People (sic) make history, but they do not make it just as they please;
they do not make it under circumstances chosen by themselves;
but under circumstances directly encountered, given and transmitted from the past.
The history of all the dead generations weighs like a nightmare on the brain of the living.
Karl Marx, The Eighteenth Brumaire of Louis Bonaparte

 Introduction

With the institutionalisation of the Asia-Europe Meeting (ASEM) in 1996, the historical relations of Asia and Europe is said to have been reaffirmed and rediscovered towards greater political, economic, and cultural cooperation. Yet a deeper logic underlies the political economy of Asia-Europe relations. It is the interest and logic of global capitalist reproduction interacting with particular social forces and states to control and benefit from it, and the conflicts and contradictions generated in these processes. As Asia and Europe become deeply integrated in the global dynamism of capitalist expansion, it has also become increasingly subjected to the crisis-ridden and contradictory nature of capitalist development as well as the heightening struggle between capitalists and pro-capitalist political forces, on the one hand, and the progressive forces for structural change, on the other. It is this logic that this essay attempts to reveal.

In realizing the aim of unpacking the logic of Asia-Europe inter-regionalism this essay is organized in four inter-related sections. First, it proposes a ‘critical comparative political economy approach to inter-regionalism’ through which the logic of capitalist reproduction in the related regions is analysed and spaces for alternative structure is explored. It examines the salience as well as the inadequacies of various critical approaches and established theories in international relations in order to develop the analytical tools for an alternative politics of world order. Second, it provides a general account on the contradictions of the neo-liberal structure in (Southeast) Asia, and examines its class struggle, civil society dynamics, and identity politics. Third, it paints a general picture of the contradictions of capital-led regional integration in the European Union as specifically depicted in the internal market and the economic and monetary union (EMU) projects. It also offers an explanation for the emergence of the neo-liberal structure in the region, and the possibility of changing this structure, through an examination of the contending and interacting social forces and class formations in the region. Lastly, it concludes the essay asserting the salience of the proposed critical comparative political economy approach to inter-regionalism, and thereafter reflecting on prospects for systemic change with emphasis on the counter-hegemonic potentials of the progressive forces of labour, social movements and civil society, and fighting identities in both regions against the hegemonic structure secured by the forces of capital.

 A Critical Comparative Political Economy Approach to Inter-regionalism

Inter-regionalism is a relatively new concept in the discipline of international political economy. It would then be tempting to capture it in theory from the analytical lenses of established theories in international relations and/or international political economy. This theoretical lure would however not serve the scholarly purpose of having a clearer grasp of the dynamics and realities of inter-regionalism under conditions of global capitalism so as to offer a theory of change for an alternative inter-regional and global order. Hence, there is a need for a critical perspective to conceptualise and capture inter-regional relations in theory. A critical comparative political economy approach to inter-regionalism is therefore herein proposed.

Established theories in international relations such as realism, neo-realism, neo-liberal institutionalism, social constructivism, and neo-Gramscianism have their respective interpretations of inter-regionalism in general and the ASEM project in particular - each of which is however inadequate in capturing the inter-regional realpoltik. Realism and neo-realism, including its hegemonic stability theory, would view ASEM as a ‘political’ project, and hence systematically neglect the deeper ‘economic’ logic of the process of inter-regionalism. Neo-liberal institutionalism sees the ASEM as a ‘regime’ in which states express their respective ‘national interests’; but this narrow conception of states-pursuing-their-national-interests-through-regimes fails to grasp the reality that the inter-regional project, the ASEM itself as an institution, is carried forward by state leaders in an effort to mitigate the difficulties they face at their domestic constituencies and external concerns in advancing what they take to be their ‘national interests’. Social constructivism sees ASEM as a creation of states that is norm- and identity-forming, but it is inadequate in theorising the realpolitik in inter-regionalism with its privileging of ideational factors such as identities, culture, and norms over the materiality of political economy. Lastly, neo-Gramscianism understands ASEM as an institution that is a battleground of struggle among social forces, but (a) its analytical inadequacy of understanding the world today which is shaped by the contradictory and crisis-ridden process of capitalist reproduction; and (b) its refusal to accept the continued primacy of class - one that is neither exclusive nor comprehensive - and of the increasingly global character of class struggle in which capitalist and pro-capitalist political forces try to secure the capitalist system and subordinated groups resist it, makes it unable to realise its project for an alternative world order.

These established theories in international relations founder on their respective inabilities to understand the ASEM as a political-economic project intended to promote the imperatives of capitalist competition against the broader background of global capitalism, and at the same time to manage the contradictions of the capitalist system. An alternative approach to inter-regionalism is herein advanced: a critical comparative political economy of inter-regional integration approach. This critical political economy approach would serve both as an intellectual filter in understanding inter-regional dynamics in contemporary Asia-Europe relations against the background of global capitalism and as a transformative framework in orienting opposition to the hegemony of the unjust and inhumane global capitalist (dis)order maintained by multilateral, regional organisations, and several other reactionary forces of capital. This critical political economy perspective would reveal the limitations and contradictions of inter-regional integration and its concomitant governance institutions and mechanisms, and thereby makes it possible to identify points of weakness which the proponents of alternative futures can exploit.

The conceptual failings of the competing frameworks broadly outlined above can overlook - if not oversimplify - the complexity of Asia-Europe relations. For fear of falling into this trap, a ‘critical comparative political economy’ perspective is herein advanced to better understand the logic underlying inter-regional cooperation between Asia and Europe. This perspective, which is strongly Marxist in orientation, is both critical and comparative. [1] It is critical in the sense that it is a critique of the dominant neo-liberal political economic model in both regions and that it is offering a theory of change derived not from normative or ethical preference of a better alternative inter-regional order, but one that arises from the inherent contradictions of the neo-liberal structure. It is comparative in the sense that it is sensitive to national dynamics - both in historical terms and in their respective contemporary responses to the neo-liberal structure - in both the Asian and European regions. The proposed approach thus brings back the power of capital and the relevance of social struggle into the analysis of inter-regionalism against the background of global capitalism.

This critical comparative political economy of inter-regionalism perspective puts forward five fundamental theses in interpreting the contemporary inter-regional dynamics. First, it sees regions as historical creations that are fully integrated in the evolution of global capitalism. [2] That is, this historical moment in which the region is presently situated is best characterised as the ‘universalisation of capitalism’ in which the logics of accumulation, competition, commodification, and profit-maximisation have penetrated to the depths of human life, nature, and all social relations. Second, as a result of the combined and uneven character of development under global capitalism, states in the region develop at an uneven pace resulting in the coexistence of both capitalist and pre-capitalist features of the society across and within nations. These varying domestic configurations suggest that it may give rise to distinct arrays of interests and distinct strategies of capital accumulation from state to state in both regions. Third, this global capitalist structure is crisis-ridden, contradictory, and unstable. Thus, the universalisation of the logic of global capitalism also comes with the universality of its contradictions. Fourth, since global capitalism has continuously oppressed the working class, degraded the natural environment, and aggravated the misery of the billions of people, in this context, class struggle, social movements, and fighting identities have also become increasingly global in character. In a word, the accumulation of capital is multiplication of the proletariat as much as the accumulation of capital is accumulation of misery. Fifth, this regional dynamic suggests that the regions are capable of change, and constantly engaged in the process of change. Change in the regions is determined in the enduring tension between structure and agency (that is, between the global/regional/inter-regional capitalist structure secured by the capitalist and pro-capitalist forces and the agents of social change resisting said hegemonic structure). To the extent that the counter-hegemonic structure advanced by the exploited groups in the system - labour, social movements/civil society, and identities - successfully resists the hegemonic capitalist structure, a new alternative structure emerges.

While the foremost concern of this essay is the analysis of the dynamics of social change at the inter-regional level, it emphasises the centrality of state-level perspective. Hence, the attention is to the state and its domestic environment to fully understand the dynamics of regional and global initiatives. Inter-regional initiatives, in this case, are seen as reinforcing the hegemony of capital at the domestic level. The nation-state is the point of concentration of capital and thus remains the arena for struggle. It therefore follows that, consistent with the critical perspective’s sensitivity to intra-regional variations within a broadly comparative framework, the inter-regional model is to be extended and zoom in to national/social dynamics.

Rising from the abstract to the concrete, the next section examines the tension between the respective regional structures and the regional formations in the Asian and European regions - elements through which inter-regional struggle as well as social change - are tremendously dependent upon. That is, the enduring conflict within the neo-liberal geographical landscape in the ASEM member states which is being secured by the forces of capital, on the one hand, and which is being resisted upon by the forces of labour, progressive social movements, and fighting identities, on the other.

 Asia: Diverse Nation-States Under Same Neo-liberal Discipline

Regional dynamic of contemporary Southeast Asia is, as ever, marked by national differences in terms of levels of economic development, characteristics of political regimes, and even of cultural attributes. The combined and uneven character of development in the region suggests that there are still pre-capitalist relations coexisting with features of modern capitalism in almost all of the countries. For instance, the persistence of constitutional monarchies in Brunei, Cambodia, and Thailand; of pre-capitalist relations in the states of Malaysia; and of political power rooted in land ownership in the Philippines as well as of conflicts over land.

The diversity of political regimes in the region ranges from the monarchy of Brunei, to military dictatorship in Myanmar, to semi-democracies/soft authoritarianisms in Malaysia and Singapore, to one-party rule in Cambodia, Laos and Vietnam, and to democratic republics in Indonesia, Thailand, and the Philippines. The past two decades implies the fluidity of the political situation in the region such as the toppling down of the two powerful military regimes of Ferdinand Marcos in the Philippines and Soeharto in Indonesia, the series of coups in Thailand, and the two ‘people power’ uprisings in the Philippines in 1986 and in 2001. Yet, this political change is superficial, and hence not real ‘democratic’ change. The political evolution that has happened validates the vicious circulation of the elites thesis (i.e., conflicts between elites and counter-elites with the masses and progressive groups used as canon fodders to the feuds). This elitist political evolution in the region is closely-bounded with the development of the global political economy from the period of import-substituting development in the post-war, to the crisis of national developmentalism and Keynesianism in the 1970s, to the Washington Consensus, and to the contemporary neo-liberal post-Washington consensus characterized by a competitive, open market economy.

Born out of the crisis of the 1970s, a neo-liberal global political economy has evolved, restructuring the impoverished domestic political economies in the region which were vulnerable to the constraints and pressures imposed upon by the oil crisis, the internationalization of financial markets, and the structural adjustment programmes attached as conditionalities to the heavily-indebted Third World. [3] This new configuration of capitalism has dramatically reorganized production through the intensification of new technologies and the introduction of financial innovations that are both geared at satisfying capital’s crave for further accumulation and, at the same time, addressing capital’s desperate attempt to contain its own crises.

The 1997 economic crisis in Asia [4] implies once again the susceptibility to crises of the global capitalist system. It has ushered in tremendous restructuring in the local political economies of the region in pursuit of ‘sound macroeconomic principles’. At the heart of the restructuring process are intra-regional variations in terms of structural responses to the region-wide liberalization, deregulation and re-regulation of industrial production - broadly speaking, the uneven shifts to more capital- and technology-intensive forms of flexible production in the name of international competitiveness, leading to the growing power of capital over labour. This has major impacts on the nature, patterns and conditions of work. Reinforcing this process is the active role by Southeast Asian states in the reorganization of their respective national labour systems in line with the ideals of competitiveness.

In the Philippines, while patronage politics remains as characterized by the persistence of political families, new social forces consistent with the neo-liberal restructuring agenda have increasingly emerged since the fall of the Marcos authoritarian rule in 1986. [5] Foreign capital, together with the World Bank and the IMF - social forces to whom the state is heavily-indebted to - have overwhelmingly imposed neo-liberalism. The state has legislated series of statutes in line with the liberalizing agenda, including deregulation and privatization. [6]

In Thailand, the aftermath of the 1997 crisis has further intensified competition between and within domestic and global capital. Central to the World Bank’s program for the post-crisis restructuring in the country are the processes of liberalisation and regulatory reform which have earned legitimacy among the politicians, domestic business, and technocrats. [7] This neo-liberal restructuring has, in turn, resulted in the increasing role of foreign capital in the economy. Yet, this localization of global capital also comes with the globalization of domestic capital, while at the same time continuously empowering its national bourgeoisies. [8]

In Indonesia at the aftermath of the 1997 crisis, the predatory state under Soeharto - which made possible rapid economic growth as well as the cementing of the seemingly invulnerable power structure - has led to huge private-sector debt and over-investment and the eventual collapse of the regime. The fall of Soeharto’s predatory state leads to the commencing of a more powerful role of the IMF in the institutionalization of neo-liberal reforms of liberalization and privatization, combined with the reduction of public spending. However, there are still attempts of the old politico-business alliance to reorganise their ascendancy through new institutional frameworks and wider social alliances. [9]

In Singapore, the important impact of the crisis was the enthusiastic welcome to globalization and to the ‘New Economy’ as the most significant feature of its contemporary political economy, giving rise to increased economic liberalization and corporate governance reforms. Amidst this process of increasing integration in the global economy, is the continuity of the centrality of the state in economic development, the internationalization of finance, and the promotion of ‘knowledge economy’. The People’s Action Party’ has been active, as ever, in its to attempt to forge alliances between state-owned companies and international capital. [10]

In Malaysia, its contemporary political economy rests on the division of power among the state, foreign capital, and domestic capital. The balance of power as manifested in the enduring tension between the state and foreign capital - in particular, the curbing of the state freedom by the globalizing speculative capital, and the former’s attempt to curtail the freedom of the latter - implies the integration of this so-called ‘developmental state’ in the larger global market. And the dynamism of both the traditional ethnic-Chinese capital and the Bumiputera commercial and industrial conglomerates suggests the active operation of capitalist competition in the economy. Thus, the overall contradictions the Malaysian state is attempting to manage extend beyond the traditional ethnic conflict but ‘[encompasses] class conflicts, the emergence of Malay capital, rise and decline of bureaucratic interests, politicisation of business, aggrandisement of powerful conglomerates, and promotion of economic nationalism’. [11]

In Vietnam, the Doi Moi in 1986 has triggered the transformation from a planned to a market economy. The business interests of the state or the ‘state-business bloc’ is apparent in the establishment of a capitalist economy. [12]

These varying domestic configurations from state to state within the neo-liberal geographical landscape in the region give rise to distinct arrays of interests and distinct projects from state to state in pursuit of their shared interest in the accumulation of capital and the establishment of the conditions for the hegemony of capital over labour. In their concerted attempts to manage the contradictions of global capitalism, the World Bank and the IMF have moved from the framework of the Washington Consensus to the adoption of the ‘post-Washington Consensus’ in the mid-1990s. Under the regime of the Washington Consensus, good economic performance requires liberalised trade, macroeconomic stability, and getting prices right, and that once governments get out of the way private markets would produce efficient allocation of growth. On the other hand, the ‘post-Washington Consensus’, and its concomitant idea of ‘social capital’, formulate non-market responses to market imperfections. [13]

Class Struggles, Civil Society Dynamics, and Identity Politics in Asia

Within the contradictory nature of neo-liberalism in Southeast Asia, there is a struggle between the reactionary forces securing the hegemony of the capitalist system and the progressive forces resisting it. In a word, there is a struggle between the capitalist and pro-capitalist forces, on the one hand, and the ‘democratic’ forces, on the other.

The reactionary forces that have interest in the maintenance of the status quo operate at the global, transnational, regional, and domestic levels. They have interest for the preservation of the general conditions of capitalist accumulation in the region. At the global level, the World Bank, the IMF, and the World Trade Organization act as managers of the global capitalist system. [14] At the transnational level, the MNCs and transnational corporations based in Europe and the US are already heavily involved in Southeast Asia. The ASEAN-Chamber of Commerce and Industry is perhaps the most powerful transnational capitalist class in the region. With its increasingly neo-liberal orientation in furthering their respective interests in capital accumulation, while at the same time, maintaining the capitalist system, at the global, regional, and local levels, the ASEAN-CCI played a crucial role in the establishment of the AFTA. There is a great possibility that in the near future ASEAN-CCI could be comparable to the elite forum of a powerful transnational capitalist elite in Europe, the European Round Table of Industrialists (ERT). [15] At the regional level, the ASEAN (including several epistemic communities sympathetic to it), APEC, and the Asian Development Bank (ADB) all work for the maintenance of the system through further liberalization and increasing competitiveness. And at the domestic level, the lead institutions for the maintenance of the capitalist system in the region are the states, together with the civil society organisations as well as labour federations they have created and controlled, not to mention the crucial role played by intellectuals in several universities in the region and the reactionary ‘anti-globalization nationalists’ [16]. Overall, these capitalist and pro-capitalist political forces are hegemonic, materialized with its powerful and influential resource-rich organizations and the ideology of neo-liberalism. Of crucial significance in their role in the preservation of the system are the multiple sites of governance - global, regional, domestic - they endeavour.

On the other hand, the ‘democratic’ forces in the region are the exploited groups in the continuous capitalist development in the region - the working class, social movements, and identities. They are ‘anti-capitalists’ by nature struggling not only for political freedom, but also for democratic control over capital. They advance a progressive notion of ‘democracy’. Since capitalist market is a political as well as an economic space - a terrain not simply of freedom and choice but of domination and coercion - they advance ‘democracy’ as a political category and an economic one. While they call for liberal freedoms, they, at the same time, struggle not simply for ‘economic democracy’ as a greater equality of distribution, but democracy as an economic regulator, the driving mechanism of the economy. [17] However, the counter-hegemonic potentials of these exploited groups have at the moment no match with the overwhelming organization of the reactionary forces.

The continuous growth of capital in the world ultimately depends on the extraction of value from labour power. Ironically, the most exploited in the system are the creators of value themselves, the workers that comprise majority of the world population. In a region of competing capitalist states that have interest in the general conditions for capital accumulation, governments are increasingly driven towards making their territory hospitable to capitalist investment, whether domestic or foreign. In Southeast Asia, labour situation is best understood through the analytical lenses provided by Michel Aglietta’s concept of the ‘national bargain’ (sometimes referred to us the ‘social contract’), which is the relationship between capital (business classes; both domestic and foreign), labour (the working classes), and the state (governmental institutions and political parties). [18] ‘Political business alliances’ is common in Southeast Asia. [19] In the Philippines, Indonesia, and Malaysia, these alliances have historically resulted in corruption and its forms of rent-seeking and cronyism. Political business in the region is characterized by a national bargain which pitted capital and state against labour. In effect, the combined forces of capital and state assault labour. Workers are a class not only in permanent conflict but also in permanent negotiation with those who pay them wages. Within the capitalist system, the most powerful negotiators are the entrepreneurs or the capitalists who are going to do everything they can to weaken the negotiating power of the workers, constructing social spaces where the owners are stronger and the workers are weaker. [20] Capital is able to make labour negotiate at a position of weakness. Reinforcing this capital offensive against labour are the states in the region - whether as ‘states that are instruments’ of a fraction of the capitalist classes as in Thailand, Indonesia, Vietnam, and the Philippines or as ‘states that are relatively autonomous from particular bourgeoisie’ as in Singapore and Malaysia - share essential common task in the maintenance of the hegemony of capital over labour. In this sense, David Harvey rightly depicts neo-liberal globalisation as a ‘geographical and ideological assault to working class forms of power’. [21] What are under assault are the workers in general and the ‘independent’ trade unions (i.e., trade unions that are neither state created nor controlled) [22] in particular.

The presence of ‘social movements’ - which is more politically- and ideologically-conscious social formation than civil society [23] - in the region join the independent trade unions in resisting capitalist development. These social formations comprise of women’s groups, neighbourhood organizations, environmentalists, lesbian and gay groups, civil rights groups, and the peace movement. What differs social movements from civil society is the progressive predisposition of the former in terms of their resistance on the three fundamental institutional supports of global capitalism, namely the transnational corporations, the transnational capitalist class, and the culture-ideology of consumerism. [24] However, their operations suffer the contradictions of market-dependence from which they rely on financial resources. These issue-based movements can be found in each state in the region - even in (soft) authoritarian regimes of Singapore, Malaysia, Cambodia, Laos, Vietnam, and Myanmar.

The operations of social movements and civil society in the region are limited by individual states. In relatively ‘liberal’ states of the Philippines, Thailand and Indonesia, organizing and mobilizing of social movements and civil society are relatively tolerated as long as they do not threaten the incumbent regime and the stability of the economy, lest states use their coercive military power. However, during the two people powers in the Philippines in the last two decades and the fall of Soeharto in 2001, social movements and civil society have succeeded in overthrowing the subjects of their protests, yet without overthrowing the enduring undemocratic economic regimes and elitist political regimes. In Malaysia and Singapore, civil society is closely monitored. The states of Vietnam, Cambodia, Laos, and Myanmar control the growth as well as the operations of civil society. Yet, the weakness of civil society in Southeast Asia is, however, not solely based on the constraints imposed on them by states but on the absence of opposition to the fundamental social and political order in the region. [25]

Finally, in this multi-cultural region of Southeast Asia, racial, religious, ethnic and national identities are still at the centre of many conflicts. Burma, Singapore, Indonesia, Thailand, Malaysia, and the Philippines have their respective enduring internal conflicts among identities. Contrary to common belief that the struggle of these identities are more conspicuous in the cultural arena rather than in the materiality of the political economy, identity conflicts in the region are in fact a struggle both for recognition and for redistribution. [26] The resistance of these oppressed identities is twofold: against their respective states and against increasing material inequality. [27] Shamsul observes the rise of Islamist groups in Southeast Asia as a product of a two rather contradictory trends: primitivisation and globalisation. [28] Rivera also validates this coexistence of the struggle for recognition and the struggle for redistribution of the long-running Muslim armed movements in Mindanao in the Philippines against the central government. [29]

These fighting identities, together with the struggle of the working class and the social movements are ‘real existing resistances’ against the celebration of the orgies of capital in Southeast Asia. To the extent that the radical potentials of these exploited groups are coordinated at the domestic, regional, and global levels advancing unified struggle against the undemocratic neo-liberal system, a truly democratic change could be realized.

 The Neo-liberal Offensive in the EU: Towards a Region of Capitalist Contradictions

The process of EU integration is constitutive of the process of globalisation. In other words, globalisation constitutes the EU, and that the latter is situated within the larger process of global economic integration implicating every pore of the society in the world in political, social, and cultural terms. At the global level, globalisation imposes the disciplines central to capitalist reproduction such as the provision of a ‘sound’ macro-economic framework, along with structural reforms - national and global liberalisation, and privatisation - and associated regulatory innovations. And this process of globalisation comes with the production of capitalist contradictions. Some of the tangible manifestations of the contradictory characteristics of global capitalist (dis)order are well-known: ecological degradation, increasing unemployment, growing national inequalities, and recurring economic crises. These ‘contradictions’ do not merely refer to tensions and conflicts; but on the systemic contradictions that result from the dependence of capitalism on its internal structure. The EU thus plays a crucial role in the promotion of the disciplines central to capitalist reproduction and in the management of the inherent contradictions of the capitalist system.

At the heart of the process of European integration is the institutionalisation of the Single Market and the EMU aimed not to retreat from globalisation but to advance it along the neo-liberal ideology. The states play a key role in the institutionalisation of this project. Far from being bypassed under the epoch of globalisation, states are being reorganized in ways that meet the requirements of global competitiveness. These states have actually authored the regional integration project in particular and the process of globalisation in general by signing treatises and international laws with constitutional effects and thereby guaranteeing the domestic, regional, and global rights of capital. [30] It is ironic though that these states have also been the absorber of business risk and of market failure. This is evident in the system of fines and sanctions of under-performing economies as provided for in the Growth and Stability Pact (GSP), which is an associated instrument of the EMU. Social institutions are also in place so long as they contribute in the task of making markets work. This constitutionalisation of the neo-liberal structure involving the processes, institutions, and ideas of regional integration for further market expansion constitute the hegemony of neo-liberalism, of making the market forces be the sole director of the fate of human lives. The dominant neo-liberal structure in the EU is a product of the continuing struggle between the capitalist and pro-capitalist political forces in the region securing neo-liberalism, on the one hand, and the subordinated classes and forces resisting, as well as rising against, this hegemonic structure. Social change in the EU would then be attained if and when the progressive forces succeed in overthrowing neo-liberal hegemony.

The EU project, in particular its EMU instrument, is a product of the struggle among social forces and class formations, created in the context of the global patterns of power and production constituting the political economy of globalisation. It represents an ideological assault to the civil society and the working class. The neo-liberal structure in the EU, typical of capitalism of being undemocratic and uneven, is as ever insecure, crisis-ridden, and contradictory. The conduct of the enlargement, for instance, reinforces the process of combined and uneven development in European integration. However, behind this drive for capital accumulation is the real subsumption of labour to capital, and hence proletarianisation, as CEEC offers a ‘relative surplus population’ within which an ‘industrial reserve army of labour’ is present. As a result, in a structure where the demand from capitalists for labour outstrips supply, wages are kept low at a subsistence level. Moreover, this ‘asymmetrical integration’ enshrined in the enlargement project results in race to the bottom, heightening pressures towards lower wages and cuts in social benefits. [31] The current economic globalisation principles of free capital movements and labour market flexibility - espoused by the EU under the internal market and the EMU - favour capital to the disadvantage of labour, resulting in detrimental effects to labour conditions, wages, social security, and health conditions, among others. [32] Workers find themselves in a labour situation thoroughly permeated by market imperatives, and have no other means of survival than to offer themselves for work at the market wage.

EU’s Contending Social and Class Formations

Capital and pro-capitalist political forces may have succeeded in creating the hegemony of the neo-liberal structure in the EU. It is however a fragile achievement. The integration project is riddled with contradictions marked by the structural market-dependent nature of the region-wide project to establish the hegemony of capital, and by tensions among class and social forces.

There is little doubt that there is no mono-causal explanation as regards the institutionalization of the market liberalization programme in the EU. The structural, agential, institutional, and statist explanations have their respective merits. The sluggish performance of the European economies in the past years that led to a neo-liberal consensus on the desirability of liberalisation, deregulation and privatisation among European stakeholders and a fundamental re-thinking of the European ‘social model’ would be a plausible structural factor for the creation of the internal market and the EMU. [33] The role of the Commission under the leadership of Delors, and the active role played by national governments are also plausible explanations for it. [34] However, power relations and configuration among class and social forces likewise contribute a great deal to the project of the completion of the market in the EU.

Of particular importance in the regional integration process are the role of states and forces of capital in the realization of the EU project in advancing their respective interests at a supranational/regional level. State leaders carry forward the EU initiative in an effort to mitigate the difficulties they face in advancing what they take to be their ‘national interest’. And as this quotation overheard in a conference for businesspeople on Europe 1992 in Berkeley on December 1989 aptly captures:

I know what the EC really stands for: Executive Committee - as in the ‘Executive Committee for managing the common affairs of the bourgeoisie’! These businessmen really do expect to recuperate at the level of Europe as a whole what they have lost at the level of national states - the capacity to govern as they please in the interest of capitalism as a whole. [35]

The forces pushing for the internal market and the EMU are not only from finance capital. They are broad-based, cutting across social classes. Capitalist states guaranteeing the neo-liberal order, the powerful supranational institution of the Commission and fractions of capital and of labour movement all built an alliance towards a shared project of establishing the general conditions for capital accumulation. The EU serves the interest of capital while peddling the myth that the rest of the populace shall benefit in the process. Interests of national capitals have privileged access to the Commission’s proposals and Council’s decisions, while there is the absence of transparency in EU institutions especially on the economic decisions that directly affect the lives of the people. [36] And affluent interest groups such as the European Roundtable of Industrialists (ERT) have an influential role to the functions of EU institutions serving the interest of the elite and mediating the interests and power of the most transnationalised segments of European capital. [37]

This moment of the ‘universalization of capitalism’ comes with the powerful role of transnational capitalist class that promotes a framework for neo-liberal governance. The ERT, for instance, is a powerful transnational capitalist class that greatly shapes socio-economic governance of the EU. [38] Its increasingly neoliberal orientation ‘reflects, and at the same time is a constitutive element within, the construction of a new European order in which governance is geared to serve the interests of a globalising transnational capitalist elite, and hence the exigencies of global “competitiveness”.’ [39] Operating in concert with the ERT and the neo-liberal forces in the EU in securing the hegemony of neo-liberalism are ‘international policy-making apparatus’ such as the Trilateral Commission, World Economic Forum, the Group of Thirty, and think tanks like the UK’s Institute of Economic Affairs and the Adam Smith Institute, the American Brookings Institute and the American Enterprise Institute. [40] There are also fractions of labour movements in Europe that have supported this concerted march towards a neo-liberal regional integration. [41]

A critical issue linked to the internal market and EMU projects would be the containment of class and social conflict, alongside the promotion of capital accumulation. Here then lies yet another contradiction. The Maastricht Treaty ‘resolved to continue the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as closely as possible to the citizen in accordance with the principle of subsidiarity’. [42] This suggests that the faithful application of the principle of subsidiarity will preserve democracy and diversity within Europe. But this principle of subsidiarity is ‘hierarchically structured’ in which, in EMU’s drive for capital accumulation, labour does the adjustment in order to accommodate ‘sound’ monetary policy. Since ‘EMU is the means and the method to set the labour market free... by retaining its national regimentation in the form of distinct and competing labour markets’ the labour question, and to a great extent class struggle, has to be resolved by the interdependence of each member state. [43] Failure then to contain class struggle in one member state would have adverse consequences for the whole Union. [44]

Hence, opposition to this hegemonic neo-liberal structure exists. The democratic forces among the social movement and the civil society, the ‘fighting identities’ struggling both for recognition and redistribution, the labour unions perpetually struggling to defeat the capital offensive, the unorganised people who could feel the exploitation and alienation under a neo-liberal order in the EU and around the world all constitute actually existing resistances against neo-liberal regionalisation and globalisation.

 Conclusion

The respective dynamics of neo-liberalism in Asia and Europe presented in this essay suggest that the ASEM project - which is internationally peddled as a ‘forum’ between the two regions - is haunted by the very same contradictions inherent in the capitalist system. Contradictions here refer not simply to tensions and conflicts but on the structural dependence of the system itself to the internal logic of the capitalist market. It is in the ASEM as an institution through which member states would try to contain these contradictions and its concomitant struggle, while at the same time pursuing their respective political economic interests with varying strategies because of the character of combined and uneven development but with a unified goal towards the reproduction of the imperatives central to capitalist reproduction.

A critical comparative political economy approach to inter-regionalism has been proposed here as an alternative framework to interpret the phenomenon of inter-regionalism due to the respective inabilities of established theories in international relations to understand the ASEM as a political-economic project intended to promote the imperatives of capitalist competition against the broader background of global capitalism, and at the same time to manage the contradictions of the capitalist system. This suggests that the ASEM is not to be easily dismissed as a weak and useless ‘meso-level’ authority between states and the global economy but one that is to be taken seriously so as not to miss the complex processes and interests involved in the project since the problems states intend to resolve are not only regional and inter-regional in character. States use ASEM to advance a particular domestic agenda. Hence, it pays attention to specific pressures, tensions, conflicts, and contradictions arising from the ‘universalisation of capitalism’. This critical political economy approach thus offers a better basis for explaining the political economy of the ASEM project, and for orienting opposition to it, than said established theories in international relations because it directly focuses on the characteristic of the project intended to resolve the contradictions of capitalism at the domestic, regional, inter-regional, and global levels. It focuses on the logic of capitalist reproduction and on the enduring struggle between the capitalist and pro-capitalist forces securing the neo-liberal landscape and the democratic forces resisting it. This critical perspective serves as intellectual filter in analysing as well as critiquing the emergent and crisis-ridden political economy of emergent neo-liberalism in the regions and as a transformative framework offering an alternative, which is derived from the contradictions of capitalist accumulation itself, that proponents of alternative inter-regional order could exploit.

At this juncture however, democratic social change in the regions of Asia and Europe appears elusive because the hegemonic structure of neo-liberalism overwhelmingly defeats the weak counter-hegemonic institutional capacity of progressive social formation. But, the regional structure that reinforces the global structure of neo-liberal globalisation generates contradictions, and hence offering opportunities for revolutionary alternative.

The strategies of capital themselves create the basis for a genuinely common programme of struggle. The systematic assault of capital against the development of the working class, the social antagonisms that spring from the capitalist reproduction, and the indispensability of the nation-state as the point of concentration of capital, all suggest that there is scope and need for class and social struggle to tame the ‘animal spirit’, discipline the ‘greedy, selfish baker’, and regulate the ‘gales of creative destruction’ towards the re-embedding to the society of the market forces that now controls the world. Thus, the progressive forces among independent trade unions, social movement, and fighting identities are called into action. First, the systematic offensive of capital in unjustly treating labour means that there is a need, and scope, for class struggle. Under conditions of globalisation, the logic of class struggle is increasingly global in character; thus any strategy of resistance must identify and oppose both domestic and global hegemonic strategies, and orient itself towards the auxiliary role played by regional and inter-regional initiatives. This is so because the nation state remains the point of concentration of the power of capital that implements and enforces both the global and regional economies; hence, it remains the most effective means in intervening in the global economy. Second, the perpetuation of elitist governance in Asia and Europe and the capital-led inter-regional integration mean that the issues from the environment to human rights remain insoluble without launching a collective challenge against the capitalist system. There is therefore a need, and scope, for advocacies of social movements and civil society to be coherent with class analysis - that is, without finding refuge within the interstices of the capitalist system). And third, the fact that the struggle for recognition of the fighting identities based on ethnicity, nationality, religion, and gender - while aptly to be regarded in their varying geographical and historical contexts - comes at this moment when material inequality in the world is increasing means that there is a need, and scope, for their continued resistance against global capitalism. The legitimate aspirations and demands of these identities for recognition is closely-bounded with the evolution of capitalism; hence, their struggle for recognition must continuously be matched by the struggle for redistribution.

Notes

1. In coming up with this ‘critical comparative political economy of regional integration perspective’, I am, to a great extent, inspired by the works of Paul Cammack who proposes ‘new materialism’, which is a classical Marxist perspective in international political economy that applies concepts derived from historical materialism to the circumstances of contemporary global political economy.

2. Ellen Meiksins Wood (1997) ‘Modernity, postmodernity or capitalism’, in Review of International Political Economy 4, 3, pp. 539-60.

3. Robert W. Cox (1996) ‘A Perspective on Globalization’, in J.H. Mittelman (ed) Globalization: Critical Reflections (Boulder, London: Lynne Rienner Publishers), pp. 21-32.

4. For an interesting discussion on several interpretation on what caused the 1997 Asian crisis, see Mark Beeson and Andrew Rosser (1999), ‘The East Asian Crisis: A Brief Overview of the Facts, Issues and the Future’, Working Paper 86, Asia Research Centre, Murdoch University, in http://wwwarc.murdoch.edu.au/publications/wpapers.shtml.

5. See Jane Hutchison (2001) ‘Crisis and Change in the Philippines’ in G. Rodan, K. Hewison, and R. Robison (eds) The Political Economy of South-East Asia: Conflicts, Crises, and Change, Second Edition (Oxford: Oxford University Press), pp. 42-70; also, Walden Bello (2000) ‘The Philippines: The Making of a Neo-Classical Tragedy’, in R. Robison, M. Beeson, K. Jayasuriya, and H. Kim (eds) Politics and Markets in the Wake of the Asian Crisis (London: Routledge), pp. 238-57; and Temario C. Rivera (1994) Landlords and Capitalists: Class, Family, and the State in Philippine Manufacturing (Quezon City: University of the Philippines Press).

6. For a comprehensive contemporary discussion on the Philippine economy, see Arsenio Balisacan and Hal Hill, (eds) The Philippine Economy: Development, Policies, and Challenges (Quezon City: Ateneo de Manila Press, 2003).

7. See Kevin Hewison (2001) ‘Thailand’s Capitalism: Development through Boom and Bust’, in G. Rodan, et al (eds) The Political Economy of South-East Asia, pp. 71-104.

8. Gerard Greenfield (2004) ‘Bandung redux: Anti-Globalization Nationalisms in Southeast Asia’, in L Panitch and c. Leys (eds), Socialist Register 2005: The Empire Reloaded (London: The Merlin Press), pp. 166-96.

9. See Richard Robison (2001) ‘Indonesia: Crisis, Oligarchy, and Reform’, in G. Rodan, et al (eds) The Political Economy of South-East Asia, pp. 104-37.

10. See Gary Rodan (2001) ‘Singapore: Globalisation and the Politics of Economic Restructuring’, in G. Rodan, et al (eds) The Political Economy of South-East Asia, pp. 138-77.

11. Khoo Boo Teik (2001) ‘The State and the Market in Malaysian Political Economy’, in G. Rodan, et al (eds) The Political Economy of South-East Asia, pp. 178-205.

12. Melanie Beresford (2001) ‘Vietnam: The Transition from Central Planning’, in G. Rodan, et al (eds), The Political Economy of South-East Asia, pp. 206-32.

13. A summary of the features of the post-Washington Consensus is as follows: [a] It is sharply critical on the Washington consensus and seeks alternative in which the intervention of the state is greater in depth and breadth; [b] It rejects the analytical agenda of state versus market, and arguing that the relationship of the two is complementary; [c] It seeks to establish the appropriate role of the state in view of market imperfections; and [d] It brings back the ‘social’ into the analysis as the means of addressing market imperfections - rather than in the idea of the Washington consensus to make the society more and more like the market. [From a chapter entitled ‘Making the post-Washington Consensus’ in Ben Fine (2001), Social Capital versus Social Theory: Political economy and social sciences at the turn of the millenium (London: Routledge), pp. 131-54.]

14. For an interesting account on the conscious policies and initiatives of the World Bank in the governance of global capitalism, see Cammack (2003), ‘The Governance of Global Capitalism’, pp. 37-59.

15. See Bastiaan van Apeldoorn (2000) ‘Transnational Class Agency and European Governance: The Case of the European Round Table of Industrialists’ in New Political Economy 5(2), pp. 175-6.

16. ‘Anti-globalization nationalists’ are groups opposing globalization but lack coherent class analysis. That is, while they oppose foreign capital, they, in effect, protect the interest of the national bourgeoisies. See Gerard Greenfield (2004)) ‘Bandung redux’, pp. 166-96.

17. I derive this notion of democracy as a political and economic ideal from Ellen Meiksins Wood (1995), Democracy Against Capitalism: Renewing Historical Materialism (Cambridge: Cambridge University Press).

18. Michel Aglietta (1979) A Theory of Capitalist Regulation (London: New Left Books).

19. See Edmund Terence Gomez (2002) ‘Introduction: political business in East Asia’, pp. 1-33; and Johannes Dragsbaek Schmidt (2002) ‘Political business alliances: the role of the state and foreign and domestic capital in economic development’, in E.T. Gomez (ed) Political Business in East Asia (London: Routledge).

20. This dynamic is referred to as ‘negotiated contradictions’ by Pablo Gonzalez Casanova (2001) ‘Negotiated Contradictions’, in L. Panitch and C. Leys (eds) A World of Contradictions, pp. 265-74.

21. David Harvey (1998) ‘The Geography of Class Power’, in L. Panitch and C. Leys (eds) Socialist Register 1998: The Communist Manifesto Now (London: Merlin Press), pp. 49-74.

22. There is a need to distinguish between state-controlled trade unions (a reactionary force) and ‘independent’ unions (a democratic force). ‘Organized labour in East Asia has long been characterized by the dominance of unions and workers’ organizations created and controlled by the state to repress genuine working class activity’. [For an exposition of the reactionary tendency of state-controlled unions in East Asia, specifically Indonesia, and the reactionary predisposition of the ICFTU and AFL-CIO, see Gerard Greenfield (2000) ‘Organizing, Protest and Working Class Self-Activity: Reflections on East Asia’ in L. Panitch and C. Leys (eds) Socialist Register 2001: Working Classes, Global Realities (London: Merlin Press), 239-48. For an interesting discussion on the history of state-created unions in Southeast Asia to contain the militant and radical ones, see Ratna Saptari and Rebecca Elmhirst (2004) ‘Studying Labour in Southeast Asia: Reflections on Structures and Processes’ in R. Elmhirst and R. Saptari (eds) Labour in Southeast Asia: Local processes in a globalised world (London: Routledge), pp. 15-46.

23. For analytical purposes, a distinction between civil society and social movements must be made. But the increasing number of literatures on civil society in recent years has encompassed the traditionally politically- and ideologically-conscious social movements.

24. Leslie Sklair (1995) ‘Social Movements and Global Capitalism’, in J.T. Roberts and A. Hite (eds) From Modernization to Globalization: Perspectives on Development and Social Change (USA: Blackwell Publishers, 2000).

25. Garry Rodan (1996) ‘Theorising political opposition in East and Southeast Asia’, in G. Rodan (ed) Political Oppositions in Industrialising Asia’, pp. 1-39.

26. Cf. Nancy Fraser (2003) ‘From Redistribution to Recognition?’ in in R. J. Antonio (ed) Marx and Modernity, Chapter 55.

27. For an excellent discussion on the dynamics between state and ethnicity in Southeast Asia, see David Brown (1994) The state and ethnic politics in Southeast Asia (London: Routledge).

28. See Shamsul A.B. (2002) ‘Globalization and democratic developments in Southeast Asia: articulation and social responses’, in C. Kinnvall and K. Jonsson (eds) Globalization and Democratization in Asia: The construction of identity (London: Routledge), pp. 203-4.

29. Temario C. Rivera (2002) ‘Assessing Democratic Evolution in Southeast Asia: Philippines’, Singapore, Institute of Southeast Asian Studies, p. 17.

30. S. Gill (1991), ‘The emerging world order and European change: the political economy of European Union’, in R. Miliband and L. Panitch, eds, Socialist Register 1992: New World Order? (London: Merlin Press), pp. 157-96.

31. For an interesting economic analysis on the enlargement project in particular and the process of EU integration in general, see E. Reinert and R. Kattel (2004) ‘The Qualitative Shift in European Integration: Towards Permanent Wage Pressures and a ‘Latin-Americanization’ of Europe’, Paper prepared for the International Conference Latin America, Brazil and the European Union Extended, Universidade Federal do Rio de Janeiro, September 2004, at http://www.othercanon.org.

32. For a comprehensive discussion on the controversial issues on global labour standards and economic globalisation, see A. Singh and A. Zammit (2000) ‘The Global Labour Standards Controversy: Critical Issues for Developing Countries’, South Centre, Geneva.

33. For an interesting analysis on the contradictions between EMU and the social market, see P. Whyman (2001) ‘Can opposites attract? Monetary union and the social market’, in Contemporary Politics, Vol. 7, No. 2, pp. 113-27.

34. See A. Young and H. Wallace (2000) Regulatory politics in the enlarging European Union: Weighing civic and producer interests (Manchester: Manchester University Press).

35. Quoted in P.C. Schmitter and W. Streeck (1994) ‘Organized Interests and the Europe of 1992’, in B. F. Nelsen and A. C-G. Stubb (1994), eds., The European Union, p. 170.

36. For an exposition of this claim, see G. Carchedi, For Another Europe (London: Verso), pp. 29-35.

37. Ibid.

38. G. Carchedi (2001) in For Another Europe, pp. 29-35, provides an account of how influential and powerful ERT is in the socio-economic governance of EU. The ERT: (a) Founders (in 1983): 1. Umberto Agnelli (Fiat), 2. Wisse Dekker (Philips), and 3. Pehr Gyllenhammer (Volvo); (b) Membership: 45 ‘captains of industry’ (i.e., CEO’s of the most important European oligopolies); (c) Resources: 1. ECU 550bn (in 1997), 2. three million employees worldwide, 3. ten working groups covering major areas of interest (e.g., competition, education), 4. Competitiveness Advisory Group (CAG), and 5. European Centre for Infrastructure Studies (ECIS); (d) Track Record of Influence: 1. the internal market, 2. the Trans-European Networks (TENs) - a gigantic investment plan in infrastructures, 3. policies on growth, competition and employment, 4. the Maastricht Treaty and the EMU, and 5. Transatlantic Business Dialogue (TABD) - set up in 1995 by the Commission and the US Department of Commerce.

39. For a case study of ERT’s power in European governance, see B. van Apeldoorn (2000) ‘Transnational Class Agency and European Governance: The Case of the European Round Table of Industrialists’, in New Political Economy, 5, 2, July, pp. 157-82.

40. See Gill, ‘Constitutionalizing Capital’, pp. 47-69.

41. For an interesting account on these splits among labour movements, see A. Bieler and S. Torjesen (2001) ‘Strength Through Unity? A Comparative Analysis of Splits in the Austrian, Norwegian and Swedish Labour Movements over EU Membership’, in A. Bieler and A.D. Morton (2001), eds., Social Forces, pp. 115-36.

42. See ‘Preamble to the Treaty of the European Union’ in Nelsen and Stubb, p. 66.

43. W. Bonefeld (2002) ‘European Governance, Subsidiarity and Labour’, at http://www.rcci.net/globalizacion/2002/.

44. W Bonefeld (2002) ‘European Integration: the market, the political and class’, in Capital & Class no. 77, pp. 117-42, (Summer).

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