40 See for example John S. Irons (1998) “Asian Crisis: an interview with Nouriel Roubini”, General Internet, http://www.economics.miningco.com/library/weekly/aa012798.html

What has been illustrated by these mercantilist and liberalist narratives is a story of international finance where the “West” and international financial institutions are teaching and guiding those economies in “crisis”. Actors here are the US, the IMF, Indonesia, Malaysia, Thailand, South Korea, and Japan. The winners in this story are the US and the IMF - us, and the losers are the Asian countries -them. Are we missing something? Where are those who are actually living in the area and suffering from the consequence of this bizarre game? This is the most important point in studying world affairs. But unfortunately, there are relatively few materials which deal with the actual impact of the Asian Financial Crisis on everyday lives. For example, Sidney Jones reported that migrant workers there are particularly vulnerable in this context 41 . He maintains:

Malaysia initially announced it would be sending back 1m foreign workers, mostly Indonesian, with some Bangladeshis and Filipinos. Anwar Ibrahim, deputy prime minister, has since retracted that figure, but the likelihood of mass deportations remains. Thailand has announced a new crackdown on an estimated 800,000 illegal migrants, most of them Burmese....the result [will be] physical violence against migrants who become the scapegoat for social and economic ills....These migrants are also subject to abuse in overcrowded immigration detention centres, to extortion by officials in both host and home countries and, in the Malaysian case, to unsafe deportation procedures in overcrowded boats. In Thailand, where the line between economic migrants and refugees is blurred, mass deportation may involve sending Burmese nationals back to persecution and worse42.

This political economic condition of everyday lives are scarcely focused on by IPE thinkers or by officials of states and international organisation. Why? My answer is very simple; it is because they are analysing and discussing a different world. What they are looking at is a world consisting of growth rates of GDP, current account balance, trade balance, foreign direct investments, and 41 Sidney Jones (1998), “Social Cost of Asian Crisis: the rigion’s economic upheaval may lead to a human rights disaster”, The Financial Times, 26/January/1998, reprinted at http://www.hrw.org/hrw/campaigns/asia-cst.htm 42 ibid, p2.

inflation rates while the human rights abuses like those highlighted above are contained in the story of a different world. Dual ontology of the Asian Crisis As I mentioned above, the Asian Crisis is an issue of the international financial system. The term “international financial system” does not mean that a concrete physical international system of buildings exists. It is purely a “man-made”43 abstract system. Of course there are connections among international or local banks and financial institutions. However, the international system is something different from the links. The international financial system which many politicians and economists are concerned with is a particular system which is constructed upon the liberal concept of open-market and deregulation. This is a particular style of financial system. If one looks at Japan, then she/he would immediately notice there is a very different form of the banking system. The point here is that the existence of “the” international financial system largely relies on general acceptance by each individual participant in the international capitalist game. As previously mentioned, the mercantilist argument in this case is apparently connected to the neo-liberalist narrative of free market economy. Then they seem to forget that there are many people living in the area and suffering pain from the economic downturn. This is a direct result of modern knowledge which has set limits on what they can say and perceive. They are trying to objectify the “facts” of this issue which, in turn, prevents one from “listening to” or “smelling” the issue. IPE thoughts of the modernist sort often dehumanise issues by narrowly capturing these issues in terms of state-centric or materialistic conceptualisations of world affairs. This dehumanisation is, in the case of the Asian Crisis, reinforced by those who are against the connection of mercantilism and neo-liberalism. In the interview with Irons, Nouriel Roubini, a reformist liberal thinker, expressed how deregulation-centred policies are misleading. However, his argument is also limited, to the reductionist economic

43 I deliberately used the term of “man-made” here in order to express two meanings. One of them is apparently to say that the international financial structure is human-made. It is not a natural phenomenon. The second meaning is to say that the international financial system is biased in terms of gender relations. It has been often pointed out by feminists IPE scholars that the system is masculine in its nature.

approach which reduces the nature of the Crisis to a mere regulation-deregulation debate. This blinds analysts to the actual effects of this Crisis on people living the area concerned. Then, the question here is of what the Asian Crisis actually means to us. To modernists, the Crisis is an economic issue which has nothing to do with peoples’ lives. It is rather about the international financial system, the US economy and other developed (supposedly sound) economies, and how to sustain them. It is about an extraordinary complicated system of economics which non-specialists have nothing to do with. For those who have been disregarded by the modernists, this issue is about their lives, their homes, and their next meal. They feel the issue in their everyday lives. As a result, what characterises the Asian Crisis debate is this duality of worlds. This is the very reason of the dehumanisation of the issue and how the dehumanisation can appear to be mundane, boring, not worth worrying about “here”. This becomes apparent when we see the recent change in the focus of economists and political economic scholars. About a year ago, the focus was surely on the economies of South East Asian states. Now, it is on Japan which is currently facing the crisis of stagnation and recession. Many of the latest issues of world political economic journals deal with the issue of Japanese political economy, and analyse how one can avoid adverse influences on the US economy. This shows how quickly those who are on the centre of international political economy can forget the issue called “Asian Crisis” after the Crisis has spread to some areas - Russia, Japan, and Latin America, despite the political economic hardship many Asian populations are still suffering. Once the tide of economic disorder started getting closer to the “home” country geographically and economically, their focus has shifted onto how they can stop the tide where it is - Japan. This means that the “Asian Crisis” in the narrative of those who are in the centre has not got, and will not get, any focus related to the ordinary population in the area of economic hardship, but will remain within the narrative of the international financial system and of the US economy. Conclusion

The Asian Crisis is an interesting issue for those who are working on IPE. From the traditional narratives of IPE, especially the western neo-mercantilists and liberalists, the Crisis often turns out to be a crisis of “theirs”. In these narratives, countries such as Indonesia, Malaysia, South Korea, and Thailand should be taking care of themselves simply because the Crisis took place as a consequence of their inappropriate economic politics. What underlies here is modernist objectification and “Self” / “Others’ dichotomy. Modernist language uses “international community” and “international economic stability” in order to enforce a particular system of knowledge to “Others”. When we take a closer look at their language, it is apparent that the term “international” actually signifies “Self”, or simply “us”. Modernist narratives based on a particular “Self”, be it mercantilist or liberal, are functioning to facilitate the world capitalist system in favour of “us”. As a result, the lives of the people in the region are excluded from any analysis of the “Asian Crisis”, and consequently, their lives are disempowered. Duality of ontology is not peculiar to the issue of the “Asian Crisis”. Rather it is a peculiar consequence of modernist objectification. Through the international political economic activities and practices of those who subscribe to these norms and principles of modern knowledge, their version of the world (a neo-liberal one) is perpetuated. If my argument is correct then “God’s invisible hand” becomes truly invisible, as do “they”. Reference Bruce R. Barlett, ed., (1983),The Supply Side Solution, Chatham House, Chatham, NJ. Cox, Robert (1992), “Towards a Post-Hegemonic Conceptualization of World Order: reflections on the relevance of Ibn Khaldun”, in James N. Rosenau and Ernst-Otto Czempiel, eds., Governance without Government: order and change in world politics, Cambridge University Press, Cambridge.

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