New Imperialists : Ideologies of Empire

170 The New Imperialists
For Lal, the history of the global economy is essentially the story of
successive attempts at maximizing the area of the market through the
creation of a “liberal international economic order” (L.I.E.O.). The first
of these occurred under the British Empire, which “was hugely beneficial
for the world, particularly its poorest. It saw the integration for the first
time of many countries in the Third World into a global economy and
the consequent first stirring of modern intensive growth.” 3
Following the decline of the British Empire the world failed to create
a new L.I.E.O. Instead, Third World governments adopted what Lal
described as the dirigiste dogma, and attempted to steer economic policy
through state intervention and Keynesian economic policies. For Lal this
was a terrible error. States were inevitably “predatory” and tried to
capture wealth for their own purposes. Their policies created “rentseeking”
behavior, as economic agents tried to benefit through state
monopolies and corruption.
In the place of dirigisme, Lal argues that the role of the state should be
simply to ensure that the “rules of the game” are fair and that the free
market is able to function. The state’s actions should be restricted to the
provision of law and order, national security, and property protection.
The rest should be left to private individuals. Lal believes, “the primary
role of government is not to maximize the social good, but rather to
maintain a framework of rules within which individuals are left free to
pursue their own ends.” 4 And, “A good government is one which
promotes opulence through a policy of promoting natural liberty by
establishing laws of justice which guarantee free exchange and peaceful
competition, the improvement of morality being left to non-governmental
organizations.” 5
According to Lal, the dirigiste era fell apart during the 1980s with the
onset of neoliberalism. The U.S.A. helped to support transnational institutions
such as the I.M.F. and World Bank with the aim of opening world
markets. Following the 1980s debt crisis and the collapse of the U.S.S.R.,
the Third World embraced globalization, which Lal tellingly defines as
the creation of a common economic space. 6
Under the current U.S. hegemony, Lal sees a direct correlation
between the presence of a supranational imperial structure and the
maintenance of a new L.I.E.O. The role of the empire is to ensure the free
flow of trade and commerce with minimum government intervention.