Untitled - socium.ge

16 Manuel Castellsvictories of Thatcher in the UK in 1979 and Reagan in the USA in 1980. Theywere both political conservatives. They came to government with a mission:to recapitalize capitalism, thus ushering in the era of economic liberal policiesthat by successive waves took over the world, in different political-ideologicalversions, over the next two decades. The crushing of organized labor politically,the cutting of taxes for the rich and the corporations, and widespreadderegulation and liberalization of markets, both nationally and internationally,were crucial strategic initiatives that reversed the Keynesian policies that haddominated capitalism in the previous twenty-five years.Balancing the budget and reducing government intervention was part of theideology but not of the practice. Indeed, Reagan presided over the largestincrease in budget deficit in peace time because of the combination of tax cutsand large military expenditures. He practiced what we called at that time“military Keynesianism,” although the term is provocative but incorrectbecause Keynesianism was not just about inducing outlets, but about integratingpeople into the consumption process (Carnoy and Castells, 1984). Whatwas important was that, directly through deregulation and privatization policies,and indirectly by the signals sent from government to companies, therules of the game changed, first in the US, second in the UK, and then in therest of the world. Market liberalization and the disengagement of governmentfrom social spending and income redistribution became a generalized practice,either by ideological choice or by the need to adapt to the rules of the worldmarket, which was imposed by the most powerful players, followed by globalflows of investment, and enforced when necessary by the IMF. A new orthodoxywas established throughout the world. We call this process globalization.It is, to be sure, unfettered capitalist globalization, spearheaded by the liberalizationof financial markets (the Big Bang of the City of London in October1987), and enshrined in asymmetrical trade globalization represented by thenew managing authority, the World Trade Organization. Under the new conditions,global capitalism recovered its dynamism, and increased profits, investment,and economic growth, at least in its core countries and in the networksthat connected areas of prosperity around the world, in the midst of a sea ofpoverty and marginalization.I want to emphasize that this was not an historical necessity, nor the onlypolicy that could have restructured capitalism, and ensured its dynamic transitionfrom industrial capitalism to informational capitalism. Indeed, in my bookon the economic crisis in America (Castells, 1980), I stressed the coherence ofthe strategy proposed by Reagan, but I also analyzed the possibilities offeredby other political programs in America, for instance the platform representedby Senator Edward Kennedy, a potential president until the Chappaquidikaffair, based on a rekindling of government-led policy adapted to the neweconomic and social conditions. In fact, if one of the key elements of the